A new milestone in civil proceedings involving foreign persons in China
Recently, due to the active transformation of the economic and social structure, the number of civil disputes complicated by a foreign element being considered in the courts of China has increased dramatically. According to statistics, the participants in such disputes are representatives of more than 100 countries around the world.
The current rules of civil procedure governing proceedings involving foreign persons in China no longer fully meet the needs for fair, effective and convenient resolution of international civil disputes, as well as for the protection of national sovereignty, security and development interests, which makes it necessary to review and improve them.
Keywords: civil proceedings, civil procedure, jurisdiction, conflict of jurisdiction, service of court documents, recognition and enforcement of foreign judgments, the principle of an "inconvenient" court.
The Civil Procedure Law is the basic law of the state that defines the basic rules of civil procedure in the People's Republic of China <1>. The current Civil Procedure Law (hereinafter referred to as the GPP of the People's Republic of China) was adopted at the fourth meeting of the seventh convocation of the National People's Congress in 1991 and was amended in 2007, 2012, 2017 and 2021. Civil proceedings are constantly undergoing changes, this is due to both the introduction of digital technologies and the improvement of the protection of the rights and legitimate interests of citizens and business entities, including foreign persons <2>. However, these changes did not lead to significant changes in legal proceedings involving foreign persons.
--------------------------------
<1> Ermakova E.P., Rusakova E.P., Mendoza-Molina S.V. Actual problems of civil procedure: studies. the manual. M., 2017. p. 15.
<2> Rusakova E.P., Wang Wei. Civil proceedings involving foreign persons in China // Arbitration and civil procedure. 2021. N 9. pp. 48-51.
On September 1, 2023, at the fifth meeting of the Standing Committee of the National People's Congress of the Fourteenth convocation, the "Decision of the Standing Committee of the National People's Congress on Amendments to the Civil Procedure Law of the People's Republic of China" was adopted <3>. According to the 11th Decree of the President of the People's Republic of China <4>, the new version of the Civil Procedure Law entered into force on January 1, 2024. This edition of the GPP of the People's Republic of China is focused on improving civil proceedings involving foreign persons, which contributes to further improving the quality and efficiency of civil cases involving foreign persons <5>.
--------------------------------
<3> Decision of the Standing Committee of the National People's Congress on amendments to the Civil Procedure Law of the People's Republic of China // Official website of the Central People's Government of the People's Republic of China.
<4> The 11th Decree of the President of the People's Republic of China // Official News Agency of the People's Republic of China "Xinhua".
<5> The new edition of the GPP has completed the changes and will better protect the rights and legitimate interests of the parties in court proceedings // Official website of the National People's Assembly.
In the new edition of the GPP of the People's Republic of China 2024, the rules of civil proceedings involving foreign persons, as in previous versions of the amendments, are still concentrated in Part 4 "Special provisions on civil proceedings in cases involving foreign persons", which has been increased from 25 to 36 articles. Specific changes are manifested in the following aspects.
First, the GPP of the People's Republic of China in 2024 expanded the competence of the people's courts in civil cases involving foreign persons. Unlike Article 272 of the GPP of the People's Republic of China in 2022, Article 276 of the GPP of the People's Republic of China in 2024 expands the jurisdiction of the people's courts. Previously, apart from cases concerning "personal relationships", the courts could only consider certain cases or disputes related to the right to property. Currently, the list of cases under the jurisdiction of the people's courts with the participation of foreign persons has significantly expanded and includes: all cases in which the place of conclusion, execution of the contract, the location of the subject of the claim, property subject to arrest, the place of commission of an illegal act, the location of the representative office are located in China. Two new cases related to exclusive jurisdiction have been added: claims related to the creation, reorganization, liquidation of legal entities or other organizations established in China, as well as claims related to the validity of intellectual property rights granted on the basis of verification in China.
With regard to civil proceedings involving foreign persons, it is provided that the People's Court has exclusive jurisdiction. So, if the parties receive a decision of a court or other jurisdictional authority issued in another country, it will not be recognized and enforced in China.
Secondly, due to conflicts of jurisdiction, provisions concerning parallel trials and the principle of an "inconvenient" court were added.
The principle of an "inconvenient" court is one of the ways to resolve the problem of a conflict of jurisdictions in parallel trials, which was previously established in judicial clarifications of the Supreme People's Court of the People's Republic of China, and has now been consolidated in the GPP of the People's Republic of China 2024.
According to Article 282, if the people's court is competent to consider a dispute, it accepts the case for consideration, even if a foreign court is already considering the case. At the same time, if the parties have concluded an agreement on the jurisdiction of the dispute in favor of a foreign court and this does not contradict the provisions of the GPP of the People's Republic of China on exclusive jurisdiction, and also does not affect the sovereignty, security or public interests of China, the people's courts may refuse to consider the case.
China officially signed The Hague Convention on Choice of Court 2005 (The Hague Convention on Choice of Court Agreements) in September 2017, which aims to create global uniform rules of jurisdiction and the procedure for recognition and enforcement of foreign judgments in international civil and commercial court cases, the provisions of which were reflected in the GPP of the People's Republic of China.
In the GPP of the People's Republic of China in 2024, the people's courts apply the principle of an "inconvenient" court with many restrictions, first of all, the defendant must raise objections regarding jurisdiction, and at the same time all five conditions set out in Article 282 must be fulfilled:
1) the main facts of the dispute are not closely related to the territory of the People's Republic of China, and the consideration of the case by the People's Court, as well as the participation of the parties in the process, are clearly inconvenient;
2) there is no agreement between the parties on the jurisdiction of the case to the people's court;
3) the case does not belong to the exclusive jurisdiction of the people's Court;
4) The case does not affect the sovereignty, security or public interests of the People's Republic of China;
5) the consideration of the case in a foreign court is more convenient.
