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.
In the last few months of 2018, the Supreme People’s Court (SPC) and China International Commercial Court (CICC) took measures to enable the CICC to start operating, although the CICC was established earlier in 2018. As SPC President Zhou Qiang reported to the National People’s Congress (NPC) in March 2018 that the CICC would be established, I expect that he will report to the NPC in March of this year that the SPC established the CICC and it has successfully begun operating. (It is likely that the National Appellate IP Court will merit a place in Zhou Qiang’s report as one of the SPC’s 2018 accomplishments, but see fellow blogger Mark Cohen (and co-authors)’s post on that development). This blogpost will summarize (and provide some commentary on) some of the recent CICC developments.
Those developments included:
- issuing rules on the international commercial expert committee;
- personnel measures–designating the heads of the of the #1 and #2 CICCs and the heads of the case management offices in the two offices and appointing seven additional judges;
- designating several (mainland) Chinese arbitration and mediation institutions to be part of its integrated one-stop dispute resolution;
- accepting several cases;
- issuing rules on CICC operations (to be discussed in a following blogpost).
Rules on the international expert committee
On December 5 the SPC General Office issued the working rules of the international commercial expert committee (expert committee) (approved by the SPC judicial committee in late October) (最高人民法院国际商事专家委员会工作规则). The date of the notice of the General Office is 21 November. It answers some frequently asked questions about the expert committee. My comments are in italics.
What do members of the expert committee do?
1) preside over mediations (Article 3 (1): This was clear from the CICC Provisions. It remains to be seen how many expert committee members will feel comfortable mediating disputes. It could be that some of the Chinese members will feel more comfortable mediating disputes than the foreign or Hong Kong-based members, as some of those members have long experience as arbitrators in China, where combining mediation and arbitration (med-arb) is usual. A significant number of expert committee members are from jurisdictions where being a mediator and mediating us regarded as separate profession and skill from arbitration and adjudicating. Articles 9-13 describe the mechanics for doing so.
(2) provide an advisory opinion on specialized legal issues such as those relating to international treaties, international commercial rules, finding and applying foreign law [foreign and greater China jurisdictions] relating cases heard by the CICC and the People’s Courts at all levels (Article 3 (2): This contains a surprising expansion of the role of the experts on the committee by authorizing Chinese courts at various levels to request an expert committee member to provide an advisory opinion on international legal, international commercial and foreign law issues. A note on terminology–the English version on the CICC website uses “foreign law” while the Chinese original uses the term “域外 ” (extraterritorial), intended to include the jurisdictions of Hong Kong, Macau, and Taiwan as well as the law of foreign jurisdictions. This blogpost will use the term “foreign law” as meaning “域外 ” extraterritorial law.
The fact that expert committee members have been so authorized indicates that ascertaining (determining) foreign law is a significant practical problem for Chinese judges. I previously mentioned in this 2017 blogpost that Judge Zhang Yongjian listed ascertaining foreign law（he uses the term 外国法·) as one of many problems confronting Chinese judges hearing cross-border issues. Several articles on the Chinese version of the CICC website (plus one on the English version (by CICC Judge Gao Xiaoli) discuss this problem. Judge Gao gently pokes fun at some Chinese scholars who fail to understand relevant judicial interpretations on ascertaining foreign law. The CICC website lists the methods available to a Chinese court in ascertaining foreign law. Among the alternatives include designating one of four authorized centers to provide an expert opinion on foreign law. Articles 14-15 describe some of the mechanics by which one or more expert committee experts can provide an advisory opinion.
Under Article 15, a litigant may request through the CICC’s Expert Office that the expert appear in court to explain his or her opinion. It is up to the expert to decide whether to appear. Presumably, expenses involved, including travel and translation, would be the responsibility of the requesting party.
