Most readers of this blog are unlikely to know that the Supreme People’s Court (SPC) publishes on its website responses to selected letters to President Zhou Qiang that make suggestions and give opinions. In a July 11 response, the SPC revealed that individual bankruptcy legislation is on its agenda. As I suggest below, actual legislation is likely to come later.
The letter said:
Dear Mr. Pan Dingxin:
We received your proposal, and after consideration, we respond as follows:
establishing and implementing an individual bankruptcy system is beneficial for those individuals or households who have fallen into serious financial distress to exempt some of their debts and enable them again through their hard work to achieve normal business and living conditions. Because of this, it has an important function to protect individuals and households that have fallen into financial difficulties. However an individual bankruptcy system relates to the establishment and improvement of an individual credit system and commercialization of commercial banks or their further marketization and other factors. At the same time, the implementation of an individual bankruptcy system requires the National People’s Congress or its Standing Committee to legislate. We believe that with development and improvement of the socialist market economic, the National People’s Congress or its Standing Committee will promulgate an individual bankruptcy law on the basis of the experience with the “PRC Enterprise Bankruptcy Law.” The Supreme People’s Court will definitely actively support the work of the relevant departments of the state, and promote the implementation of an individual bankruptcy system.
Thank you for your support of the work of the Supreme People’s Court!
Supreme People’s Court
June 15, 2017
Few are aware that Shenzhen has been working on draft individual bankruptcy legislation for several years now, looking to Hong Kong’s experience and legislation, described in a recent report as a “complete” individual bankruptcy system (“完善的个人破产制度”). The process has been going on for so long that the team (designated by the local people’s congress and lawyers association) and headed by a Shenzhen law firm partner published a book one year ago with its proposed draft and explanations.
Although Professor Tian Feilong of Beihang University’s Law School has been recently widely quoted for his statement about Hong Kong’s legal system undergoing “nationalisation,” this is an example, known to those closer to the the world of practice, that Hong Kong’s legal system is also seen as a source of legal concepts and systems that can possibly be borrowed. The drafting team looked at Hong Kong (among other jurisdictions) and others in China have proposed the same as well.
Shenzhen’s municipal intermediate court has completed an (award-winning) study on judicial aspects of individual bankruptcy shared with the relevant judges at the SPC.
If recent practice is any guide, individual bankruptcy legislation will be piloted in Shenzhen and other regions before nationwide legislation is proposed, and it will be possible to observe the possible interaction between those rules and the government’s social credit system. So national individual bankruptcy legislation appears to be some years off.
As to why the SPC has a letter to the court president function, the answer is on the SPC website: it is to further develop the mass education and practice campaign (mentioned in this blogpost four years ago) and listen to the opinions and suggestions of all parts of society (the masses). Listening to the opinion and suggestions of society are also required of him as a senior Party leader, by recently updated regulations. The regulations are the latest expression of long-standing Party principles.
My article below was published in the 17 March edition of the South China Morning Post:
To solve the many specific cross-border legal issues affecting the people of Hong Kong and the rule of law in the special administrative region, an independent and non-partisan advisory committee on cross-boundary legal issues should be established.
The committee, which ideally would draw its membership from current or retired senior members of the legal profession, would provide policy guidance to a working group drawn from the legal community. The idea would be to draw together people familiar with the Hong Kong and mainland legal systems. They would work together to propose options for practical solutions to problems involving complex legal issues.
These problems could be issues in the news, such as parallel trading, and other serious problems not in the news such as cross-boundary pollution, criminal justice or domestic violence. The members of the working group must be able to reach out to those with the right expertise or background, regardless of political views.
One example of an important issue not in the news is domestic violence. Grenville Cross SC has recently written about the need for improving Hong Kong domestic law on this front. I have written about domestic violence on the mainland, highlighting new guidance by the Supreme People’s Court and others for dealing with this serious social problem. Hong Kong social trends, such as cross-border marriages and Hong Kong elderly people settling on the mainland, mean that cross-border domestic violence is an unrecognised problem.
Another issue concerns cross-border cooperation in criminal matters. The South China Morning Post reported last autumn that the Supreme People’s Procuratorate had announced that it would focus on establishing ways to bring suspects home, including extradition and repatriation, with Hong Kong as the first target. If the government is being asked to conclude a rendition agreement or criminal law judicial assistance arrangement, this touches on a broad range of legal issues for individuals, companies and other organisations.
A Hong Kong foundation can consider investing some resources to fund the necessary research and analysis on which the advisory committee will need to rely. Such foundations have been generous in funding research on law and Chinese studies in universities elsewhere. The proposed advisory committee and working group are intended to provide practical results and are sure to provide value for money.
On 13 January the People’s Court Daily published a report, linked here (and also issued on Wechat), with statistics and summaries of legal developments in 2013 concerning mutual legal assistance between mainland China and Hong Kong, Macau, and Taiwan. These developments, which also have practical implications for lawyers and the judiciary in all four jurisdictions are highlighted below.
There were almost 11,000 cases involving delivery of judicial documents, taking of evidence, and other mutual legal assistance, with a significant increase since the conclusion in June, 2009 of a judicial assistance agreement between the mainland and Taiwan.
In 2013, the Supreme People’s Court (SPC) began work on a judicial interpretation concerning the recognition of Taiwan court rulings and judgments, which the report says would be more comprehensive and expand the scope of judgments that can be recognized. The SPC also began work on a judicial interpretation for the transfer of mainland prisoners from Taiwan back to the mainland to serve out their sentences.
The SPC and the Hong Kong authorities [presumably the Department of Justice] have undertaken fruitful discussions on the recognition and enforcement of civil and commercial judgments that lack jurisdiction agreements (相互认可与执行非协议管辖民商事判决) as well as an arrangement concerning criminal cases in which the mainland and Hong Kong have concurrent jurisdiction.
The arrangements with Hong Kong have significant implications for the business and legal community in Hong Kong. The Supreme People’s Court Monitor looks forward to more information from the Hong Kong government on both issues.