Supreme People’s Court to Issue White Paper on Judicial Review of Arbitration and Related Model Cases

For a longer project, I am carefully analyzing the Supreme People’s Court’s (SPC’s) 2019 Opinions on the People’s Courts Providing Further Services and Guarantees for Belt & Road Construction (BRI Opinion #2) (关于人民法院进一步为“一带一路”建设提供司法服务和保障的意见, about which I previously wrote in January (at some length). Each phrase in an SPC Opinion has a particular meaning and usually a backstory. As I said in January, it takes knowledge of a constellation of related policies and practices to decode SPC Opinions.  Those of us outside the Chinese court system realistically can be expected to identify only a portion of the references. This blogpost focuses on two phrases in Article 25 of BRI Opinion #2–“publish typical (model/exemplary) cases on an irregular basis, issue white papers at a suitable time (不定期公布典型案例, 适时发布白皮书).  

What’s new?

In public speeches this month (August, 2020), two SPC judges revealed that the suitable time for issuing a white paper and model cases somewhat related to the BRI is “soon.”  As I (and many others) have written, the SPC has used the political importance of the BRI to improve the legal infrastructure for and personnel handling the judicial review of arbitration.  (As others have written, under Chinese arbitration law, the courts have a greater role in the review of arbitration.), Judge Shen Hongyu, deputy head of the SPC’s #4 Civil Division revealed in a speech in early August, reported in Legal Daily, that “in the future, a bilingual white paper annual report on the judicial review of arbitration in 2019 and analysis of typical cases on the judicial review of arbitration will be issued” (将发布《2019年度仲裁司法审查案件白皮书》(中英双语版)以及仲裁司法审查典型案例分析).  The same news was repeated by #4 Civil Division Judge Ma Dongxu and Judge Shen Hongyu in a recent conference (held on-line) of the Chinese Arbitration Law Society.

White Papers

Issuing a judicial review of arbitration white paper would be a first for the #4 Civil Division and a step forward in transparency about the work of the SPC and judicial review of arbitration in particular. From the title, I surmise that the white paper will be nationally focused, similar to the SPC’s annual bilingual intellectual property white paper and environmental protection white paper. Although I have previously written about difficulties in locating full text versions of Chinese court white papers, I am quite sure that this white paper will be made accessible.

Late last year, the Beijing #4 Intermediate Court (and China University of Political Science and Law) issued a big data study of cases involving the judicial review of arbitration cases (analyzed here in English) I surmise that the SPC’s white paper it will show the success of the new judicial interpretations that the SPC issued in late 2017 and related notices as well as the pro-arbitration policy of the SPC. Greater openness about the judicial review of arbitration would be welcome by all interested parties. It is unclear whether the #4 Civil Division will give consolidated information about the cases that it reviews through the Prior Approval system, which is its version of the qingshi (请示,request for instructions), about which I have previously written.  This article in the Kluwer Arbitration Blog provides a good summary of Chinese practitioner objections to the request for instruction procedures in the Prior Approval system.

Publishing typical cases

As I wrote last month and many times previously on this blog, the SPC frequently uses typical/model/exemplary cases, in several ways, including  to supplement judicial interpretations and legislation.  That was made clear by last month’s guidance on similar case search. The #4 Civil Division (the cases are issued by the SPC itself, of course) and the Supreme People’s Court Intellectual Property Court (SPCIPC) often use typical cases in analogous ways–unifying judicial standards. The press release that the SPC released in June on typical cases involving ship crew members was by SPC standards, quite blunt in pointing out the inadequacy of related law.  (“Our country has not formulated a special crew law.. it lacks more targeted regulations…Typical cases combine the characteristics of the protection of the rights and interests of seafarers, analyze the law and reasoning, and fill the gap between the norms and the facts by extracting the main points of the judgments (我国尚未制定专门的船员法…缺乏更有针对性的规定。典型案例结合船员权益保护的特点,析法说理,通过裁判要旨的提炼,填补规范与事实之间的空隙)

Justice Luo Dongchuan, formerly the SPC vice president responsible for both the #4 Civil Division and the SPCIPC pointed out the gap-filling role of typical cases more discretely. (He has since been transferred to Fujian Province to serve as Secretary of the Provincial Party Committee’s Political-Legal Commission).The SPC issued BRI-related typical/model cases in 2015 and 2017  and BRI guiding cases in 2019.   (For those interested, Stanford Law School’s Guiding Cases Project has translated the model and guiding cases (note that there is a trademark symbol for B & R cases). The legal rules in typical/model cases and guiding cases may eventually be incorporated into a judicial interpretation or legislation (explained in my earlier article).

