Category Archives: diversified dispute resolution

Justice Tao Kaiyuan, speaking at the Beijing Arbitration Commission

Among the many issues that I am discussing in my “neverending article” is the role of the Supreme People’s Court (SPC) in the complicated process of drafting new legislation and amending existing legislation, as is sometimes revealed in the “Services and Safeguards Opinions” about which I write often. The role of the SPC is for the most part unseen and unnoticed. Because the Arbitration Law is so critically important to dispute resolution between Chinese and non-Chinese parties, this blogpost highlights the SPC’s role in the unfinished process of revising the Arbitration Law and includes some of my own comments on the positions taken by the SPC. I flag one particular issue that in my view would benefit from discussion and analysis by those with international arbitration law expertise.

Justice Tao Kaiyuan participated in a meeting of the Chinese People’s Political Consultative Conference (CPPCC)’s Committee on Social and Legal Affairs on 30 May on the Arbitration Law draft revision (link is to the Chinese original) and provided a summary of some of the work of the SPC and lower courts in “pushing forward the progress of amending the Arbitration Law. ” (Mao Xiaofei of the Chinese Academy of Social Sciences, International Law Institute has kindly shared her translation into English of the Arbitration Law revision, which includes a comparison with the current text.)

The 2020 document Guiding Opinions of the Supreme People’s Court on the People’s Courts Serving and Guaranteeing the Further Opening Up to the Outside World (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) about which I previously wrote, contains the phrase “push forward the progress of amending the Arbitration Law (and several other laws) (推动仲裁法、海商法、海事诉讼特别程序法等国内商事海事法律的修法进程). Additionally, the Annual Report on Judicial Review of Commercial Arbitration (2019), edited by the SPC’s #4 Civil Division (I had a cameo role in improving the English version) also mentions the SPC will support the amendment of the Arbitration Law. Persons whose eyes glaze over when reading official documents would miss this curious phrase. Few persons outside of China have access to the Annual Report.

Xu Liquan, one of the deputy heads of the CPPCC, also spoke at the 30 May meeting discussing the Arbitration Law draft and revealed arbitration statistics I had not previously seen–that Chinese foreign-related enterprises have a dispute rate of up to 10% ( 涉外企业纠纷发生率高达10%) in cross-border transactions, over 90% select arbitration as the dispute resolution method, but a large majority select arbitration outside of China. Mr. Xu did not mention the source of these statistics, but I understand them to be derived from a report by the China Arbitration Institute of the China University of Political Science and Law (CUPL). The report summarizes the China Arbitration Institute’s survey of more than 100 foreign-related enterprises recommended by the State-Owned Assets Supervision and Administration Commission (SASAC). The full report has not yet been made public.

From these statistics, it can be seen that if China wants to be considered a more attractive destination for commercial dispute resolution, improving the Arbitration Law is crucial.

A translation (amended machine translation) of Justice Tao’s remarks (I surmise they are a summary) follows below, along with some of my own comments in italics.

Some background on her remarks, for those who need it: The Ministry of Justice, as the regulator of arbitration institutions, is the institution charged with providing draft amendments to the Arbitration Law to be forwarded to the National People’s Congress Standing Committee. (I myself had the good fortune to be involved in a cameo role in this process as a consultant to the Great Britain China Centre (GBCC) before and during the pandemic. )

The Supreme People’s Court has been actively participating in this work, and supports the revision of an arbitration law that is based on China’s national conditions, draws on international practices, and takes into account the development stage of our country’s arbitration industry.

Justice Tao signals the SPC’s very active involvement in providing input to the Ministry of Justice. It appears from her summary that views from several different divisions and offices of the SPC are reflected in what she said, including the #4 civil division (responsible for international arbitration matters), #3 civil division (intellectual property and anti-monopoly), and the enforcement bureau. I surmise that it will actively involve itself in commenting on the draft of the Arbitration Law when it is considered by the National People’s Congress Standing Committee.

“Drawing on international practices” is a broad term, including the UNCITRAL Model Law and “international practices” of leading courts on arbitration-related issues. On China’s national conditions, although most foreign practitioners are aware of the top 3-5 Chinese arbitration institutions, the vast majority are funded by local governments. The local arbitration institutions have appointed arbitrators sometimes more for their official position than their knowledge of arbitration, and have management and staff with varying levels of competency. Local lawyers prefer the courts, where an appeal is possible if the initial decision is unfavorable.

Regarding further opening up of the domestic arbitration market and allowing overseas arbitration institutions to conduct business in the Mainland. In recent years, the Supreme People’s Court has successively issued a number of judicial documents to support the introduction of foreign arbitration institutions to set up branches to carry out arbitration business in the construction of Lingang New Area of China (Shanghai) Pilot Free Trade Zone, Hainan Free Trade Port and Beijing “two zones” [pilot free trade zone and service trade zone]. In the next step, we will support the opening of the arbitration market in other pilot free trade zones.

