Tag Archives: Hong Kong

Greater Bay Area, Hong Kong

How the Supreme People’s Court Serves the Greater Bay Area Strategy

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Photo taken on a bridge between Hong Kong and Shenzhen, 2018

In the run-up to the 25th Anniversary of the establishment of the Hong Kong Special Administrative Region, the Supreme People’s Court (SPC) issued a report on its work (Chinese only) in support of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) Strategy 2019-2022.  The report was republished on the website of the Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region (HKSAR)),  the Liaison Office of the Central People’s Government in the Macao Special Administrative Region (Macao SAR) and in mainland Chinese media. The lack of an English (and Portuguese) translation I attribute to the need to publish the report timely.

This report contains useful information for legal professionals in Hong Kong, Macao, and those beyond as it reveals issues and concerns in the area of civil and commercial law as relations between the mainland and the two SARs become closer through the GBA Strategy. For reasons of time, I am focusing my comments on the first two sections but the rest of the report merits analysis as well. My comments are in italics.

I. Political background

The opening sentence of the report states that the development of the  Greater Bay Area is a national strategy personally devised, personally planned, and personally driven by President Xi Jinping. The report sets out how the judicial functions of the courts serve and safeguard the construction of the GBA. The opening paragraph sets out some of the basic principles that the SPC is implementing, including “promoting the convergence (linkage) of judicial legal rules,  deepening judicial exchanges and cooperation among Guangdong, Hong Kong and Macao  (在推进粤港澳司法法律规则衔接，深化粤港澳司法交流合作).

The first sentence frames the political importance of the report and the work of the SPC supporting the GBA Strategy.

The SPC has issued many “judicial services and safeguards” documents setting out the role of the courts in supporting and promoting national strategies. Understanding these documents is important for understanding current issues in the Chinese courts as related to that strategy, as well as the future direction of judicial policy and related measures. This blog has analyzed quite a few of those “judicial services and safeguards” documents.  Of those many posts, GBA-related “judicial services and safeguards” documents are mentioned here and there.  The report sets out a list in the following section.

Section III will briefly address the judicial legal rules linkage and judicial exchanges and cooperation policies.

II. Mechanisms for implementing the GBA national strategy through the courts

The mechanism is “horizontal coordination and vertical implementation.”   The SPC established a GBA special working small group (专项工作小组) jointly composed of relevant SPC departments and the Guangdong Higher People’s Court (Guangdong High Court) The Guangdong High Court is the institution that has principal responsibility. It has involved all levels of the (mainland) Chinese courts.

It is the normal working practice of the SPC and other central institutions to establish working small groups to achieve important tasks that link across institutions.  It appears that a significant part of the GBA strategy involves implementing reforms within the mainland. It is not clear whether there are discussions among the Guangdong High Court and HKSAR and Macao SAR authorities on specific matters affecting the two SARs.  One assumes that to be the case.

The SPC has focused on promoting judicial cooperation mechanisms between the Mainland and Hong Kong and Macau, signed Discussion  Minutes” (会谈纪要) with Hong Kong and Macau on strengthening judicial and legal exchanges and cooperation (full text here), and instructed the Guangdong High Court and the Hong Kong Department of Justice (HK DOJ) to sign a “Guangdong-Hong Kong-Macao Greater Bay Area Legal Exchange and Mutual Cooperation Arrangement” (粤港澳大湾区法律交流与互鉴框架安排). 

It appears that the SPC is taking the lead on more major matters involving interactions with Hong Kong and Macao.  I have not been able to find all of the documents mentioned, however. It appears that this legal exchange and mutual cooperation agreement (dated 2019) should be added to the list of arrangements about which I wrote last year. I have not been able to identify the full text of this arrangement and would welcome a citation. Judge Si Yanli mentioned the Meeting Minutes and Mutual Cooperation Arrangement in her article published earlier this year.