The rules do not clarify a number of practical questions related to this. Could a court request an advisory opinion from an expert and from a designated discernment 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. It is unclear whether experts can charge for these services. Another concern for experts could be liability, and the standard for an opinion found to be negligently made. Additionally, for the many foreign experts on the committee who do not know Chinese, it is unclear who will be responsible for translation. Presumably, the court that requested the opinion or the International Expert Committee office (see 6 (2), which states that the office provides services to experts. Perhaps the forthcoming Code of Ethics of the Expert Members will address these questions.
(3) provide advice and suggestions on the development of the International Commercial Court; (4) provide advice and suggestions on the formulation of judicial interpretations and judicial policies of the Supreme People’s Court; (5) Other matters entrusted by the International Commercial Court; The first two provisions set out a formal structure for foreigners to provide advice, suggestions, and comments on judicial interpretations, judicial policy and other developments to the SPC, a first. Article 18 anticipates that the Expert Office will direct requests for comments or advice on specific draft judicial interpretations, policies, etc. to one or more experts, as the CICC considers useful rather than expert committee members being informed about ongoing developments. However, it does enable expert committee members to make suggestions or proposals on their own initiative.
The last few months have seen a number of CICC personnel developments, including the appointment of seven additional judges. In early November, Judge Zhang Yongjian, deputy head of the #1 Circuit Court and head of the #4 Civil Division, was appointed as head of the #1 CICC and Judge Zhang Ming, deputy head of the #6 Circuit Court, was appointed head of the #2 CICC.
Judges Xi Xiangyang and Ding Guangyu, presiding judges on the #1 and #6 Circuit Courts respectively, and CICC judges, were at the same time appointed heads of the case management offices of the two courts.
Judge Song Jianli has been appointed the head of the CICC Expert Office.
The additional seven judges are:
- Wang Shumei (deputy head of the SPC’s #4 Civil Division, specializing in maritime law);
- Wei Wenchao, who has had a number of roles at the SPC, most recently as deputy head of the #5 Circuit Court. He had previously served as deputy head of the Environmental and Natural Resources Division;
- Song Jianli, head of the Experts Office, who studied at Southampton Institute (now Solent University) (in addition to his studies in China), and was a visiting scholar at Cambridge, the University of Pennsylvania, and the Max Planck Institute of Comparative and International Law, and has primarily worked in the SPC’s #4 Civil Division;
- Zhang Xuemei, of the SPC #2 Civil Division (domestic commercial issues);
- Yu Xiaohan, also of the #4 Civil Division, and like Wang Shumei, a maritime law specialist;
- Ding Guangyu, who studied at the University of Manchester and has had a number of roles at the SPC, including at the China Institute of Applied Jurisprudence, and in the #4 Civil Division;
- Guo Zaiyu, who spent many years at the Hubei Higher People’s Court before transferring to the SPC’s #4 Civil Division.
It is clear from these announcements that at this time, the CICC is a part-time responsibility for the judges involved, who have their ongoing responsibilities at the SPC, either at one of the Circuit Courts, the new Intellectual Property Court, or SPC headquarters. And some senior people, such as Judge Zhang Yongjian, have triple administrative roles.
One-stop diversified dispute resolution mechanism
As an earlier blogpost flagged, the institutions clearly intended to be part of the one-stop diversified dispute resolution mechanism were the leading Chinese arbitration and mediation institutions handling foreign-related matters. Most of these institutions sent senior representatives to attend the first meeting of the experts committee, so I was not surprised to see the following institutions listed:
- China International Economic and Trade Arbitration Commission (CIETAC);
- Shanghai International Economic and Trade Arbitration Commission;
- the Shenzhen Court of International Arbitration (SCIA);
- Beijing Arbitration Commission;
- China Maritime Arbitration Commission;
- the Mediation Center of China Council for the Promotion of International Trade (CCPIT); and
- Shanghai Commercial Mediation Center.
SCIA has an arrangement with the Hong Kong Mediation Centre since 2014 by which Mediation Centre settlements may be enforced in mainland China through a consent award issued by SCIA.