I wrote a report on this almost two years ago. There are many practical issues to be ironed out, and Zero Covid plus the unamended Arbitration Law makes it even less likely that a major foreign arbitration institution will agree to commit to opening an office in China that handles cases.

Regarding the reasonable expansion of the scope of arbitration cases. We agree with the suggestion that intellectual property, sports, and anti-monopoly disputes be included in the scope of arbitration, but it depends on the type [of dispute], and only civil and commercial disputes should be submitted to arbitration.

There has been a great deal of discussion in China about the arbitrability of intellectual property, sports, and anti-monopoly disputes, with cases having been heard in the courts. See this detailed discussion of the sports law issues here in an earlier volume of the Beijing Arbitration Commission’s annual volume Commercial Dispute Resolution In China: An Annual Review And Preview by Guo Cai and Jeffrey Benz. On intellectual property issues, a search in Chinese or English will turn up many articles–this one by Baker & McKenzie and this one by the intellectual property firm SIPS are two of many. The arbitrability of antimonopoly disputes in China has been discussed by both practitioners and academics. Another highly disputed issue is the scope of the disputes that are arbitrable, linked to the definition of “civil and commercial” disputes in the areas of intellectual property and anti-monopoly law.

However, we suggest further research on whether the international investment arbitration between the host country and the investor should be regulated by the Arbitration Law. First, international investment arbitration is different from commercial arbitration, and it is suggested to retain the provision that commercial arbitration applies to civil and commercial disputes between equal parties. Second, the investment protection agreement signed by my country provides different solutions to international investment disputes. According to the commercial reservation statement made when our country joined the “Convention on the Recognition and Enforcement of Foreign Arbitral Awards”, the recognition and enforcement of arbitration awards disputed between the host country and investors, the Convention does not apply.

Some of the Belt & Road “Services and Safeguards Opinions” have flagged investment arbitration as an issue of concern. Enabling investment arbitration in China involves a number of interlinked issues. I recommend Professor Chi Manjiao’s recent article on the many complicated issues related to improving Chinese law on investment arbitration.

Regarding the boundary between confidentiality and disclosure of information in the process of judicial review of arbitration. We agree with the suggestion that the advantage of arbitration confidentiality should be maintained in arbitration judicial review cases. It is difficult to make specific provisions in the Arbitration Law drawing the line between confidentiality and transparency, and it is suggested that it can be resolved through judicial interpretation. In judicial practice, judges do not involve facts irrelevant to arbitration judicial review when writing documents. The parties may also request the people’s court not to disclose the judgment documents on the grounds that the case involves personal privacy and commercial secrets. In the future, it may be considered to establish clearer rules to further balance the relationship between arbitration confidentiality and judicial openness.

Drawing the line between confidentiality and transparency is an issue worldwide, so it makes sense to leave this matter to the SPC to provide more detailed rules through a judicial interpretation.

On the protection of the rights and interests of third parties (案外人). The Arbitration Law should protect the legitimate rights and interests of third parties, but the current draft amendment to the Arbitration Law [Article 84] stipulates that the prerequisite for a third party to challenge the subject matter of enforcement is that the enforcement has not yet been completed, and even if the grounds are valid and the People’s Court decides to terminate the enforcement, it still cannot negate the validity of the arbitral award that has harmed his or her legitimate rights and interests, and this situation is particularly prominent when the parties to an arbitration case apply for arbitration in bad faith or sham arbitration. Therefore, it is necessary to introduce a system of application for setting aside an arbitral award by a third party, so as to fundamentally solve the problem that the current system of remedies for third parties in the draft amendment is insufficient to adequately protect their lawful rights and interests.

This is the section that I hope will attract discussion by those highly knowledgeable about arbitration law. Article 84 of the consultation draft of the Arbitration Law gives third parties in [domestic] arbitration enforcement proceedings the right to challenge the subject matter of the enforcement. Justice Tao is taking the view that the remedies for third parties in the draft are insufficient, and third parties should have the right to apply to a court to set aside the arbitral award at the enforcement stage. It appears that Justice Tao was persuaded by the views of the SPC’s Enforcement Bureau, as set forth in an article published a year ago by Judge Shao Changmao, head of one of its offices. Silence by other divisions does not necessarily signal agreement.

In my view, incorporating such a provision in the Arbitration Law could lead to even more challenges to arbitral awards and appears to signal a return to earlier law, in which courts could set aside domestic arbitral awards. It likely reflects the SPC’s concern with stopping sham dispute resolution, whether it is sham litigation (subject to criminal penalties) sham mediation (about which I have written earlier), or sham arbitration. However, it could lead to the “cure being worse than the disease.” The Chinese arbitration community is likely to take the view that this will not be helpful in making China become a more attractive destination for cross-border arbitration.

