On January 1 of this year, amendments to the Civil Procedure Law of the People’s Republic of China (CPL) entered into effect, representing the nation’s proactive approach to refining its legal system and fostering a more credible international judiciary. Though more work remains to be done, these amendments reflect China’s commitment to aligning with global private international law standards and is a significant milestone in constructing a comprehensive foreign-related rule of law framework.
The Civil Procedure Law is China’s basic procedural rule governing civil litigation, which regulates domestic civil litigation procedures while setting up special chapters focusing on foreign-related civil litigation procedures (i.e., the “Part Four Special Provisions on Foreign-Related Civil Procedures”). This revision of the CPL involves only a small portion of the domestic procedure, but more notably makes substantial changes to the foreign-related civil procedure, which responds to many of the core concerns raised in practice.
The necessity of legislative amendments
The modification of the foreign-related codification was driven by multiple factors. Accompanying the continuous advancement of China’s foreign economic and trade activities, the number of foreign-related civil and commercial disputes heard by Chinese courts has been on the rise in recent years. One of the consequences has been that issues such as jurisdiction conflicts and parallel litigation, which fall within the scope of private international law, have become increasingly prominent in judicial practice.
Although the CPL has been amended four times since it was adopted in 1991, until now, no substantive changes had been made to the content of foreign-related civil litigation procedures. This has led to a lack of clarity in the existing procedural rules on core issues such as foreign-related jurisdiction, as well as a legal vacuum with regard to certain rules. Not only has this made it difficult in the past to satisfy the expectations of parties for judicial predictability; it has also not been conducive to enhancing the quality and efficiency of judicial trials.
In consequence, based on the long-term experience gained in foreign-related civil and commercial judicial trials, the new CPL adds several substantive provisions to the foreign-related chapter.
Highlights of the modified rules
An important highlight of the new law is the improvement of the rules on service of process in foreign-related cases. For a long time, it has been a problem for courts to serve process on parties that do not reside in China. Now, according to Article 283(4) of the revised CPL, the acceptance of service by a litigation agent is no longer conditional on the authorization of the party concerned, which means that the court can serve documents on any agent entrusted by the party concerned in the case. This expands the ability of the litigation agent to accept service of authority and, to a certain extent, could prevent the served person from maliciously excluding service of authority to circumvent the judicial process. At the same time, Article 283 (5) – (7) and Article 283 (9) conditionally expand the scope of subjects to be served and the service manner, which can further improve the efficiency of service in foreign-related trials.
Additionally, in terms of the jurisdiction issue, the new law changed the stringent element in the jurisdictional agreement requiring that the dispute between the parties must have “a physical connection” into “an appropriate connection” with China. On the one hand, it may increase the possibility for the parties to choose a Chinese court to resolve their disputes and expand the scope of jurisdiction of Chinese courts. On the other hand, the new provision draws on the rules of the Hague Convention on Choice of Court Agreements 2005, an important international convention that coordinates the allocation of jurisdiction in international civil and commercial cases and harmonizes the recognition and enforcement of foreign judgments. Thus, this could be seen as a stepping stone to China’s future ratification of the Hague Convention. Nevertheless, it should be noted that in practice, how a court applies the rules is still a matter of legal interpretation, requiring judges to carefully balance criteria unique to each case. As such, China’s Supreme Court should take care to issue timely judicial interpretations to clarify the rules and publish authoritative guidance cases to strengthen the consistency of application at all levels of courts.
Further, the legislation introduced new rules for handling lis pendens (namely parallel proceedings) and for the first time enshrined the doctrine of forum non conveniens in the statute. The principle of forum non conveniens is a significant tool for courts to deal with foreign-related jurisdictional issues under the common law. The new CPL actively incorporates it to provide a more operable method for determining jurisdiction, so as to enhance the equal protection of procedural rights between Chinese and foreign parties.
Problems Remaining with the New Law
The operation of civil litigation procedures in China is strongly authoritarian and lacks flexibility, which leaves insufficient room for the court’s discretion. This feature is easily manifested in the issue of jurisdiction in foreign-related cases, where judges rely solely on the provisions of the law.
Under common law, legislative rules provide only certain bases for jurisdiction, and judges will then examine the facts of a particular case and look for relevant factors that support or do not support jurisdiction. The court will decide whether or not to take jurisdiction based on a combination of legal rules and discretion. For example, in determining whether to permit to commence proceedings in England, the English court first requires the applicant (usually the defendant in a foreign proceeding) to prove that the case satisfies one or more of the jurisdictional gateways set out in the Civil Procedure Rules Practice Direction 6B. Next, the court will use forum conveniens discretion, which involves the consideration of appropriateness and substantial injustice, weighting several factors such as prior foreign proceedings, litigation cost, and potential delay to determine whether the English court is clearly the most appropriate court to exercise jurisdiction. Compared with rigidly interpreting the law in some Chinese courts, this approach pays close attention to the different facts to find out the decisive factors for establishing jurisdiction, which is more likely to realize fairness and justice in individual cases.
Furthermore, the new law remains silent on jurisdiction in certain areas. In international air crash compensation litigation, for instance, if the same case is litigated in China and the United States, the families of the deceased passengers often hope that the case will be heard by the United States courts. One of the reasons is that the “long-arm jurisdiction” principle in the United States litigation system clearly stipulates that “minimum contacts” with the United States can establish jurisdiction in international litigation. However, the Chinese courts lack such provisions and judges tend to resort to the relevant international conventions, which makes it difficult in practice to make a persuasive finding that substantively resolves disputes.
Another issue to be noted is that the pursuit of simplicity and efficiency in the resolution of international commercial disputes, paired with an emphasis on the procedural autonomy of parties, inevitably contradicts China’s traditional ex officio doctrine. Although the basic institutional framework cannot be easily changed, the new CPL attempts to mitigate potential conflicts. It is not surprising that many of the new rules further reinforce the concept of the adversary system under the common law, aiming to strengthen the protection of the legal procedural rights of parties in foreign-related cases. Therefore, China’s future improvement for foreign-related litigation, in my view, should continue this approach and find a more satisfactory balance between party autonomy and judicial power.
Positive attempts toward improving the foreign-related rule of law
The Chinese government is currently placing great emphasis on building the rule of law in foreign-related matters, optimizing the international business environment, and encouraging people to engage in international trade by improving the level of the rule of law. Against this backdrop, this first substantive amendment to foreign-related civil procedures can improve the predictability of dispute resolution and the efficiency of trials. By boosting the equal protection of the parties’ procedural rights and interests, Chinese courts will gain greater international credibility. These efforts not only show that China is positively integrating into the mainstream trend of global private international law development, but also represent a vital step in the process of constructing its foreign-related rule of law framework.
Helena Tian is a graduate student at UCL Faculty of Laws (UK) and a graduate of Nankai University in China. She is also an assistant editor for JURIST.
