When the Supreme People’s Court (SPC) issues an “opinion” (意见), it is not issuing a judgment or ruling. It is issuing a policy document, without the force of law. In the New Era, the SPC has issued over dozen policy documents that provide “judicial services and guarantees” for major government strategies or initiatives, many more than before. They are examples of how the SPC supports the Party and government by issuing policy documents to support important strategies or initiatives (serving the greater situation (服务大局). What few, if any have written about is the structure of these opinions that support important strategies or initiatives as they relate to civil and commercial law issues. Understanding the structure is key to understanding the documents. Understanding opinions is important for understanding current issues in the courts and the future direction of judicial policy.
This blogpost uses the two opinions announced at the 27 December 2019 press conference pictured above, at which Justice Luo Dongchuan and Judges Wang Shumei and Gao Xiaoli (head and deputy head of the #4 Civil Division) introduced the two opinions (and a judicial interpretation). A subsequent blogpost will highlight what is new in these three documents. All three are connected directly or indirectly to the Belt & Road Initiative (BRI) and improving China’s foreign investment environment. The two opinions are:
- Opinion on providing services and guarantees for the Belt & Road (2) (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); and
- Opinion on Providing Services and Guarantees for Construction of the Lingang area of the Shanghai Pilot Free Trade Zone (Lingang FTZ Opinion) (关于人民法院为中国（上海）自由贸易试验区临港新片区建设提供司法服务和保障的意见).
The Opinions update two of the SPC’s two major recent policy documents on cross-border issues: the 2015 Opinion on Providing Services and Guarantees for the Belt & Road (BRI Opinion, and Opinion on Providing Guarantees for the Building of Pilot Free Trade Zones (FTZ Opinion).
The BRI Opinion #2 and Lingang FTZ Opinion are intended to harmonize the two earlier policy documents with post 19th Party Congress developments and priorities, including those mentioned in the 2019 19th Party Central Committee Fourth Plenum Decision. I had previously reviewed the BRI Opinion and FTZ Opinions in detail. My analysis of the Pilot FTZ Opinion can be found here and I have previously written and spoken about the BRI Opinion.
Lower courts may issue documents that supplement the SPC’s policy documents, as is true with these Opinions. This is a subject that I have written about on this blog and elsewhere before. The Shanghai Higher People’s Court has already issued a guidance document that provides related services and guarantees, with important content.
The two Opinions also link to three different events or matters–the promulgation of the Foreign Investment Law; the Second Belt & Road Forum for International Cooperation; and Xi Jinping’s visit to Shanghai and establishment of the Lingang Special Area of the Shanghai FTZ.
Structure of these Opinions
The structure of the two opinions is typical for SPC civil and commercial opinions “providing judicial services and guarantees” for major government strategies and initiatives. Opinions often (but not always) start out with a first section with titles analogous to the section titles of these two Opinions:
I. Comprehensively grasping the new requirements and new tasks in serving the “Belt and Road” Initiative
I. Enhance understanding and get aligned with the mission of offering judicial services and guarantees to the New Area
A sample of the language of the first section is quoted below, from the second paragraph of the BRI Opinion #2:
Keeping committed to the concept of further providing judicial services and
guarantees by the people’s courts for the “Belt and Road” Initiative: The people’s courts shall firmly take the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guideline; study and fulfill the spirit of the19th CPC National Congress and the Second, Third, and Fourth Plenary Sessions of the 19th CPC Central Committee, as well as the essence of the key speech of General Secretary Xi Jinping on the Second Belt and Road Forum for International Cooperation; strengthen consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment…
The purpose of this initial section is two-fold. The first is to notify the lower courts of the political goals, background, and principles of the Opinion. The second to signal to the political-legal hierarchy that the policies that the SPC sets out in the body of the opinion are harmonized with the latest Party/government policies.
There are no hard and fast rules concerning the body of opinions, as analogous sections may occur in different order. It may depend on the drafters and the topic involved.
