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SPC's Revised Rules Extend Reach of International Commercial Courts

Thu, 11 Apr 2024
Categories: China Legal Trends

On 18 Dec. 2023, China’s Supreme People’s Court (SPC) issued the “Decision on Amending the Provisions of the Supreme People’s Court on Several Issues Concerning the Establishment of International Commercial Courts (CICC)” (关于修改<最高人民法院关于设立国际商事法庭若干问题的规定>的决定). The decision took effect from 1 Jan. 2024.

According to the amended provisions, the CICC may now have jurisdiction over the first-instance international commercial cases where the amount in controversy exceeds CNY 300 million and the parties have agreed to submit their dispute to the SPC.

Under these provisions, three requirements - the international nature, the agreement in writing, and the amount in controversy - must be met in order to establish a valid choice of court agreement with the CICC as the chosen court:

1. The case must involve an international commercial dispute.

A commercial case may be recognized as an international commercial dispute if one of the following circumstances apply:

  • One or both parties are foreigners, stateless persons, foreign enterprises, or organizations;
  • One or both parties have their habitual residence outside the territory of the People’s Republic of China (PRC);
  • The subject matter is located outside the territory of the PRC;

The legal facts that create, change, or terminate the commercial relationship occur outside the territory of the PRC.

2. The choice of court agreement between the parties must be in writing, stipulating that they agree to submit the dispute to the SPC.

3. The amount in controversy must exceed CNY 300 million.

It is worth noting that the legal basis for the CICC to establish its jurisdiction by agreement has now changed from Art. 34 of the Civil Procedure Law (CPL), which requires an “actual connection” between the chosen court and the dispute, to Art. 277 of the CPL - the rule for consensual jurisdiction in international cases - which no longer requires the chosen court to have an “actual connection” with the dispute in cases where Chinese courts are the chosen courts.

As maIn other words, the amended provisions have extended the reach of the CICC.

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In addition, the SPC has also amended the procedures for ascertaining foreign law in the CICC.


Photo by manos koutras on Unsplash

Contributors: CJO Staff Contributors Team

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