At the end of December 2018, the CICC accepted several cases, all of which can be categorized as general international commercial disputes, with none specifically related to Belt & Road projects. The disputes include: an unjust enrichment dispute involving Fujifilm and several Chinese companies, a product liability dispute involving Italian pharmaceutical company called Bruschettini (which sells its products through Sinco Pharmaceuticals Ltd., a Hong Kong-listed company), several disputes related to Thailand’s Red Bull (from this report, I surmise that the case was referred by the Beijing Higher People’s Court), and several disputes involving the validity of arbitration clauses, including one involving China Travel Service (Hong Kong) and one of its hotels. ____________________________
The author is a member of the international commercial expert committee but her views do not represent the committee, the CICC, or the SPC.
In 2018, the Supreme People’s Court Monitor published 25 posts and had almost 39,009 page views, from 146 jurisdictions, primarily from:
- United States;
- (mainland) China;
- Hong Kong;
- United Kingdom.
with Germany, Australia and Singapore trailing. Mainland China is in second place for the first time.
Why did I do less blogging when compared to 2017, when I published 41 posts? Perhaps it can be attributed to competing professional obligations–including writing several academic-style articles (all in the production pipeline), and the significant effort required to unpack SPC documents and initiatives in under 1500 words. Perhaps also attributable to failing to realize that the “perfect is the enemy of the good.” The many developments in 2018 have left me with a large backlog of documents and issues to discuss.
In 2018, the work of the Monitor resulted in several official and semi-official honors (listed in chronological order):
- in June, the honor (and the challenge) of giving lecture #19 (in Chinese) as part of the lecture series (大讲堂) sponsored by the Supreme People’s Court (SPC)’s China Institute of Applied Jurisprudence, as reported in this earlier blogpost. It was the last lecture that Judge Jiang Huiling chaired before he was transferred from the Institute to the National Judicial College and I’m not aware that another lecture has been held since he was transferred. I am very grateful to Judge Jiang (for his invitation and comments) and the two commentators, Professor Hou Meng, now of Renmin University Law School, and Huang Bin, senior editor of Journal of Law Application, for their thoughtful comments;
- In August, the honor of being selected to the China International Commercial Court’s International Expert Committee (Expert Committee), and the challenge of giving an eight-minute speech with substantive content that struck the right tone at the first meeting of the Expert Committee. As reported in this earlier blogpost, the attendees at that first meeting included senior officials from within the SPC and related institutions, including the Ministry of Foreign Affairs and the Ministry of Commerce.
- In November, speaking at the third annual UK-China Rule of Law Roundtable, sponsored by the Great Britain China Centre (GBCC) (an introduction to GBCC is found here) and the China Law Society (CLS). The Roundtable focused on international commercial dispute resolution (CDR) Fortunately, GBCC takes an inclusive approach to its high-powered and congenial delegations. The delegation included a number of us with other than UK passports.
Since the blog was founded almost six years ago:
Page views: 108,990
Most followers use Twitter to follow the Monitor. Although Twitter is not accessible in mainland China without a VPN, 21% of the Monitor’s Twitter followers are based there.
Thank you to:
- the many judges and other staff members currently or formerly affiliated with the SPC (and its institutions) and local courts, who helped me understand how the SPC and lower courts operate and nuances of life in the Chinese court system in countless ways;
- my colleagues and students at the School of Transnational Law, Peking University (Shenzhen);
- my fellow bloggers Jeremy Daum (Chinalawtranslate.com), Wei Changhao (npcobserver.com, Mark Cohen (Chinaipr.com), and Eugene Fidell (globalmjreform.blogspot.com);
- the law schools and other institutions around the world, that have listed my blog as a Chinese law resource;
- law and political science professors who have recommended the Monitor to students and many others in other institutions who have provided support in various ways;
- journalists and scholars writing about the Chinese judiciary who have cited the Monitor;
- organizers of conferences and other events in Beijing, Changsha, Shanghai, Washington, DC and New York.
A special thank you to those who had the fortitude to read drafts of articles and blogposts and give frank comments.