Thirdly, in judicial practice in civil cases involving foreign persons, the service of court documents has always been a key factor, therefore, amendments were made to Article 283 of the GPP of the People's Republic of China in 2024, according to which the provision that judicial representatives should "have the right to accept documents" was replaced by "must accept court documents".
In recent years, China has consistently introduced into the judicial system of the people's courts such functions as "smart court", "electronic court" and "Internet court", which have been actively integrated into the civil process <6>. To expand the ways of serving court documents, the GPP of the People's Republic of China in 2024 eliminated the provisions on "fax, e-mail" and replaced them with "participants in the process can use confirmed electronic methods", which significantly expanded their list. Previously, the deadline for handing over documents was "three months", in the GPP of the People's Republic of China in 2024. it has been changed to "sixty days", which increases the efficiency of document delivery.
--------------------------------
<6> Rusakova E.P. Integration of modern digital technologies into the legal proceedings of the People's Republic of China and Singapore // State and Law. 2020. N 9. pp. 102 - 109.
In addition to serving documents in civil proceedings involving foreign persons, the search for and receipt of evidence outside China is also an important component of the mutual legal assistance system, which has a significant impact on the effectiveness of the consideration of cases.
On the one hand, the GPP of the People's Republic of China retains the provision that people's courts can search for and obtain evidence abroad in accordance with international treaties or through diplomatic channels. On the other hand, new provisions have been added to allow people's courts to use alternative methods of obtaining evidence abroad: if the laws of the host country do not prohibit this. Thus, people's courts can use the following methods of obtaining evidence:
1) for persons with Chinese citizenship, parties and witnesses, it is possible to instruct the consulates of the People's Republic of China in the host country to collect and receive evidence;
2) with the consent of both parties, use instant messengers to collect and receive evidence;
3) other ways to collect and obtain evidence with the consent of both parties.
Fourth, the basic rules for the recognition and enforcement of foreign judgments that have entered into force have been revised. According to Article 300 of the GPP of the People's Republic of China 2024, this edition specifies the grounds according to which the people's courts refuse to recognize and enforce the decisions of foreign courts:
1) a foreign court is incompetent to consider this case;
2) the participants in the judicial process, in respect of whom enforcement of the judgment is sought, were not properly notified that civil proceedings were being conducted against them or, despite proper notification, did not have a "reasonable" opportunity to present their arguments or participate in the process, or the person did not have procedural capacity and did not have the appropriate the judicial representative;
3) the decision was made under the influence of deception;
4) the People's Court has already issued a judicial decision or has already recognized the decision of the court of a third country in the same dispute;
5) the decision on the case contradicts the basic principles of Chinese law or infringes on state sovereignty, security, and public interests.
In addition, a separate article has been added to the GPP of the People's Republic of China in 2024, which defines the grounds according to which it is possible to determine whether a foreign court was competent to consider a specific dispute, namely:
1) a foreign court is incompetent to consider this case according to its legislation, or, despite having competence according to its legislation, the case to it beyond the jurisdiction;
2) this decision violates the provisions of the Chinese civil procedure law on exclusive jurisdiction;
3) this decision violates the agreement of the parties on the choice of jurisdiction in a particular dispute.
Fifthly, according to Article 302 of the GPP of the People's Republic of China in 2024, if a party applies to the People's Court with an application for recognition and enforcement of a foreign court's decision in a certain case, and the people's court is already considering this case, then the people's court has the right to suspend the proceedings and terminate the proceedings. However, if the decision of a foreign court does not comply with the provisions of the GPP of the People's Republic of China, the People's Court has the right not to recognize such a court decision and resume proceedings in the case.
In addition to the above, other amendments have also been made that are of great importance for civil proceedings involving foreign persons.
According to Article 47 of the GPP of the People's Republic of China in 2024, assistants (assistants) of judges and forensic technicians were also included in the number of persons who can be challenged, thereby expanding the range of such persons. Assistants (assistants) of judges in the proceedings perform many tasks, such as presiding over pre-trial negotiations, in the process of exchanging evidence, preparing court documents that can directly influence the judge's decision. In China, judicial assistants (assistants) with the status of "civil servants" are reserve judicial officers and "preliminary judges".
According to Article 115 of the GPP of the People's Republic of China in 2024, if a participant in civil proceedings "unilaterally distorts the basic facts of the case" and violates "the state interests of China, public interests or the legitimate rights and interests of other persons," the People's Court has the right to refuse to accept the claim and, depending on the severity of the act, impose a fine or detain this person.
In Chapter 15 "Special Procedures" of the GPP of the People's Republic of China in 2024, new provisions were added concerning cases of "inheritance management". It is especially difficult to ensure the protection of the hereditary mass before the start of inheritance if foreign persons are involved in the dispute.
In order to coordinate with the inheritance management system in accordance with the Civil Code of the People's Republic of China and to ensure uniformity of judicial practice, Articles 194-197 of the GPP of the People's Republic of China 2024 contain provisions on "the court appointing the inheritance manager", "principles of appointing the inheritance manager", "the procedure for carrying out actions by the inheritance manager in special situations" and other procedural rules, which increases efficiency this process.
Conclusion. The changes affecting the GPP of the People's Republic of China in 2024 mainly relate to civil proceedings involving foreign persons, covering issues of jurisdiction, service of documents, collection of evidence, judicial cooperation, etc. The new provisions contribute to adaptation to the new realities of civil proceedings involving foreign persons, eliminate existing gaps and inaccuracies in current legislation, thereby providing more effective protection the rights and legitimate interests of citizens. However, the current version of the GPP of the People's Republic of China still requires further detail regarding civil proceedings involving foreign persons, as well as development and improvement based on international experience.
