All posts by Supreme People's Court Monitor

Susan Finder has been observing the PRC Supreme People's Court for over 20 years, and was the first person to engage in a close analysis of its operations. She taught Chinese law and other subjects in the Law Department of the City University of Hong Kong, before putting her knowledge to work in the China practice group of Freshfields Bruckhaus Deringer, one of the first international law firms to recognize the importance of the China market. She had the good fortune to study with three of the early pioneers of Chinese legal studies: Jerome Cohen, R. Randle Edwards, and Stanley Lubman and to have many leading practitioners and legal academics among her classmates at Harvard Law School (J.D.) and Columbia Law School (LL.M). Susan Finder speaks and reads (Mandarin) Chinese and Russian and some German.

Brief comments on the China International Commercial Court

On 29 July, I spoke briefly at an American Society of International Law  webinar entitled “Charting the New Frontiers of International Dispute Resolution in the Asia-Pacific.” The post below is the (slightly edited) text of my comments on the China International Commercial Court (CICC). I have made some of the same points in earlier blogposts and this version includes those links.

Thank you for this opportunity to provide my thoughts on the CICC.  As some people know, I am on the CICC’s international expert committee, but nothing I have to say should be attributed to the Supreme People’s Court (SPC) or the China International Commercial Court (CICC). I’m not going to comment on the numerous articles I have seen either in both English and Chinese but instead focus my remarks on what I understand the focus of the work of the CICC to be now, suggest some reasons, and identify some trends.

The CICC has thus far accepted 18 cases in the three years since it was established.  Although I have never seen official confirmation of this, it appears that when the CICC was approved, it was approved as a part-time court.  It can be seen from the biographical description of each judge that each of them has at least one other full-time responsibility additional to being a CICC judge.  Some of the judges have two other full-time responsibilities.  The Intellectual Property Court of the SPC, is instead is a full-time court—it is unclear whether they have additional headcount. I have not seen a discussion of why one was approved as a part-time court and the other a full-time court—perhaps the leadership decided that the Intellectual Property Court was the one that would make a more important national and international impact, given the critical importance of intellectual property at this stage at China’s development and the range of intellectual property law issues in contention between China and certain of its trading partners.

In my view, the fact that the CICC is not a full-time court—means that the SPC’s #4 Civil Division, which provides leadership for the  CICC, must be strategic about what the CICC does.  Based on the language in some of the recent SPC documents,  particularly the September 2020 policy document on the Open Economy, I surmise that the #4 Civil Division is considering the best way forward with the CICC, as there is this language–“promote the construction of the CICC” (推进最高人民法院国际商事法庭建设). Additionally, the SPC has designated two senior Chinese academics (Shan Wenhua of Xian Jiaotong University and Liu Xiaohong of the Shanghai University of Political Science and Law), who are expert committee members to provide research on this topic.

Based on the type of cases that the CICC has accepted and the language in the end 2019 2nd Belt & Road Opinion and the 2020 Open Economy document, my understanding that the short-medium focus of the CICC is to be a model or guide for China’s lower courts in unifying “foreign-related” substantive and procedural law —it is currently domestically focused, rather than focusing on hearing large numbers of foreign-related cases.

So far, most of the cases that the CICC has accepted have been referred from the lower courts. The CICC will take the cases if it meets its criteria and it can see that the case involves issues regarding which existing law and judicial interpretations are unclear and that involve issues that frequently arise in practice. This can be seen in Articles 22 and 25 of BRI Opinion #2 “and the role of the CICC in providing models and guidance shall be developed… the role of cases in determining rules and guiding behavior shall be leveraged  (发挥国际商事法庭示范引领作用_…,发挥好案例的规则确定和行为指引作用).  Therefore the CICC has accepted and decided at least 5 cases related to arbitration—filling in gaps in Chinese arbitration law and judicial interpretations—and has accepted two more related to demand guarantees/standby letter of credit fraud disputes.  It has also issued a judgment on an issue related to product liability.

A second and it seems underappreciated aspect (outside of China) of the role of the CICC is in providing “models and guidance”– 示范引领作用– to guide the lower courts and to pilot reforms that are replicable (a Chinese judicial reform concept), as stated in Article 22 and 25 of BRI Opinion #2. That can be seen from reports on certain local courts:

  1. The Beijing #4 Intermediate Court—promoting one-stop diversified dispute resolution (多元化解纷纠纷中心), with links to local arbitration (CIETAC & the Beijing Arbitration Commission) & mediation organizations, the goal being for this court to come up with new ideas in international commercial dispute resolution to focus on Beijing’s advantages;
  2. The Suzhou International Commercial Court (approved by the SPC, and involving cooperation with the Singapore government through the China-Suzhou Suzhou Industrial Park );
  3. Haikou/Hainan also—the SPC’s policy document supporting the Hainan Free Trade Port mentions an international commercial court, although it seems to be less developed.

I would like to mention also that it is possible that whatever guidance is developed may also draw on the memoranda concluded and other best practices discussed at the Standing Forum of International Commercial Courts, of which the SPC is a member.

From what I can see from these local initiatives, the themes may include:

  1. promoting mediation (also in line with SPC policy on mediation taking priority);
  2. Centralizing case acceptance;
  3. Addressing additional arbitration-related issues;
  4. Possibly considering rules regarding more complex commercial disputes.

From my own research and discussions with some local judges, it appears to be early days to see any further guidance coming out of these local courts.

I wouldn’t be surprised to see the CICC eventually developing further rules, for example, related to mediation, drawing on the work of the lower courts, as this is a pattern I have seen before in other areas of law with the SPC because it appears CICC regulatory infrastructure is less fully developed in comparison with other commercial courts in other jurisdictions.  Experience from the lower courts could accelerate matters in part.

I surmise that either the CICC or local “international commercial courts” will eventually provide greater legal infrastructure related to what I call “invisible BRI disputes”–the increasing number of cases between two Chinese companies involving projects overseas, particularly in the area of construction engineering, often heard in the Chinese courts—that involve issues such as how to:

  1. find and apply foreign law;
  2. provide information and expertise about foreign technical standards; and
  3. improve the role of expert witnesses (with the necessary expertise) in construction engineering disputes.

These types of disputes raise several of many areas of law that need further work as Chinese companies operate internationally but want to have related disputes heard at home, and China seeks to progress domestic and foreign-related legislation.  I surmise that the Beijing #4 Intermediate Court will eventually come up with some guidance through its collaboration with the Beijing Arbitration Commission and other institutions.

Turning to the expert committee…the expert committee is an institution different from a user committee in jurisdictions such as US, Canada, the UK, Australia, New Zealand, Kenya etc. where they are often required by law and are primarily focused on incorporating input from users, including those practicing lawyers in evolving court rules.  I note that Taiwan involved a user committee in working on its new commercial & intellectual property court. Court rules in China are entirely within the authority of the SPC, and lower courts in practice issue them as well, and there is no compulsory requirement in Chinese legislation for incorporating public input in the course of drafting court rules. The CICC expert committee and other Chinese court expert committees (such as that established by the Beijing Financial Court appear to be established to enable courts to access expertise among the experts on a flexible basis, and it appears intentionally not involving lawyers practicing in China.  The link between the role of the expert committee members and the subject matter competence is weaker than with user committees, and thus far the few formal meetings of the entire expert committee have included speeches making general statements about international commercial dispute resolution in contrast to the more technically focused user committees in the jurisdictions I have mentioned.

From the BRI documents mentioned above that the SPC has issued, it appears that the SPC is still trying to determine a proper role for the expert committee (at least on the foreign side) as I don’t believe the roles mentioned in CICC regulations have turned out to fit with the SPC’s actual needs and the varied backgrounds of the experts. I’ve been in touch with several foreign members of the expert committee, none of whom has been approached by the CICC individually to provide expertise. One of many issues (as I’ve written about before) is that mediation outside China is considered to be its own type of expertise, different from arbitration (an area in which a number of experts are well known). Another question is whether the expert committee is made known internally within the SPC as a platform through which others in the SPC can access foreign expertise.

For all these reasons—the limited time that CICC judges have to devote to specific CICC matters, the focus on progressing Chinese substantive & procedural law through CICC decisions, the possible use of the lower courts to assist the CICC to evolve international commercial rules appropriate for China, and the flexible use of the expert committees–in the short to medium term I see the work of the CICC as more domestically focused, as the SPC does its part to progress Chinese domestic and foreign-related legislation, or as the current slogan has it “统筹推进国内法治和涉外法治.”

 

Update on judicial interpretations

One of the most important functions (职能) of the Supreme People’s Court (SPC) is issuing judicial interpretations (司法解释), which it issues for the most part unconnected with a specific “case or controversy” but rather drawing on many cases that have previously arisen in the lower courts. They are a critically important way that the SPC unifies the application of law. The extent to which SPC judicial interpretations are binding is one of several fundamental uncertainties attaching to this function, as the National People’s Congress (NPC) Standing Committee is authorized to review them and may require amendments to them or more, and it is unclear how much they bind institutions outside the court system.  But what can be said is that they are critically important to the operation of the Chinese legal system, The SPC, particularly its headquarters in Beijing,  focuses on judicial interpretation work for reasons connected with the slow pace and abstract language of Chinese legislation, although Chinese (and foreign) scholars, lawyers and other commentators sometimes criticize the SPC’s expansive reading of laws. 

About one month ago (in June 2021), the SPC updated its 2007 Judicial Interpretation Work Provisions (JI Work Provisions) in this decision  关于修改《最高人民法院关于司法解释工作的规定》的决定).  [See a refresher on the legislative basis of judicial interpretations, if needed.] The JI Work Provisions describe the types of judicial interpretations the SPC can issue, which institutions can propose drafting judicial interpretations, the drafting process, the promulgation process, the filing process, etc. The update was a minimally invasive one, adding to Article 6  a new category of documents, now classified as judicial interpretations–rules (规则). Rules are defined in a new paragraph of Article 6, as follows: “The judicial interpretations regulating the trial practices of people’s courts shall adopt the format of “Rules”–the intention being that when the SPC issues court rules, they should be in the form of 规则. That means that from now on there are five types of judicial interpretations:

The amendments underwhelm this observer, who had read many SPC documents signaling that many changes were needed. Two of those are Article 26 of the 2019 Fifth Five-Year Judicial Reform Plan Outline and Article 2 (3) of the  2020 Opinions of the Supreme People’s Court on Improving the Work Mechanism for Unifying the Standards for Application of Law (Opinion on Improving the Work Mechanism) :

#26 Improve mechanisms for the uniform application of law. Strengthen and regulate work on judicial interpretations, complete mechanisms for researching, initiating, drafting, debating, reviewing, publishing, cleaning up, and canceling judicial interpretations, to improve centralized management and report review mechanisms….

Article 2 (3) of the Opinion on Improving the Work Mechanism:

Judicial interpretation is an important part of the socialist judicial system with the Chinese characteristics and an important duty of the Supreme People’s Court. For special issues of application of laws in judicial work, especially the unspecific and unclear provisions of the laws which result in difficulty in understanding and enforcement, changes in circumstances which result in different understanding of the basis for handling cases, different standards used for rulings of specific cases in same type and other relevant issues, the Supreme People ’s Court shall strengthen investigation and study and formulate judicial interpretations in a timely manner strictly in accordance with the law. In respect of the judicial interpretations involving the interests of the people or major and complicated issues, public comments shall be solicited openly. It is imperative to further standardize the procedures for formulation of judicial interpretations, improve the mechanism for research, project initiation, draft, argumentation, review, promulgation, clearing and repeal and improve centralized management and record-filing review mechanism.

The question is, why after all this language about providing more details about judicial interpretation procedures, did the SPC leave the rules unchanged, except for adding one new category of judicial interpretations? The SPC’s press conference announcing the 2020 Opinion on Improving the Work Mechanism does not shed any light on this question.   

I surmise that the SPC leadership decided that it was most prudent to leave the regulations unchanged because it is best to leave maximum flexibility in the drafting process. The language in the documents above on improving judicial interpretation procedures remains significant as reminders to the SPC Research Office and others involved in the judicial interpretation drafting process. The Research Office is the gatekeeper for reviewing proposals, examining and coordinating the drafting of judicial interpretations. It also acts as the liaison when other central institutions forward their draft legislation and judicial interpretations to the SPC for comments, coordinating the SPC’s response with other divisions and offices, with a knowledgeable person noting that “the view of the Research Office prevails.”

The SPC liaises with the NPC Legislative Affairs Commission during the judicial interpretation drafting process to harmonize the views of the institutions. In an article published on 21 July by China University of Political Science and Law Professor Luo Xiang on appraisals by administrative institutions in criminal cases, he compared an article in the Criminal Procedure Law judicial interpretation issued for comment with the final version, noting that “the Office for Criminal Law of the Legislative Affairs Commission of the National People’s Congress clearly held a negative attitude [to the language of the article in the original draft] “(全国人大法工委刑法室则明确持否定态度).

As I understand the language in the two documents quoted above, they serve as further reminders that the Research Office staff should review the package of documents that come before them before the documents are forwarded to the SPC Judicial Committee (Adjudication Committee) for consideration with these factors in mind (among others):

  • does it clear that the divisions (tribunals) involved have done sufficient research and investigation about the issues that arise in practice;
  • is it sufficiently comprehensive, with the right amount of discretion given to the lower courts and accommodate varying judicial competence, economic and social development; and
  • does it incorporate the views of relevant internal and external stakeholders?

On the topic of flexibility in procedures, take the example of public consultation. As I mentioned in January,  the Regulations on JI Work Provisons do not specify a minimum (or maximum) time period for soliciting opinions from the public. 

Reviewing the comment periods for some of the other judicial interpretations and other judicial documents for which comments were solicited in 2020, the deadlines appear to vary significantly.  I surmise that the deadline is set by the team in charge of drafting the judicial interpretation. In November 2020, the SPC solicited public comments on proposed amendments to its judicial interpretations related to the taking of security for 18 days, while comment periods for other judicial interpretations and judicial documents seem to be often one month and sometimes two months

It appears many judicial interpretations do not involve public consultation. Consulting the public is optional, unlike consulting internal and other official stakeholders. Article 17 of the JI Work Provisions requires approval by two SPC leaders–the vice president in charge of that type of issue, plus either the court president or the executive vice president (currently Justice He Rong). As I wrote in my recently published book chapter, a review of SPC judicial interpretation public consultations reveals that few, if any, have been in the area of criminal law or criminal procedure law. One experienced SPC judge gave his view of why that was so:

It’s the SPC’s bureaucratic nature! It thinks that the power to draft interpretations is with it and it is completely within its ability to draft good judicial interpretations. So therefore no democratic procedure has been formed to broadly consult different parts of society during the drafting process. The practice always has been internal consultation, generally consulting gongjianfasi [公检法司] [public security, procuratorate, courts, and administration of justice], and experts, the various divisions and offices of the SPC, and then it is submitted and approved. If timing is rushed, one or two experts will be consulted.

My book chapter, describing what I called “gated community” procedures,  explores other reasons as well.

Another topic mentioned by the documents cited above is project approval or initiation, also discussed in further detail in my book chapter. Since 2018, the SPC has provided the domestic and international professional world with more transparency about its judicial interpretation agenda by making public the document by which the SPC leadership gave project approval (立项) to proposals for drafting judicial interpretations. The SPC has a yearly plan for drafting judicial interpretations, as set out in the JI Work Provisions, analogous to the National People’s Congress (NPC)’s legislative plans. It should be noted that the JI Work Provisions do not require the project approval document to be made public. This year, the judicial interpretation agenda has not [yet] been released. It is unclear whether it is a matter that was overlooked in the flood of other documents issued or for some other reason.

 

Invisible Belt & Road Disputes

slide from my presentation

In academic and many professional discussions of Belt & Road Initiative (BRI) disputes, the focus is on disputes between the Chinese and foreign parties.  Few mention disputes between two or more Chinese parties but linked with a BRI project.   (Professor Vivienne Bath of the University of Sydney Law School is one of the few exceptions.)   These are what I call “invisible  BRI disputes,” because few in the academic world and a small group in the professional world have noticed them.

I mentioned these type of disputes during my keynote speech at the University of Pittsburgh School of Law and Asian Studies Center’s “Deals and Disputes: China, Hong Kong, and Commercial Law” webinar when I spoke about the role of the Supreme People’s Court (SPC) in developing “Chinese international commercial law” (as I defined the term).–as can be seen in the slide above.

Although I made inquiries with some authoritative persons in the world of Chinese arbitration and the judiciary,  they were unable to give even a vague estimate of the number of these invisible BRI disputes, but all had the sense that they have been increasing and will continue to increase, both in arbitration and in the courts, as more projects undertaken by Chinese contractors overseas encounter unanticipated problems and enter into dispute settlement proceedings with one or more foreign counterparties and thereafter seek to claim their losses from their Chinese subcontractors (or sub-subcontractors) or suppliers or prevent their banker from paying out under a demand guarantee (or counter-guarantee).

The Belt and Road Initiative: Legal Risks and Opportunities Facing Chinese Engineering Contractors Operating Overseas (Engineering Contractors Book), written by a group of highly experienced Chinese legal advisers to major Chinese contractors, identified some of the risks to Chinese companies when doing contracting projects overseas.  As this and other sources have written, Chinese contractors are often engineering, procurement, construction (EPC) contractors in BRI jurisdictions.

This blogpost looks at three types of business risks leading to invisible disputes, as identified by the authors of the Engineering Contractors Book and others advising Chinese engineering contractors.  I look forward to others taking this topic forward.

Invisible Dispute #1

The Engineering Contractors Book said of the risks of subcontracting to other Chinese companies: “illegal subcontracting and multilevel subcontracting has become one of the biggest risks to Chinese contractors nowadays…[T]he choice of subcontractor is very important, which will result in one honors all; one damns all.” The book gives this example of invisible dispute #1.

 Company A is a large [Chinese] international contractor… Company A undertakes the general contracting, and completes sets of equipment, engineering consultation and engineering design, project management and engineering supervision, installation and debugging and technical services of various domestic industrial projects. A project in Country F in Southeast Asia was developed and executed by two subsidiaries of Company A: Company B and Company C. Company B is a trading company. This was the first time that it carried out foreign projects. Previously, Company B had no overseas project experience and personnel with relevant experience. Company C is an enterprise whose main business is project design, debugging and tests. In the selection of equipment suppliers, materials suppliers and other suppliers, Company B chose enterprises that had cooperated with Company A in other projects. Problems concerning these enterprises occurred during the installation, debugging and operation process, resulting in project delay, repeated procurement and increased costs. In the stage of commissioning and trial, Company C subcontracted the work to Company K, and Company K subcontracted to Company P, which was also a subcontractor of the employer. This subcontracting mode caused many problems, which led to project delay and triggered the employer’s claim.

According to a recent article in the Chinese press, about 70% of these disputes are heard in Chinese domestic arbitration.  A legal adviser to a provincial-level state-owned engineering contractor wrote recently about several of such cases heard in the courts.