I am prefacing this blogpost with a statement that nothing in it (or future blogposts, for that matter) represents the Supreme People’s Court (SPC), the China International Commercial Court (CICC), or its newly established International Commercial Expert Committee (Expert Committee).
As can be seen from the above photo taken in the SPC, with President Zhou Qiang, Vice President Luo Dongchuan and others, I was among the first group of experts appointed to the CICC’s International Commercial Expert Committee. Former World Trade Organization Appellate Judge Zhang Yuejiao and I were the only two women who attended the initial meeting on 26 August. I’ll set out some comments on the Expert Committee and the initial meeting.
The Expert Committee is the first official SPC committee that includes foreigners and others from outside of mainland China, and it may be the first of its nature within the Chinese justice (司法) system. The Expert Committee was established as a way to involve foreigners in the CICC. As I wrote earlier this year, unlike Singapore or Dubai, because of the restrictions of Chinese law, the CICC could not invite foreign judges to serve on the court. Among the 32 experts appointed to the Expert Committee include many leading specialists in international arbitration and dispute resolution, including judges, arbitrators, scholars and practitioners from inside and outside China. The detailed rules on how the CICC and the Expert Committee will operate (and interact) are still being drafted. The provisions on the establishment of the CICC anticipate that the experts on the Expert Committee will be able to mediate disputes and provide opinions on foreign law, among other functions.
The initial meeting was held on a Sunday morning, likely to accommodate President Zhou Qiang’s schedule or that of the other senior officials who attended the meeting. SPC newly appointed Vice President Luo Dongchuan chaired the proceedings. Future events will reveal his relationship, if any with the CICC. He had previously headed the SPC’s #4 Civil Division and was most recently the head of Xinjiang’s Supervision Commission. The senior officials who attended from outside the SPC included Mr. Xu Hong, head of the Department of Treaties and Law of the Ministry of Foreign Affairs (MFA), several officials from the Department of Treaties and Law of the Ministry of Commerce (MOFCOM), as well as representatives from China’s major arbitration institutions. A large group of officials from the SPC also attended, seated in the row behind the experts. The CICC judges sat separately. President Zhou Qiang presented all the experts present with their letters of appointment, followed by speeches by officials from MFA and MOFCOM, and several of the most prominent experts on the Expert Committee, including Huang Jin, President of the China University of Political Science and Law, Sir William Blair, former High Court judge and judge in charge of the Commercial Court in London, and Rimsky Yuen, former Hong Kong Secretary for Justice.
The remaining two hours of the meeting consisted of brief presentations by some of the SPC judges involved and several experts, while other experts provided comments. Both Judge Zhang Yuejiao and I spoke. My brief presentation was on “the CICC: An Important Step in the Internationalization of the Chinese Courts.” I raised a few of the legal issues that I had raised in earlier blogposts. I concluded by reminding the attendees that the CICC could be a great opportunity to train a new generation of Chinese international judicial personnel, and that I was looking forward to the CICC giving a chance to some of my students at the Peking University School of Transnational Law to intern there!
At the end of June, the Supreme People’s Court (SPC) held ceremonies to mark the establishment of its international commercial tribunals (国际商事法庭)(this post will use the phrase “international commercial court,” or “CICC” as the official media are using both terms). The provisions establishing the international commercial courts went into effect on July 1. As I wrote earlier this year, political and technical requirements shaped the CICC, as will be explained below.
These (partial) comments do not set out an overview of the court, as that has already been done by several law firms (and there are likely to be more), including Zhong Lun (published on the Kluwer Arbitration blog) and Herbert Smith Freehills.
In my view, those drafting the structure of the CICC were constrained by Chinese law, the nature of the Chinese court system and related regulatory systems. Although some Chinese commentators have referred to the CICC privately as a “mini-circuit court,” the CICC incorporates innovations, some of which have not been recognized by commentators thus far and provisions from the latest round of judicial reforms. The brief judicial interpretation establishing the CICC leaves related questions unanswered, some of which I will raise below. I expect some of those questions to be gradually answered as regulations underpinning the CICC are issued.
