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SPC Moves to Further Open Up Chinese Courts

Sun, 31 Jan 2021
Categories: Insights
Contributors: Meng Yu 余萌

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China’s Supreme Court issued the Guiding Opinions on the Service and Safeguard of the People’s Court for the Further Opening-up in September 2020, indicating its readiness to participate in the global competition of the cross-border dispute resolution market. 

On 25 Sept. 2020, the Supreme People’s Court (SPC) issued the Guiding Opinions on the Service and Safeguard of the People’s Court for the Further Opening-up (关于人民法院服务保障进一步扩大对外开放的指导意见) (“the Opinions”).

This means that the SPC is ready to take a major step in opening up to the world more comprehensively. As Justice Yang Wanming (杨万明), the Vice President of the SPC said at the press conference, the SPC formulated the Opinions after summarizing the long-term judicial practice experiences in cross-border litigation, aiming to provide clear goals and requirements for the opening-up of Chinese courts.

This post highlights the core contents of the Opinions as follows.

1. Three Principles

Principle one: Protect the legitimate rights and interests of Chinese and foreign parties in an equal manner. That is: (1) Chinese and foreign parties have equal litigation status and litigation rights; (2) the courts shall equally apply Chinese and foreign laws; (3) Chinese and foreign parties enjoy equal substantive rights.

Principle two: Respect party autonomy. That is, the courts shall respect the rights of the parties to confer jurisdiction on certain courts, to choose the governing law and the dispute settlement methods such as mediation, arbitration, or litigation.

Principle three: Legally exercise jurisdiction. That is, on the one hand, Chinese courts shall exercise jurisdiction in accordance with the law; and on the other hand, they shall respect the jurisdiction of courts or dispute resolution agencies in other countries, properly handling the international conflicts of jurisdiction and parallel international litigation.

2. Four Key Tasks

Task one: Improve the application of law rules for foreign-related cases. That is: (1) the courts shall improve its ability to apply foreign laws, international treaties, and practices; (2) the courts shall hear foreign investment cases fairly, to protect the rights of investors; (3) the SPC will participate in the formulation of international treaties, and promote the formation and improvement of global commercial legal rules; and (4) the SPC will improve the transparency of Chinese law, translating and publishing Chinese court cases.

Task two: Promote foreign-related commercial and maritime trials. That is: (1) the courts shall fairly hear the international trade and investment cases, especially the newly emerging cases such as service trade and digital trade; (2) the courts shall fairly hear the maritime cases and the international railway and road transportation cases to ensure the smooth flow of China’s international trade logistics; and (3) the courts shall fairly hear the foreign-related commercial and maritime cases concerning the COVID-19 pandemic. 

Task three: Promote the integration of foreign-related trials and intelligent courts. That is: (1) the SPC will establish an online platform of litigation services for the convenience of parties abroad; and (2) the SPC will encourage the courts to provide the online case-filing, online mediation, and online court trial services, and explore the corresponding litigation rules.

Task four: Improve the diversified dispute resolution mechanism of international commercial disputes. That is: (1) the SPC and the China International Commercial Courts (“CICC”) shall optimize the procedural and working mechanism of case handling. The SPC shall expand the selection range of expert members of the International Commercial Expert Committee, and the CICC will introduce Internationally renowned commercial arbitration institutions and commercial mediation institutions to participate in their dispute resolution, and (2) the SPC will support overseas arbitration institutions to establish business organizations in China and accept international arbitration cases.

3. Three Types of Important Cases

Case Type one: Administrative trial. The courts shall handle the administrative litigation between Chinese or foreign enterprises or individuals and the Chinese government, especially the cases in fields including international trade, finance, intellectual property, immigration, and customs.

Case Type two: Intellectual property trial. (1) The courts shall effectively apply the punitive damages for intellectual property infringement to curb infringement; and (2) the SPC shall improve the foreign-related intellectual property litigation procedures and properly handle IP-related international parallel litigations, in order to make more parties willing to deal with intellectual property disputes in China.

Case Type three: The trial of cross-border bankruptcy and financial cases, as well as the enforcement of foreign-related judgments. (1) The SPC shall participate in the formulation of cross-border bankruptcy international treaties, and improve the cross-border bankruptcy coordination mechanism; (2) the courts shall improve their capacity of hearing financial cases such as cross-border investment and financing, securities, and insurances; and (3) the courts shall participate the international cooperation of cross-border enforcement, thus equally safeguarding that the prevailing parties, both Chinese and foreign, can realize their rights and benefits.

4. Three Focuses on Improving the International Influence of China’s Justice

Focus one: International cooperation. That is: (1) The SPC will participate in the conclusion of judicial assistance treaties, and actively provide the judicial assistance according to the treaties and reciprocity; and (2) the SPC shall promote the mutual recognition and enforcement of civil and commercial judgments, and China will clarify the procedural rules and review standard of the recognition and enforcement of civil and commercial judgments.

Focus two: International Communication. That is: (1) The SPC will strengthen the cooperation with WTO, UNCITRAL, World Bank, WIPO, and ICJ; and (2) the SPC will negotiate and sign memorandums with the supreme courts of various countries and regions, so as to promote the development of informatization, judicial reform, case studies, ascertainment of foreign law, and mutual recognition and enforcement of civil and commercial judgments.

Focus three: Cultivation of international talents. That is: (1) The SPC and local courts will cooperate with law schools to train international talents in the fields of economy, trade, finance, technology, intellectual property, environmental protection, and ocean; (2) the SPC will support Chinese judges who hear foreign-related cases to participate in international exchanges and the formulation of international rules.

5. Our Comments

The Opinions shows the SPC’s readiness to actively participate in the competition of the cross-border dispute resolution market and thereby to provide high-quality global public goods. However, as Professor Xiao Yongping (肖永平) of Wuhan University puts, the specific content of the Opinions indicates that the SPC does not adopt a zero-sum game in the international dispute resolution, but instead upholds an inclusive competition strategy. 

Clearly, the SPC holds an open attitude towards the application of foreign laws, the arbitration and mediation of foreign institutions, as well as the recognition and enforcement of foreign judgments. However, the extent of this openness still depends on the specific measures taken by the SPC in the future based on the Opinions.

 

Contributors: Meng Yu 余萌

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