To  implement “wherever the Party Center’s policy decisions are deployed, the judicial services of the people’s courts will be there”  (党中央的决策部署到哪里，司法服务就跟进到哪里), the SPC issued the following documents:

A version of the above slogan can be seen across central institutions, including the Central  Commission for Disciplinary Inspection, Sinograin, and the National People’s Congress.  SPC Vice President Yang Wanming has used a version before at a 2020 press conference, as I noted here.

  1. Opinion Concerning the Provision of Judicial Services and Safeguards for the Construction of the Guangdong, Hong Kong, and Macao Greater Bay Area 关于为粤港澳大湾区建设提供司法服务和保障的意见》I have not been able to locate this document.
  2.  Opinions of the Supreme People’s Court on Providing Support and Guarantee for Shenzhen to Build Itself into a Pilot Demonstration Zone for Socialism with Chinese Characteristics《关于支持和保障深圳建设中国特色社会主义先行示范区的意见》
  3. Opinions of the Supreme People’s Court on Supporting and Guaranteeing the Construction of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin《关于支持和保障横琴粤澳深度合作区建设的意见》
  4.  Opinions of the Supreme People’s Court on Supporting and Guaranteeing Comprehensively Deepening the Reform and Opening-up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (关于支持和保障全面深化前海深港现代服务业合作区改革开放的意见)

I mentioned the latter three documents in earlier blogposts.

The Guangdong High Court, taking the lead in implementing GBA judicial policy, has issued a number of operational plans and assembled a list of reform measures.  The operational plan includes: 1. three-year operational plan for promoting the construction of the GBA (推进粤港澳大湾区建设三年行动方案);

2.  Three-Year Action Plan to Support Shenzhen in Building an Experimental Demonstration Zone for Socialism with Chinese Characteristics(支持深圳建设中国特色社会主义先行示范区三年行动方案)

3.  A list plus ledger of 46 reform measures “清单+台账”方式推动46项改革举措

Other measures that GBA-area  local people’s courts have taken:

  1. centralized trial of foreign-related, Hong Kong, Macao and Taiwan civil and commercial cases  (this is a theme in professionalizing the hearing of foreign-related cases);
  2. Trying out a trial model of “professional judges + Hong Kong and Macao jurors  + industry experts”; (it is not clear how much this is actually happening in the Covid era, with strict border controls still ongoing);
  3. Accumulate practical experience that can be promoted and replicated elsewhere such as the centralized jurisdiction of Hong Kong and Macao-related cases, separation of complicated and simple cases, and expanded application of laws.
  4. The Higher People’s Court of Guangdong Province has released 60 typical cases of cross-border disputes in the Guangdong-Hong Kong-Macao Greater Bay Area for three consecutive years, providing professional and clear legal guidance for parties in the three places. See my earlier blogpost on SPC typical cases.
  5. The Shenzhen Intermediate People’s Court established the first administrative trial center in the Mainland to implement centralized jurisdiction of administrative cases and took the lead in exploring the transfer of some administrative cases involving Hong Kong and Macao to the jurisdiction of grassroots courts. The People’s Court of the Guangdong-Macao Deep Cooperation Zone in Hengqin was inaugurated,

This last list of matters is highlighting the accomplishments of the GBA courts in implementing judicial reform, especially in mechanisms that can be replicated elsewhere in the Chinese court system.

III. Judicial Legal Rules Convergence and Judicial Exchanges and Cooperation Policies

Section 3 of the report addresses this topic, focusing primarily on what is termed judicial exchanges and cooperation policies (司法交流合作), mentioning that the SPC concluded three arrangements and one judicial assistance document (司法协助文件) with the HKSAR and two arrangements with the Macao SAR.  Because I have previously written about this topic in several earlier blogposts, I will instead focus on the topic of judicial legal rules convergence (linkage, 司法法律规则衔接). The report mentions very little about this.

As mentioned above, Judge Si Yanli published an article earlier this year (2022) in China Law Review（Research into Difficult Issues of Legal Rules Convergence in the Greater Bay Area, Focusing on the Diversified Dispute Resolution Mechanism as an Entry Point中国法律评论, 粤港澳大湾区法律规则衔接疑难问题研究——以多元化纠纷解决机制为切入点 ) with very useful insights for understanding what is meant by judicial legal rules convergence (linkage) and the areas of law that are under consideration. What she discusses in her article are not official statements of policy.