The small team of judges and limited jurisdiction of the court are likely to mean that overall trends in Belt & Road dispute resolution are unlikely to be significantly affected by its establishment. As a court focused on international commercial issues staffed by some of China’s most knowledgeable judges in that area, the court is likely to have a positive effect on the competence of the Chinese judiciary regarding international trade and investment issues, particularly as the SPC leadership knows that the international legal community is monitoring the court’s operation. It is unclear from recent reports whether the SPC will allocate additional resources to support its operation, which to this outside observer would be a shortsighted approach to take, as even something as apparently simple as translating judgments into English (as appears to be the intention of the court) is time-consuming.
Structure of the court
From Judge Gao’s press interview earlier this year (the subject of that earlier blogpost, a full English translation of which is found on the CICC website,) it is clear that she and her other colleagues involved in drafting the judicial interpretation were well aware of international commercial courts that had been or were being established elsewhere in the world. This research was provided by the China Institute for Applied Jurisprudence, the SPC’s in-house think tank (briefly described in this earlier blogpost).
However, the political imperatives of establishing the CICC as a priority matter meant that the SPC was constrained by the realities of current Chinese law. Because judicial interpretations of the SPC cannot contravene the civil procedure, judges and other national law (National People’s Congress legislation) [and there appeared to be insufficient time and possibly appetite for promulgating legislation piloting exceptions to these provisions]. This meant that the language of the court could not be English, the procedural law had to be Chinese civil procedure law, and the judges had to be judges so qualified under current Chinese law.
Jurisdiction of the court
As has explained elsewhere, under Article 2 of its Provisions, the CICC has jurisdiction over five types of cases, three of which are rather flexible (cases under a higher people’s court jurisdiction that it applies to have the SPC hear; first instance international commercial cases that have a nationwide significant impact; any other international commercial cases that the SPC considers appropriate to be tried by the CICC). This enables the CICC to control its caseload, as the eight judges on the CICC are likely to have their existing caseload in the SPC division or circuit court in which they are working, plus major obligations in drafting judicial interpretation or analogous judicial guidance. I am personally unaware of cases in which a higher people’s court has required the SPC to hear a case within its jurisdiction (please contact me if you have such information) but it can be anticipated that a higher people’s court may prefer to rid itself of a difficult case (either legally or more likely institutionally) to avoid a mistaken decision.
Judges of the court
As has been noted elsewhere, the eight judges appointed to the CICC are all SPC judges, although Article 4 of the CICC provisions appears to permit qualified judges from the lower courts to be selected. Those provisions do not mention whether a selection committee (one of the current judicial reforms) was used to select the current CICC judges, or whether a selection committee will be used for future appointments. There are in fact experienced judges in some of the lower courts who are able to use English as a working language. However, the exigencies of needing to appoint judges in a brief period of time (and possible SPC headcount restrictions, after the SPC has cut headcount under the quota judge system) meant that all CICC judges are from the SPC. This means a number of judges are relatively junior.
The expert committee to be established (rules yet to be issued) is an innovation under Chinese court practice. Unlike many other major jurisdictions, the Chinese courts lack user committees or advisory committees. This could be a useful way of bringing international input before the Chinese courts in a formal way. although the usefulness of the institution may depend on how often the committee meets and how familiar its members are with the Chinese court system. Presumably acting as a mediator or providing an expert opinion on a matter of foreign law will be optional (further details to be revealed when those rules are issued). Some persons may prefer to provide general advice to the SPC rather than involve themselves in the specifics of a particular dispute.
Evidence before the court
The CICC will not require translations into Chinese of evidence, if the parties so agree, or require evidence to be notarlized and legalized. As I wrote previously, China has not yet acceded to the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents, so in Chinese court litigation, notarization and legalization of documents is often required., starting when a party files suit or when a foreign party responds. It is not clear whether the CICC will require notarization and legalization of foreign party authorization of counsel. It is an innovation possible within the constraints of current law, that the CICC will consider evidence even if evidence from outside of China has not been notarized and legalized. Notarization and legalization costs time and money and a great deal of effort. It is understood that China is considering acceding to the Hague Legalization Convention.