I surmise that incorporating this provision would make major international arbitration institutions more reluctant to establish case management offices in China. It would mean that Chinese courts could set aside their awards, which they could not do if the award was considered to have been made outside the mainland. I look forward to further discussion by the international arbitration community on the appropriateness of incorporating such a provision in the Arbitration Law.

Finally, amending the Arbitration Law, from my own brief involvement in the process and discussions with persons involved, is more complex that it appears but is a crucially important matter for the future of Chinese and China-related dispute resolution. Once the law is finalized, the process deserves a study of its own. The final version of the amended Arbitration Law will be an indication of the balance between internationalization (harmonization with international practice) and Chinese characteristics.

_________________________

Many thanks to three anonymous peer reviewers for their comments on earlier drafts of this blogpost.

My apologies to the patient followers of this blog for the long gap between blogposts.

Civil Code, Communist Party and the Courts, diversified dispute resolution, judicial documents, judicial interpretations

Supreme People’s Court’s 2022 Pre-“Two Sessions” Accomplishments

March 3, 2022 Supreme People's Court Monitor Leave a comment

In the period between 1 January and today (2 March 2022), the Supreme People’s Court (SPC) issued quite a few judicial interpretations, judicial documents, and typical cases. This blogpost focuses on one judicial interpretation; several Greater Bay-related interpretations and documents; and several sets of typical cases issued since the beginning of the year. Apologies to readers that I do not have time to analyze any of this properly-I am doing the first of many major revisions of an academic article, for submission.

Judicial interpretations: General Part of the Civil Code

In late February, the SPC issued the Interpretation of the General Part of the Civil Code (最高人民法院关于适用《中华人民共和国民法典》总则编若干问题的解释). I had previously surmised that it would be finalized before the National People’s Congress (NPC) meeting in March. It went into effect on 1 March 2022. An SPC press release is found here, with background information on drafting, mentioning that the drafters had completely accepted the views of the Legislative Work Commission (LAC) in the drafting process, for reasons previously discussed. I surmise in the meeting rooms in which the draft interpretation was discussed, there was a robust exchange of views. A more recent article, published after this blogpost was originally written), that I recommend to those with an interest (Understanding and Application of the General Part), has more detailed information about the drafting.

As discussed earlier, the drafters solicited views within the court system and among some of the leading Beijing law schools. The press release highlighted the importance of integrating socialist core values into the interpretation. Commentary by a responsible person of the Research Office of the SPC here. That office led the drafting of the General Part, as flagged in this blogpost. The authoritative person (perhaps Judge Guo Feng, but unknown), mentions the integration of socialist core values into the General Part of the Civil Code, as is required by the ongoing SPC plan and a multi-institutional Party document that has not been made public. The “Understanding and Application of the General Part) was written by Judge Guo Feng, Chen Longye (mentioned here), and Liu Ting, a judge’s assistant, whom I surmise was seconded to the Research Office from the Nantong (Jiangsu) Intermediate People’s Court. Therefore I assume that the authoritative person quoted in the earlier press release was in fact Judge Guo.

The article by Judge Guo and colleagues details the many entities that saw the draft of the interpretation: relevant entities within the SPC; all the higher people’s court; as well as the Central Publicity Department (中宣部), Central Political-Legal Commission (中政委),the office of the Central Governing the Country According to Law Commission (中央依法治国办), the Supreme People’s Procuratorate (最高人民检察院), Ministry of Public Security (公安部)、Ministry of Justice (民政部)、State Administration of Market Regulation (市场监管总局), China Law Society (中国法学会), China Academy of Social Sciences (presumably the Law Institute), the All-China Federation of Industry and Commerce, and others. They twice sought comments from the LAC in writing(两次书面征求全国人大常委会法工委的意见)–this means through formal institution to institution communications.

As I wrote in an earlier blogpost, it appears that the SPC is both “serving the greater situation” by implementing in the courts the Party’s plan to integrate socialist core values in plans to legislate and amend legislation（社会主义核心价值观融入法治建设立法修法规划） [the new plan, entitled 关于建立社会主义核心价值观入法入规协调机制的意见（试行）] while at the same time seeking to deal with many of the difficult legal issues that face it.

The General Part covers the following issues: capacity for civil rights and capacity for civil conduct, guardianship, declaration of disappearance and declaration of death, civil legal acts, agency, civil liability, statute of limitations, and supplementary provisions. Professor Wang Liming’s highly authoritative commentary, posted on an SPC Wechat account, is found here. Professor Yang Lixin has also published an authoritative article. I recommend this version, with red highlighting by now-former SPC judge Xiao Feng of the important points of Professor Wang, Yang, and Shen Weixing, dean of Tsinghua University Law School and Professor Yu Fei of China University of Political Science and Law.