In correspondence, an arbitrator who has heard these cases commented:

subcontracting and multilevel subcontracting are common phenomena, especially overseas. When the contractor cannot finish on time, the employer looks to the local construction team….

these cases are troublesome.  The problem is obtaining the crucial evidence, not because of any local restrictions, but because after projects go into operation, there are major changes to the site [of the construction project], so loss is difficult to determine. [In one case[ there were several boxes of peripheral and circumstantial evidence, in English, Arabic, and Chinese, but they did not form a chain of evidence.

Invisible Dispute #2

The authors of the Engineering Contractors Book wrote about demand guarantee risk.  In their view, fraudulent claims by the employer (and beneficiary of a demand guarantee) in a construction project are a significant risk because some employers may make claims in bad faith; international legal harmonization on the issue of fraud in demand guarantees is insufficient.  Invisible dispute #2 arises when an employer seeks to draw on the demand guarantee and the Chinese contractor files a claim against its bank, requesting the court to issue an injunction to stop payment under the demand guarantee on the basis of fraud.  Sometimes the project owner’s overseas bank is added, involving demand guarantees given by a Chinese contractor operating overseas and its bank. One example was mentioned in an earlier blogpost and another example is found in the deal list of a leading Chinese disputes lawyer:

Represented Beijing xxxx International Engineering Technology Co., Ltd. in an overseas construction letter of guarantee dispute before the ….. High People’s Court (first instance) and the Supreme People’s Court (second instance)–

The hearing of cases involving demand guarantees (standby letters of credit) appears to be an important area in which Chinese style case law will supplement the principles in the Civil Code, its relevant judicial interpretation, and the SPC’s 2016  judicial interpretation on independent (demand) guarantees.  At the end of last year (2020), the Shanghai Higher People’s Court issued a policy document on improving the hearing of foreign-related financial cases  (上海法院服务保障进一步扩大金融业对外开放若干意见), one point of which calls for the courts to improve the hearing of demand guarantees. The policy document was accompanied by typical cases (典型案例), one of which was a demand guarantee case heard by the Shanghai Financial Court.

I expect two further authoritative decisions will harmonize how legal and finance professionals understand Chinese law related to demand guarantees.  Those decisions will be made in two cases that the China International Commercial Court (CICC) has heard but has not yet decided. The cases involve demand guarantee (standby letter of credit) issues and the question of the standard for fraud and the issuance of an injunction.  If the SPC takes a case as a CICC case, it means that the legal issue is considered important enough to require a panel of five Supreme People’s Court (SPC) judges to hear the case.  The decisions will be soft precedents, ones that fill in a gap in statutory law and judicial interpretations.

Invisible Dispute #3

The authors of the Engineering Contractors Book wrote about supplier (often Chinese supplier) risk:  “if contractors fail to enhance the selection and management of suppliers, they are likely to face difficulties during the project execution. In practice, there are many cases in which contractors suffer losses due to improper selection or poor management of suppliers…Some suppliers use various unreasonable means to guarantee their profits in the bidding and follow-up process, which will inevitably bring greater risks to contractors.” My comments here are limited to Chinese supplier risk.

One example that can be identified most easily is related to the construction of Justice House in Tbilisi, Georgia.  Disputes over the quality of equipment and related issues ended up in litigation in the Sichuan Higher People’s Court.

Concluding thoughts

It is understood that first and third type of disputes may be heard by Chinese arbitral tribunals or courts, depending on whether the contracts have arbitration clauses, while the demand guarantee cases are generally heard in the courts.  Chinese legal professionals have commented that these cases are challenging for both arbitral tribunals and the courts to hear, particularly if much of the evidence is outside of China and especially if technical expertise is needed. Another issue raised by one of the authors cited is the choice (application) of law, as some jurisdictions may require that local law apply to any subcontracting, but Chinese courts tend to apply Chinese law.

Two recent articles in the Chinese professional legal press by a senior Chinese construction lawyer focused on a recent initiative to establish a qualification system for expert witnesses in construction engineering disputes.  It is even more challenging for Chinese courts to hear disputes that may involve foreign technical expertise.  Yet another issue relates to evidence formed abroad.   A third issue, not mentioned in this blogpost, relates to the greater need for dispute adjudication boards in construction disputes heard in the Chinese courts. Both the China International and Economic and Trade Arbitration Commission (CIETAC) and the Beijing Arbitration Commission have such rules in place, although with different titles.

These invisible BRI disputes raise several of many areas of law that need further work  as Chinese companies operate internationally but want to have related disputes heard at home, and China seeks to progress domestic and foreign-related legislation, or as the current slogan has it “筹推进国内法治和涉外法治.”

____________________________

Many thanks to Sun Wei, partner with the Zhong Lun Law Firm, and some authoritative persons for sharing their insights. The author alone is responsible for the above views.

SPC WHITE PAPERS & ANNUAL REPORTS WITH ENGLISH TRANSLATIONS

I’ve just created a page with links to SPC white papers and annual reports with English translations. As I commented there, these reports are useful for the professional and academic public outside of China. It would be a service to the professional and academic publics inside and outside of China if these reports could be accessed in one place on the SPC’s official website in their Chinese and English versions (to the extent there are English versions). For the English versions, making them more accessible could also be understood (for some) as telling the story of the Chinese courts better to the English-reading international public. Please use the comment function to suggest additional links and additional reports and make corrections.

The Supreme People’s Court & the Development of Chinese International Commercial Law

I am very honored to have been the first keynote speaker of the webinar “Deals and Disputes: China, Hong Kong, and Commercial Law” held on May 18-21 (2021).   The webinar was organized by the University of Pittsburgh, with its School of Law’s Center for International Legal Education working together with its Asian Studies Center. Many thanks to Professors Ronald Brand and James Cook for the kind invitation.   For those who missed it, the recording of my presentation is now available on the Youtube channel of the Center for International Legal Education.

I spoke on the Supreme People’s Court (SPC) and the Development of Chinese International Commercial Law (as I defined it).  My presentation synthesizes many points that I have made separately on this blog and should be useful to students or others seeking to understand several aspects of the work of the SPC.   Many thanks to Professor Pamela Bookman and Mary Buck Young for taking the time to make insightful comments on earlier drafts of my Powerpoint slides. Special thanks to (one of) my research assistants, Yuan Ye, for his work in transforming SPC statistics into a more understandable form and translating them into English.

Mainland-Hong Kong Insolvency “Arrangement” Forthcoming

For those for whom the timing is right, tomorrow’s (14 May afternoon) event gives the interested person an opportunity to watch a discussion in real-time concerning a new hard-law legal “Arrangement”  (it is now clear that the document is not so entitled) between the Mainland (presumably the Supreme People’s Court (SPC) and the Hong Kong Special Administrative Region (Hong Kong SAR) on bankruptcy (insolvency) law and learn about relevant recent updates. The document is the Conference Summary [Meeting Minutes] on Procedures for the Mutual Recognition of and Assistance in Insolvency Procedures by the Courts of the Mainland and the Hong Kong SAR (内地与香港特别行政区法院相互认可和协助破产程序的会谈纪要).  At the same time, the SPC is releasing an Opinion approving pilot projects to implement the Conference Summary  最高人民法院关于开展认可和协助香港特别行政区破产程序试点工作的意见.  A pilot project approach is usual when the SPC wants to test whether procedures are workable before implementing them nationwide.

social media posting by one of Hong Kong’s leading barristers chambers describes it as the “most momentous cross-border insolvency development in a generation. ”  Although it is not so stated, I surmise (by reviewing the press conference announcing the Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region” (the Supplemental Arrangement (关于内地与香港特别行政区相互执行仲裁裁决的补充安排), that the official signing of the new insolvency Arrangement will be held in the morning, after which a press conference will be held. My guess, based on that press conference, is that  SPC Vice President Yang Wanming (杨万明副院长) will sign on behalf of the SPC and that Hong Kong SAR Secretary for Justice Teresa Cheng will sign on behalf of the Hong Kong SAR Government.  The link to the SPC’s press conference indicates that Vice President Yang Wanming will in fact sign and that Judge Si Yanli will participate in the signing ceremony and the press conference.

According to the social media posting above, Mr. Justice Jonathan Harris, current Companies and Insolvency Judge of Hong Kong’s High Court, will be delivering a keynote speech during the afternoon Forum announced above.   My guess (without any factual basis) is that Judge Si Yanli will give a keynote as well.  The Arrangement is likely to have involved a great deal of hard work on the part of all involved in the drafting.

Justice Harris’s judgments contain valuable insights into some of Hong Kong’s cross-border insolvency-related issues, such as the intersection between stock exchange listings and insolvency.  His decision in the Winding-Up Proceedings of China Huiyuan Juice Group is a good example:

As I explained at the outset of this decision the court is hearing many petitions to wind-up listed companies whose businesses are in the Mainland.  Since the court resumed hearings in May more than half the petitions I have heard have involved listed companies. Remarkably petitions to wind-up Hong Kong incorporated companies operating domestic businesses are currently a minority…  What is now quite clear is that the use of the group structures I have described present difficulties.  It will be useful if I describe these and what I anticipate will be their impact for creditors and shareholders in Hong Kong and other jurisdictions….

As will be apparent from this decision the practice has developed of Mainland businesses listing in Hong Kong using corporate vehicles which have no connection with the Mainland, which is commonly the COMI [Center of Main Interest], , or Hong Kong where the business is to be listed.  The structure is made more complicated by group architecture which involves inserting between the listed company and the mainland companies at least one, and my impression is commonly more than one, intermediate subsidiary incorporated in a different offshore jurisdiction.  As this decision demonstrates this structure creates a significant barrier to steps being taken by creditors and shareholders to enforce rights using the courts of Hong Kong, which is the legal system that they have probably assumed they will be able to access if they need to take steps to enforce their legal rights against a company listed here.

As I have previously written,  cross-border bankruptcy (insolvency) law is an area of particular focus of the SPC.  Phrases in two 2020 SPC Opinions signal this Arrangement. Article 16 of the November 2020 SPC Opinion  on Providing Support and Guarantees for Shenzhen to Build Itself into a Pilot Demonstration Zone for Socialism with Chinese Characteristics (最高人民法院关于支持和保障深圳建设中国特色社会主义先行示范区的意见) states:

Promote the establishment of a cross-border bankruptcy recognition and assistance mechanism推动建立跨境破产认可与协助机制.

Additionally, Article 12 of the September 2020 SPC  Guiding Opinions on Further Expanding People’s Court Service Safeguards for Expanding the Opening Up to the World (Open Policy Guiding Opinions)) (最高人民法院关于人民法院服务保障进一步扩大对外开放的指导意见) contains the following (translation thanks to Chinalawtranslate):

12. Properly handle cross-border bankruptcy [insolvency], financial, and enforcement cases. Adhere to the principle of equal protection for similar claims, actively participate in and promote the formulation of international treaties on cross-border bankruptcy [insolvency], improve the coordination mechanisms for cross-border bankruptcy [insolvency] and protect the rights and interests of creditors and investors in accordance with the law…12.妥善处理跨境破产、金融、执行案件。 坚持同类债权平等保护原则,积极参与和推动跨境破产国际条约的制定,完善跨境破产协调机制,依法保护债权人和投资人权益。

This single issue illustrates the close reading skills needed to understand SPC Opinions.

Further analysis of the implications of the Arrangement will need to follow its release.

Soft and Hard Law Arrangements & Other Agreements Between the Mainland Authorities and the SAR Governments

1st Joint conference meeting on the Hong Kong BRI Arrangement

If you have never heard of hard and soft law  Arrangements (安排) and other agreements between Mainland authorities and the Hong Kong and Macau Special Administrative Region (SAR) governments, do not be surprised.  The classification is my own and I see it as useful to capture the types of Arrangements and other soft law agreements that have been signed between certain Mainland authorities and the Hong Kong SAR and the Macau SAR, as well as Arrangements between the two SARs. This blogpost highlights several of the more important soft law Arrangements and other agreements between the mainland authorities and the SAR governments.  

This classification harmonizes with the analysis of Professor Wang Heng of the University of New South Wales concerning Belt & Road Initiative Agreements.  

Definition of Arrangements

Although I have written previously about Arrangements between the Supreme People’s Court (SPC) and the Hong Kong Special Administrative Region (SAR) Government, I have not seen an official definition of “Arrangement.”     It appears to be used as a form of agreement between certain Mainland authorities  (intended to include institutions such as the Supreme People’s Court and the Standing Committee of the National People’s Congress as well as ministries and commissions under the State Council ( and it seems some counterparts at the provincial level) and the government of the Hong Kong or Macau SAR.  Some are between the two SARs. I have not seen an equivalent to the Law on the Procedure for the Conclusion of Treaties.  Perhaps guidance exists internally. I surmise (from my blogpost on the recent SPC Arrangement) that the Hong Kong and Macau Affairs Office supervises Arrangements.

What I had not realized until recently that Arrangements are far more numerous and cover a broader range of areas than most legal professionals outside of China (including me) are generally aware of.   Both types of Arrangements can include affiliated measures, such as joint [steering] conferences 联席会议 (related to one of my recent posts ) and yearly implementation measures, such as agreed areas for cooperation.   

Hard and Soft Law Arrangements

 The “Hard Law Arrangements” often have content that is somewhat analogous to a treaty between sovereigns-that is, they have normative content, while the “Soft Law Arrangements” have more soft law content, some more analogous to the ones Professor Wang Heng discussed in the BRI content, while others have language found in domestic Chinese government documents.  I will borrow the definition that Professor Wang Heng uses in his article: soft law refers to quasi-legal obligations or law-like promises that are not legally binding but may affect state behavior.  His definition draws on earlier work, such as that of my colleague Professor Francis Snyder.  (My colleague has a forthcoming book chapter on soft law.)

Professor Wang Heng describes Belt & Road Initiative (BRI) primary agreements (soft law agreements) as largely emphasizing project development rather than rule development. This is also seen to some extent with “soft law Arrangements.” 

“Hard Law” Arrangements

“Hard Law Arrangements” and other “hard law” agreements between mainland authorities and the Hong Kong and Macau SARS are well-known, so this section only mentions a few of the most prominent: 

Professor Henry Gao noted in an article that during the negotiations leading to the conclusion of the CEPAs, it had been suggested that they should be called free trade agreements (FTAs) but they were named  “Closer Economic Partnership Arrangements” instead. He commented that in substance, the two CEPAs are no different from the other FTAs around the world.

For those interested, the Ministry of Commerce (MOFCOM) has a webpage that consolidates the related Macau supplemental agreements.

  •  Dispute Resolution Arrangements

Hong Kong’s Ministry of Justice has a webpage (available in multiple languages) with links to arbitration-related Arrangements as well as recognition and enforcement of civil and commercial judgments Arrangements.  The webpage also links to Arrangements involving other Hong Kong SAR government departments. It appears that some agreements mentioned on that webpage may be soft law documents, but I have not seen the full text of some of these documents and so cannot confirm.

An Arrangement on the Mutual Recognition and Enforcement of Arbitral Awards between the Supreme People’s Court and the Macau SAR Government also exists.

Many other hard law Arrangements have been signed, but I have not seen a single repository of these documents. It is my hope that the Hong Kong Government can do so.

Soft Law Arrangements and Other Soft Law Agreements

It appears that less attention has been paid to soft law Arrangements and other soft law agreements.  There are also memoranda of understanding (MOU), with analogous usage to those in BRI projects. A number of the important ones are highlighted below.

  • July, 2017 National Development and Reform Commission, People’s Government of Guangdong Province, Government of the Hong Kong Special Administrative Region, Government of the Macao Special Administrative Region Framework Agreement  on Deepening Guangdong-Hong Kong-Macao Cooperation in the
    Development of the Greater Bay Area Greater Bay Area (GBA Framework Agreement)

This Framework Agreement is a soft law agreement that links hard and soft law content. In discussing BRI soft law agreements, Professor Wang Heng mentions Project-Linked Agreements and Mechanism-Creating Agreements and mentions that some combine both. The GBA Framework Agreement mentions some of the above hard law Arrangements, with a great deal of new soft law content aimed at promoting the development of the GBA.  It flags what was then forthcoming BRI Arrangements. Among the goals cited:

deepen co-operation between the Bay Area and related countries and regions in… legal and dispute resolution services… and to build an important support area for pursuing the Belt and Road Initiative.for Hong Kong…

establish a centre for international legal and dispute resolution services in the Asia-Pacific Region…

This is the document that attracted my interest in “soft law Arrangements.”  Several articles relate to developing Hong Kong’s role in dispute resolution, such as:

2.To support Hong Kong in developing high value-added maritime services, including…maritime law and dispute resolution,

26. To support Hong Kong in establishing itself as a centre for international legal and dispute resolution services in the Asia-Pacific region to provide relevant services for the Belt and Road Initiative.

The Hong Kong BRI  Arrangement links to Article 34 of the SPC’s 2019  Opinion On Further Providing Judicial Services and Guarantees by the People’s Courts for the “Belt and Road” Initiative (BRI Opinion #2). That article contains language about supporting the Hong Kong SAR to develop as a regional legal service and dispute resolution center and Hong Kong playing a more important role in jointly developing the BRI:

The development of the regional legal service and dispute resolution center of the Hong Kong Special Administrative Region (“Hong Kong SAR”) shall be further supported, the cooperation between arbitration institutions in Hong Kong such as Hong Kong International Arbitration Centre and arbitration institutions in the Mainland, the arbitration institutions in the Hong Kong SAR shall be introduced to the construction of the “one-stop” dispute resolution platform of international commercial courts… and the Hong Kong SAR shall play a more important role in the joint development of the “Belt and Road” Initiative. 进一步支持香港特别行政区区域法 律服务和纠纷解决中心的建设,支持 香港国际仲裁中心等仲裁机构与内地 仲裁机构的合作,在国际商事法庭 “一站式”纠纷解决平台建设中适当 引入香港特别行政区仲裁机构…不断发挥 香港特别行政区在共建“一带一路” 中的重要作用。

The Arrangement establishes a joint conference mechanism (that features in a number of Arrangements) comprising responsible officials from the National Development and Reform Commission (NDRC), the Hong Kong and Macao Affairs Office of the State Council and other relevant departments as well as senior representatives of the HKSAR.  The SPC has participated in at least two of these meetings, but from the reports on the meetings, does not appear to be a joint conference member institution.

The  Hong Kong BRI Arrangement could be linked to the 2019 Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region and the 2020 Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong SAR. Although  BRI Opinion #2 explicitly restates the Chinese government’s desire that more international commercial disputes (including BRI ones) be resolved in China, this clause is also a recognition that the Hong Kong International Arbitration Centre is often selected in contracts between Chinese companies and foreign companies, including in BRI disputes, as evidenced in Professor Matthew Erie‘s recently published article.

Under the Arrangement, the two sides have agreed, in related documents, upon major areas of work and in 2020, allocation of responsibilities and have established an annual joint conference. It is unclear whether a similar set of documents exist for the Hong Kong BRI Arrangement.