Among the many suggestions for rule convergence in her article are the following: concluding civil and commercial judicial assistance agreements between (or among) Guangdong, Hong Kong and Macao. Among the areas she suggests a GBA judicial assistance agreement would be useful is the service of process and creating a mechanism bringing the entire process online. She also suggests that the three jurisdictions cooperate in areas of law outside of the arrangements that have been reached, such as inheritance and intellectual property.  She also suggests that Hong Kong and Macao invested entities in the GBA be able to choose Hong Kong or Macao law for contracts and Hong Kong or Macao arbitral institutions for arbitration. Note that an article on the website of the Hong Kong Department of Justice mentions that this is being piloted. 

Judge Si very usefully proposes a GBA agreement on the enforcement of mediation agreements that would draw on the Singapore Mediation Convention, discussing the many obstacles in the way of that occurring, including gaps in Chinese (mainland) mediation legislation.  Hong Kong official media has reported on work on GBA mediation platform, with ongoing work on mutual recognition of qualifications, accreditation, and mediator code of conduct.

————-

 As I have previously commented, the judicial (and more broadly, the legal) aspects of the GBA merit more attention than they have received thus far.  But understanding the documents of the GBA has its challenges. As mentioned previously,  some documents have not yet been made public.  The larger challenge in understanding them for local Hong Kong (and I assume Macao students) is that it requires the reader to be familiar with the language of (mainland) Chinese official documents.   

The GBA is likely to have an impact on the careers of at least some students in the GBA area law schools, including my own students at the Peking University School of Transnational Law (in Shenzhen), as well as in Hong Kong’s and Macao’s three law schools, so I look forward to some group of students taking up the challenge.

_______________________________________________________

Finally, I will post occasionally & shorter blogposts from now on, while I work on several articles that have deadlines this summer.

 

Court Operations, Court Reform

Dispute Resolution Reforms in the Shanghai FTZ Underway– Updated

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Current plans for the new Shanghai Free Trade Zone (Shanghai FTZ) include  reforms to China’s dispute resolution systems, both the courts and commercial arbitration. Court reform developments, in particular, are moving rapidly.

On 5 November, the establishment of a tribunal (自贸区法庭) in the Shanghai FTZ was announced, with Judge Luo Dongchuan, the head of the #4 civil division of the Supreme People’s Court (Court) in attendance, among others.

It follows the announcement by the Court designating the Shanghai courts to be among the first in the country to implement certain judicial reforms.  These reforms are linked to the Supreme People’s Court  2013 Judicial Reform Opinion (discussed in this blogpost).

Professor Ding, Chairman of Legal Affairs Commission, Shanghai Municipal People’s Congress Standing Committee, identified some of the reforms contemplated as well as some of the obstacles to legal reform in the Shanghai FTZ.  in a thoughtful speech given at the opening of the China (Shanghai) Pilot Free Trade Zone Court of Arbitration (affiliated with the Shanghai International Arbitration Center).

This post, which updates my earlier blogposts on the subject, looks at two important developments affecting dispute resolution in the Shanghai FTZ:

  • the Court designating the Shanghai courts to take the lead in judicial reforms;
  • Professor Ding highlighting to the Shanghai political and legal leadership that the Shanghai FTZ provides an unprecedented opportunity for Shanghai to build itself into an international arbitration center.

A.             The Courts

The presence of Judge Luo of the Court is a signal that the Shanghai FTZ tribunal is an initiative that the Court backs.   According to a statement of the vice president of the Shanghai Higher People’s Court, the jurisdiction of the tribunal will include civil and commercial cases related to the Shanghai FTZ:

  • investment;
  • trade;
  • finance;
  • intellectual property; and
  • real estate.

