The post introduces one of the biggest difficulties encountered by Chinese courts in the trial of foreign-related civil and commercial cases: how to ascertain foreign law.
This post summarizes the article titled “Proof of Foreign Law in Foreign-Related Civil and Commercial Trials in Chinese Courts" (涉外民商事审判实践中外国法的查明), which was published in “Wuhan University International Law Review” (武大国际法评论) (Vol. 17, No. 1, September 2014). The author is Judge Gao Xiaoli (高晓力), Deputy Director of the 4th Civil Division of China's Supreme People's Court (SPC). Among other responsibilities, the SPC’s 4th Civil Division where Judge Gao works mainly guides the handling of foreign-related civil and commercial cases in Chinese courts at all levels.
1.Two difficulties encountered by Chinese courts in foreign-related civil and commercial cases
At present, when it comes to foreign-related civil and commercial trials, there are two problems among Chinese courts that have resulted in the low efficiency of hearing cases, namely the service aboard and the ascertainment of foreign law. The latter mainly refers to that when Chinese courts should apply foreign law in accordance with China's conflict rules, they are generally troubled by how to discern foreign law (including how to obtain and correctly understand foreign law).
2. Who has the duty to prove foreign law, the judges or the parties?
The "Law of People’s Republic of China on the Application of Laws to Foreign-related Civil Relations" (中华人民共和国涉外民事关系法律适用法) (hereinafter referred to as "Law on the Application of Laws to Foreign-related Civil Relations"), promulgated in 2010, answered this question in legislation for the first time. Paragraph 1, Article 10 of the law expressly provides that: "Foreign laws applicable to foreign-related civil relations shall be ascertained by people's courts, arbitral institutions or administrative organs. Parties concerned shall provide the laws of the relevant foreign country if they choose to be governed by foreign laws." In other words, generally the court has the duty to ascertain foreign law. If any party chooses to be governed by foreign laws, he shall be responsible for providing the foreign laws.
Before that, the SPC held a similar attitude. In the two judicial interpretations issued by the SPC respectively in 1987 and 1988, the court has the duty to ascertain foreign law. "Proof by parties" is only one of the methods used by Chinese courts to ascertain foreign law. The Law on Application of Laws to Foreign-related Civil Relations has absorbed this SPC's view.
3. How do Chinese courts obtain foreign law?
The above-mentioned judicial interpretation issued by the SPC in 1988 lists the ways for Chinese courts to ascertain foreign law. The judicial interpretation is "Opinions of the Supreme People's Court on Several Issues concerning the Implementation of the General Principles of the Civil Law of the People's Republic of China (for Trial Implementation)" (最高人民法院关于贯彻执行《中华人民共和国民法通则》若干问题的意见(试行)), Article 193 of which stipulates: "The applicable foreign laws may be ascertained through the following means: (1) provided by the litigant, (2) provided by the central organization of the country having entered into the judicial assistance treaty with China, (3) provided by Chinese embassy or consulates in that foreign country, (4) provided by foreign embassy or consulates in China, (5) provided by Chinese or foreign experts. If foreign laws cannot be ascertained through these means, the laws of the People's Republic of China shall apply."
i. Provided by parties
Proof by parties is one of the approaches for Chinese courts to ascertain foreign law. In China’s court practice, more often than not, the foreign laws proved through this approach could be adopted by judges.
The parties usually provide the court with the legal opinions of a foreign lawyer on the content and implications of foreign law. However, Chinese courts do not require lawyers to provide opinions on foreign law. If the parties themselves have sufficient knowledge of foreign law and can properly present their opinions, they may also prove foreign law to the court without the assistance of a lawyer.
In some cases, some courts require the parties to notarize and certify the foreign lawyers' legal opinions on foreign law provided by them. The author disagrees with the practice of these courts and considers it unnecessary to require the notarization and the certification.
ii. Provided by treaties
China has currently signed judicial assistance treaties in civil and commercial matters with more than 30 countries. These bilateral treaties usually stipulate "exchange of legal information".