The Macau and Hong Kong BRI Arrangements are quite different from one another and deserve further analysis. Under the Macau BRI Arrangement, for example, the Macau SAR Government undertakes to be a platform for liaison with Lusophone countries.

It is unclear why there is no courtesy English translation of this Arrangement (as there is for the Hong Kong BRI Arrangement). The content of this Arrangement provides insights into plans for Hong Kong and the Mainland to cooperate in the area of science and technology, but time does not permit further analysis.

A final comment is that it appears to be difficult to locate the full text of some of the soft law Arrangements reported.

More to Come?

I surmise that the Hong Kong and Macau SARs’ futures will involve more hard and soft law Arrangements and other agreements with the Mainland.  The topic of these agreements deserves closer attention. I hope that someone with an interest, the time, and the language skills can take this research forward. 

 

RECORDING & REVIEW PT. 8: “SAME LIFE, DIFFERENT VALUES,” OR HOW THE NPC LEGISLATIVE AFFAIRS COMMISSION REVIEWS JUDICIAL INTERPRETATIONS

Written by Dongyu Sun.  Edited by Susan Finder and Changhao Wei.

This post also appears on the NPC Observer.

On December 15, 2005, a loaded truck rolled over on a mountain road in Chongqing, crushing a trishaw carrying He Yuan and her two friends to school. All three perished in the accident. What thrust this tragedy into the national spotlight, however, was the drastically different amounts of compensation their families received. The trucker’s employer settled with the families of Yuan’s friends for over 200,000 RMB each, but was willing to pay hers only 80,000 RMB—because she, unlike her classmates, had a rural hukou (or household registration).[1] The company cited a 2003 Supreme People’s Court (SPC) interpretation on the application of law in personal injury cases (2003 Interpretation), which created two separate standards for compensating the deaths of urban and rural residents.

As a result of this effectively hukou-based rule, countless victims’ families have found themselves in the same position as Yuan’s. The Chinese public has dubbed this phenomenon “same life, different values” [同命不同价] and has persistently criticized the 2003 Interpretation. Some citizens have requested that the NPC Standing Committee (NPCSC) conduct a constitutional review of the Interpretation.

It was not until 2020 that the NPCSC’s Legislative Affairs Commission publicly addressed these requests in its annual report on “recording and review” (R&R) [备案审查]. This report’s timing and content are significant. Below, we will first take a closer look at the 2003 Interpretation and the controversy surrounding hukou-based compensation standards, before returning to the Commission’s report.

The SPC’s 2003 Interpretation

Under article 15 of the 2003 Interpretation, in a civil case where the deceased victim was an urban resident, the defendant must generally pay twenty times the previous year’s per capita disposable income of urban residents of the relevant province for the victim’s death. For a victim who was a rural resident, the previous year’s per capita disposable income of rural residents[2] is used as the base instead. The urban per capita disposable income is consistently several times higher than its rural counterpart across China. In practice, courts mainly used the victim’s hukou to determine the applicable standard. Article 12 of the 2003 Interpretation contains similar residence- (hence hukou-) based compensation standards when the victim has been permanently disabled. At the time, the standards in the 2003 Interpretation were considered appropriate for China and in line with official policy that made distinctions based on hukou.

Within a few years, the SPC publicly acknowledged that the dual standards created inequities between urban and rural victims. Then-SPC President Xiao Yang told media in 2007 that the SPC had already formed “a preliminary view” on “same life, different values,” and would issue new rules after that year’s NPC session. But in 2008, an SPC vice president disclosed that it was not possible for the SPC to reach a consensus on a replacement standard.[3] Instead, the SPC issued measures in 2006 and 2011 directing the lower courts to consider factors in addition to hukou (such as a victim’s “habitual residence”) in applying the 2003 compensation standards. Basic level courts encountered many difficulties in implementing this guidance, however, so hukou largely remained the determining factor.

The issue of the dual compensation standards arose during the drafting of China’s Tort Liability Law [侵权责任法].[4] One draft would have set a uniform national standard for death compensations, based on the average annual salaries of urban employees nationwide, while another would have provided an individual-based rule.[5] The NPCSC in the end did not adopt either provision and left the rules in the 2003 Interpretation intact. The Tort Liability Law did make one limited change in response to cases like He Yuan’s: under article 17 (now codified as article 1180 of the Civil Code [民法典]), if multiple people died because of the same tort, a court could award their families the same amount of death compensation without regard to their individual circumstances.

From these developments, it is clear that the authorities considered that the hukou-based rules fit the reality of unequal development of China’s urban and rural regions.[6] They thought that an individual-based rule would give judges too much discretion, but that uniform rules would either create too much burden for rural tortfeasors (if based on urban income level), or be unfair to urban victims (if tied to rural income level). So the 2003 Interpretation, plus the SPC’s flexible measures, were considered the least worst.

Fang Shimin’s Request for Review

Over the years, Chinese citizens have requested the NPCSC to review the validity of the 2003 Interpretation through its R&R process, explained here in more detail. In sum, that process is an oversight tool that empowers the NPCSC Legislative Affairs Commission (LAC) to reject a sub-statutory legal document if it deems the document unconstitutional, unlawful, contrary to the Communist Party’s major policies, or otherwise “clearly inappropriate.”

The Southern Metropolis in January 2021 reported on such a citizen request and the LAC’s reply. Mr. Fang Shimin, a retired manager of an Anhui mine company with an interest in the law, wrote to the LAC in mid-2018, arguing that the 2003 Interpretation’s hukou-based rules violated the guarantee in Article 33 of the Constitution that all citizens are “equal before the law.”

The LAC (specifically, its Office for Recording and Reviewing Regulations) disagreed with Mr. Fang. It responded to him in December 2018, after having consulted with the SPC and its own Office for Civil Law. The LAC explained that the differential compensations were constitutional because they did not in fact make up for the victims’ disabilities or lost lives, but were instead economic relief to the victims or their families. The LAC’s reply did also acknowledge that there were some issues with the 2003 Interpretation that need to be “studied and resolved,” including how to define the compensation more reasonably so that “most citizens would accept them.”

Recent Policy Change & Reform Pilots

The turning point for the hukou-based compensation rules came in late 2013, when the Communist Party decided to “accelerate” hukou reform. A few months later, the State Council issued a major policy document that called for abolishing the distinction between urban and rural hukou and replacing both with “resident hukou” [居民户口]. By February 2017, all mainland provinces had implemented this reform. The State Council also ordered companion reforms to other institutions (e.g., social welfare programs) consistent with the uniform “resident hukou” system, but one government researcher said at the time that there would be “a long way to go” before the urban-rural disparity in social benefits disappears.

After a few years of development, in April 2019, the Party Central Committee and the State Council issued a joint policy document to further hukou reform and to promote integrated development of urban and rural areas. The document specifically requires “reforming the personal injury compensation system and equalizing compensation standards for urban and rural residents.”

To implement this directive, the SPC soon required provincial-level courts to initiate pilot programs to equalize compensation standards. According to our research, almost all courts have decided to conduct the pilots within the whole province, while a few limited their scope to a few designated cities. The majority of provinces are experimenting with uniform compensation standards in all civil cases involving personal injury, but a few are testing them in only a subset of tort cases, for instance, those arising from traffic accidents. As for the new compensation standards, most provinces are now applying the urban standards under the 2003 Interpretation to all victims, whereas some are trying out new formulae, such as the per capita disposable income of all residents of a province.

The pilots are still underway as of this writing. The SPC has not indicated when they would end.

The LAC’s Report

It was against this backdrop that the LAC again responded to citizens’ requests to review the SPC’s 2003 Interpretation. According to its 2020 R&R report, some citizens (like Mr. Fang before them) argued that “the inequalities in judicial trial practices that have resulted from the [2003 Interpretation’s] different calculation standards were inconsistent with the relevant constitutional spirit”—namely, the equality principle.

The LAC responded:

After review, we think that as the society develops and makes progress, the State has proposed the integrated development of urban and rural areas, and the gaps between urban and rural development and the residents’ living standards will gradually narrow, so the differences between standards for calculating compensations for personal injury to urban and rural residents should accordingly be abolished.

我们审查认为,随着社会发展进步,国家提出城乡融合发展,城乡发展差距和居民生活水平差距将逐步缩小,城乡居民人身损害赔偿计算标准的差异也应当随之取消。

The LAC then mentioned the ongoing pilot programs to equalize the compensation standards as authorized by the SPC and reported that it had “advised” the SPC to “timely” amend its 2003 Interpretation after “summarizing lessons learned from the pilots.”

It thus appears that the LAC dodged the constitutional question raised by the citizens’ requests. Instead, it relied on two other grounds under the R&R’s governing rules—new state policies and changed realities—to disapprove the hukou-based rules in the 2003 Interpretation. Yet, curiously, Liang Ying, head of the LAC’s Office for Recording and Reviewing Regulations, affirmed the constitutional nature of the LAC’s review of the 2003 Interpretation in an interview with the Legal Daily. If so, then why did the LAC was not more forthcoming about its true reasoning in its official report?

It might have concerns for the ramifications of using the Constitution to invalidate the SPC’s hukou-based standards. Although the post-2014 hukou reforms have removed the urban-rural classification, they have neither ended the hukou system nor instantly improved the urban-rural inequality created by the prior classification. Most citizens continue to obtain critical social services and benefits—compulsory education, healthcare, affordable housing, unemployment benefits, pension, veterans’ benefits, among many others—from the local government at the place of their hukou. (Rural migrants may access urban benefits, but only if they meet the often-stringent residency requirements, especially in megacities.[7]) Except under a few now-integrated welfare programs, rural residents in general still receive social entitlements of inferior quality. For instance, the State Council maintains separate rules for the urban and rural subsistence allowance programs. And by end of 2020, only 7 of 31 mainland provinces had achieved (rough) parity of subsistence allowances between urban and rural residents; in all other provinces, eligible urban residents received at least 20 percent (and up to 130 percent) more allowances than rural residents.

Were the LAC to reject officially the 2003 Interpretation’s dual compensation standards on constitutional grounds, it would render other hukou-based rules—rules that disfavor rural residents—susceptible to the same constitutional challenge. By contrast, relying on policy and societal changes that are specific to personal injury compensation would give the LAC more leeway to turn away constitutional attacks on other hukou-based rules. By framing the controversy over the 2003 Interpretation as one of policy, therefore, the LAC can signal that other hukou-based rules are open to change, but also make clear that the changes will come only at the authorities’ discretion.

_____________________________________________

SUN Dongyu graduated from the School of Transnational Law of Peking University in 2018, with a Juris Doctor degree in American law and a Juris Master degree in Chinese law. He was recently awarded a German Chancellor Fellowship by the Alexander von Humboldt Foundation in Germany for the year 2021–22. He currently works as a research assistant to Professor Susan Finder. 

Changhao Wei is a Postdoctoral Fellow at Yale Law School’s Paul Tsai China Center, where he focuses on China’s legislative process and constitutional enforcement mechanisms. He is the founder, manager, and editor of NPC Observer, a website that covers China’s national legislature, the National People’s Congress.

_    _    ___-

[1] Rural hukou was officially “agricultural hukou” [农业户口], and urban hukou “non-agricultural hukou” [非农业户口].

[2] The Interpretation uses the term “per capita net income of rural residents” [农村居民人均纯收入], but the National Bureau of Statistics has stopped using that metric since 2016 and has replaced it with the “per capita disposable income of rural residents” [农村居民人均可支配收入].

[3] See Zhang Xudong [张旭东], The Theoretical Paths to Solving the Conundrum of “Same Life, Different Values” [破解“同命不同价” 难题的理论路径], Mod. L. Sci. [现代法学], no. 6, 2008, at 97, 98.

[4] See Zhang Xinbao [张新宝], An Interpretation of the Death Compensation System in the Tort Liability Law [《侵权责任法》死亡赔偿制度解读], China Legal Sci. [中国法学], no. 3, 2010, at 22, 23.

[5] Id.

[6] Zhang, supra note 4, at 98.

[7] See, e.g., Kam Wing Chan, China’s Hukou System at 60: Continuity and Reform, in Handbook on Urban Development in China 59, 73–74 (Ray Yep et al. eds., 2019).

Integrating socialist core values into court judgments

On 18 February 2021,  the Supreme People’s Court (SPC) issued the Guiding Opinions on Deeply Promoting the Integration of  Socialist Core Values into the Analysis and Reasoning of Adjudicative Instruments (关于深入推进社会主义核心价值观融入裁判文书释法说理的指导意见 the SCV Guiding Opinion).  This Guiding Opinion is intended to guide the way SPC  and lower court judges write their court judgments and rulings (and any other judicial document issued to the public) to better incorporate the use of socialist core values and for those judgments to be better understood by the general public. 

For close observers of the SPC and the Chinese court system, the SCV Guiding Opinion came as no surprise.  That this Opinion would be issued was clear from phrases in several Party and SPC documents issued in recent years.  The SCV Guiding Opinion is important not only for what it says about the use of socialist core values in judgments and also for its guidance to judges on the analysis and reasoning in court judgments, rulings, and other documents.  

This blogpost is not intended as an extended academic analysis of socialist core values and the law, of which there are several excellent ones by Sue Trevaskes and Delia Lin.  It will address some more modest questions, such as:

  • what it says, including what it requires of SPC and lower court judges;
  • the documents linked to the SCV Guiding Opinion
  • how the SCV Guiding Opinion should be classified & whether it is binding or persuasive;
  • what a quick sampling of judgments containing socialist core values uncovers,
  • the vision of the court system portrayed by the SCV Guiding Opinion.

I have italicized my comments.

Summary of the SCV Guiding Opinion

The background for the SCV Guiding Opinion is that it is part of what is required by the Party Center to integrate socialist core values into the legal system and to promote their use in national governance.  This has been a theme in writings of Xi Jinping about the law, the Party  Plan on Building the Rule of Law in China (2020–2025), previous Party documents, and related SPC documents.  Some of those background documents are listed in a later section of this blogpost.

Article 1 provides that the underlying principles of the SCV Guiding Opinion are:

  1. a fusion of law and morality, which is linked to their fusion in traditional legal thought ( 法治与德治相结合); 
  2. people-oriented (以人民为中心), meaning that judgments should be clear to ordinary people and serve the purpose of educating them; and
  3. the organic unity of legal, political, and social effectiveness (政治效果、法律效果和社会效果有机统一 ), because by strengthening the guiding role of socialist core values it will enhance the legal, social, and rational recognition of judicial judgment.

The summary below highlights some of the principal points for Chinese judges.

Article 4 specified the types of judgments in which the use of socialist core values should be increased:

  1.  Cases involving national interests, major public interest, and widespread public concern;
  2. Cases involving epidemic prevention and control, emergency rescue and disaster relief, protection of heroes, brave actions for righteousness, legitimate defense,  and other such cases may trigger social moral evaluation;
  3. Cases involving the protection of vulnerable groups such as the elderly, women, children, and the disabled, as well as groups that have major disputes and may cause widespread concern in the society;
  4.  Cases involving public order and good customs, customs, equality of rights, ethnic religions, etc., where the parties to the litigation have major disputes and may cause widespread concern in the society;
  5. Cases involving new situations and new issues that require in-depth interpretation of legal provisions, judicial policies, etc., to guide social trends and establish value orientation;
  6. Other analogous cases.

What this means is that in cases where there is a great deal of public concern, judges should seek to use socialist core values.  Some of these, especially with national interest, major public interest, types of cases that attract Party leadership attention, or wide public concern are likely to be those in which the higher levels of the courts, or local political-legal commissions provide their views.

A significant part of the SCV Guiding Opinion contains guidance to lower court judges. I surmise that the guidance is directed towards less experienced and educated judges. My understanding is that more sophisticated judges, who are highly knowledgeable about political matters in addition to being technically highly competent, would consider the guidance unnecessary.

Articles 5-6 address judgment drafting.  These provisions relate to the  2018 SPC Guiding Opinions on Strengthening and Standardizing the Analysis and Reasoning in Adjudicative Instruments. Article 5 gives Chinese judges rules of interpretation generally in cases involving socialist core values., directing them to first look to a normative legal document (law or judicial interpretation) as the basis for judgment, the legislative intent, and supplement it with socialist core values.  Article 6 gives directions to judges in civil and commercial cases where there is no normative legal document as the direct basis for the judgment. Judges should use socialist core values ​​as the guide and custom and the most similar legal provisions as the basis for the judgment; if there is no most similar legal provision, judges should make judicial decisions in accordance with the spirit of the legislation, legislative purposes, and legal principles, and make full use of the core socialist values ​​in the judgment documents to explain the basis and reasons for the judgment.  It is this principle that has attracted dry comments from some of the legal professionals with whom I am acquainted.

Article 7 gives guidance to judges in cases involving multiple socialist core values, directing them to consider the spirit of the legislation, legal principles, provisions, and law and legal provisions to balance and select the relevant principles and values.   Article 8 directs judges to respond, if possible, orally in court, to the use of socialist core values by parties in court.

Article 13 directs judges handling cases that fall into one of the Article 4 categories, to emphasize socialist core values, in situations in which cases are discussed in professional judges committees or judicial (adjudication) committees.

Article 14 encourages socialist core values to be included in judicial training, particularly that related to the Civil Code, and Article 16 encourages competitions to find the best judgments that cite socialist core values.

Flagging the SCV Guiding Opinion

Several recent Party and SPC documents flagged the SCV Guiding Opinion.  Among them are:

  • the April 2020 Opinions of the Supreme People’s Court on Thoroughly Implementing the Spirit of the Fourth Plenum of the 19th Party Congress to Advance the Modernization of the Judicial System and Judicial Capacity– (最高人民法院关于人民法院贯彻落实党的十九届四中全会精神推进审判体系和审判能力现代化的意见)–improve and promote the in-depth integration of socialist core values ​​into the supporting mechanisms for trial and enforcement (完善推动社会主义核心价值观深度融入审判执行工作配套机制). My blogpost on that document briefly mentioned socialist core values;
  • the 2020 Plan on Building the Rule of Law in China (2020–2025), mentioned above
  • the 2019 5th Five Year Judicial Reform Plan Outline; and
  • the 4th Plenum of the 19th Party Congress.

This Guiding Opinion can be considered the progeny of the SPC’s 2015 Opinions on Cultivating and Practising Socialist Core Values at People’s Courts. 最高人民法院关于在人民法院工作中培育和践行社会主义核心价值观的若干意见, after which the SPC issued typical cases, both discussed in Sue Trevaskes’ and Delia Lin’s academic articles linked above. Their articles also discuss other related documents. As I wrote in 2018, the SPC issued a five-year plan, never made public, to incorporate socialist core values into judicial interpretations.

How to Classify the SCV Guiding Opinion

As to which basket of SPC documents the SCV Guiding Opinion should be placed, that relates to the catalog that I set out in a November 2020 blogpost on the SPC’s soft law. I classified a number of the SPC’s documents into different categories.  According to my classification, the SCV Guiding Opinion should be classified as Opinion Type 1, although the criteria I mentioned don’t fit perfectly.