According this statement by the President of the Pudong New Area People’s Court, the Shanghai FTZ tribunal will implement the following reforms:

  • case acceptance;
  •  pre-litigation mediation;
  • greater transparency;
  •  use of model cases, and
  • moving more litigation procedure on-line. 201311061401215050.

The decisions of the tribunal will be considered decisions of the Pudong New Area People’s Court and appeals will be made to the #1 Municipal Intermediate People’s Court.

The new reforms for all of Shanghai announced by the Court on 25 October, which build on previous work by  the Shanghai court leadership, include:

  • increasing judicial transparency, including judicial procedure, judicial decisions, and information concerning enforcement;
  • reforming the internal operating rules of the judiciary, so that it operates according to judicial rather than administrative principles;
  • motivating and providing protection to judges to enable them to decide cases fairly;
  •  improving the operating structures of the courts;
  • amending the operating rules for judicial committees;
  • providing a structure for the discussion of cases.

The Shanghai courts have started to take the first steps by issuing regulations to address one of the many issues facing litigants in the Chinese courts, the refusal to take cases (http://www.chinacourt.org/article/detail/2013/11/id/1116965.shtml）.  We can expect many more regulations to come.

The reforms highlighted by the Court will be difficult to implement, particularly the reform of internal operating rules of the judiciary, because the PRC judiciary has operated according to those principles throughout its history (as many others inside and out of the Chinese judiciary and mainland China have pointed out (including this author)). Many of these reforms relate, indirectly, to the relationship of the courts and other government institutions, as well as the nature of Communist Party leadership of the courts.

The Court announced that it has established standards and metrics to evaluate the effectiveness of the announced reforms. On the basis of those reforms, The Court will gradually roll out those reforms throughout the entire country.

The announcement designating the Shanghai courts as one of the court designated to lead the way in judicial reforms indicates  the importance of Shanghai and the Shanghai FTZ.  The Court has put aside the scandal involving a group of senior judges of the Shanghai Higher People’s Court visiting prostitutes (that led the Supreme People’s Court to issue a statement that the judges had tarred the image of the nation’s judges and scarred judicial credibility (http://english.peopledaily.com.cn/90882/8356970.html)).

Designating the Shanghai courts to take the lead in court reform presents a challenge to the Shanghai Higher People’s Court—can they establish a court that will earn the credibility of both domestic and foreign litigants through having competent judges who are able to put into practice ethical standards?  The announcements related to the Shanghai FTZ tribunal indicate that the Shanghai court authorities are selecting well educated judges for the task.

B.             Arbitration

Among the challenges Professor Ding identified in building the Shanghai FTZ into an international arbitration center is challenges to the arbitral institution.  One of those challenges is internationalization.

Challenges to the arbitration institution—possible internationalization?

 In the September interview mentioned above, Lu Hongbing advocated that cooperation between foreign arbitration institutions and Shanghai based ones should be encouraged in the Shanghai FTZ.

Real cooperation involves the following questions (among others!), and a web of legal issues:

  • Should cooperation between foreign and Shanghai based arbitration mean allowing international arbitration institutions to establish offices in the Shanghai FTZ?
  • If that is permitted, should foreign arbitration institutions be permitted to hold arbitrations (seated) in China?
  • Would an arbitral award under those circumstances still be considered to be “international” and enforceable in China under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) or Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region (Arrangement with Hong Kong)

Enabling real cooperation between foreign arbitration institutions and Shanghai based ones will require profound analysis of and well-considered solutions to the complex of issues related to the Arbitration Law and Civil Procedure Law raised by the above questions.

An additional outstanding issue that the Court will need to resolve  is the issue of the validity and enforceability of arbitration clauses of the Shanghai Court of International Arbitration (and its predecessor, the CIETAC/Shanghai).  A draft of a judicial opinion resolving the matter is said to be under consideration by the Supreme People’s Court.  That also needs to be resolved if dispute resolution in the Shanghai FTZ (and all of Shanghai) is to serve the needs of disputing parties.