As of now, Chinese courts have not taken this approach yet, because the procedure is rather cumbersome. Pursuant to these treaties, if the court wants to ascertain foreign law through this approach, its request and related materials (including translations) need to be firstly reported to the SPC before they are submitted to China’s Ministry of Justice by the SPC, and subsequently transferred to the Ministry of Justice of the foreign country by China’s Ministry of Justice, and finally transferred to the competent authority of this country.
Although Chinese courts have not taken this approach to prove foreign law by themselves, the SPC has assisted foreign courts in ascertaining Chinese law. In 2007, a Polish court intended to apply Chinese law in a case, in which it requested China's assistance under the bilateral treaty between China and Poland. The SPC provided judicial assistance in light of the request referred by China’s Ministry of Justice.
iii. Provided through diplomatic channels
Foreign laws, which are ascertained through diplomatic channels, include those provided through Chinese embassy or consulates in that foreign country and those provided through the foreign embassy or consulates in China.
As far as the author knows, China’s diplomatic service has barely consulted foreign legal materials for Chinese courts in the trial of civil and commercial cases. Likewise, Chinese courts have not taken the initiative to request the diplomatic service to provide foreign law, which can be obtained through Chinese embassy or consulates aboard, or through foreign embassy or consulates in China.
Even so, the author believes that Chinese courts can make full use of diplomatic channels to ascertain foreign law if necessary.
iv. Provided by experts
Chinese courts can commission Chinese or foreign legal experts to provide opinions on foreign law, but such practice is rare. The reason is that there are no neutral institutions in China that are able to provide expert opinions on foreign law for the court; also, there are no expert databases in the field of foreign law; what's more, few Chinese law professors are proficient in a foreign law and can be called “experts”. Besides, Chinese courts also lack the criteria for selecting experts. Under these circumstances, when the court voluntarily appoints foreign legal experts to provide opinions on foreign law, it is liable to be questioned by the parties. That is to say, it is difficult for Chinese courts to choose foreign legal experts who can be recognized by both parties.
CJO Note: Not long after the author published the article, this dilemma encountered by Chinese courts has been preliminarily solved. The SPC has established several centers for discerning foreign law in China in cooperation with relevant organizations, such as the "China Institution for Discerning Foreign Law" at China University of Political Science and Law.
v. Other means
Chinese law does not restrict the ways in which the court ascertains foreign law. The author suggests that Chinese judges ascertain foreign law through other effective means according to their own capacities, such as consulting foreign law databases through the Internet and libraries, etc.
The author points out that judges who try foreign-related civil and commercial cases in Chinese courts generally have strong foreign language skills, and some judges also have experience in studying foreign law. They can fully ascertain foreign law on their own.
In addition, if a foreign court has already rendered a judgment on a specific legal issue in its country, Chinese judges can learn from how foreign courts apply their own law, thus helping themselves to gain knowledge of this foreign law. For example, the SPC has already taken this approach in the case "(2002) Min Si Zhong Zi No.14" ((2002)民四终字第14号) of the equity dispute between the appellant Canada Green Valley (International) Investment & Management Ltd. and the appellee Hong Kong Green Valley Investment Company.
CJO Note: Another interesting post may help you to better understand the judicial practice of the ascertainment of foreign law in Chinese courts.
4. How do Chinese courts understand foreign law?
The author indicates that the ascertainment of foreign law includes two parts: obtaining foreign law and understanding foreign law. The latter refers to reasonably determining the meaning of the foreign law, properly applying it to the current case, and making a correct judgment.
Article 18 of the "Interpretation of the Supreme People's Court on Several Issues Concerning Application of the Law of the People’s Republic of China on Application of Laws to Foreign-related Civil Relations of the People's Republic of China (I)" (最高人民法院《关于适用〈中华人民共和国涉外民事关系法律适用法〉若干问题的解释（一）》) (hereinafter referred to as "the 2012 Judicial Interpretation") provides: "The people's court shall listen to the opinions of all the parties concerned on the content, interpretation and application of applicable foreign laws. If the parties concerned do not raise any objection to the content, interpretation and application of such foreign laws, the people's court may give recognition; if any party has objections, the people's court shall conduct examination for the recognition.”