As I defined it, that type of Opinion is one issued solely by the SPC, which create and transmit to the lower courts new judicial policy, update previous judicial policy, and establish new legal guidance that may be eventually crystallized in judicial interpretations and direct the lower courts, but cannot be cited in judicial judgments or rulings. They are generally linked to an important Party or state strategy or initiative. 

The SCV Guiding  Opinion is linked to an important Party and state strategy or initiative, that of promoting socialist core values. As a “guiding opinion,” it is intended to push policy forward. Article 17 of this document directs the SPC itself and lower courts to issue occasionally socialist core value-related model cases. From a quick search of recent lower court model cases, local courts have taken account of this.

Socialist Core Values in Chinese court judgments 

Chen Liang, one of my current students, sampled cases from basic level courts in various parts of China as set out in this spreadsheet. He originally found over 6000 cases that used “socialist core values.”In his research, he found three ways that courts invoke socialist core values:

  1.  elaborating a legal standard (such as Case No. 1), a trend that I had found in my own research);

In this case, the defendant (a government branch) rejected the plaintiff’s application to recognize his father, a KMT military officer, as a martyr who died in the Anti-Japanese War, and the plaintiff sued to correct this decision. The Court invoked the SCV to emphasize the importance of the recognition of someone as a martyr, and then affirmed the defendant’s strict scrutiny of the application.

2.invoking socialist core values as a way to allocate liability (such as Case No. 9); 

The plaintiff was hit by the defendant, and was in hospital. After 15 days in hospital, the doctor recommended him to leave, but he refused by claiming he had headache. Then, the plaintiff stayed in hospital for 110 days, and sued the defendant for compensation of medical fees of 110 days. When considering the exact duration to be compensated, the Court noted that the plaintiff’s action was wasting public medical resources, which was a violation of the SCV, and then confirmed that the defendant only had to compensate for the medical fees of 15 days in hospital.

3. invoking socialist core values as a way to educate people (or to promote total social welfare) (such as Case 10).

The plaintiff and defendant agreed to jointly operate a restaurant, and they had disputes during the operation. The plaintiff sued for damage. During the trial, the parties insulted with dirty words against each other. Given that, the Court asked the parties to contemplate on their behaviors considering the whole society was promoting SCV.

This use of cases to educate the public, noted in the academic articles mentioned above, also links to a more recent line of documents about which I wrote in July 2020, relating to using cases to explain the law and the popularization of law responsibility system (普法责任制). As mentioned in that blogpost, Sue Trevaskes has also written about the history of the popularization of law (pufa).

In my view, following this document, we are likely to see many more cases mentioning socialist core values, likely falling in all three categories mentioned above.

Vision of the Chinese Court System

This Guiding Opinion can be seen as a part of the “socialist core valueization” of Chinese law and the legal system, and in particular, the judiciary. It is one important piece of how the judiciary is being further transformed in the Xi Jinping era.

Article 1 is part of official legal ideology so that the drafters of this Guiding Opinion (the  SPC’s Judicial Reform Office) must incorporate those principles. The Party Center requires this to be done.   As  Sue Trevaskes and Delia Lin mentioned in their writings, as in the traditional legal state, “morality here is treated in a particular normative sense whereby claims are made about the unified nature of socialist values held by China’s rulers and the ruled.”  This long-time observer of Chinese society would question whether the moral values across Chinese society are as unified as this ideal has it. 

An aspect the drafters of this document may not have considered is  whether this approach to law and court judgments is consistent with China’s desire to promote the use of Chinese law overseas, which the SPC has promoted in its Opinion on Further Providing Judicial Services and Guarantees by the People’s Courts for the Belt and Road Initiative (BRI Opinion #2, discussed in this blogpost).  The fusion of law and morality in cases involving multinational commercial parties seems problematic. 

These principles see the public as a body to be educated, and that judgments need to further incorporate socialist core values to be better accepted by the public.  Writing judgments in language the public can understand–plain language judgments–is a worldwide concern of domestic courts, but incorporating socialist core values may or not be the way to achieve that.

As I mentioned above, a significant part of the SCV Guiding Opinion contains guidance to lower court judges. I surmise that the Judicial Reform Office decided that this guidance was needed for less experienced and educated judges in less developed parts of China. The more experienced judges, with many years of experience and training, both substantive and ideological, are unlikely to need such guidance set out in an SPC document.

The reality of Chinese society that Chinese judges face, particularly at the local level, is not the one that matches the socialist core values ideal. That can be seen from cases discussed in the Chinese professional media (and some cases that have caught Chinese media attention) about some of the difficult issues that they face when needing to incorporate socialist core values. A few of those cases could include:

cases involving the status of children whose parents are not married under the Chinese legal definition of marriage to one another. That may be gay or lesbian couples or one in which a married man fathers a child with a woman with whom he is not married;

Cases involving disputes between a gay or lesbian couple that has split over mutually-owned property; 

Cases involving the rights of single women who wish to have children without being married.

The SCV Guiding Opinion can be seen a signal of the direction towards which the Chinese courts are being guided.  The more sophisticated judges will know how to balance the above requirements with the need to issue a judgment that parties in cases that involve fundamental personal rights find acceptable.

 

 

How the Supreme People’s Court Coordinates With Other Party & State Organs

3rd meeting of the Inter-Ministerial Conference Combatting Illegal Trade in Wild Plants and Animals

A little-discussed aspect of the work of the Supreme People’s Court (SPC) is coordinating with other Party and state organs to better serve the greater situation and resolve specific policy issues.   At some point, I will set out a fuller description of this distinctive function of the SPC and its background history, but that will need to wait until I have plumbed the SPC’s past regulatory documents and conducted a more complete survey of practices in SPC divisions.   I examined one aspect of the way that the SPC coordinates with other departments in a book chapter to be published in the fall of 2021. That chapter focuses on the drafting of criminal procedure judicial interpretations. The  “never-ending” academic article that I am writing touches upon one aspect, briefly. This blogpost highlights some formal frameworks for coordination and at least some of what is involved. 

 Coordination with other central Party and state organs regarding specific legal issues is one of the unrecognized functions of the SPC. It  is hard to assess how much coordination work is done in comparison to other functions of the SPC, such as hearing cases or drafting judicial interpretations.  Because the Collection of the Supreme People’s Court’s Judicial Rules, a handbook for judges, places the principle “establish coordination mechanisms, properly resolve administrative disputes” in the section of general principles of administrative law, I surmise that coordination is a very important function of the administrative division. From my research below and discussions with knowledgeable persons,  some judges in the civil and commercial divisions are involved in work under these frameworks, and likely also the Research Office. Some issues involve multiple divisions of the SPC.

My understanding is that coordination with other central Party and state organs is a customary function of the SPC that is being repurposed, in part, in the New Era. For that reason, I surmise that more of this will take place in SPC headquarters in the future. This is based on two factors. The first is that SPC hears most commercial and administrative cases in the circuit courts. Second, coordination with other central organs appears to be an increasingly important part of New Era governance.  That was flagged in several statements of Liu Zheng, deputy head of the SPC’s Judicial Reform Office, in a February, 2021 press conference, where the SPC released its report on online mediation. Liu Zheng stated:

promote the improvement of the social governance pattern of joint construction, co-governance and sharing…(促进完善共建共治共享的社会治理格局)

In describing the accomplishments of the SPC in promoting diversified dispute resolution, he stated:

We strengthened our communication and coordination with Central departments (ministries) and commissions, we held three coordination meetings at the ministry level, and established a joint action mechanism (加强与中央部委的沟通协调,3次召开部委层面协调交流会,建立联动机制 ).

  At the central Party level, clearly coordination occurs at the level of broad policy through the Central Political Legal Commission and the Building Ping’an (peace and safe)-China Coordination Small-Group about which Li Ling wrote last year.  Other coordination occurs through leading small group offices (工作领导小组办公室).  I describe one below.  This blogpost will focus on State Council Inter-Ministerial Joint Conferences because it is through those that much of the more specific coordination occurs.  Thankfully for the researcher, State Council transparency is quite good and I found many approval documents for Inter-Ministerial Joint Conferences. From my research thus far, the SPC participates in many Inter-Ministerial Joint Conferences established by the State Council. I note that some other jurisdictions have Inter-Ministerial Council Conferences as well, not involving the judiciary. In some instances, ministries or commissions of the State Council create coordination mechanisms with the SPC, while the SPC initiates some.  Some coordination is done more formally on an as-needed basis, as Liu Zheng mentioned and that requires separate research. It is understood that within the framework of the formal structures, interaction and coordination occur at the staff level.

Leading Small Group Coordination Offices

As mentioned above, the Party Center has established some leading small group coordination offices to coordinate specific central Party and state organs policies and measures. Because of the nature of the matter, the SPC is a member. One example is the following office.

The Pursuit of Fugitive [Officials] Pursuit of Stolen Assets Working Office of the Central Anti-Corruption Coordination Leading Small Group (中央反腐败协调小组国际追逃追赃工作办公室), established in 2015, of which the SPC is a member.  The 2017 judicial interpretation on asset recovery is likely related to the SPC’s work in this group.  The SPC is involved in the yearly Skynet operation. Through this office,  the SPC  participates in related campaigns under this mechanism, such as a 2015 one against offshore companies and underground banks.

Inter-Ministerial Joint Conferences

The State Council has established many Inter-Ministerial Joint Conferences (部际联席会议), in which other Central-level ministries take the lead (牵头) and the SPC is one of many other Party and state organs involved. For those unfamiliar with Inter-Ministerial Conferences in China, the Office of the Central Staffing Commission has an authoritative explanation (amended Google translate):

The inter-ministerial joint conference  is established to negotiate and handle matters involving the responsibilities of multiple departments of the State Council. It is established with the approval of the State Council. The member units communicate in a timely manner and coordinate differing opinions. It is a work mechanism for enabling the smooth implementation of a task (responsibility). It is the highest-level joint meeting system of administrative agencies. The establishment of inter-ministerial joint conferences should be strictly controlled. For matters that can be resolved through coordination between the sponsoring department and other departments, inter-ministerial joint conferences are generally not established. The establishment of inter-ministerial joint conferences must be submitted to the State Council for approval. The lead department shall ask for instructions, clarify the name, convener, lead unit, member unit, work tasks and rules, etc., and submit it to the State Council for approval after approval by relevant departments. After the task of the inter-ministerial joint conference is completed, the lead department shall submit an application for cancellation, stating the establishment time of the inter-ministerial joint conference and the reasons for its cancellation, etc., and submit it to the State Council for approval after the approval of the member units. The newly established inter-ministerial joint conference which is led by the leading comrades of the State Council, may be entitled ” State Council… ” , and the other joint conferences are collectively referred to as ” inter-ministerial joint conferences . ” The inter-ministerial joint conference does not engrave a seal or formally issue documents. If documents must be formally issued, the name of the leading department and the seal of the leading department may be used, or the relevant member units may jointly issue a document.

SPC and Inter-Ministerial Joint Conferences

Sometimes the SPC is a founding member of an Inter-Ministerial Joint Conference. In other situations, it is recognized that the expertise of the SPC is needed and the SPC is invited to join after the Inter-Ministerial Joint Conference has been in operation for several years. Some examples are:

  1. The Inter-Ministerial Joint Conference on the Implementation of the Intellectual Property Strategy of the State Council,  headquartered at the China National Intellectual Property Administration, of which the SPC is one of many members. It is directed towards achieving the National Intellectual Property Strategy and unusually, has its own website.  A previous version was established in 2008, but that was superseded in 2016 when the State Council revamped the Inter-Ministerial Joint Conference, likely to better achieve China’s Intellectual Property Strategy.  Justice Tao Kaiyuan is designated as a member of the Joint Conference on behalf of the SPC.  The Joint Conference meets from time to time and issues an annual plan, allocating responsibilities to members according to their authority.  Among the matters allocated to the SPC in the 2020 plan is promoting three-in-one hearing of intellectual property cases and drafting a Guiding Opinion for Three-in-one Work ( 深入推进知识产权审判“三合一”工作,制定“三合一”工作指导意见。(最高人民法院). ” (For those unfamiliar with Three-in-one hearings,” they refer to integrating jurisdiction over civil, administrative and criminal intellectual property cases. It is understood that discussions occur at staff level to coordinate and promote policies. 
  2.  The Inter-Ministerial Joint Conference on Combating Illegal Plant and Wildlife Trade (打击野生动植物非法贸易部际联席会议), established in 2016. The SPC (and the Supreme People’s Procuratorate (SPP)) was invited to join the conference in  2020., which likely means that the organizer, the State Forestry Administration, did not realize that the expertise of the SPC and SPP were necessary. The SPC is one of 27 Central-level organs. It is likely that the 2020 Guiding Opinions on Punishing the Illegal Trade of Wild Animals issued by the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice is a product of this Inter-Ministerial Mechanism.
  3. The Inter-Ministerial Conference on Money Laundering (反洗钱工作部际联席会议制度).  The State Council established it in 2004.  The People’s Bank of China takes the lead. National Money Laundering Strategies are drafted under its auspices. The role of the SPC is to supervise and guide the trial of money laundering crimes and formulate judicial interpretations in a timely manner in response to relevant legal issues encountered (督办、指导洗钱犯罪案件的审判,针对审理中遇到的有关适用法律问题,适时制定司法解释)It is understood that at a staff level, discussions take place regularly, and the SPC has issued several judicial interpretations as a result.
  4. As mentioned in a blogpost in 2020, in 2017 the State Council approved an Inter Ministerial Joint Conference on the Popularization of Law, with Zhang Jun, then head of the Ministry of Justice, as head and the SPC as one of the parties.

SPC established coordination mechanisms

The SPC establishes coordination mechanisms with other government and Party departments such as:

  1. The family trial method and work joint conference mechanism (家事审判方式和工作机制改革联席会议), established in 2017 with Central Political-Legal Commission consent; and
  2. Under the framework of Inter-Ministerial Joint Conferences, specific coordination mechanisms may be established. One likely product of ongoing policy discussions under the framework of the Intellectual Property Inter-Ministerial Joint Conference discussed above was the January 2021 establishment of a mediation coordination mechanism between the SPC  and the China National Intellectual Property Administration.

Legal basis

The legal basis of coordination appears to be Article 2 of the Organic Law of the People’s Courts in which the courts are called upon to “guarantee the smooth progress of the building of socialism with Chinese characteristics.”

Comments

In the New Era, we can expect to see more and more coordination by the SPC, much of it invisible to those of us outside the system.  It appears to be a recognition of the technical competence of the SPC in resolving a broad range of technical issues required to be resolved in furtherance of the governance of the country.  The State Council and its ministries and commission need the SPC’s expertise to deal with a large variety of legal issues–criminal, civil, administrative, enforcement.  The SPC coordinates with other central Party and state organs because it needs them to resolve specific issues. Given China’s state-run governance model, establishing mechanisms to better coordinate and promote national strategies and targets, and better draft policies and measures are considered an efficient way to accomplish governance targets and serve the needs of the Party and country.

 

 

Happy Niu 🐂Year!

 

 

 

 

 

 

 

Happy Niu 🐂Year to all blog followers and readers! Best wishes to all for good health, success in work and study, and all else!

In recent weeks I have been focusing on several longer pieces of writing and am still in “focus mode.”

While most of the Supreme People’s Court  (SPC) has been taking a break, based on previous year’s reports, it is likely that the team of people working on drafting President Zhou Qiang’s speech to the National People’s Congress (NPC) are hard at work.  I surmise that they will draw on January’s Central Political-Legal annual work conference, where responsibilities for implementing this year’s major tasks were allocated, and guidance from President Xi was transmitted. At that time, the Party leadership heard work reports from the SPC’s (and Supreme People’s Procuratorate’s) Party Group, so it seems likely that the report to the NPC will draw on that report as well.

Among the content that I expect to be included in the report is:

  • successful transition to the Civil Code, including review  of old judicial interpretations (and other judicial normative documents), canceling and amending old ones;
  • successes in meeting the challenges that Covid-19 meant for the courts, including the increased use of online proceedings;
  • smart courts and informatization;
  • accomplishments of the Supreme People’s Court’s Intellectual Property Court, including its first anti-suit injunction;
  • the issuance, for the first time, of reports on the judicial review of arbitration in 2019 and judicial assistance in civil and commercial matters between the Mainland and Hong Kong.  The full text of the two reports has not yet been released to the public, so I surmise that they will be released during the NPC meeting;
  • In the area of criminal law, likely the effective use of criminal proceedings in the battle against Covid-19;
  • successes in the saohei (organized crime) campaign;
  • successes in the area of environmental law, such as the recent signing of a framework agreement between the SPC and the leading small group on the protection of the Yellow River and the June, 2020 policy document on providing judicial services and guarantees to the protection and high quality development of the Yellow River;
  • furthering of socialist core values, such as the guiding opinion issued on 18 February on integrating those values into judgments (最高人民法院印发《关于深入推进社会主义核心价值观融入裁判文书释法说理的指导意见) and
  • judicial reforms such as the recently approved establishment of the Beijing Financial Court (the Shanghai Financial Court has been very busy since it was established) and the piloting of reforms to separate simple and complicated cases (the SPC recently submitted a midterm report to the NPC Standing Committee on the pilots).

We’ll see next month how accurate the above guesses are. In the meantime, additions or corrections are welcome.

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The SPC New Year’s greetings are ©the SPC, found in this short video 

Supreme People’s Court Solicits Comments on Court Online Procedures

On 21 January, the Supreme People’s Court (SPC) issued  for public comment regulations on online hearings, applicable to civil (commercial), administrative and enforcement cases, and certain criminal cases, entitled Regulations on Some Issues Related to People’s Courts Handling Cases Online (English translation available at Chinatranslate.com) 关于人民法院在线办理案件若干问题的规定(征求意见稿). This topic is likely to be of interest to foreign and foreign-invested users of the Chinese court system (although they are a tiny minority of users). Judging by the number of articles in the English-language professional media on China’s internet and online courts, the draft may also attract comments from interested professionals outside of China. One issue I would hope is clarified is whether they apply to cross-border cases (cases involving jurisdictions outside of (mainland) China, as my quick reading is that the draft is unclear.  (Corrections welcome!) .

It is likely that the SPC’s Judicial Reform Office took primary responsibility for drafting the regulations because the email and physical mail address for comments is directed to that office.  The deadline for comments is 5 February.  I surmise the 16 day comment period  is linked to the upcoming Chinese new year’s (spring festival) holiday, rather than disinterest in receiving comments from foreign, foreign-invested, or foreign-related institutions or individuals.  In the experience I have had personally or been aware of through other foreign institutions involved in commenting on draft interpretations, SPC judges have taken comments from foreign Chambers of Commerce in China, foreign-invested companies, and foreign professional bodies seriously. Some of the foreign Chambers of Commerce, for example, have legal committees, but it would take some time for them to organize a translation of the draft and assemble comments from committee members.