The Court, Professor Ding Wei (and other Shanghai government legal specialists) and the legal advisers for the People’s Government of Pudong District (lead outside counsel is understood to be the Zhong Lun Law Firm) need to work on designing solutions to untangle  the web of interconnected legal issues affecting the internationalization of arbitration.  Given that multiple central government institutions will need to be involved with any solution, it is likely progress on real cooperation with foreign arbitration institutions can only occur over the long term.

C.             Conclusion

The Shanghai FTZ provides the Chinese government an opportunity to experiment with Chinese dispute resolution reforms, both in the courts and arbitration.  The Court is taking steps in Shanghai to address the difficult legal and political issues that must be considered and resolved to make real progress.  Many are “watching this space”, particularly after the establishment of the Shanghai FTZ tribunal.

 

[ii] http://www.chinacourt.org/article/detail/2013/09/id/1080615.shtml

Court Operations, Court Reform

Dispute Resolution Reforms in the Shanghai FTZ Underway

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Few are aware that current plans for the new Shanghai Free Trade Zone (Shanghai FTZ) include  reforms to China’s dispute resolution systems, both the courts and commercial arbitration. Court reform developments, in particular, are moving rapidly, because the Supreme People’s Court (the Court) has designated the Shanghai courts to be among the first in the country to implement certain judicial reforms (http://rmfyb.chinacourt.org/paper/html/2013-10/26/content_72024.htm?div=-1#).  These reforms are linked to the Supreme People’s Court  2013 Judicial Reform Opinion (discussed in my 30 October blogpost) and  announced on 29 October.

Reforms in dispute resolution were highlighted by Professor Ding Wei, Chairman of Legal Affairs Commission, Shanghai Municipal People’s Congress Standing Committee (http://www.cietac-sh.org/English/ResourcesDetail.aspx?tid=39&aid=571&zt=3) , in a thoughtful speech given at the opening of the China (Shanghai) Pilot Free Trade Zone Court of Arbitration (affiliated with the Shanghai International Arbitration Center) on 22 October.  Professor Ding identified some of the reforms contemplated as well as some of the obstacles to legal reform in the Shanghai FTZ.

This post, which updates my blogpost of 28 October, looks at two important developments affecting dispute resolution in the Shanghai FTZ:

  • the Court designating the Shanghai courts to take the lead in judicial reforms;
  • Professor Ding highlighting to the Shanghai political and legal leadership that the Shanghai FTZ provides an unprecedented opportunity for Shanghai to build itself into an international arbitration center.

A.             The Courts

Professor Ding’s made a statement in his speech that “judicial arrangements (for the FTZ) relate to the organization and authority of matters stipulated by the Organizational Law of the People’s Courts, and local government cannot make changes” makes it clear that substantial court reform in the FTZ is not in the hands of the Shanghai government, but rather the central government.  From its press announcement on 25 October (http://www.chinacourt.org/article/detail/2013/10/id/1113813.shtml), it is clear that the Court sees the opportunity presented by the dynamism of economic developments in Shanghai, including the Shanghai FTZ (although not mentioned).

Although currently there is no Shanghai FTZ court ( Lu Hongbing, vice president of the All China Lawyers Association and founding partner of the Shanghai-based Grandall Law Group,  mentioned in a September article the possibility  that one will be established (http://stock.sohu.com/20130924/n387092295.shtml)), the Court is calling on the Shanghai courts to make reforms that will benefit litigants in the Shanghai FTZ  (as well as the entire Shanghai court system.

The new reforms announced by the Court on 25 October, which build on previous work by  the Shanghai court leadership, include:

  • increasing judicial transparency, including judicial procedure, judicial decisions, and information concerning enforcement;
  • reforming the internal operating rules of the judiciary, so that it operates according to judicial rather than administrative principles;
  • motivating and providing protection to judges to enable them to decide cases fairly;
  •  improving the operating structures of the courts;
  • amending the operating rules for judicial committees;
  • providing a structure for the discussion of cases.