According to this provision, the court shall organize a debate between the parties over foreign laws, regardless of whether the foreign laws are obtained by the court ex officio (including those obtained by means of treaties) or are provided by the parties to the court. After listening to the opinions of the parties, the court decides how to apply foreign laws.
The author expresses that during the formulation of the 2012 Judicial Interpretation, there were some viewpoints that foreign laws obtained by the court, especially those obtained through treaties, could be directly used as the basis for judgment without listening to the opinions of the parties. However, after discussion, the majority believed that the court should fully listen to the opinions of the parties on foreign laws, which would be beneficial for Chinese judges to correctly apply them.
Two situations may occur after the parties have a debate on foreign laws. First, if all parties concerned agree or plead to apply the same foreign law, Chinese courts can apply that foreign law as agreed or plead by all parties, but courts should pay attention to examining whether this violates the public interest of Chinese society or infringes upon the legitimate interests of a third party. Second, when the parties concerned have different opinions on the content and meaning of foreign law, the judges shall exercise its discretion to render a reasonable judgment.
5. Consequences of failure to ascertain foreign law
Paragraph 2, Article 10 of the Law on the Application of Laws to Foreign-related Civil Relations clearly stipulates: "In the event that foreign laws are unable to be ascertained or contain no relevant provisions, laws of the People's Republic of China shall apply." The "failure to ascertain foreign law" should be divided as follows:
i. The court has the duty to ascertain foreign law
Paragraph 1, Article 17 of the 2012 Judicial Interpretation provides: "If the people's court fails to obtain foreign laws through reasonable means, such as those provided by the parties, those provided by international treaties that have come into force in the People's Republic of China, and those provided by Chinese or foreign legal experts, such laws may be recognized as foreign laws that cannot be ascertained.”
This article only lists some ways to ascertain foreign law, in other words, it emphasizes that the court needs not to exhaust all ways so as to avoid reducing the court's efficiency in hearing cases. However, it still stresses that the court can only consider it "unable to ascertain foreign law" when it comes to the situation where the court "fails to obtain foreign laws through reasonable means". In the author's opinion, this requires judges to make efforts to ascertain foreign law and apply it correctly. Foreign law cannot be easily excluded on the grounds that it cannot be ascertained.
ii. The parties are obliged to prove foreign law
Paragraph 2, Article 17 of the 2012 Judicial Interpretation stipulates: "Where, in accordance with the provision of Paragraph 1 of Article 10 of the Law on the Application of Laws to Foreign-Related Civil Relations, the parties concerned should provide the foreign laws but fail to provide such foreign laws without due justification within the reasonable time limit specified by the people's court, such laws may be recognized as foreign laws that cannot be ascertained.”
If the parties concerned choose to be governed by foreign law, they should provide that foreign law. The court shall, where needed, specify a reasonable time limit for the parties. Within the reasonable time limit, if the parties refuse to provide foreign laws to the court without due justification, or if they fail to provide foreign laws, the people's court is empowered to decide that "foreign laws cannot be ascertained." However, if the parties cannot provide foreign laws with "justified reasons", the court should extend the time limit appropriately.
iii. The parties are obliged to prove foreign law in case of divergences
If the parties have already provided foreign law, but have different opinions on the foreign law, the court shall determine the foreign law on its own, instead of identifying such situation as "failure to ascertain foreign law".
6. If there is an error in the application of foreign law, can it be considered as "erroneous application of the law"?
If a foreign law should be applied to a case in accordance with China’s conflict rules, and the judge has erred in applying the foreign law, the author thinks that it should be regarded as "erroneous application of the law".
Pursuant to the PRC Civil Procedure Law, if the law is incorrectly applied, the parties can appeal against the judgment that has not taken effect in the first instance, and then the judgment can be amended by the appellate court. As for the judgment that has come into effect, the parties can also apply for retrial (i.e., the “adjudication supervision procedure” in China). This means that if Chinese judges make mistakes in applying foreign laws, the parties’ right to judicial remedy can be ensured.
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