The SPC regulations on judicial interpretation work do not specify a minimum (or maximum) time period for soliciting opinions from the public.  Reviewing the comment periods for some of the other judicial interpretations and other judicial documents for which comments were solicited in 2020, the deadlines appear to vary significantly.  I surmise that the deadline is set by the team in charge of drafting the judicial interpretation (or other judicial document). In November, the SPC solicited public comments on proposed amendments to its judicial interpretations related to the taking of security for 18 days, while comment periods for other judicial interpretations and judicial documents seem to be often one month and sometimes two months

Where comments were solicited on judicial interpretations and other judicial documents in the area of intellectual property law, the general public, including the foreign public, seems to be given more time to make comments.  That may reflect the international nature of intellectual property law and long-term interactions between intellectual property specialists at the SPC and foreign intellectual property judges and other foreign experts knowledgeable about China’s intellectual property system. As Mark Cohen commented when the SPC’s Intellectual Property Court was established: [a specialist intellectual property appellate court] “has been a focus of much discussion between US and Chinese experts over 20 or more years, notably between the SPC and former CAFC [Court of Appeals for the Federal Circuit] Chief Judge Rader, former USPTO [United States Patent and Trademark Office] Director Kappos and others (including the author/owner of this blog {Mark Cohen]).”

I surmise that the persons soliciting comments would accept comments submitted after the formal deadline. That has been my own experience, but  in relation to another area of law.  To be safe, those planning to submit comments after the deadline are advised to contact the persons whose emails are listed in the notice, to ensure that their comments will in fact be read and considered. 

New Supreme People’s Court guidance on how Chinese judges consider cases

photo of professional judges’ meeting in a Qingdao area court

Among the many reforms set out in mentioned in the February, 2019  Supreme People’s Court ‘s (SPC’s) fifth judicial reform plan outline is improving the mechanism of the Professional Judges Meeting, about which I have previously written.   Earlier this month (January, 2021), the SPC issued guidance on professional/specialized judges meetings (I have also translated it previously as specialized judges meetings) , entitled Guiding Opinion on Improving the Work System of Professional Judges Meetings (Professional Judges Meetings Guiding Opinion or Guiding Opinion),  (关于完善人民法院专业法官会议工作机制的指导意见), superseding 2018 guidance on the same topic. The earlier guidance had the title of Guiding Opinions on Improving the Working Mechanism for Presiding Judges’ Meetings of People’s Court (For Trial Implementation).  The meetings are intended to give single judges or a collegial panel considering a case additional thoughts from colleagues, when a case is “complicated,” “difficult,”, or the collegial panel cannot agree among themselves.  

This blogpost will provide some background to the Guiding Opinion, a summary of the Guiding Opinions, a summary of a non-scientific survey of judges, and some initial thoughts. 

Background to the Guiding Opinion

The Guiding Opinion is a type of soft law that enables the SPC to say that it has achieved on of the targets set out in the current judicial reform plan. According to a recent article by the drafters, they researched and consulted widely among courts, but that does not mean that a survey went out to all judges.  It is further evidence that the SPC is operating as Justice He Xiaorong stated five years ago–” after the circuit courts  are established, the center of the work of SPC headquarters will shift to supervision and guidance…” 

Judicial reform and the Guiding Opinion

The Professional Judges Meeting Guiding Opinion is linked to #26 of the current judicial reform plan outline, discussed in part in this June, 2019 blogpost.  I have bold-italicked the relevant phrases:

#26 Improve mechanisms for the uniform application of law. Strengthen and regulate work on judicial interpretations, complete mechanisms for researching, initiating, drafting, debating, reviewing, publishing, cleaning up, and canceling judicial interpretations, to improve centralized management and report review mechanisms. Improve the guiding cases system, complete mechanisms for reporting, selecting, publishing, assessing, and applying cases. Establish mechanisms for high people’s courts filing for the record trial guidance documents and reference cases. Complete mechanisms for connecting the work of case discussion by presiding judges and collegial panel deliberations, the compensation commission, and the judicial committee. Improve working mechanisms for mandatory searches and reporting of analogous cases and new types of case. (完善统一法律适用机制。 加强和规范司法解释工作,健全司法解释的调研、立项、起草、论证、审核、发布、清理和废止机制,完善归口管理和报备审查机制。完善指导性案例制度,健全案例报送、筛选、发布、评估和应用机制。建立高级人民法院审判指导文件和参考性案例的备案机制。健全主审法官会议与合议庭评议、赔偿委员会、审判委员会讨论案件的工作衔接机制。完善类案和新类型案件强制检索报告工作机制)

Uniform Application of Law

As for why the uniform application of law is an issue, a quick explanation is the drafting of Chinese legislation often leaves important issues unresolved and  leaves broad discretion to those authorities issuing more specific rules.  To the casual observer, it appear that the Chinese legislature (NPC) “outsources” to the SPC (and Supreme People’s Procuratorate (SPP) for some issues) the hard job of drafting more detailed provisions. (see Chinalawtranslate.com for many examples and NPC_observer.com for insights about the legislative drafting process).  Although the Communist Party’s plan for building rule of law in China calls for legislatures to be more active in legislating (see NPC Observer’s comments), in my view the SPC (and SPP) will continue to issue judicial interpretations, as the NPC and its standing committee are unlikely to be able to supply the detailed rules needed by the judiciary, procuratorate and legal community.  Although the general impression both inside and outside of China is that the SPC often “legislates,” exceeding its authority as a court, as I have mentioned several times in recent blogposts, the SPC issues judicial interpretations after close coordination and harmonization with the NPC Standing Committee’s Legislative Affairs Commission.

Professional Judges Meeting Guiding Opinion

The Guiding Opinion is linked to the judicial responsibility system, about which my forthcoming book chapter will have more discussion.  Professor He Xin addresses that system, among other topics in his recently published academic article.

The Guiding Opinion authorizes certain senior members of a court (court president, vice president, head of division, as part of their supervisory authority (under the Organic Law of the People’s Courts) to chair meetings of judges (who exactly will attend depends on the court- to discuss certain types of cases and provide advice to the single judge or three judge panel hearing a case. (In my informal inquiries, I have found that interns are sometimes permitted to attend, but sometimes not). The types of cases mentioned in Article 4 of the guiding opinions and listed below are not complete, but raise both legal and politically sensitive issues:

  • ones in which the panel cannot come to a consensus,
  • a senior judge believes approaches need to be harmonized;
  • involving a mass (group) dispute which could influence social stability;
  • difficult or complicated cases that have a major impact on society;
  • may involving a conflict with a judgment in a similar case decided by the same court or its superior;
  • certain entities or individuals have made a claim that the judges have violated hearing procedure. 

Before the discussion, the judge or judges involved in the case are required to prepare a report with relevant materials, possibly including a search for similar cases, which may or may not be the same as the trial report described in my July, 2020 blogpost, 

The guiding opinions sets out guidance on how the meeting is to be run and the order in which persons speak.

Depending on the type of case involved, a case may be further referred to the judicial committee or the matter may be resolved by the meeting providing their views to the collegial panel. 

Article 15 of the guiding opinions provides that participating in these meetings is part of a judge’s workload. The guiding opinions provide that a judge’s expression of views at these meetings should be an important part of his or her performance appraisal, evaluation, and provision, and the materials can be edited into meeting summaries, typical cases, and other forms of guidance materials,   which can be used for additional points in performance evaluation.  One of the operational divisions of the SPC and at least one circuit court has published edited collections of their professional judges meetings, with identifying information about the parties removed.

Comments

From my non-scientific survey of judges at different levels of court and in different areas of law, my provisional conclusion is as follows. Judges hearing civil or commercial cases seem to hold these meetings more often, particularly at a higher level of court.  Criminal division judges seem to hold such meetings less often (at least based on my small sample), but the meetings are considered to be useful. 

 Frequency seems to depend on the court and the division, with one judge mentioning weekly meetings, while others mentioned that they were held occasionally. Most judges that I surveyed considered the meetings useful, because they provided collective wisdom and enabled judges to consider the cases better. One judge noted that it may also result in otherwise unknown relevant facts coming to light. 

I would also add my perception that it also gives the judges dealing with a “difficult or complicated case” (substantively or politically) in a particular case the reassurance that their colleagues support their approach, even if the judges involved remain responsible under the responsibility system. This is important when judges are faced with deciding cases in a dynamic area of law with few detailed rules to guide them, or where the policy has changed significantly within a brief time. My perception is that this mechanism provides a more collegial environment and better results that the old system of having heads of divisions signing off on judgments. I would welcome comments from those who have been there.

The Guiding Opinions provide yet another illustration of how Chinese courts operate as a cross between a bureaucracy and a court, from the rationale for holding the meeting to the use of meeting participation as an important part of performance evaluation. 

Although the slogan (of several years ago) is that judges should be treated more like judges,  the Guiding Opinion appears to treat lower court judges analogous to secondary or university students, to be given grades for their class participation.  

What are the implications of this mechanism?

Litigants and their offshore counsel (Chinese counsel would know this) need to know that the result in their case in a Chinese court may be influenced by judges who are not in the courtroom when their counsel advocates orally. Written advocacy should still have an impact on professional judge committee discussions.  It appears that counsel is not informed that the case has been referred to a professional judges committee for discussion and it is not possible for counsel to know who is part of the committee and apply for judges to be recused in case of a concern that there has been a conflict of interest. 

Would it result in more commercial parties deciding that arbitration is a better option, as they have better control over dispute resolution in their particular case?  My perception is that the decision concerning appropriate dispute resolution is based on other factors, and the existence of the professional judges meeting as a mechanism to provide views to judges hearing a case has little impact on that decision.  I welcome comments on that question.

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Many thanks to those who participated in the survey and also to those who commented on an earlier draft of this blogpost.  

Supreme People’s Court’s 2020 Accomplishments in Transitioning to the Civil Code

 

photo of a meeting of the SPC’s judicial committee. I surmise a screen for viewing presentations is not visible.

On 30 and 31 December 2020, the Supreme People’s Court (SPC) delivered  its first batches of documents designed to ensure a seamless transition to the Civil Code on 1 January 2021, about which I wrote last recently and in November, 2020. Several SPC leaders spoke at a press conference on the morning of 30 December 2020 to announce the issuance of these documents, with Justice He Rong taking the lead.  Justice He Rong also gave highlights of items on the SPC’s agenda on the transition to the Civil Code for 2021, but those details will be forthcoming in a subsequent blogpost.

I correctly predicted that the SPC judicial committee would meet one or more times before year-end and we readers of SPC media will see one or more long catalogues of cancelled and amended judicial interpretations and other judicial normative documents published on or before 1 January 2021.

We can  see the results of the long hours of work of unknown numbers of people, particularly within the SPC, the National People’s Congress Legislative Affairs Commission (NPC LAC), and  many “relevant departments” in drafting these judicial interpretations.  Justice He Rong mentioned the timely guidance of the (NPC LAC) (我们得到了全国人大常委会法工委的及时指导),  support and coordination from the Supreme People’s Procuratorate, and support and help from central state organs and academics and the public.  Timely guidance from the NPC LAC signals (as mentioned previously), that SPC staff spent unknown numbers of hours  ensuring that these judicial interpretations were properly harmonized. 

It is unclear to me whether those of us outside the system will ever learn about the amount of work involved. I surmise the responsibility of delivering this timely and properly  depended on the project management skills of the Research Office.  If foreigners could give recommendations to SPC leaders concerning “models of socialist labor (动模范),” I would recommend it to all involved in the transition to the Civil Code. 

Given the very general provisions of the Civil Code, these judicial interpretations (and more to come) are crucial for the operation of the Chinese legal system, despite theoretical questions about their binding nature beyond the court system.

As of 1 January 2021, the following judicial interpretations and other normative documents implementing the Civil Code have been issued (the English titles below are rough translations).  I will link to English translations as they become available. Unless otherwise noted, a document is a judicial interpretation. Among the many aspects of the drafting process, per the SPC’s relevant five year plan, socialist core values have been incorporated into the judicial interpretations.

The judicial interpretations 

Scattered comments are in italics. Where judicial interpretations have numbering , for example (1), it suggests that the drafters anticipate further comprehensive interpretations as the greater situation (大局) evolves:

  1. Decision on invalidating certain judicial interpretations and judicial normative documents (关于废止部分司法解释及相关规范性文件的决定). It canceled 116 of them, some of which I recall reviewing for my 1993 article;
  2. Regulations on timing application  of the Civil Code (

    关于适用《中华人民共和国民法典》时间效力的若干规定).  These rules relate to application of Civil Code for disputes etc. that arose pre-Civil Code. Although the general rule is that the then current law and judicial interpretations will be applied, for some types of cases  the Civil Code will be applied. (If it better protects a party’s rights and interests, upholds social and public order, and promotes socialist core values). Chart with explanation linked here.

  3. Interpretation on the application of the marriage and family part of the Civil Code (1) (最高人民法院关于适用《中华人民共和国民法典》婚姻家庭编的解释(一)). Note article 1 links ongoing domestic violence to the term “abuse” in the Civil Code. Chart with judicial interpretation, Civil Code, and prior judicial interpretation linked here
  4. Interpretation on the application of law to labor disputes (1) 最高人民法院关于审理劳动争议案件适用法律问题的解释(一).  

  5.  Interpretation on the application of law to construction contracts (1)(最高人民法院关于审理建设工程施工合同纠纷案件适用法律问题的解释(一));
  6. Interpretation on the application of law to the property (rights in rem) part of the Civil Code] (1) (最高人民法院关于适用《中华人民共和国民法典》物权编的解释(一)). Rules relate both to immovable (real) and movable property, and authority of both courts and arbitral institutions;
  7. Interpretation on the application of law to the inheritance part of the Civil Code (1) (最高人民法院关于适用《中华人民共和国民法典》继承编的解释(一)). Chart with judicial interpretation, Civil Code, and prior judicial interpretation linked here
  8. Interpretation regarding the system of taking security) ( 关于适用
    《中华人民共和国民法典》有关担保制度的解释). This is a comprehensive interpretation on secured interests (besides mortgages, guarantees, liens, pledges, it also has content concerning factoring, finance leasing, and retention of title, as well as the giving of security by companies. It specifies that independent (demand) guarantees continue to be governed by the 2016 judicial interpretation on that topic. Those latter regulations are crucial to BRI infrastructure projects, as mentioned in this blogpost.
  9. Decision on amending the interpretation on the application of the Trade Union Law and 27 other civil law related judicial interpretations  related to civil-related judicial work (关于修改《最高人民法院关于在民事审判工作中适用〈中华人民共和国工会法〉若干问题的解释》等二十七件民事类司法解释的决定);
  10. Decision on amending the judicial interpretation on the hearing of patent tort disputes and 18 other intellectual property-related judicial interpretations (关于修改《最高人民法院关于审理侵犯专利权纠纷案件应用法律若干问题的解释(二)》等十八件知识产权类司法解释的决定);
  11. Decision on amending the “SPC Provisions on some issues concerning people’s courts seizing goods being shipped by rail” and 18 other enforcement-type judicial interpretations (关于修改
    《最高人民法院关于人民法院扣押铁路运输货物若干问题的规定》等十八件执行类司法解释的决定)。 Comparison chart linked here;
  12. Decision on amending the “Official Reply of the Supreme People’s Court on Whether the Right to Use of Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Classified as Insolvent Property” and 29 other commercial-type judicial interpretations (最高人民法院关于修改《最高人民法院关于破产企业国有划拨土地使用权应否列入破产财产等问题的批复》等二十九件商事类司法解释的决定)
  13. Decision on amending the “Provisions of the Supreme People’s Court about Several Issues Concerning the Civil Mediation Work of the People’s Courts” and 19 other civil procedure-related judicial interpretations (最高人民法院关于修改《最高人民法院关于人民法院民事调解工作若干问题的规定》等十九件民事诉讼类司法解释的决定);
  14. Notice that certain guiding cases are not to be further used for reference (最高人民法院关于部分指导性案例不再参照的通知). This is a judicial normative document, not a judicial interpretation.
  15. SPC issues amended “regulations on civil causes of action” (最高人民法院印发修改后的《民事案件案由规定》).  This is a judicial normative document, not a judicial interpretation. This link contains both the decision itself to amend the causes of action and the amended causes of action. Compensation for sexual harassment is listed (#372), but detailed provisions on the elements have not yet been issued.

As for the review of local level judicial guidance documents for consistency with the Civil Code, mentioned in the November blogpost, the Shanghai Higher People’s Court has reported that it has met its performance goal.  Another blogpost will discuss new SPC guidance(that I  flagged a year and a half ago, in the current judicial reform program) directed towards reining in local court guidance, or as seen another way, strengthening the SPC’s firm guiding hand!

Civil Code & Supreme People’s Court update

Merry Christmas to all blog readers who celebrate!

The Supreme People’s Court media outlets posted a brief article on 23 December updating the court system and legal professionals on progress towards seamless transition to the Civil Code on 1 January, about which I wrote last month, by reporting on a . From that notice, it appears that the staff of the SPC’s Research Office (which coordinates judicial interpretations and is in charge of guiding cases) and other staff members of the SPC’s Leading Small Group for Implementing Civil Code Work 民法典贯彻实施工作领导小组 (Leading Small Group) will have long nights of work until the end of the year.

The notice reported on a recent meeting chaired by Justice He Rong. She is the executive vice president (and deputy Party Secretary of the SPC) and led a meeting of the entire Leading Small Group and the SPC’s judicial committee to review the work of the committee.The decision was to “approve in principle” decisions concerning canceling and amending 591 judicial interpretations and related judicial normative documents (judicial documents) and 139 guiding cases. “Approval in principle” (原则通过), as discussed here, is not mentioned by the SPC’s 2007 regulations on judicial interpretations but is one of the SPC’s long-established practices. It means that the judicial committee has approved it, subject to some “minor” amendments. Minor amendments are more than typographical errors and relate to specific substantive matters.

Justice He reminded meeting participants that the smooth transition to the Civil Code was highly valued by General Secretary Xi Jinping, so that it was part of the SPC’s political responsibility to complete the work properly and timely.   But the focus of this blogpost is again on the practicalities, rather than the political aspects of this project.

Although it was said to be Justice He’s guidance, I surmise that it was the drafters’ thinking to  take this comprehensive cleanup as an opportunity to focus on making the Civil Code easy for users to apply, and strive to build a clear, concise, and highly targeted judicial interpretation system. I read from the language of this notice that the drafters plan to issue more comprehensive judicial interpretations on broad areas of law (such as the one on taking security that is has been issued for comment) rather than ones relating to specific questions of law. 

The judicial committee decided to cancel 116 judicial interpretations and other judicial documents, and approved in principle amendments to 14 other general judicial interpretations and other judicial documents, and another 111 judicial interpretations and judicial documents in the areas of:

  1. civil law (27),
  2. commercial law (29);
  3. intellectual property law (18);
  4. civil procedure law (19); and 
  5. enforcement procedures (18).

So it seems likely the SPC judicial committee will meet one or more times before year end and we readers of SPC media will see one or more long catalogue of cancelled and amended judicial interpretations and other judicial normative documents published on or before 1 January 2021. I hope the hard work of the team involved over many months is properly acknowledged.