Importance of the White Paper

I wrote in December of last year that one aspect of being in a leadership role in the SPC (referring to the president, vice presidents, division heads, deputy heads, and  their equivalents in the affiliated institutions of the SPC) is ensuring that policies, actions, initiatives, and other decisions hit the target of being politically correct (post 19th Party Congress and post 4th Plenum) while being “problem-oriented,” that is, addressing relevant practical issues.  Judge Shen skillfully hit that target in her speeches. She linked her first presentation to language in the Decision of the 4th Plenum of the 19th Party Congress, stating that “promoting external publicity on the rule of law and spreading the voice of the rule of law in China is an important manifestation of serving the overall situation of the Party and the country ( 推进对外法治宣传,传播中国法治声音,是服务党和国家工作大局的重要体现). As I asked in January, does it hit the target with foreign audiences? Is engaging special publicity for foreigners in fact useful in reassuring foreign governments, foreign state-owned companies, commercial entities, and individuals that their dispute is best heard in China?

Rather than special publicity, the bilingual white paper and model cases, aimed at both domestic and foreign audiences, are in fact better vehicles by which the domestic and foreign legal communities can assess how Chinese courts supervise arbitration, and how that compares to other jurisdictions.  Because many trade, investment, and licensing agreements involving Chinese parties have arbitration clauses, this white paper is sure to be reviewed carefully by many. 

 

The National Civil Commercial Trial Work Conference Draft Conference Summary or how the SPC guides the lower courts through issuing conference summaries

 

Screenshot 2019-12-25 at 5.30.17 PM

Screenshot of the explanation accompanying the draft conference summary

In early August, the Supreme People’s Court (SPC) issued the National Civil Commercial Trial Work Conference Conference Summary (Draft of the SPC #2 Civil Division for the Solicitation of Opinions from the Public) 全国法院民商事审判工作会议纪要 (最高人民法院民二庭向社会公开征求意见稿. The draft, which sets a comment deadline of 25 August and includes a brief (but useful) introduction, provides a summary of current critical legal issues in domestic commercial law. As explained below, this document provides an excellent example of one of the ways that the SPC guides the lower courts through issuing judicial normative documents 司法文件 or 司法规范性文件 (also called judicial regulatory documents and judicial guidance documents (司法指导性文件) and uses national court conferences to derive a consensus on critical legal issues. The 123-article draft document relates to legal issues, rather than the political issues discussed at length in Justice Liu Guixiang’s speech (as described in a recent blogpost). The fact that this draft was issued for public comment and so quickly shows that guidance from the SPC to the lower courts is needed quickly at a time where the domestic Chinese economy is facing downward economic pressure.  I  explain what this document is, why it was issued for public comment, and its implications. The planned summary of the issues will need to wait until time permits (perfect is the enemy of the good).

Collection of Guidance Documents of the SPC

Conference Summary

It is a fact that the Supreme People’s Court (SPC) issues a broad range of documents that guide the lower courts in addition to its judicial interpretations.  Several recent posts on this blog (and two of my recent book chapters) have focused on several of those documents. One of the documents that the SPC issues is entitled “conference summary/meeting minutes” (会议纪要), which is also a type of Party/government document (as mentioned in earlier blogposts).

As I explained “earlier” (25 years ago) in my 1993 article, the SPC uses specialized court conferences as a way of transmitting central legal policy, unify or harmonize court practices in accordance with that policy, and obtain an overview of court practices and problems.  Although conference summaries do not have the status of a judicial interpretation, the lower courts will generally decide cases according to its provisions. “Harmonizing court practice” means in Chinese judicial parlance that judges are applying the law similarly.