The second section of the BRI Opinion has its counterpart in the third section of the Lingang FTZ Opinion:
II. Further performing the role of judicial trials, and serving and guaranteeing the joint construction of the “Belt and Road” with high quality in all aspects
III. Strengthen judicial trial function and maintain an institutional regime in the New Area focusing on investments/trade liberalization
These sections are meant to notify the lower courts about current relevant judicial policy, and implicitly inform them of any changes from previous policy and what the lower courts must do in support of that policy goal. The policies are likely to be linked to current Party/government policy. From the BRI Opinion #2:
The people’s courts shall support the opening-up policy in the financial sector; the exemplary role (示范作用) of financial courts shall be maximized; eligible courts shall be encouraged to build special trial teams for financial cases; the application of law in foreign-related financial cases shall be further regulated and standardized;…valuable experiences of foreign countries in efficiently hearing financial cases shall be drawn upon…
Article 10, in Section III of the Lingang FTZ Opinion calls for
closer ties and communication mechanisms with the financial regulatory authorities shall be built to facilitate the construction of an integrated and efficient financial management system, in a bid for a better environment for doing business, for prevention of financial risks and for better national financial security.
In support of the opening-up policy in the financial sector, the SPC is promoting the role of financial courts (currently Shanghai, others to follow) in providing new mechanisms or methods in hearing cases or in their operations. That is visible from the Shanghai Financial Court’s innovations in class actions in the sphere of securities law claims (claims against issuers, underwriters, directors and management, control parties, etc. for false and misleading disclosure upon initial issuance or in periodic reporting). The Shenzhen intermediate court has established a special trial team for financial cases but not a separate court. From Article 10 of the Lingang FTZ Opinion, it can be anticipated that the Shanghai Financial Court has or will establish special communication channels with the financial regulators.
The titles of the third section of the BRI Opinion #2 is:
III . Further improving the application of law in cases involving the Belt and Road Initiative, and building a stronger rule-based business environment that is governed by law
From BRI Opinion #2:
13. The people’s courts shall vigorously carry forward the contract spirit and the good faith principle, and determine the acts of fraud and malicious collusion based on the rules of evidence beyond a reasonable doubt. If, in a civil or commercial case involving the construction, operation, purchasing, or bidding process of a project, there is a discrepancy on contract validity between the laws of the relevant countries, the people’s courts shall apply the law that holds the contract valid without damaging the honest party or benefiting the dishonest one, and promote mutual trust and benefits between the participants in the Belt and Road Initiative.
Each article in the third section of the BRI Opinion #2 focuses on a specific policy that the SPC wants the lower courts to promote. In article 13, the SPC is seeking to control the tendency of lower courts to find a contract invalid because of allegations of fraud or malicious collusion, likely made by a Chinese litigant seeking to avoid contractual liability. The Lingang FTZ Opinion does not have an exact counterpart to section III of the BRI Opinion #2, but has articles that focus on specific policies to be promoted, such as “properly handling cross-border bankruptcy cases….”
The title of the final section of BRI Opinion # 2 is:
VI. Further strengthening the organizational structure and team building to coordinate efforts to serve and guarantee the Belt and Road Initiative.
The last section relates to institutional and personnel matters. Take the following paragraph in the BRI Opinion #2 as an example:
39. The role of international exchange and research platforms such as international forums, legal roundtables..shall be further strengthened, and the exchanges and cooperation with the judicial systems of other countries shall be conducted. Training and studying programs for foreign judges shall be supported, and foreign legal service providers and think-tanks for the Initiative shall be invited to China to exchange views with Chinese counterparts so as to promote the formation of a diverse and interactive platform for legal exchanges….
Content in the last paragraph of the Lingang FTZ Opinion has some analogous provisions:
Establish a study training program and talent cultivation mechanism in line with international standards…Efforts shall be made to…(2) further expand international judicial communication channels, organize international judicial forums….
These provisions send signals within the SPC and its institutions, as well as lower courts about the types of programs that may be promoted, permitted or explored. It is likely that the National Judges College, its provincial branches, and its partners will continue to train foreign judges, as has expanded greatly in recent years. It appears that there could be greater possibilities for Chinese judges to go on exchange with other countries than has been possible in recent years. It may also provide the basis for a local court or division of the SPC to apply for funding to hold a legal roundtable or host an international exchange. For the Lingang FTZ Opinion, it gives the Shanghai courts priority in organizing international programs and establishing programs to send outstanding young judges focusing on cross-border commercial issues on educational programs either in China or abroad.
The official report states that the SPC Party Group approved the two Opinions. It appears from my previous research that pre-19th Party Congress, SPC policy documents did not necessarily require SPC Party Group approval. I surmise since the Party Political-Legal Work Regulations were promulgated in January 2019, it has now become a requirement, because Article 15 requires Party Groups/Committees to be responsible for setting major policies and directions.
My thanks to a knowledgeable person for triggering my thinking about this and for insightful comments on an earlier draft.