Arrangements and the Supreme People’s Court

SPC Press conference following the Supplemental Arrangement signing, Judge Si 2nd from left

On 27 November, the Supreme People’s Court and the Hong Kong SAR Government held a ceremony in Shenzhen at which the two sides signed the Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region” (the Supplemental Arrangement (关于内地与香港特别行政区相互执行仲裁裁决的补充安排). It supplements the original Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the HKSAR which was signed on 21 June 1999 and came into effect on 1 February 2000 (1999 Arrangement). The SPC also issued 10 related typical cases (典型案例) in both Chinese and English versions, the first time the SPC has done so for an arrangement.

SPC arrangements with the Hong Kong SAR are considered  judicial assistance documents.  As Hong Kong is part of China (one country-two systems),  the view is that judicial assistance between the Mainland and Hong Kong can be broader and closer (and so differs from international judicial assistance).

After the Supplemental Arrangement becomes fully effective, it will ease the implementation of a number of arbitration-related matters between the Hong Kong SAR and the (mainland) Chinese courts.  Herbert Smith Freehills and other law firms and barristers’ chambers) have published insightful summaries of the Supplemental Arrangement. 

This blogpost discusses some issues related to SPC arrangements (with the Hong Kong and Macao SARs), drawing on the remarks made by Judge Si Yanli, one of the deputy heads of the SPC’s Research Office at the press conference following the ceremony.  The Research Office is a unique institution of the SPC.  It does not directly hear cases, but is often involved in a broad range of issues.  A 1995 SPC document describes it as a  “comprehensive operational department.”

Judge Si is responsible for handling Hong Kong and Macau related matters , who would have headed the team negotiating with the HKSAR Department of Justice on these arrangement Judge Si is well-known to the Hong Kong international arbitration community.  She has spoken at Hong Kong Arbitration Week events in recent years, impressing all who have heard her speak with her insightful presentations.

Legal Framework for Arrangements

The legal framework for this arrangement, and the other previous ones concluded between the two jurisdictions is Article 95 of the Hong Kong Basic Law:

Article 95
The Hong Kong Special Administrative Region may, through consultations and in accordance with law, maintain juridical relations with the judicial organs of other parts of the country, and they may render assistance to each other.

Fitting Arrangements into the Chinese legal landscape

A single sentence in Judge Si’s press conference called attention to a procedure that is rarely discussed, at least in English–fitting arrangements into the Chinese legal landscape.  Judge Si mentioned that for the Supplementary Arrangement to be effectively implemented on the mainland, it must be transformed into a judicial interpretation. Although Judge Si did not set out the reasons that the SPC does so, it is understood that if implemented in this way,  judges in local Chinese courts who need to implement an arrangement can issue rulings or judgments  that cite the relevant provisions of an arrangement that have been transformed into a judicial interpretation.  

The effective implementation of the Supplementary Arrangement in the Mainland needs to be transformed into judicial interpretation, and for its effective implementation in Hong Kong, it needs to be transformed into local legislation. In the Mainland, on November 9, the 1815th meeting of the judicial committee of the SPC passed the “Supplementary Arrangement” and agreed to transform it into a judicial interpretation;补充安排》在内地的生效实施需要转化为司法解释,在香港的生效实施需要转化为本地立法。在内地,11月9日,最高人民法院审判委员第1815次会议已审议通过《补充安排》,并同意将其转化为司法解释;

Drafting 

The drafting of the Supplemental Arrangement involved input from relevant authorities, among them the Legislative Affairs Commission (LAC) of the National People’s Congress.  That is clear from this statement in Judge Si’s press conference. 

The successful signing of the “Supplementary Arrangement” is due to  the strong guidance of the Legislative Affairs Commission, of the Standing Committee of the National People’s Congress, the Hong Kong Basic Law Committee, the Hong Kong and Macao Affairs Office of the State Council and other relevant central authorities, as well as the strong support of the judicial and legal circles in the two places.《补充安排》的成功签署离不开全国人大常委会法制工作委员会、香港基本法委员会,国务院港澳事务办公室等中央有关部门的大力指导以及两地司法法律界的有力支持.

Soliciting views from relevant authorities is usual practice when the SPC drafts judicial interpretations. In this way the judicial interpretation that the SPC issues draws on specialist knowledge in the relevant authorities and enables the judicial interpretation to reflect a harmonized approach.  As to the importance of the SPC consulting the LAC of the National People’s Congress, that institution will review the final version of a judicial interpretation after the judicial committee of the SPC approves it and files it with the Standing Committee of the National People’s Congress. Again, it enables the judicial interpretation to reflect an approach harmonized between the SPC and the LAC.

Further thoughts

As the Chinese court system evolves to become increasingly integrated with international treaties and conventions, we are likely to see aspects of international conventions or bilateral judicial cooperation documents converted into or implemented through judicial interpretations, and the strong guidance of the LAC, the Ministry of Foreign Affairs, and other relevant central authorities making it possible.

The “Soft Law” of the Supreme People’s Court

Tiantong Litigation Logo

On 13 November, the TianTong Law Firm published a bilingual version of the article below in their TianTong Litigation Circle Wechat public account. (Follow the article link to read the Chinese version.) The Tian Tong Litigation’s public account has half a million subscribers. I am very appreciative of TianTong litigation partner David Gu’s (顾嘉) kind invitation and the careful editing of his colleagues.  The Chinese title of the article is: 最高人民法院对“软法”的适用:外国观察者的视角 | 跨境顾释 (with the English title of “A foreign observer comments on the ‘soft law’ of the Supreme People’s Court”).  The hard work of my research assistant Sun Dongyu, one of our Peking University School of Transnational Law graduates, and Fu Panfeng, assistant research fellow of the Institute of International Law of the Chinese Academy of Social Sciences transformed my English article into readable Chinese. 

Much of the substantive content of the article has previously appeared in this blog, but with a different perspective and conclusion. 

_____________________

I am very honored to have this opportunity to publish some of my observations about the developments of the Supreme People’s Court (SPC) with TianTong Litigation Circle. I have been observing developments of the SPC for almost 30 years, and am honored to have been included in the first batch of members of the international expert committee of the China International Commercial Court. The views expressed in this article are my own and should not be attributed to the committee, the China International Commercial Court, or the SPC.
One of the many special features of the SPC, as an important supreme court in the world, that it allocates a great deal of effort to different types of “soft law.” Soft law is a concept that the late Professor Luo Haocai, formerly vice president of the SPC, introduced and developed in China, so discussing the “soft law” of SPC is particularly appropriate. For those who are not aware of this academic concept, it means norms that affect the behavior of related stakeholders, even though the norms do not have the status of formal law.
This article gives my thoughts on two aspects of SPC soft law—its judicial policy documents and cases that it has specially selected.

I. Judicial documents

I have a special interest in judicial documents, because they drew me into researching the SPC in the early 1990s.
The seven categories of documents below are classified as judicial documents or “judicial normative documents” (“司法文件” or “司法规范性文件”) and sometimes judicial policy documents” (“司法政策性文件”). The SPC’s website lists some of them. An attentive reader can discover from reviewing the documents on the website that my description is not comprehensive. The SPC issues many other documents as well, covering personnel and administrative matters, but this article focuses on those with normative provisions.
SPC judicial documents are partially governed by 2012 regulations on the handling of SPC official documents (“人民法院公文处理办法”), which leave much unsaid and unexplained. It seems likely that additional guidance exists, whether in the form of bureaucratic custom or internal guidelines. Many, but not all, are the SPC’s special versions of Party/government documents.

1. Categories of judicial documents

1) Opinions (“意见”). According to my observations, the SPC issues several types of Opinions. I have not yet done detailed research into these different types of documents and have not seen detailed analysis in Chinese (or English). What I’m setting forth below is my tentative analysis.

i. Opinion Type 1

An Opinion issued solely by the SPC, that addresses a range of matters. The Services and Guarantees Opinions appear to fall into this category. These documents create and transmit to the lower courts new judicial policy, update previous judicial policy, establish new legal guidance that may be eventually crystallized in judicial interpretations and direct the lower courts, but cannot be cited in judicial judgments or rulings. They are generally linked to an important Party or state strategy or initiative. The ones labeled “Guiding Opinions” are intended to push policy forward, but others may do as well. Sometimes the SPC issues illustrative “model/exemplary/typical cases to clarify certain points to the lower courts (and the legal community), such as the Opinion providing Services and Guarantees [Safeguards] to the Yellow River Basin, for which the SPC issued illustrative cases.

ii. Opinion Type 2

An Opinion issued solely by the SPC, that consolidates rules or guidance found in disparate documents and adds some new rules, focuses on one particular topic, relating to litigants. The April, 2020 Opinions on Promoting Lawful and Efficient Trials of Bankruptcy Cases is a good example. It incorporates a provision from the Minutes of the National Court Work Conference on Bankruptcy Trials, for example, regarding consolidating bankruptcy cases of affiliated enterprises.

iii. Opinion Type 3

An Opinion also issued solely by the SPC, that sets out in normative form Party policy/judicial reforms, that may be the framework for further normative opinions, and eventually crystalized in law. An example is the 2015 Opinions on Improving the Judicial Responsibility System of the People’s Courts . The first line clearly links the document to Party decisions–“for the purpose of implementing the general deployment of the Party Center on deepening the reform of the judicial system….(“为贯彻中央关于深化司法体制改革的总体部署”). It is linked to several normative Opinions and the judicial responsibility system has been incorporated into the People’s Court Law.

iv. Opinion Type 4

An Opinion in which the SPC is one of several issuing institutions, that does not create new legal rules but harmonizes legal positions among institutions and for the courts, and clarifies how the law should be applied. This type of Opinion also cannot be cited as the basis for a judgment or ruling. This type of Opinion is particularly common in the area of criminal law, and is often related to the latest campaign or focus of the authorities. The 2019 Opinions on Several Issues Regarding the Handling of Criminal Cases of Illegal Lending , (“最高人民法院、最高人民检察院 公安部 司法部印发《关于办理非法放贷刑事案件若干问题的意见》的通知” ) part of the Special Campaign to Crack Down on Underworld Forces (“扫黑除恶专项斗争”) is a good example. One aspect of the ongoing campaign, which began in early 2018, is to use the criminal justice and regulatory authorities to crack down on “routing loans” (“套路贷”), an offense not defined by the Criminal Law. This 2019 Opinion harmonizes the understanding among the criminal justice authorities to punish those providing “routing loans.” Article 1 describes certain types of lending activity that can be punished under the crime of illegal business operations (Criminal Law article 225(4)).

2) Conference summary/meeting minutes (“会议纪要”). A conference summary arises from an SPC specialized court conference. A conference summary is used to transmit central legal policy, unify or harmonize court practices in accordance with that policy. Although conference summaries do not have the status of a judicial interpretation, the lower courts will generally decide cases according to its provisions. My understanding of the term “harmonizing court practice” means in Chinese judicial parlance that judges are applying the law similarly. A recent example is the 9th National Courts’ Civil and Commercial Trial Work Conference Summary. The document itself has a very useful explanation: “the Conference Minutes [Summary], which are not judicial interpretations, cannot be cited as a basis for adjudication. For first instance and second instance pending cases after the Conference Minutes have been issued, people’s courts may reason according to the relevant provisions of the Conference Minutes when specifically analyzing the reasons for the application of law in the “The court is of the view” section of adjudicative instruments.”

3) Professional judges meeting summary (“法官会议纪要”). I have not yet written in detail about these, but in my observation, they are a product of the judicial reforms. The SPC circuit courts appear to have led the way on publishing these as a way of “unifying judicial practice” but the #2 Civil Division (focusing on commercial issues) has published a collection as well.

4) Response or reply (“复函” or “答复”). These are responses or replies to requests for instructions or approvals. The SPC, like other Party and state organs, handles requests for instructions (“请示”). Although proposals have been published either to incorporate the practice into procedural law or abolish it, the practice lives on at all court levels, including the SPC. If the issue raised is considered important enough, the reply will be approved as a judicial interpretation. There are apparently fewer requests for instructions than ten or twenty years ago. I surmise more are submitted on the criminal issues than civil. One subcategory of these responses are the ones issued by the SPC’s #4 Civil Division, the division focusing on cross-border commercial and maritime issues. These are responses to request from instructions (“请示”) from provincial-level courts (including the higher courts of Beijing, Shanghai, Tianjin, and Chongqing), as required by the SPC’s Prior Reporting system for arbitration matters.

5) Notice (通知). Documents transmitting one of the above types of judicial documents are often called notices, but this is meant to call attention to a document entitled “notice” (“通知”), such as the Notice concerning some questions regarding the centralized handling of judicial review of arbitration cases (“关于仲裁司法审件归口办理有关问题的通知”) .

6) Rules (“规则” and “条例”). One recent example of the use of rules (“规则” is the CICC’s Procedural Rules for the China International Commercial Court of the Supreme People’s Court (“最高人民法院办公厅关于印发《最高人民法院国际商事法庭程序规则(试行)》的通知” ), issued by the SPC’s General Office. The rules were discussed by the SPC judicial committee but not issued as a judicial interpretation. I have observed that “规则” is used for court rules–as the same term is used for the Working Rules of the SPC’s Compensation Committee (最高人民法院赔偿委员会工作规则) . The term “条例” is used to regulate internal court system matters, such as rules (using the term “条例”) on judicial training(“法官教育培训工作条例” ) and 2012 rules on especially appointed inspectors (最高人民法院特约监督员工作条例).

7) Memorandum of Understanding (MOU). The most well-known example is the 2016 Memorandum of Understanding on Taking Joint Disciplinary Actions against Dishonest Persons Subject to Enforcement (“《对失信被执行人实施联合惩戒的合作备忘录》”). It appears to be the first time (or at least one of the first times) that a large group of central Party-state institutions has concluded an MOU. The SPC concludes many, only some of which have been made public. The lower courts do so as well. It shows that some “Western” legal concepts are useful in the Chinese context.

2. Comments

According to the SPC’s rules on judicial interpretation work , judicial interpretations must be published. The SPC Gazette and People’s Court Daily are required to publish the interpretations, but for the other documents published, it is hit or miss. As for the judicial documents listed above , not all are published, as there is no requirement to do so. As I have observed previously, the SPC is generally publishing more judicial documents than before. The contrast is clear, when compared to the early 1990’s, when I started to research the SPC. One positive and important example is the approved judicial interpretation agenda, issued in the form of a notice from the General Office of the SPC .
The SPC’s official website publishes some, but not all of the judicial documents that can be found in some other sources. A problem for those puzzling out these documents is that unfortunately the staff of the SPC’s website does not take the due care they should to ensure that documents are published in the correct classification, so the careful observer will find that misclassifications occur from time to time. Sources other than the SPC’s website may have more of these judicial documents. Some of these judicial documents, such as replies or responses by the #4 Civil Division under the Prior Reporting system for arbitration matters, are published in the division’s own publication, as discussed further below.
There are two additional comments on judicial documents worth mentioning, i.e. data (or lack thereof) and persuasiveness to the lower courts. It is difficult to determine how the number of judicial documents/judicial regulatory documents that the SPC issues compares to the number of judicial interpretations, as it is clear that it is inconvenient for some judicial documents to be made public (and some appear to be classified).
A second comment is on the persuasiveness of these judicial documents to the lower courts. I surmise that some of them are more important to local court leaders than to ordinary judges, but it depends on the nature of the judicial document. It is my understanding that judicial documents with normative provisions (conference summaries or Opinions with normative content) are cited in trial reports (“审理报告” or “审查报告”), but not in judgments or rulings.

II. SPC Selected cases and decisions

A second important area of SPC soft law is SPC selected cases and decisions, which are increasingly important as a form of guidance to lower court judges, especially with the formal implementation of the similar case guidance system . Since 2016, I have been writing about the development of case law with Chinese characteristics, because in my view, it is a very important development.

1. Guiding Opinions 

The 27 July 2020 Guiding Opinions Concerning Strengthening Search for Similar Cases to Unify the Application of Law (“Guiding Opinions”) (“《关于统一法律适用加强类案检索的指导意见(试行)》”) , is significant because it will make judicial decisions more consistent, an ongoing issue in the Chinese court system. The SPC is approving the practice of judges using principles derived from prior cases to fill in the gaps in legislation and judicial interpretations.
The Guiding Opinions codifies many of the practices of the Chinese courts and imposes some new requirements. I have written before that it does not mean that China has become a common law legal system. Although the Guiding Opinions do not address this question, comments by an SPC judge suggest that the special status of cases selected by the SPC by its operational divisions remains in place. It is cases with a special status that I will discuss further below, because it is something most readers in and out of China do not focus on.
The rules on case law in Article 4 of the Guiding Opinions are in line with what I have previously written:
1) SPC guiding cases;
2) SPC typical (model) cases (“典型案例”) and judgments or rulings of the SPC;
3) Reference cases issued by provincial-level higher people’s courts and decisions by those courts;
4) Higher-level courts in the jurisdiction in question and judgments of that court.

2. Specific types of SPC cases

My understanding is that these are general principles, but the specific scope of cases that need to be searched will depend on the specifics. Among the specific types of SPC cases not mentioned in the Guiding Opinions are the following:

1) The cases issued by the SPC Circuit Courts

The SPC Circuit Courts issue cases under different names that are intended to guide the lower courts within their circuits and also indirectly guide legal practitioners in that circuit. In 2016, for example, the #2 Circuit Court issued a set of 30 case summaries (literally important points, 案例要旨) on administrative cases, selected from the many administrative cases heard in the first year and a half of operation. It appears that all six Circuit courts issue reference or typical cases. Earlier this year, the #2 Circuit Court launched a “case a week” (每周一案) series. The Sixth Circuit issues cases entitled Sixth Circuit Case Guidance (“六巡案例参考”) , while the Third Circuit issues typical cases .

2) Cases selected by the operational divisions of the SPC

The SPC provides guidance to the lower courts in the form of cases published in “trial guides”(“审判指导丛书”) and other related specialized publications. The cases published in these trial guides, which have various titles, are for the most part not “guiding cases”(“指导性案例”) and therefore may not be cited in a court judgment. However, because they have been specially selected by the SPC, they are quite persuasive to the lower courts and therefore important to legal professionals. The SPC sees them as a supplement to legislation, judicial interpretations, various types of judicial normative documents/judicial documents/(“司法规范性文件”/ “司法文件”) and useful in providing a source for judicial interpretation drafting. I call these cases “stealth” guidance or “soft precedents”, as they are used without citation in judgments.
Examples of these trial guides include: Reference to Criminal Trial (“刑事审判参考”), edited by a team from the five SPC criminal divisions, the #4 Civil Division’s Guide to Foreign-related Commercial and Maritime Trial; and the Administrative Division’s Administrative Law Enforcement and Administrative Adjudication (“行政执法与行政审判”).
The editors of these publications select cases they consider significant. The editors describe them as “selected to provide specific guidance and reference for criminal justice officials in finding facts, admitting evidence, applying the law and determining sentences when handling similar cases.”(“选择在认定事实,采行证据,法律适用和裁量刑罚…为了刑事司法工作人员处理类似案件提供具体指导和参考”) The editors of the Guide to Foreign-related Commercial and Maritime Trial describe the cases as providing powerful guidance (“具有较强的指导意义”“为了…遇到类似问题提供了解决思路”). They describe their selected cases as being typical and of guiding significance (“具有典型和指导意义的审判案例”). Some of the cases in these trial guides are entitled replies (some called “答复” and others entitled “复函”), as discussed above. One very important type is required by the SPC’s Prior Reporting system for cross-border arbitration matters (for example, as when a lower court intends to refuse the enforcement of a foreign arbitral award). The #4 Civil Division publishes both the request for instructions as well as their response, while the SPC Administrative Division in their publication Administrative Law Enforcement and Administrative Adjudication (“行政执法与行政审判”) only publishes their responses to the lower courts.