The SPC entitles conference summaries “judicial normative documents”(司法文件) judicial guidance documents (司法指导性文件) and sometimes judicial policy documents” (司法政策性文件).  As I’ve written before, this fuzzy use of terminology is not unusual. An (authoritative) follower has proposed using the English translation “judicial regulatory document” for 司法规范性文件.  An authoritative person (who cannot be named), concurred with the follower’s proposal. The book pictured above, edited by a group from the People’s Court Press (affiliated with the SPC),  includes a number of conference summaries (some with commentary by drafters). The editors commented that “although judicial guidance documents are not judicial interpretations and cannot be cited in a court judgment document as the basis of a judgment, it is generally recognized that they have an important guiding impact on the trial and enforcement work of the courts at every level.”

Public Consultation

This conference summary appears to be one of the few that has been issued for public consultation (the previous civil/commercial conference summary was also issued for public comment (see here).  My understanding is that the usual practice has been to solicit the views of certain experts outside the court system in the drafting process (as well of many in the court system).  As to why this draft has been issued for public comment, a knowledgeable person said it was to “hear views from all parts of society (听取社会各界的意见). I surmise that the #2 Civil Division (the division that took the lead in drafting the conference summary) took the view that it was useful to understand the views and comments that “the market” (the legal professional community) has relating the rules in the conference summary before finalizing it. This way the conference summary can be amended before it is finalized to account for any useful comments and the #2 Civil Division can anticipate issues that may arise when the conference summary becomes effective.

Purpose, Implications and Drafting Procedures

In the introduction to the draft, the SPC described its purpose in issuing this conference summary.  “The main purpose is in relation to various problems encountered in the process of trial practice, to provide some resolution methods that judges can use as a reference when discussing reasoning in the application of specific laws, to unify judicial thinking, and limit judicial discretion, work hard to have the masses feel justice in every case”   (主要目的是就审判实践中遇到的一些问题,提出解决方案,作为法官在具体法律适用、进行说理论证时的参考,统一全国法院的裁判思路,约束法官自由裁量空间,提高司法公信力,稳定当事人、法律工作者及社会的预期,努力让人民群众在每一个司法案件中感受到公平正义).  The conference summary has implications for the legal professional community as a whole (particularly lawyers and in-house counsel) because it signals what approach the lower courts are likely to take to current controversial issues.

According to the notice, the drafters of the conference summary combined the legal issues set out in Justice Liu’s report with issues raised by delegates at the conference and issues derived during the process of preparing for the conference.  As described in the book chapters mentioned above (and in great detail in a book chapter stuck in the production pipeline), this is representative of judicial interpretation and judicial document drafting.

Substantive Content

From the number of articles relating to specific issues, it is possible to see where the inadequacies in current legislation exist and where the courts lack consensus on important commercial law issues.  Since the draft was issued, Chinese law firms have published articles focusing on specific issues. Time does not permit me to explain its provisions now.

  1. Issues related to the application of the General Principles of Civil Law and its relationship with other legislation (5 articles)(《民法总则》适用的法律衔接问题(5条))
  2. Trial of company disputes (22 articles) (关于公司纠纷案件的审理(22条))
  3. Trial of contract disputes (26 articles) (关于合同纠纷案件的审理(26条)
  4. Trial of security disputes (18 articles)(关于担保纠纷案件的审理(18条)
  5. Financial consumer rights protection disputes (6 articles)(关于金融消费者权益保护纠纷案件的审理(6条)
  6. Trial of securities disputes (11 articles)关于证券纠纷案件的审理(11条)
  7. Trial of business trust dispute cases (7 articles)(关于营业信托纠纷案件的审理(7条))
  8. Property insurance disputes (6 articles)(关于金融消费者权益保护纠纷案件的审理(6条))
  9. Trial of commercial paper disputes (4 articles)(关于票据纠纷案件的审理(4条)
  10. Bankruptcy cases (13 articles) (关于破产纠纷案件的审理(13条)
  11. Trial of cases involving third party objection to enforcement and withdrawal of a case (5 articles) (关于案外人执行异议之诉和第三人撤销之诉纠纷案件的审理(5)
  12. Cases with both civil and criminal aspects (2 articles) 关于民刑交叉纠纷的处理(2条)
  13. Etc. (1 article)