Mediation and arbitration linking mechanism
The mechanism to link mediation, arbitration and litigation is an important part of the judicial reform measures (mentioned in this blogpost on diversified dispute resolution). Which mediation and arbitration institutions will link to the CICC are unclear (and the rules for selecting those institutions), but the policy document underpinning the CICC refers to domestic rather than foreign or greater China institutions. The Shenzhen Court of International Arbitration and Hong Kong Mediation Centre have entered into a cooperative arrangement to enable cross-border enforcement of mediation agreements, so presumably, this is a model that can be followed for Hong Kong.
The CICC provisions do not add new content on the enforcement of their judgments. As this earlier blogpost mentioned, enforcement of its own (and that of Chinese lower courts abroad) and foreign court judgments in China is on the SPC’s agenda. As I have written (and spoken about) previously, China (with SPC participation in its delegation) has been taking an actively part in negotiations on the Hague Convention on the Recognition & Enforcement of Foreign Judgments, (the link includes the draft convention) and has signed but not yet ratified the Hague Convention on the Choice of Courts Agreements.
Borrowing beneficial ideas from abroad
It appears that the drafters of the CICC provisions considered some of the practices of Frankfurt High Court International Commercial Chamber in their draft: No translation of documents which are drafted in the English language (if there is consent); witnesses can be heard in English;and extensive use of video conferencing or other electronic means.
Some outstanding questions
- Will the mediation and arbitration linking mechanism be able to link with jurisdictions outside of mainland China? Under Chinese law, preliminary measures (interim measures) such as injunctions, property or evidence preservation are not available for offshore arbitration. Will the CICC mechanism be able to change this, or will changes to current law be required, as seems more likely?
- Will difficult issues before the CICC be referred to the SPC’s judicial committee or other institutions within the SPC? As I wrote about a year ago, the SPC has adopted new judicial responsibility rules, setting out guidance under which cases heard by a collegiate panel are referred to a professional judges committee or the SPC’s judicial committee. Query whether difficult cases that have been discussed by the entire body of CICC judges will be referred further. The CICC includes several of the SPC’s most knowledgeable judges on cross-border matters (as well as the head (chief judge) and deputy heads of the #4 Civil Division, the division focusing on cross-border/international matters). These details are likely to be worked out over time.
- Will the two CICC courts have their own support staff? Will it have its own case acceptance office? Is the intention to give more work to existing staff, or will there be an increase in headcount to support the new institution? The CICC judges need resources to support their work, whether it be in translation or research assistance. If the consequence of the establishment of the CICC is to give additional work to existing personnel, it is not out of the question that someone involved may collapse from overwork. SPC President Zhou Qiang noted in his most recent report to the NPC that there have been deaths from overwork in the lower courts. Some of the Chinese courts’ most experienced and knowledgeable judges in the area of cross-border commercial law have been appointed to the court.
The establishment of the court and its English language website gives foreign outside observers a chance to monitor how a Chinese court deals with and decides commercial cases, creating even greater pressure on the SPC and a small team of its most competent international commercial judges.
In my view, the establishment of the CICC will not affect how highly sophisticated lawyers draft dispute resolution clauses for large-scale Belt & Road projects. Many of those lawyers will still draft clauses providing for offshore arbitration because of the New York Convention (and the corresponding arrangement between Hong Kong and the mainland) and some concern about Chinese arbitration institutions. I have personally found it is difficult to get an accurate grasp of what current practice is with Belt & Road related dispute resolution clauses, given the range of deals under the Belt & Road Initiative. It is difficult to predict how the CICC may change those practices. The CICC and its associated dispute resolution mechanism provide an alternative to existing dispute resolution mechanisms. Will it show itself to be a more attractive way to resolve international commercial disputes, efficient and cost-effective, while maintaining high quality? We will need to monitor how it develops.
Many thanks to those who commented on earlier drafts of this blogpost.