Greater Bay Area Judicial Assistance and Judicial Policy

The SPC issued several Greater Bay related documents since 1 January, listed below, which relate to SPC policy on developing civil judicial assistance with the Hong Kong and Macau Special Administrative Regions:

1.Mutual Assistance Arrangement between the SPC & the Macau SAR in Arbitration Procedures (最高人民法院关于内地与澳门特别行政区就仲裁程序相互协助保全的安排);

Important background found in the press conference, in which Judge Si Yanli and others involved in negotiating the Arrangement spoke. My earlier blogpost explains why Arrangements are approved as judicial interpretations, although they do not fit the formal jurisdiction of one: “Judge Si mentioned that for the Supplementary Arrangement to be effectively implemented on the mainland, it must be transformed into a judicial interpretation.” Those following legal developments in the two SARs should note the following language in the press conference: “the Outline of the Greater Bay Area and the Hengqin Plan both propose to promote the convergence of rules and coordination of mechanisms in the Greater Bay Area of Guangdong, Hong Kong, and Macao. Inter-regional judicial assistance is an important way to reflect Chinese characteristics, highlight the advantages of “two systems” and achieve convergence of legal rules and mechanisms. 《大湾区纲要》《横琴方案》均提出要推进粤港澳大湾区规则衔接、机制对接。区际司法协助是体现中国特色、彰显“两制”优势，实现法律规则衔接、机制对接的重要途径”。This theme is further developed in two January, 2022 policy documents linked below.

2. Arrangement on Reciprocal Recognition and Enforcement of Civil Judgments in Matrimonial and Family Cases by the Courts of the Mainland and of the Hong Kong Special Administrative Region 最高人民法院关于内地与香港特别行政区法院相互认可和执行婚姻家庭民事案件判决的安排. The SPC and Hong Kong Department of Justice held a useful seminar to explain its provisions, at which Judge Si Yanli spoke, among others. I expect that the law firms focusing on family law matters will follow up with detailed client alerts.

3. Opinions on Supporting and Guaranteeing the Comprehensive Deepening of the Reform and Opening-up of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone 关于支持和保障全面深化前海深港现代服务业合作区改革开放的意见， linked to the Central Committee and State Council’s September, 2021 document on Qianhai/Hong Kong and Opinions on Supporting and Guaranteeing the Construction of Hengqin Guangdong-Macao Deep Cooperation Zone 关于支持和保障横琴粤澳深度合作区建设的意见, linked to the Central Committee & State Council’s September document on Hengqin/Macau. It is unclear to me whether the SPC solicited the views of the two SARs on these documents. As mentioned above, it mentions national policy to achieve convergence of legal rules and mechanisms in the Greater Bay Area and mentions several aspects of that policy that is relevant to dispute resolution. Among those are (numbers are from the points in the relevant Opinion):

4. Expanding the jurisdiction of the Qianhai court, including permitting it to take cases when the parties have agreed on the jurisdiction of the Qianhai, but there is no connection to the dispute. This appears to be another piloting (the SPC’s Lingang Opinion has a similar provision) of a possible future amendment of the Civil Procedure Law to abolish the closest connection rule for cross-border jurisdiction (see Professor Vivienne Bath’s research on this issue);

5. Work on (加强) establish an inter-regional judicial assistance system with Chinese characteristics, consider an electronic platform for civil and commercial judicial assistance in the Guangdong-Hong Kong-Macao Greater Bay Area;

8. Explore the establishment of a unified qualification recognition system for Hong Kong and Macao mediators to practice in the Guangdong-Hong Kong-Macao Greater Bay Area. The lawyer qualification system requires that the lawyer be a Chinese citizen, consistent with Chinese legislation. Query whether the same requirement will be imposed on mediators. This would be disadvantageous for Hong Kong mediators who are not Chinese citizens.

I highly recommend Judge Si Yanli’s recent academic article on Greater Bay judicial assistance issues for those with an interest in this topic.

It is my hope that someone can undertake further analysis of these documents.

SPC Typical Cases

Perhaps because General Secretary Xi Jinping has said “one case is better than a dozen documents (习近平总书记强调， “一个案例胜过一打文件”), in the run-up to the “Two Meetings,” the SPC has issued quite a few typical cases. Typical cases are intended to guide the courts and the general public.