These cases retain their special authority even after the Guiding Opinion was issued, as indicated by comments by Senior Judge Yu Tongzhi , an editor of Reference to Criminal Trial. He noted in an article published on 31 July that for criminal cases, the best source to search similar cases is the guidance cases published in Reference to Criminal Trial.”(“就刑事司法而言,可供检索的“类案”,首选无疑是最高人民法院五个刑事审判庭唯一、共同主办的《刑事审判参考》刊载的“指导案例”)。
In my view, this discrete, technical reform of the Guiding Opinion, including the SPC selected cases described above (a form of soft law), has implications greater than the drafters of the Guiding Opinions may have realized, including a possible impact on Chinese legal education. It has the potential to make litigation and assessment of a party’s legal position in non-contentious matters more predictable for parties.

III. Conclusion

Some final thoughts about why the SPC often uses “soft law” to guide the lower courts. In my understanding. SPC judicial interpretations (司法解释) are SPC “quasi-hard law”, as rules on judicial interpretation work state that they have the force of law. That means that they are intended to be in place for an extended period of time and as a consequence, the drafting process tends to be long and involved. Chinese courts, in my understanding, must serve the greater situation (服务大局). The greater situation is dynamic. Soft law enables the SPC to guide the lower courts timely in applying the law and judicial interpretations in specific cases, harmonized with current policy. In this way, the courts perform their important role in governance.

In sum, whether it is SPC policy documents or different types of case guidance or case decisions, SPC soft law is intended to strengthen the firm guiding hand of the SPC, as part of its authority to guide the lower courts.


I have replaced footnotes in the article with links.

Civil Code & the Supreme People’s Court

 
The new Chinese Civil Code will become effective on 1 January 2021, with broad impacts on Chinese law in and out of China.  As mentioned by most of the better law firms commenting on the Civil Code, the Supreme People’s Court (SPC) will fill in some of the broad principles through judicial interpretations.  Other regulatory ministries will do so for specific issues, such as land and property mortgages.  But the Civil Code involves a great deal of work behind the scenes at the SPC, so that 1 January 2021 sees a seamless transition from the separate bodies of Contract Law, Inheritance Law, etc. to the Civil Code and inconsistent judicial interpretations are no longer in effect.  A recent article in one of the SPC’s media outlets by the group in charge of the work gives more detail to the work that I flagged this in May, when I gave comments on the SPC’s major research topics on Chinalawtranslate.com::

the SPC will support the Civil Code by issuing transitional arrangements & judicial interpretations. Over the years, the SPC has been issuing judicial interpretations and other documents relating to the areas of law that will form the Civil Code, particularly in the area of personality rights (Portraiture, Personal Information, Privacy, Genetic Information rights etc.), areas where legislation has been lacking. So work will be needed to review the previous documents in a big “housecleaning exercise”. The articles [in the Civil Code] on personal information, privacy, etc. are not very detailed, although they are important to individual people. Then the question is here, what protections will be provided by forthcoming judicial interpretation(s). This will fill in some of the abstract statements in the Civil Code.

The article by the Leading Small Group Office reveals the following:

  1. Civil Code work is high priority as it is work that designated by the Party Center (literally, 党中央决策部署在人民法院得到不折不扣贯彻落实).  General Secretary Xi Jinping has pointed out that related judicial interpretations need to be improved timely, so the Civil Code, related legal provisions and the spirit are consistent ( 要及时完善相关民事司法解释,使之同民法典及有关法律规定和精神保持一致). But the focus in this post is not on the politics, but the practicalities of implementing the Civil Code in China). 
  2. The SPC has created a leading small group to lead an institution-wide team, entitled the Leading Small Group for Implementing Civil Code Work  民法典贯彻实施工作领导小组 (Leading Small Group).  SPC President Zhou Qiang heads the Leading Small Group. I’ve not yet identified who is heading the Leading Small Group’s Office (最高人民法院民法典贯彻实施工作领导小组办公室).
  3. The Leading Small Group Office [presumably] assembled a Task Breakdown Table( “切实实施民法典”任务分解表”).  The work involved includes: reviewing 591 related judicial interpretations and 139  guiding cases as well as SPC Gazette cases. It seems to involve significant project management skills.  At the SPC level, the Leading Small Group’s Office worked with the judicial interpretation department (the Research Office, as far as I know) and assigned responsibilities by the the principle:  “whoever drafted is responsible”.  That means that the #1 Civil Division would have reviewed interpretations related to family law issues (marriage and inheritance law, for example), and the #2 Civil Division would have reviewed company law and other related issues for which it is responsible.  According to the article, this review work was basically completed by the end of September. 
  4. The criteria for review are as follows: if the content of an old judicial interpretation has been completely adopted by the Civil Code, then the judicial interpretation will be abolished when the Civil Code becomes effective. If a current judicial interpretation completely conflicts with the Civil Code, the current one will be scheduled to be abolished. Another scenario is that the Civil Code and the current judicial interpretation are inconsistent, but it is worth amending it.  A last category is where the Civil Code has new provisions for which the SPC lacks related judicial interpretations. That goes on the SPC’s “to-do” list. For the many people interested in Chinese civil law, please be aware that the Leading Small Group Office has published a related set of books 《中华人民共和国民法典理解与适用》(全6卷11册)
  5. The article does not further mention the review of guiding cases and SPC Gazette cases, but presumably the same process applies to guiding cases and SPC Gazette cases. As the SPC’s Research Office is responsible for guiding cases, I expect that a careful review of existing cases was the responsibility of that office.
  6. The next step is to consolidate the long list of judicial interpretations that have been affected and the recommended solution in a list and accompanying report for eventual review and approval by the SPC’s judicial committee .  I would expect that there is a separate list for guiding cases that need to be abolished.  I would expect that the list of cases that may need to be abolished would also require an accompanying report.  
  7. As I have written on this blog previously, local courts issue local court guidance under different titles. In a blogpost last year, I mentioned that the SPC  has/will require local courts to report guiding rules applicable within their jurisdictions to the SPC. Part of the  work of the SPC in preparing for the Civil Code is to guide and supervise local courts to carry out a similar exercise to the SPC and report the results to the SPC.  Presumably some number of persons in the Leading Small Group Office are responsible for monitoring and coordinating with local higher people’s courts.  It is likely that the local courts are also discussing issues with their counterparts at the SPC. We should expect each local high court (and intermediate courts, such as Shenzhen) that issue local court guidance to issue lists of local court guidance that will be abolished or amended as of 1 January, to ensure a uniform approach by the Chinese courts as of 1 January.
  8. On the agenda for 2021 is amending the approved causes of action (案由) to be consistent with Civil Code, as the Civil Code will provide for new types of civil actions.  The SPC has designated persons to work on this (presumably on the “whoever is responsible principle”) and the plan is for work on drafting new causes of action to be completed by the end of 2021. 
  9. Another issue is transitional arrangements and retroactivity, that is, what law should be applied for cases that arose before the Civil Code was effective or were already in the court system when the Civil Code becomes effective. These are “universal” issues, not confined to China ( a quick search turned up relevant articles from the United States, Germany, England and Wales, among others).   The SPC undertook surveys within the court system on these issues and held three internal workshops in Guangdong to solicit views of local judges, particularly on commercial law-related issues. 
  10. An initial draft of the first judicial interpretation of the Civil Code (part 1) is in place, with the provisional title of “Supreme People’s Court Interpretation Concerning the Some Questions on the Application of the Civil Code of the People’s Republic of China (1) 《最高人民法院关于适用〈中华人民共和国民法典〉若干问题的解释(一)] 》”.  It will be sent to “relevant departments” to solicit their views. The relevant departments are not listed, but there would be many of them, including the Ministry of Land and Resources, Ministry of Housing and Urban-Rural Development, and Ministry of Civil Affairs. Soliciting the views of the general public is not mentioned. 
  11. As for specialized judicial interpretations on critical issues such as property, contract, personality rights, family law issues, inheritance, and tort law (including sexual harassment, presumably), those are already “cooking” on the SPC’s judicial interpretation “stove.”  That is, the divisions of the SPC responsible are researching and drafting related issues, so that soon after the Civil Code becomes effective, old judicial interpretations are amended and new ones are issued. The divisions are taking the following three approaches–codifying prior judicial interpretations concerning a particular issue or issues, so that there is a single relevant judicial interpretation. The lower courts and the Chinese legal profession (and foreign parties as well) would find this approach helpful, as the relevant legal principle would be clearer.   A second approach would be to amend an existing judicial interpretation. The SPC plans to do this for certain interpretations, to provide timely guidance to the lower courts, to better ensure uniformity of court decisions. Third, for new areas of law, such as personality rights, relevant judicial interpretations will be issued “at an appropriate time.” 
  12. We can expect the SPC to further guide the lower courts (and the legal profession) on personality rights issues through “typical cases” and guiding cases or guidance cases issued by divisions of the SPC, before the SPC issues a related comprehensive judicial interpretation.
  13. The SPC is also working on improving its punitive damages system in intellectual property rights cases and when the timing is right, will work on a judicial interpretation. 
  14. On environmental and natural resource issues, the SPC is working on a judicial policy document, which is expected to be issued before year end. I surmise it is one of the major tasks of the SPC’s Environmental and Natural Resources Division. 
  15. The SPC will adjust its quality assessment standards for civil cases, and is working on related measures (研究制定评估考核办法文件),which will involve increasing use of professional judges meetings and judicial committee meetings as a way of ensuring uniformity of court decisions.
  16. The SPC’s guidance will promote diversified dispute resolution, (linked to the Fengqiao experience), which will have different implications in commercial areas of law than family law.  
  17. The SPC is still working on its judicial interpretation involving civil/criminal cross-over cases and has done several rounds of consultations with the “relevant departments,” presumably including the Ministry of Public Security and Supreme People’s Procuratorate.  This is a long-standing issue and difficult one.  This issue has been repeatedly raised by private entrepreneurs and their lawyers, among others. This issue is also “universal,” not confined to China.
  18. Other matters for the SPC include ongoing and future training, publicity, research, and publication concerning the Civil Code. The training is already ongoing within the SPC and lower courts on the Civil Code. The SPC is holding a series of training sessions conducted by experts.  Additionally, the SPC is also tasked with issuing Civil Code-related publicity aimed at the general public.  The SPC’s professional publications will do their part and publish Civil Code related articles research and practice oriented articles.  Although it isn’t specifically stated, I surmise that it is likely that next year’s SPC research agenda will include Civil Code related issues.
  19. I hope that the Leading Small Group Office takes heed of the recently published comments of retired SPC Judge Cai Xiaoxue:  when formulating judicial interpretations, various opinions should be humbly listened to in order to avoid errors or infeasibility of rules to the greatest extent. In the implementation of judicial interpretation, only by frequent self-examination and listening to different voices can errors be discovered and corrected, and fairness and justice can be maintained to the utmost extent (“在制定司法解释时,应当虚心听取各种不同意见,才能最大限度地避免规则错误或者不可行。在司法解释施行过程中,只有常常自省,注意倾听不同声音,才能发现错误,纠正错误,才能最大限度地维护公平正义”。).

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Persons with comments or corrections, please use the comment function or email me.

Partial guide to Supreme People’s Court documents

The Supreme People’s Court (SPC) issues a range of documents as part of its authority to supervise the lower courts. The significance and authority of these documents is confusing to many, both in and out of China, in the world of practice, in academia, and in government, and of course among Chinese law students and graduates.

They are an illustration of how documents continue to be an important tool for Chinese governance, a fact it appears is often forgotten outside of China. “In current Chinese political life, governing the country by documents objectively exists” ( “在现实中国政治生活中,文件治国是一种客观存在”), from this 2017 article by Zhang Xuebo of the Central Party School’s Politics and Law Department.

This blogpost provides an updated consolidated (partial) guide through the forest of SPC judicial documents, drawing on my past research and analysis, not including judicial interpretations (司法解释). I will return to this topic in the future and will discuss judicial interpretations in a separate blogpost.  I have a special interest in judicial documents, because they drew me into researching the SPC in the early 1990s.

The seven categories of documents below are classified as judicial documents  or “judicial normative documents” (司法文件 or 司法规范性文件 and sometimes judicial policy documents” (司法政策性文件). The SPC’s website lists some of them. As I’ve written before, this fuzzy use of terminology is not unusual. An (authoritative) follower has proposed using the English translation “judicial regulatory document” for 司法规范性文件.  An attentive reader can discover from reviewing the documents on the website that this blogpost is not comprehensive.I will have more to say about all of these documents in the fullness of time, when I have an opportunity to explore the forest. The SPC issues many other documents as well, covering personnel and administrative matters, but this blogpost focuses on those with normative provisions.

SPC judicial documents are partially governed by 2012 regulations on the handling of SPC official documents (人民法院公文处理办法), which leave much unsaid and unexplained. It seems likely that additional guidance exists, whether in the form of bureaucratic custom or internal guidelines. Many, but not all, are the SPC’s special versions of Party/government documents.

It is one of the special features of the SPC that so much time and effort is allocated to different types of “soft law,” likely linked to other features of the Chinese legal system.

Partial catalogue of SPC judicial documents

1.Opinions (意见)–In my view, the SPC issues several types of Opinions. I have not yet done detailed research into these different types of documents and have not seen detailed analysis in Chinese (or English).  What I’m setting forth below is my tentative analysis. I’m likely to discover more categories of Opinions as I do further research.

Opinion Type 1:  An Opinion issued solely by the SPC, that addresses a range of matters. The Services and Guarantees Opinions appear to fall into this category. These documents create and transmit to the lower courts new judicial policy, update previous judicial policy, establish new legal guidance that may be eventually crystallized in judicial interpretations and direct the lower courts, but cannot be cited in judicial judgments or rulings. They are generally linked to an important Party or state strategy or initiative. This post has a summary of what opinions are, while another one focuses on how they are structured.  I have often written about this type of Opinion. The ones labeled “Guiding Opinions” are intended to push policy forward, but others may do as well.  Sometimes the SPC issues illustrative “model/exemplary/typical cases to clarify certain points to the lower courts (and the legal community) , such as the Opinion providing Services and Guarantees [Safeguards] to the Yellow River Basin, for which the SPC issued illustrative cases.

Opinion Type 2: An Opinion issued solely by the SPC, that consolidates rules or guidance found in disparate documents and adds some new rules, focused on one particular topic, relating to litigants. The April, 2020,  Opinions on Promoting Lawful and Efficient Trials of Bankruptcy Cases is a good example.It incorporates a provision from the Minutes of the National Court Work Conference on Bankruptcy Trials, for example, regarding consolidating bankruptcy cases of affiliated enterprises.

Opinion Type 3: An Opinion also issued solely by the SPC, that sets out in normative form Party policy/judicial reforms, may be the framework for further normative opinions, and eventually crystalized in law.  An example is the 2015 Opinions on Improving the Judicial Responsibility System of People’s Courts.  The first line clearly links the document to Party decisions–“for the purpose of implementing the general deployment of the Party Center on deepening the reform of the judicial system….(为贯彻中央关于深化司法体制改革的总体部署). It is linked to several normative Opinions and the judicial responsibility system has been incorporated into the People’s Court Law.

Opinion Type 4: the SPC is one of several issuing institutions. They do not create new legal rules but harmonize legal positions among institutions and for the courts, and clarify how the law should be applied. They also cannot be cited as the basis for a judgment or ruling. These are particularly common in the area of criminal law, and are often related to the latest campaign or focus of the authorities. The 2019 Opinions on Several Issues Regarding the Handling of Criminal Cases of Illegal Lending, (最高人民法院 最高人民检察院 公安部 司法部印发《关于办理非法放贷刑事案件若干问题的意见》的通知) part of the  Special Campaign to Crack Down on Underworld Forces (扫黑除恶专项斗争) is a good example.  One aspect of the ongoing campaign, which began in early 2018, is to use the criminal justice and regulatory authorities to crack down on “routing loans” (套路贷), an offense not defined by the criminal law.  This 2019 Opinion harmonizes the understanding among the criminal justice authorities to punish those providing “routing loans.” Article 1 describes certain types of lending activity that can be punished under the crime of illegal business operations (Criminal Law article 225(4)). (See more here).

2.  Conference summary/meeting minutes(会议纪要): the SPC uses specialized court conferences as a way of transmitting central legal policy, unifying or harmonizing court practices in accordance with that policy, and obtaining an overview of court practices and problems. Although conference summaries do not have the status of a judicial interpretation, the lower courts will generally decide cases according to its provisions. “Harmonizing court practice” means in Chinese judicial parlance that judges are applying the law similarly.” A recent example is the 9th National Courts’ Civil and Commercial Trial Work Conference Summary.  The document itself has a very useful explanation: “the Conference Minutes [Summary], which are not judicial interpretations, cannot be cited as a basis for adjudication. For first instance and second instance pending cases after the Conference Minutes have been issued, people’s courts may reason according to the relevant provisions of the Conference Minutes when specifically analyzing the reasons for the application of law in the “The court is of the view” section of adjudicative instruments.” This post has a summary of what conference summaries are.

3. Professional judges meeting summary (法官会议纪要):  I have not yet written a blogpost focused on these. although I have mentioned them from time to time. I have several published collections of these in my library.  The SPC circuit courts appear to have led the way on publishing these as a way of “unifying judicial practice” but the #2 Civil Division (focusing on commercial issues) has published a collection as well.

4. Response or reply (复函 or 答复) These are responses or replies to requests for instructions or approvals. SPC, like other Party and state organs, handles requests for instructions (qingshi 请示). Although proposals have been published to either incorporate the practice into procedural law or abolish it, the practice lives on at all court levels, including the SPC.  If the issue raised is considered important enough, the reply will be approved as a judicial interpretation. There are apparently fewer requests for instructions than ten or twenty years ago. I surmise more are submitted on the criminal issues than civil.  One subcategory of these responses are the ones issued by the SPC’s #4 Civil Division, the division focusing on cross-border commercial and maritime issues. These are responses to request from instructions (请示) from provincial-level courts (including the higher courts of Beijing, Shanghai, Tianjin, and Chongqing), as required by the SPC’s Prior Reporting system for arbitration matters. See more here.