The Shanghai courts have started to take the first steps by issuing regulations to address one of the many issues facing litigants in the Chinese courts, the refusal to take cases (http://www.hshfy.sh.cn/shfy/gweb/xxnr.jsp?pa=aaWQ9MjkyMzQ0JnhoPTEPdcssz)(http://www.chinacourt.org/article/detail/2013/11/id/1116965.shtml）.  We can expect many more regulations to come.

The reforms highlighted by the Court will be difficult to implement, particularly the reform of internal operating rules of the judiciary, because the PRC judiciary has operated according to those principles throughout its history (as many others inside and out of the Chinese judiciary and mainland China have pointed out (including this author)). Many of these reforms relate, indirectly, to the relationship of the courts and other government institutions, as well as the nature of Communist Party leadership of the courts.

The Court announced that it has established standards and metrics to evaluate the effectiveness of the announced reforms. On the basis of those reforms, The Court will gradually roll out those reforms throughout the entire country.

The announcement designating the Shanghai courts as one of the court designated to lead the way in judicial reforms indicates  the importance of Shanghai and the Shanghai FTZ.  The Court has put aside the scandal involving a group of senior judges of the Shanghai Higher People’s Court visiting prostitutes (that led the Supreme People’s Court to issue a statement that the judges had tarred the image of the nation’s judges and scarred judicial credibility (http://english.peopledaily.com.cn/90882/8356970.html)).

Designating the Shanghai courts to take the lead in court reform presents a challenge to the Shanghai Higher People’s Court—can they establish a court that will earn the credibility of both domestic and foreign litigants through having competent judges who are able to put into practice ethical standards?

B.             Arbitration

Among the challenges Professor Ding identified in building the Shanghai FTZ into an international arbitration center is challenges to the arbitral institution.  One of those challenges is internationalization.

Challenges to the arbitration institution—possible internationalization?

 In the September interview mentioned above, Lu Hongbing advocated that cooperation between foreign arbitration institutions and Shanghai based ones should be encouraged in the Shanghai FTZ.

Real cooperation involves the following questions (among others!), and a web of legal issues:

  • Should cooperation between foreign and Shanghai based arbitration mean allowing international arbitration institutions to establish offices in the Shanghai FTZ?
  • If that is permitted, should foreign arbitration institutions be permitted to hold arbitrations (seated) in China?
  • Would an arbitral award under those circumstances still be considered to be “international” and enforceable in China under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) or Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region (Arrangement with Hong Kong)

Enabling real cooperation between foreign arbitration institutions and Shanghai based ones will require profound analysis of and well-considered solutions to the complex of issues related to the Arbitration Law and Civil Procedure Law raised by the above questions.

An additional outstanding issue that the Court will need to resolve  is the issue of the validity and enforceability of arbitration clauses of the Shanghai Court of International Arbitration (and its predecessor, the CIETAC/Shanghai).  A draft of a judicial opinion resolving the matter is said to be under consideration by the Supreme People’s Court.  That also needs to be resolved if dispute resolution in the Shanghai FTZ (and all of Shanghai) is to serve the needs of disputing parties.

The Court, Professor Ding Wei (and other Shanghai government legal specialists) and the legal advisers for the People’s Government of Pudong District (lead outside counsel is understood to be the Zhong Lun Law Firm) need to work on designing solutions to untangle  the web of interconnected legal issues affecting the internationalization of arbitration.  Given that multiple central government institutions will need to be involved with any solution, it is likely progress on real cooperation with foreign arbitration institutions can only occur over the long term.

C.             Conclusion

The Shanghai FTZ provides the Chinese government an opportunity to experiment with Chinese dispute resolution reforms, both in the courts and arbitration.  The Court is taking steps in Shanghai to address the difficult legal and political issues that must be considered and resolved to make real progress.  Many are “watching this space”!

[i] My translation: The translation on the website states: the justice arrangement concerning duty allocation among people’s court is an important power under the “PRC People’s Organization Law.” No local organizations are permitted to change it.

[ii] http://www.chinacourt.org/article/detail/2013/09/id/1080615.shtml