Nine typical cases on protecting the rights of juveniles 未成年人权益司法保护典型案例, well worth further analysis, with several involving family education orders to parents and one involving failure of a hotel to verify the identity and contact information of a juvenile couple that checked into a hotel room (where they had sex);
Ten typical cases on solid waste pollution人民法院依法审理固体废物污染环境典型案例, seven criminal cases, two civil cases, and one administrative case. Three involve public interest litigation, two by the procuratorate and one by a civil society organization;
The third set of Belt & Road-related cases 最高法发布第三批涉“一带一路”建设典型案例. The cases are not necessarily specifically connected with the Belt & Road but involve Chinese cross-border commercial, maritime, and arbitration issues. One China International Commercial Court (CICC) case is included, a case on an infrastructure payment guarantee, as is the Brentwood case. The SPC’s comments on the CICC case are consistent with my comments published earlier on this blog about the role of CICC in providing soft precedents for the Chinese courts: “the principle of attribution has an exemplary guiding role for the resolution of similar disputes in the future (该归责原则对今后类似纠纷案件的解决具有示范指导作用).”
Accompanying the release of the General Part judicial interpretation was the first set of Civil Code typical cases The typical cases are not limited to illustrating the General Part but relate to different parts of the Civil Code, also stressing socialist core values.
A first set of typical cases of the courts providing services and safeguards to the free trade zones 人民法院服务保障自由贸易试验区建设典型案例. The cases are intended to guide the lower courts and general public, and as the introduction states illustrate the “achievements of the people’s courts in actively creating a business environment that is ruled by law, internationalized, and convenient.” For those interested, see my earlier article on the SPC and free trade zones, available on
SSRN
The second batch of cases in which the people’s courts promote socialist core values 第二批人民法院大力弘扬社会主义核心价值观典型民事案例. These cases are worth further analysis for what they show about the treatment of the elderly, among other social issues.

Civil Code, Communist Party and the Courts, diversified dispute resolution, judicial committees, judicial documents, judicial interpretations

Supreme People’s Court’s 2021 Year-End Accomplishments

January 4, 2022 Supreme People's Court Monitor Leave a comment

Photo from the “look back meeting” described below

Apologies to readers for the long gap between posts–I have been focusing on yet another academic article and am finding that even so-called “short articles” take much longer than anticipated, especially when the topic reveals more and more complexities than were apparent when I submitted the abstract to the journal months ago.

So instead of any involved analysis, I’ll list some of the year-end (from December) accomplishments of the Supreme People’s Court (SPC) with some brief notes. Another aspect of the SPC being a cross between a Party-state organ and a court is that it needs to meet year-end goals and submit year-end reports. The SPC’s judicial reform leading group recently discussed and approved its year-end report (最高人民法院司法改革领导小组2021年工作总结报告). The judicial reform leading group is headed by President Zhou Qiang. Other members include Justices He Rong, Ma Shizhong (head of the Political Department), He Xiaorong, and Shen Liang. The Judicial Reform Office presumably drafted by the report. It is likely a constituent part of the SPC’s year-end report to go to the Party leadership, before the annual Central Political-Legal Work Conference.

Another aspect of the SPC being a cross between a Party-state organ and a court is that it is inspected by Party inspection groups and is a focal point of campaigns on the education and rectification of political-legal organs.

Among the SPC’s year-end accomplishments are the following. For the avoidance of doubt, judicial interpretations, judicial documents, and typical cases are all means by which the SPC guides the lower courts. I will have more to say about this topic in the unfinished academic article mentioned above.

Judicial interpretations

Online Mediation Rules of the People’s Courts (人民法院在线调解规则). Online mediation is an important focus of the SPC, as could be seen from this white paper on Diversified Dispute Resolution from early 2021 and from other efforts of the SPC to promote resolving disputes at their source, as consistent with the deployment of the Party Center (党中央关于“将非诉讼纠纷解决机制挺在前面”的重大部署要求. The responsible person of the SPC’s Case Filing Division (presumably the head) pointed out that these rules “had created an online diversified dispute resolution model with Chinese characteristics that differed from ADR or ODR” )形成了有别于ADR和ODR的中国特色在线多元纠纷解决模式). His statement appears designed to be more politically correct than accurate. It is clear that the SPC follows government policy in using “diversified dispute resolution” rather than “alternative dispute resolution,” (ADR) but the English language abbreviation”ODR,” according to my research, is intended to be a general term to capture all sorts of online dispute resolution and not meant to promote one particular model of online dispute resolution. The underlying implication is that “ODR” reflects a “Western” approach. However other (mainland) Chinese government departments use “ODR” without issue. Additionally, the Hong Kong government uses the term “ODR” to refer to its online dispute resolution platform, eBRAM.
Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate (SPP) on Several Issues Concerning the Application of Law in Handling Criminal Cases Endangering Food Safety (最高人民法院最高人民检察院关于办理危害食品安全刑事案件适用法律若干问题的解释). As a joint judicial interpretation, it was approved by the judicial (adjudication) committee of the SPC first and next by the Procuratorial Committee of the SPP.
Several Provisions of the Supreme People’s Court on the Application of Prohibition Order Preservation Measures in Eco-environmental Infringement Cases(最高人民法院关于生态环境侵权案件适用禁止令保全措施的若干规定) –relating to injunctions to stop environmental pollution, either before or after a party has filed suit. We can expect more and more SPC interpretations and documents related to environmental pollution.
Relevant Provisions of the Supreme People’s Court on Issues concerning Applications for Verification of Arbitration Cases under Judicial Review 最高人民法院关于仲裁司法审查案件报核问题的有关规定. This decision by the SPC updates the 2017 provisions of the same name, adding one article and a clause in another. The new Article 3 requires higher people’s courts to submit draft rulings in judicial review of arbitration matters in domestic arbitration (non-foreign, Hong Kong, Macau or Taiwan-related) if the higher court intends to concur with a lower court ruling that the arbitral award violated social public interest. The new second clause of Article 4 requires the higher people’s court to submit the matter to the SPC within 15 days.
Several Provisions on the Compulsory Enforcement by People’s Court of Company Shareholding (最高人民法院关于人民法院强制执行股权若干问题的规定). This appeared on the 2019 judicial interpretation agenda, so it has slipped by two years. The provisions apply to enforcing judgments or rulings against shareholder equity in either limited liability companies or companies limited by shares, but not including companies limited by shares that are listed.
Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Disputes over Compensation for Personal Injury in Railway Transport
最高人民法院关于审理铁路运输人身损害赔偿纠纷案件适用法律若干问题的解释 This interpretation concerns persons injured in railway transport accidents, excluding accidents on passenger trains.