5. Notice (通知).  Documents transmitting one of the above types of judicial documents are often called notices, but this is meant to call attention to a document entitled “notice” (通知), such as the Notice concerning some questions regarding the centralized handling of judicial review of arbitration cases (关于仲裁司法审件归口办理有关问题的通知), discussed here.

6. Rules (规则)and (条例 ) One recent example of the use of rules (规则 is the CICC’s Procedural Rules for the China International Commercial Court of the Supreme People’s Court (最高人民法院办公厅关于印发《最高人民法院国际商事法庭程序规则(试行)》的通知), issued by the SPC’s General Office.  The rules were discussed by the SPC judicial committee but not issued as a judicial interpretation. I have observed that 规则 is used for court rules–as the same term is used for the Working Rules of the SPC’s Compensation Committee  . The term  条例 is used to regulate internal court system matters, such as rules (using  the term 条例) on judicial training(法官教育培训工作条例) and 2012 rules on especially appointed inspectors.

7. Memorandum of Understanding (MOU)  The most well-known example is the 2016 Memorandum of Understanding on Taking Joint Disciplinary Actions against Dishonest Persons Subject to Enforcement (对失信被执行人实施联合惩戒的合作备忘录).  It appears to be the first time (or at least one of the first times) that a large group of central Party-state institutions has concluded an MOU. The SPC concludes many, only some of which have been made public. The lower courts do so as well.  It shows that despite ongoing criticism of “Western” law and legal concepts, the Chinese Communist Party and Chinese government finds it useful to borrow some of them for its own uses. (See more here.)

Transparency

According to the SPC’s rules on judicial interpretation work, judicial interpretations must be published.  As for the judicial documents listed above, not all are published, as there is no requirement to do so.  (I have more on this subject in an academic article on judicial transparency). As I have observed on this blog and in the article, the SPC is generally publishing more judicial documents than before. The contrast is clear, when compared to the early 1990’s, when I started to research the SPC.  One positive and important example is the the approved judicial interpretation agenda, issued in the form of a notice from the General Office of the SPC. The SPC Gazette and People’s Court Daily are required to publish the interpretations, but for the other documents published, it is hit or miss.  The SPC’s official website publishes some, but not all of the ones that can be found in some other sources  A problem for those puzzling out these documents is that unfortunately the staff of the SPC’s website does not take the due care they should to ensure that documents are published in the correct classification, so the careful observer will find that misclassifications occur from time to time. Sources other than the SPC’s website may have more of these judicial documents.  Some of these judicial documents, such as replies or responses by the #4 Civil Division under the Prior Reporting system for arbitration matters, are published in the division’s own publication, as discussed here.

Other comments

Two additional comments on data (or lack thereof) and persuasiveness to the lower courts.  It is difficult to determine how the  number of judicial documents/judicial regulatory documents that the SPC issues compares to the number of judicial interpretations, as it is clear that it is inconvenient for some judicial documents to be made public (and some appear to be classified).

A second comment is on the persuasiveness of these judicial documents to the lower courts.  I surmise that some of them are more important to local court leaders than to ordinary judges, but it depends on the nature of the judicial document. It is my understanding that judicial documents with normative provisions (conference summaries or Opinions with normative content) are cited in trial reports (审理报告 or 审查报告), but not in judgments or rulings.Finally, I surmise that SPC decisions are or will become increasingly important as a form of guidance to lower court judges, especially with the formal implementation of the similar case guidance system.

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Those with corrections or comments or additions, please use the comment function or email me at supremepeoplescourtmonitor@gmail.com.  Many thanks to certain knowledgeable persons for spending some of their valuable free time commenting on earlier drafts of this blogpost.

 

Supreme People’s Court’s new policy document on opening to the outside world

SPC Press conference announcing the policy document

On the afternoon of 25 September, the Supreme People’s Court (SPC) issued yet another guiding opinion providing services and guarantees, this one on providing services and guarantees in support of expanding opening to the outside world  (Services & Guarantees to the Open Policy Guiding Opinions (Guiding Opinions)) (最高人民法院关于人民法院服务保障进一步扩大对外开放的指导意见). It was approved by the SPC’s Party Group, as was BRI Opinion #2.

Senior legal officials from the Ministry of Commerce (MOFCOM) and the Ministry of Foreign Affairs (MFA) spoke at the SPC press conference, in what this observer views as a cross-institutional show of support for China’s policies of opening to the outside world. At a time that government officials are focused on “dual circulation,”  it is a reminder that the opening to the outside world policy remains in place and that one of the SPC’s many responsibilities is to handle those issues properly.  The photo is also one illustration of the place of the SPC within China’s system (体制). 

SPC Vice President Yang Wanming (杨万明) spoke first at the press conference, with the officials from MOFCOM and MFA adding comments. This signalled to the careful observer that he has assumed the responsibility for overseeing the #4 Civil Division (responsible for foreign-related commercial and maritime matters) from Luo Dongchuan (who has been transferred to Fujian Province to serve as Political Legal Commission Party Secretary).

This brief (17 articles) guiding opinion providing judicial services and guarantees (not a judicial interpretation, see this explanation of what it is) is the latest judicial policy on foreign-related (this blogpost will use the term “cross-border”, to incorporate some Hong Kong-related) legal issues (inbound and outbound) relevant to the Chinese courts, drawing on BRI Opinion #2 (issued end 2019 and BRI Opinion #1) and the June, 2020 guidance on Covid-19 and cross-border commercial issues. 

As readers of this blog could anticipate, this opinion is harmonized with the latest international and domestic developments and the latest guidance from Xi Jinping.  According to the official commentary, it is intended to be guidance for judges engaging in cross-border cases for the foreseeable future, and appears to further develop the principles related to cross-border issues in the Opinions of the Supreme People’s Court on Thoroughly Implementing the Spirit of the Fourth Plenum of the 19th Party Congress to Advance the Modernization of the Judicial System and Judicial Capacity.  

As to what those judicial services and guarantees are, Justice Yang said the following:

Wherever the national strategy is deployed, the judicial services and guarantees of the people’s courts will be there (国家战略部署到哪里,人民法院司法服务和保障就到哪里.)

How does this document relate to other Chinese legislation?

To clarify the relationship between this opinion on the one hand and legislation, judicial interpretations and other types of judicial documents (such as the two BRI Opinions), Justice Yang gave a quick summary in SPC jargon:

While maintaining consistency with existing laws and regulations, judicial interpretations, and judicial policy documents, the Guiding Opinions also strengthen the macro-guidance of the people’s courts’ services and guarantees opening to the outside world from a higher level,  and are organically linked to other SPC judicial policy documents for major opening-up decisions, major strategies, and major initiatives, to further improve the system of judicial services and guarantees of the work relating to opening to the outside world与现有法律法规和司法解释、司法政策文件保持一致的同时,从更高层面加强人民法院服务保障对外开放工作的宏观指导,与最高人民法院出台的其他司法服务保障国家对外开放重大决策、重大战略和重大举措的司法政策文件有机衔接,进一步完善了司法服务保障对外开放工作体系。

What is means is:

  1. The Guiding Opinions are intended to be consistent with current law and regulations, SPC judicial interpretations, and SPC judicial policy documents.
  2. The Guiding Opinions links with previous SPC policy documents (such as BRI Opinions #1 & #2, the FTZ Opinions, the Lingang Opinions, Diversified Dispute Resolution Opinions, etc.)(see more below);
  3. It is intended to provide comprehensive guidance and better support government policies on opening to the outside world.

The Guiding Opinions. like many of the documents analyzed on this blog, are written in SPC jargon. Decoding this language poses challenges to those are concerned or who should be concerned about the impact of how the Chinese courts interact with the rest of the world. 

Decoding the language, however, enables the careful reader to understand outstanding issues and contemplated reforms or other measures, including possible judicial interpretations.

Summary and comments

This blogpost will summarize and make some brief comments on some of the issues mentioned in each of the six sections of the documents and make a few concluding comments.  There are many more issues in this document that should be explored, but I’ve been delayed by a hand injury.

1. Political stance

The first section calls for judges to raise their political stanceThis is standard language in the New Era. The first article frames the documents in current political language, including that frequently used in Chinese foreign policy documents and to relevant political documents. Therefore the first article (and elsewhere) refers to multilateralism, equally situated parties, and creating a legalized, internationalized convenient business environment.

The second article calls for the courts to provide services and guarantees for ten crucial national strategies and policies: promoting the BRI; pilot free trade zone construction [enhancement]; Hainan Free Trade Port construction; construction of the Greater Bay area; Beijing-Tianjin-Hebei area development; Yangtze River basin development; Shenzhen model city for socialist development; China-Shanghai Cooperation Organization local economic cooperation demonstration zone; Great Maritime Power construction. 自由贸易试验区建设、海南自由贸易港建设、粤港澳大湾区建设、京津冀协同发展、长江三角洲区域一体化发展、长江经济带发展、深圳中国特色社会主义先行示范区建设、中国-上海合作组织地方经贸合作示范区建设、海洋强国建设。This second article also calls for new mechanisms for hearing cases, and improving the application of law, to create a transparent stable predictable legalized business environment. The list of ten national strategies and policies is a signal to the leadership and to the lower courts, but for those of us far outside the System,  it signals to us that these are the most important current policies related to foreign-related judicial policy. It also appears that the national strategies linked to the opening policy evolves over time.

2.  Basic principles of foreign-related litigation

The second section focuses on basic principles of foreign-related litigation–of which it sets out three: protecting the equal rights of parties; respecting the intent of the parties; and implementing (judicial) jurisdiction according to law. 

The second principle, described in Article 4, includes the right of parties to choose governing law, a court with jurisdiction and arbitration, litigation, or mediation to resolve their disputes. However, as mentioned previously, Chinese law treats choice of arbitration and litigation differently, requiring litigants choosing a (foreign court) to have an actual connection to the foreign court (see Professor Vivienne Bath’s previous scholarship on this), although there isn’t a counterpart position for arbitration. As mentioned previously, the  application of foreign law by Chinese courts is a work in process.  The SPC has given a great deal of publicity to its platform for the ascertainment of foreign law. which includes determinations of foreign law on a certain issue by certain authorized organizations and opinions given by members of the international expert committee of the China International Commerce Court (CICC). As I wrote close to two years ago, the China International Commercial Court (CICC) rules do not clarify a number of practical questions. Could a court request an advisory opinion from an expert and from a designated ascertainment center, and if so, what relative weight will be attached to each? Presumably, a court would give it greater weight than an opinion from an expert provided by a party. 

The third principle, described more fully in Article 5, is linked to protecting China’s judicial sovereignty and repeats the statement that conflicts in jurisdiction and parallel proceedings will be resolved properly (妥善解决). This has appeared in BRI Opinions #1 and #2, but specific measures to resolve parallel proceedings have not yet been noted. Parallel and conflicting proceedings are an ongoing issue (not only between the Chinese courts and other courts outside mainland China) and will be further mentioned below.  As Professor Bath discussed, several scenarios are common. One involves situations in which parties had agreed to the exclusive jurisdiction of the courts of one country, but a party brings proceedings in the courts another country (China), which accepts the case and may issue a judgment before the original court. Another set of cases involves an alleged arbitration agreement which provides for arbitration overseas, but a party brings a case in a Chinese court nonetheless.  A variation has recently been noticed by two leading practicing lawyers in China.  In that case, an issue that had been pleaded in arbitration proceedings in Hong Kong and reviewed by the relevant Hong Kong court was not given res judicata effect in China.  The ruling by the Shijiazhuang court has been reviewed by the SPC under its Prior Review proceedings.

Although parallel proceedings in courts outside of China and in China have previously been noted primarily in maritime law (and anti-suit and anti-anti-suit orders),the parallel/conflicting proceedings issues seem to be moving to the area of Intellectual property (IP) law, likely related to the multi-jurisdiction litigation between Huawei and Conversant concerning standard essential patents, including in the UK Supreme Court and the German courts. What has been noted is one of the SPC’s research topics includes protecting China’s judicial sovereignty (national interests) through anti-suit or anti-anti-suit injunctions. The SPC Intellectual Property Court has issued an anti-suit injunction order against Conversant and the Wuhan Intermediate Court issued an anti-suit injunction order against Intel Digital (the linked article has a summary of the facts in the Wuhan case, but reserve judgment on the author’s comments on the authority of Chinese courts to issue these order).

3. Modernizing China’s foreign-related and maritime litigation systems

This third section contains four articles: application of law; fully develop the advantages of service and guarantees to cross-border trade and investment; promote the integration with the internet of foreign-related litigation; and develop diversified dispute resolution related to international commercial dispute resolution. Many of the provisions in this section repeat provisions in the BRI Opinions #1 and #2.  What appears to be new is a statement that the SPC will seek to integrate prestigious foreign arbitration and mediation organizations to be part of its one stop mediation/arbitration/litigation mechanism.

4. Increase judicial protections

Article 10 mentions foreign-related administrative litigation issues. They were mentioned briefly in BRI Opinion #2 and once in BRI Opinion #1, here seeing greater stress.  Section 11 focuses on cross-border intellectual property issues.  It has some important new content.  It mentions improving (完善涉外知识产权诉讼制度) foreign-related IP litigation procedures, putting into judicial policy previous statements by former Vice President Luo Dongchuan about the need for special IP litigation rules. It again mentions researching and responding to parallel international litigation relating to intellectual property rights and becoming a preferred place for settling IP disputes. From comments made by several leading experts in a recent webinar the Chinese courts are an important jurisdiction in IP litigation. It is unclear whether the use of anti-suit (or anti-anti-suit )injunctions by the Chinese courts will be the way that litigants are encouraged to turn to the Chinese courts to settle their global IP disputes. According to comments by several persons with expertise in Chinese IP law and related commercial issues, a number of factors are leading to the Chinese IP courts becoming an important forum for the resolution of IP disputes.  Related to this, see the analysis by Doug Clark, partner in the IP law firm Rouse in this article, in which he says that the Chinese courts are looking to take on the role of setting global FRAND rates. Also see related blogposts on Mark Cohen’s blog, Chinaipr.com.  These issues are complex and important.

5.  Prevent and resolve major risks

This section has only two articles.  Article 13 focuses on perfecting risk control mechanisms for major cases and firmly establishing an overall national security concept.  These phrases are not unique to the SPC, but reflect language in Party documents, with the “overall national security concept” attributed to Xi JinpingThis article also calls on courts to coordinate the overall international and domestic situations, adhere to bottom-line thinking and risk awareness, understand the domestic and international situation and risks and challenges facing China’s opening up.  The final phrase in this article calls on courts to resolutely defend our (China’s) judicial sovereignty and national security.  So it seems that the concept of “judicial sovereignty” (used several times in this document) is being used to protect China’s national sovereignty.

The second one (Article 14), on guaranteeing state security and economic and social order gives a different priority to possible cross-border criminal law issues from either BRI Opinion.  Neither BRI Opinion mentioned  infiltration (渗透), espionage (间谍), sabotage, subversion  (渗透颠覆破坏). Infiltration and espionage are mentioned immediately after the article heading. (the sentence is: “thoroughly participate in the struggle against infiltration, espionage, separatism, terrorism, and cults, by strictly combatting crimes of infiltration, subversion, and sabotage, and crimes of espionage, violent terrorism, ethnic separatism, religious extremism, and other crimes that endanger national security” 深入参与反渗透反间谍反分裂反恐怖反邪教斗争,严厉打击各种渗透颠覆破坏、间谍、暴力恐怖、民族分裂、宗教极端等危害国家安全的犯罪. (Many thanks to Chinalawtranslate.com for this translation). Other concerns, such as violent terrorism, ethnic separatism, religious extremism have been seen previously in the other two BRI documents. and article 14 again stresses criminal justice cooperation between China and the rest of the world. The reason for the change in priorities is unclear. What signal does this send to the international commercial and judicial world (international community) that infiltration, espionage, sabotage and subversion are being mentioned?

6. Increasing judicial cooperation, increase the international influence of the Chinese judiciary

These three articles address judicial cooperation, judicial exchanges, and training of judges who can handle foreign-related cases.  

Article 15 concerns judicial assistance treaties, encouraging Chinese judges to participate in the negotiation of bilateral and multilateral judicial assistance treaties.

Article 16, on judicial exchanges, including highlighting exchanges with the principal international legal organizations, also summarizes ongoing SPC practices in developing exchanges with BRI judiciaries, although it is not so specified.  

Article 17 calls for the better training, recruitment and promotion of persons who can deal with specialized legal issues such as cross-border finance, environmental protection, maritime law, intellectual property. Measures include joint programs with universities, exchanges with international organizations and international commercial courts, with the objective of having judges who are able to participate in the drafting or amendment of relevant international rules [a glimpse into a judiciary certain special functions] and the creation of a group of Chinese judges with an international perspective. This appears to be directed to law schools and senior personnel in the lower courts and likely involved concurrence by the SPC’s International Cooperation Bureau.  As has been mentioned in earlier blogposts, the career progression for legal professionals to become judges has slowed because of the personnel reforms in the previous round of judicial reforms, under which young professionals work as judges assistants for a number of years before applying (and passing relevant examinations)to become a judge.  From my observations, fixed quotas on the number of judges in a court can mean a talented, educated judges assistant in one court may wait significantly longer than a similarly qualified person in another court to become a judge.

A few concluding comments

Perhaps it is not realized that multiple documents conveying many of the same messages, with references that need decoding, may not convey the intended message to the international business community that the Chinese courts welcome and will treat fairly foreign commercial litigants, and that Chinese law is stable, transparent and predictable. 

The Guiding Opinions call for increasing publicity about and the international influence of Chinese justice, and international confidence in Chinese law, through translating guiding and typical (exemplary/model) cases into foreign languages.  This echoes language in BRI Opinion #2.  The international community outside of China may or may not consider those sources to be primary ones in forming a view about the Chinese courts.  In my view, it is more likely that the international community will look to decisions and rulings of the Chinese courts in several categories of cases: enforcement or other proceedings involving foreign (and Hong Kong) arbitral awards;  parallel or competing proceedings, whether with other courts or with international arbitration;  difficult commercial ones, particularly involving Chinese state-owned enterprises, or other Chinese national champions and issues related to intellectual property, particularly as it relates to “cutting-edge” technology.  This observer surmises that the international judicial community will also look for a spirit of mutual respect for foreign courts and their jurisdiction.

The Guiding Opinions repeats language about Chinese courts participating in the formulation of international rules, an ongoing theme since the 2014 4th Plenum of the 18th Party Congress decision. One example is the constructive role of the SPC negotiator as a member of the Chinese delegation that participated in the drafting of the Hague Judgments Convention. But what the international community will also look for is China’s capacity to harmonize its legislation to be able to ratify the international conventions whose drafting it participates in.

The introduction to Guiding Opinions notes that comments were sought from many sources. It is unclear whether the views of international users of the Chinese court system were solicited. Other developments in which the international community may display an interest are the creation of additional institutions within the Chinese judiciary to enable the Chinese judiciary to better understand the needs of(domestic and international) users.

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Many thanks to several highly knowledgeable readers who commented on earlier drafts of this blogpost.