Since the Fourth Plenum of the 19th Party Congress, and especially since President Xi Jinping spoke about the need for China to train foreign-related legal personnel (涉外法治人才), the Supreme People’s Court (SPC) press, SPC leadership, and others important to the SPC leadership, such as Shen Deyong, former executive vice president of the SPC and current leaders of the CPPCC have reiterated the importance of “foreign-related legal personnel” to China and the people’s courts. Training “foreign-related legal personnel” is incorporated into the Party’s Plan for Building the Rule of Law (2020-2025), an indication of its importance. Shen Deyong criticized the way that “foreign-related legal personnel” is used within government institutions– “team is too small, their numbers are too few, they are scattered and the market is chaotic.””涉外法律服务人才队伍建设还存在一些问题和不足，主要呈现队伍“小”、人才“少”、分布“散”、市场“乱”的特点. I would add to the issues that he flagged that policies directed towards attracting “foreign-related legal personnel” to the courts inevitably encounter the special characteristics of the courts’ personnel system as it has evolved since the quota judge reform was implemented, both the training system and especially career advancement from judges assistant to quota judge.
As readers of this blog know, the Chinese courts need “foreign-related legal personnel” in many areas. Those include working on cross-border cases across a broad range of procedural and substantive areas, undertaking research related to cross-border judicial policy and cross-border legal issues that have an impact on the judiciary, as well as working on a range of issues related to the SPC’s and lower courts’ interactions with the outside world.
Law students apply to become judges assistants after graduation for a variety of reasons. Some become further interested after internships (see this blogpost on SPC interns–a version with more data may appear later). Other law school graduates are motivated by presentations by outstanding judges at their law school (SPC Judge Gao Xiaoli’s 2015 talk at the Peking University School of Transnational Law earned her many new fans), while still others recognized that a job “in the system” would resolve their hukou problems and enable them to live in Beijing, Shanghai, or other major cities. Yet others are motivated to use their education in the service of the public. I can say with authority that law graduates with knowledge of transnational law, fluency in English (and other foreign languages) are working as legal assistants in courts all over China. Recruitment of legal assistants is a local matter, so the #4 Civil Division of the SPC (in charge of foreign commercial matters) and likely the Political Department of the SPC (in charge of personnel) lacks statistics on the number of “foreign-related legal personnel” working in the local courts.
Special characteristics of the courts’ personnel system
I write about the judiciary’s personnel system with some trepidation as I am well aware that my knowledge of the regulatory system is incomplete. (Some of the relevant regulations cited in analyses of the personnel reforms are not accessible to those outside the court system.) On the issue of placement of junior “foreign-related legal personnel,” I have not heard from either knowledgeable persons, former students, or other junior personnel in the Chinese court system that specific policies have been implemented within the court system (the Political Department of the SPC is responsible at the national level, and locally, political departments of local courts are responsible) to channel judges assistants recruited from China’s law schools with transnational training and experience into roles in which their academic background can be used and their “foreign-related” legal skills can be developed. In the absence of specific policy, too many local court leaders appear to see the young people with a transnational legal background and experience merely as workers that can be put to work in the national judicial machine (司法民工). Judges assistants from higher courts are sometimes sent down to the local level to work for two years, in line with young cadre development policy.
If the three documents cited above have language about training, it seems likely that a training plan is somewhere in the approval pipeline. My guess is that this is yet another matter that requires coordination among multiple institutions within the SPC, including the #4 Civil Division–the ones asking for the training to be done, with the Political Division and the National Judges College. As I wrote last year, a new national court training plan (2019—2023年全国法院教育培训规划)) is underway. As senior leadership has called for cultivating “foreign-related legal personnel,” it seems likely that the SPC will eventually issue (perhaps not publicly) a training plan for judges handling all sorts of foreign-related issues, both civil-commercial and criminal.
Another issue for foreign-related legal personnel in the courts is career advancement for judges assistants. As I mentioned in passing in an earlier blogpost, career advancement from judges assistant to quota judge has slowed. Specific promotion criteria are set locally. Local studies have been done on the role of the judges assistant but have not surmounted the language barrier (see this one from one of the Chongqing Intermediate People’s Courts) that provide specific data and specific analysis deriving from local conditions. 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.
Unless the SPC can evolve better national policy directed towards a career for “foreign-related legal personnel,” some of them will leave, disappointed with the failure of the judicial system to use their talents, despite the official publicity. There will be many companies and law firms, some dealing with the issues I described previously, that will value them.
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 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.
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 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.
Many thanks to several highly knowledgeable readers who commented on earlier drafts of this blogpost.
SPC Guiding Opinion III is a judicial policy document (司法政策性文件). As this blog has often commented, the Supreme People’s Court (SPC) must serve the greater situation and deal with practical legal issues, so that the SPC itself and its senior leadership are correct, politically, and professionally. One of those ways is by providing properly calibrated guidance to the lower courts and other related authorities with the appropriate political signals. For this document, Justice Luo Dongchuan provided the political background and signals in his introductory remarks at the SPC news conference. The document itself is practically oriented (as those in the system say “problem-oriented”–“问题导向”)（and the practitioners say “干活”).