On the “coming attractions” discussed in some earlier blogposts, the SPC’s judicial committee (adjudication committee) spent many hours on 30 December 2021 discussing the draft judicial interpretation of the General Part of the Civil Code. When I wrote last about the draft of the General Part, I noted that Judge Guo Feng, deputy head of the Research Office, mentioned that the General Part (1) interpretation is scheduled to be submitted to the SPC’s judicial (adjudication) committee before year-end. That means that Judge Guo (and likely one or more of the principal drafters) were in the room to discuss the draft article by article. The judicial committee finally decided to approve the draft “in principle.” 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. So it is likely that after the SPC amends the provisions that the judicial committee considered needed more work, a quasi-final draft will go back to the National People’s Congress Standing Committee (NPCSC LAC)’s Legislative Affairs Commission because SPC guidance provides that “liaison with the NPCSC LAC must be timely, and after major revisions to the judicial interpretation draft after consulting with the NPC LAC, the view of the NPCSC LAC should be solicited again.” I expect that the draft of the General Part judicial interpretation will be finalized before the National People’s Congress meeting, so that the report can mention this accomplishment.

As I have mentioned many times in the course of 2021, we do not know what was on the SPC’s 2021 judicial interpretation agenda. Those of us outside the System can only hope that the 2022 agenda will be released and that the judicial reform agenda will continue to be released.

Judicial documents (incomplete list)

Provisions of the Supreme People’s Court and the Ministry of Justice on Providing Legal Aid for Defendants in Death Penalty Review Cases 最高人民法院司法部关于为死刑复核案件被告人依法提供法律援助的规定. These are joint regulations issued by the two institutions and therefore are classified as “judicial documents,” as discussed here. These provisions establish a mechanism for the Ministry of Justice to appoint legal aid lawyers to defendants whose cases are being submitted to the SPC for death penalty review. If a defendant appoints his or her own lawyer), then the legal aid lawyer stops providing services.
Provisions on Judges’ Disciplinary Work Procedures (for Trial Implementation)《法官惩戒工作程序规定（试行). I will follow up with analysis at some point as I published a book chapter on judicial discipline at the beginning of 2021. These provisions do not change the conclusion in my chapter.
Opinions on Strengthening the Substantive Trial of Sentence Reduction and Parole Cases (关于加强减刑、假释案件实质化审理的意见). This is another multiple institution document, intended to tighten up procedures for sentence reduction and parole cases. They are in part a response to a 2020 tragedy in Beijing, in which a prisoner whose sentence was commuted killed one man and injured two more. The incident further revealed that the corruption discussed in this 2015 blogpost continues to exist.
Notice of the Supreme People’s Court on Studying and Implementing the “Decision of the Standing Committee of the National People’s Congress on Amending the Civil Procedure Law of the People’s Republic of China.”最高人民法院关于认真学习贯彻《全国人民代表大会常务委员会关于修改〈中华人民共和国民事诉讼法〉的决定》的通知. This notice and the amended Civil Procedure Law are of practical importance to tens of thousands of Chinese judges and litigants in the Chinese courts, individuals and entities, domestic and foreign. The notice signals that the SPC is working on amendments to the Civil Procedure Law judicial interpretation (the previous version plus commentary was published in two volumes). This reform relates to the reorienting of four levels of the courts, will increase the number of cases heard with one judge, promotes mediation and smart courts.
and 6. Two Judicial Services and Safeguards Opinions, one on Providing Judicial Services and Safeguards for Promoting the Development of the West in the New Era and Forming a New Pattern and Opinions on Providing Judicial Services and Safeguards for Promoting the High-quality Development of the Central Region in the New Era（最高人民法院关于为新时代推进西部大开发形成新格局提供司法服务和保障的意见（ and 关于为新时代推动中部地区高质量发展提供司法服务和保障的意见. Related to these two is a document from November 2021– Conference Summary of the Work Promotion Meeting Serving and Safeguarding Ecological Protection and High-quality Development of the Yellow River Basin.最高人民法院服务保障黄河流域生态保护和高质量发展工作推进会会议纪要. That document in turn relates to a 2020Judicial Services and Safeguards Opinion. These are part of a large number of documents providing judicial services and safeguards for Party Center strategies and initiatives, particularly related to regional integration. The article I have temporarily set aside to write this blogpost discusses the purposes and impacts of these documents. I have previously written about these documents often, such as these quick analyses of their structure and purposes. Both Opinions link to Party Center-State Council documents. More analysis to come when I am able to finish the last five pages of the “short academic article” mentioned above.

