China Justice Observer

中国司法观察

It's Time to Settle Cross-border E-commerce Disputes in China's Internet Courts

Sun, 26 Jul 2020
Categories: Insights

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On 15 July 2020, Hangzhou Internet Court(杭州互联网法院) established a cross-border trade tribunal(跨境贸易法庭), specializing in hearing cross-border e-commerce cases. 

We have posted a series of articles about China’s Internet courts and have received a number of readers' letters from abroad. Many of these readers are involved in e-commerce disputes related to China, hoping to file lawsuits through Internet courts, which can greatly reduce their costs in litigation.

The cross-border trade tribunal of Hangzhou Internet Court now meets the needs of these readers.

On 15 July 2020, the day of establishment, the cross-border trade tribunal heard a case of a Singapore user suing Zhejiang Tmall Network Co., Ltd., a leading e-commerce company in China, which is an e-commerce platform of Alibaba (hereinafter referred to as “Tmall”). The user claimed that the computer purchased on Tmall was not a brand-new one, nor was it pre-installed with a life-long genuine Office 2016, which was a breach of contract by Tmall.

According to the news report, in order to verify the transaction information provided by the parties, Hangzhou Internet Court, based on its blockchain technology, has controlled the whole process records such as customs declaration, tax payment and price payment through Hangzhou cross-border digital trade judicial platform (杭州跨境数字贸易司法平台) it established jointly with Hangzhou Customs, Hangzhou Taxation Bureau and other departments. This will greatly reduce the cost of presenting evidence.

Hangzhou is home to China’s largest e-commerce company Alibaba, which occupies the biggest market share in China’s cross-border e-commerce. Clearly, the cross-border trade tribunal and the cross-border digital trade judicial platform of Hangzhou Internet Court will greatly promote the settlement of cross-border e-commerce disputes related to China.

However, questions remain as to the operational mechanisms of the cross-border trade tribunal. According to our research, in practice, there are still some obstacles for foreign parties to resort to Internet courts. For example:

(1) To prevent sham litigation, Internet courts need to verify the identity of the parties, which is mainly based on the database of Chinese nationals/enterprises’ information. It is hard for foreign parties to get identity verification, because their information is not in the database.

(2) According to Chinese law, foreign parties should submit notarized and authenticated identity documents to Chinese courts, which are often done offline and in hard copies. This may not cater to the online litigation mode of Internet courts. Moreover, compared with the amount in controversy ranging from hundreds to thousands of US dollars in cross-border e-commerce disputes, the cost of notarization and authentication is also relatively high.

We have not yet known how the cross-border trade tribunal will solve these problems, but we will keep a close eye on it.

 

 

Photo by Jason Yuen (https://unsplash.com/@fanfandyuen) on Unsplash

Contributors: Guodong Du 杜国栋 , Meng Yu 余萌

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