From the photo above it is clear that the #4 Civil Division, headed by Judge Wang Shumei, which focuses on cross-border commercial and maritime issues, took the lead in drafting. That division is one of the smaller divisions of the SPC and “punches above its weight.”
A judicial policy document is not a judicial interpretation but as the SPC editors of a collection of these documents noted, “it is generally recognized that they have an important guiding impact on the trial and enforcement work of the courts at every level.” SPC Guiding Opinion III is one example of the many types of SPC “stealth” guidance to the lower courts. I describe it as “stealth guidance” because it affects how cases are handled, heard, and decided, but cannot be cited in a court judgment or ruling. For that reason, only the highly observant will note the impact of judicial policy documents.
I anticipated that the SPC would issue further Covid-19 pandemic guidance when I spoke [links to video] in April at a virtual event sponsored by Berkeley Law School’s Center for Law & Technology. Some of the guidance reveals frequently used litigation tactics of Chinese parties.
Selected comments on the content
The document is divided into four sections:
Civil procedure mechanics–parties, evidence, deadlines, and statutes of limitations (Articles 1-5): This section draws on the recently amended and effective civil evidence rules
Article 1 directs Chinese courts to approve applications for extensions for foreign (cross-border) parties who are delayed in being able to provide notarized and authenticated documents to evidence the identity. Delays in obtaining notarized and authenticated powers of attorney are to be treated similarly. If China had acceded to the 1961 Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, for all of China, this requirement would no longer be necessary. The Convention is applicable to Hong Kong because of UK-PRC handover arrangements, which enabled conventions originally applicable to Hong Kong pre-1997 to continue in effect.
Article 3 reveals one of the frequently used litigation tactics of Chinese parties in cross-border litigation in China–that is disputing the authenticity of a document because it has not been properly notarized and legalized. The SPC Guiding Opinion III advises lower courts to notify parties that they may reserve their arguments concerning these formalities, and focus their arguments on relevance and persuasiveness of the evidence.
2. Ascertainment (determination) and application of law
These articles remind Chinese courts to use the Law of the People’s Republic of China on the Law Applicable to Foreign-Related Civil Relationships to determine governing law (assuming a contract does not designate a governing law), and to look to the SPC Guiding Opinion I for guidance on force majeure under Chinese law. The SPC also reminds lower court judges not to substitute Chinese law if foreign law governs. This is not the first time that this type of reminder has appeared in SPC policy documents, indicating this is an ongoing problem. This section also includes guidance on the application on the UN Convention on the Sale of Goods.
Articles 8 and 9 relate to letters of credit, standby letters of credit, and demand (independent) guarantees. It reminds lower courts to correctly apply the International Chamber of Commerce (ICC)’s UCP 600 (Uniform Customs and Practice for Documentary Credits), the ICC’s URDG 758(demand guarantee rules), and the related SPC judicial interpretation concerning demand guarantees.
This likely means that Chinese contractors who have provided independent guarantees or standby letters of credit for construction projects overseas are seeking to prevent the owner of the projects from drawing on these guarantees through litigation in the Chinese courts. This case decided by the SPC in April, 2020, reverses the judgment of the Shandong Higher People’s Court in favor of the Chinese contractor. The dispute relates to a Shandong Electric Power Company (SEPCO) project in India. Previous reporting in the Indian press seen here.
3. Transport contracts
Articles 11-17 relate to various types of transportation contracts as well as shipbuilding contracts.
4. Green channel.
This last section reminds courts to use online procedures and cross-administrative region arrangements if convenient and that Hong Kong, Macau, and Taiwan related commercial cases should be handled with reference to this guidance.
How was the document drafted?
As to how the SPC determined the FAQs of the lower courts, it did what all corporates and institutions around the world do these days–convened a video conference. The participants presumably came from the maritime courts and the foreign-related civil divisions of the provincial courts.
Why did the SPC issue it?
The number of cases directly affected by this guidance is relatively small. According to statistics released with President Zhou Qiang’s report to the NPC in May, there were 17,000 first instance foreign-related commercial cases and 16,000 foreign-related maritime cases in the Chinese courts in 2019, compared with 31.5 million cases in the Chinese courts overall.
However, foreign-related cases tend to be more sensitive because, as Zhou Enlai said “外事无小事” (foreign matters are never small matters” –foreign-related matters, because they involve relations with other countries and the prestige of the Chinese state, are sensitive. That means that judges hearing cross-border cases have a particular pressure to handle these disputes in a way that is consistent with the law (of course), acceptable to the leadership of their court & to the outside world. One important aspect of SPC Guiding Opinion III is the impact on Belt & Road projects, In many of these projects Chinese companies are often contractors, or also contractors and equipment suppliers (and Chinese banks provide financing). On the civil/commercial side cross-border cases possibly involve treaty/convention obligations (or treaty-like arrangements, in the case of Hong Kong).
As issues dealt with in SPC Guiding Opinion III relate to the most important Chinese cross-border commercial issues that have arisen during the pandemic, it has an impact on the Chinese (and foreign) business community, far beyond the number of foreign-related cases in the Chinese courts, and is likely to have an impact on related arbitrations governed by Chinese law.