Reshaping the judiciary

In the fall of 2021, the Party Center launched the second round of the rectification and education of national political-legal organs, with a leading group leading and an office assisting in implementing the campaign. The SPC was one of the focal points (along with other central organs). Just before Christmas, the SPC held a “looking back” meeting to discuss what was revealed and progress made in response. The SPC established a leading small group and office to handle matters properly. (For those interested in further details, please see this webpage.) President Zhou Qiang noted in his work report that the SPC has effectively rectified a batch of stubborn diseases (one of the targets of this inspection) and resolutely eliminated a batch of black sheep (literally, a group of horses that harm the masses) (一批害群之马). The same phrasing is reported from the Ministry of Justice and other political-legal institutions at both the central and local levels. Related to the rectification and education campaign are several new SPC opinions. Those include one strengthening the judicial responsibility system, and creating a new court team 关于在加快推进司法责任体系改革和建设中进一步加强人民法院队伍建设的意见 and another on enforcement. The SPC has issued another related opinion found here, on the “four types of cases.” Perhaps unrelated to stubborn diseases and black sheep is decisions by some SPC judges to continue their careers elsewhere.

Finally

I wish all readers a happy and healthy new year, both “Western” and Chinese. I also hope that this year brings us, located in and out of mainland China, opportunities to gather together to discuss legal developments in China from different perspectives quietly, without rancor or blame, but with mutual respect.

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I would like to express my appreciation to two anonymous peer reviewers of a previous draft of this blogpost. Special thanks to the person who caught a significant error in the draft.

alternative dispute resolution, Communist Party and the Courts, diversified dispute resolution, securities & futures disputes

What’s on the Supreme People’s Court’s financial law agenda?

September 11, 2021 Supreme People's Court Monitor Leave a comment

This year, the Supreme People’s Court (SPC) has not released its judicial interpretation agenda to the general public, so observers concerned about what the SPC is doing in specific areas of law must be attentive to what SPC leaders mention in either speeches in major conferences or articles in the media. Justice Liu Guixiang, a member of the judicial committee with deputy ministerial status, spoke in early September at the 4th Annual Conference on Serving Small and Medium Sized Investors . His speech was one of many leader’s speeches (visible in the link领导人讲话) delivered at this conference sponsored by the China Association for Public Companies, Securities Association of China and other securities industry associations. (For the careful listener (or reader) his speech provides insights on what can be expected from the SPC in the near future in the area of financial law. It is linked to China’s development of its securities market and dealing with the increasing number of financial fraud cases and civil disputes. Some of what he told the audience illustrate, in the area of financial and securities law, how the SPC operates in the New Era. Those include:

the SPC plans to issue a new conference summary on financial trials （金融审判座谈会纪要) before the end of the year, to unify trial standards. This is linked to government policies on the prevention and resolution of financial risks;
the SPC plans to amend the 2003 interpretation
Some Provisions of the Supreme People’s Court on Trying Cases of Civil Compensation Arising from False Statement in Securities Market, as it is outdated, particularly the requirement of an administrative penalty before investors can file suit. The interpretation is inconsistent with the amended Securities Law;
the SPC will guide the lower courts on the hearing of securities group cases (证券集体诉讼制度), particularly focusing on financial fraud, providing better relief to investors, and assisting to stabilize the market in its transition to a registration based listing system. He stressed that the SPC would require lower courts to apply the principle of harmonizing standards for fault and administrative penalties in financial fraud cases, distinguishing different types of fault, and “striking hard” in cases of intentional financial fraud (要求人民法院在处理财务造假等案件中，基于“过错与处罚相一致”原则，区分过错类型，依法严厉打击故意造假行为过错与处罚相一致);
The SPC will provide guidance to the local courts on strictly applying new rules (in the Civil Code and the SPC’s judicial interpretation) on guarantees provided by listed companies and will also provide further guidance on the bankruptcy (and reorganization ) of listed companies.
The SPC will cooperate further with relevant government organs and other institutions to further develop non-litigation solutions to securities disputes. One example Justice Liu likely had in mind was the recently promulgated notice jointly issued by the General Office of the SPC and the China Securities Regulatory Commission (CSRC) on establishing an online system for linking the CSRC’s electronic platform with the SPC’s mediation electronic platform, to enable mediated settlements within the securities and future mediation systems to become enforceable through judicial confirmation online (在线申请司法确认或出具调解书等诉调对接工作) This August 2021 document is entitled Notice on Establishing a Linkage Between Mediation and Litigation “General to General” Online Securities and Futures Disputes Mechanism 最高人民法院办公厅中国证券监督管理委员会办公厅关于建立“总对总”证券期货纠纷在线诉调对接机制的通知. That document, which implements the Party Center’s concept — social governance pattern of co-construction, co-governance and sharing (建立共建共治共享社会治理格局)includes a joint meeting system between the two institutions and affiliated organizations, with the CSRC’s Investor Protection Bureau and the China Securities Small and Medium Investor Service Center Co., Ltd. taking an important part. The linkage between mediation and litigation is part of diversified dispute resolution. It calls for analogous linkage at the local level between offices of the CSRC and the courts. The SPC has issued other documents previously, particularly the Supreme People’s Court and the China Securities Regulatory Commission of Issuing Opinions on Comprehensively Advancing Establishment of Diversified Resolution Mechanism of Securities and Futures Disputes. The SPC’s 2021 bilingual report on its diversified dispute resolution reforms (2015-2020) provides more details on this and other reforms.
Finally, Justice Liu called for promoting the securities representative litigation mechanism (mentioned in Article 95 of the Securities Law and further developed in a 2020 judicial interpretation, Provisions of the Supreme People’s Court on Several Issues Concerning Representative Actions Arising from Securities Disputes). The Shanghai Financial Court has taken the lead in these cases. What Justice Liu means is using the results in representative litigation to resolve outside of the courts other similar securities & futures disputes, particularly group disputes. This is an example of implementing the SPC’s diversified dispute resolution policies. This mechanism is can also be characterized as linking to the Party Center’s current policy of mediating first and resolving disputes at their source to reduce the quantity of litigation (党中央关于“将非诉讼纠纷解决机制挺在前面，从源头上减少诉讼增量), as discussed in greater detail in the bilingual report.

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Those with more specialized knowledge in Chinese securities law should provide corrections or comments by using the blog’s comment function.

alternative dispute resolution, CICC, diversified dispute resolution, Expert Committee, international commercial court

Brief comments on the China International Commercial Court

August 1, 2021 Supreme People's Court Monitor Leave a comment

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 2^nd 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:

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;
The Suzhou International Commercial Court (approved by the SPC, and involving cooperation with the Singapore government through the China-Suzhou Suzhou Industrial Park )；
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:

promoting mediation (also in line with SPC policy on mediation taking priority);
Centralizing case acceptance;
Addressing additional arbitration-related issues;
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:

find and apply foreign law;
provide information and expertise about foreign technical standards; and
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.”

alternative dispute resolution, arbitration, BRI, CICC, diversified dispute resolution, foreign investment law, foreign-related cases

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

October 9, 2020 Supreme People's Court Monitor 3 Comments

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:

The Guiding Opinions are intended to be consistent with current law and regulations, SPC judicial interpretations, and SPC judicial policy documents.
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);
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 stance. This 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 Jinping. This 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.

alternative dispute resolution, CICC, diversified dispute resolution, international commercial court, Women in the judiciary

CICC Expert Committee Office Renamed

August 11, 2019 Supreme People's Court Monitor Leave a comment

A brief notice appeared on the China International Commercial Court (CICC)’s websites on 9 August, announcing that the Office of the International Commercial Expert Committee (Expert Committee) of the Supreme People’s Court (SPC) (国际商事专家委员会办公室) had been renamed the Coordination and Guidance Office (协调指导办公室) for the CICC from 21st June 2019. The main duties of the Office are described as directing and coordinating construction, adjudication management and external exchange (负责指导协调国际商事法庭建设、审判管理、对外交流; 负责国际商事专家委员日常工作等) of the CICC, and also in charge of the routine work of members of the Expert Committee. I surmise that these functions are meant to convey that the office will not only support activities related to the Expert Committee but also be responsible for a variety of matters, such as coordinating the drafting of rules and the wide variety of administrative matters that go along with any administrative entity in China, particularly one that deals with foreigners. The notice also announced that from 23rd July 2019, Ms. Long Fei, who has a Ph.D. from China University of Political Science and Law, has been appointed as the Deputy Director (Person in Charge) of the Coordination and Guidance Office. She had formerly been the Director of Department of Guidance Service, Judicial Reform Office of the SPC. She brings to the new role many years of work on diversified dispute resolution related issues.

Supreme People's Court Monitor