by Arvin LUO Fuzhong, Doctoral Candidate at Tsinghua College, Visiting Analysis Affiliate at HKU, LL.M. (Cornell), Bachelor of Legal guidelines (ZUEL).*
The doctrine of discussion board non conveniens is a crucial precept in civil process legal guidelines and often utilized by courts in lots of authorized methods, particularly these of frequent regulation international locations. Based on this precept, when courts train their discretionary energy to find out whether or not to train jurisdiction over the factual circumstances of a case, they primarily take into account problems with effectivity and equity to search out probably the most applicable discussion board to settle the dispute. If the acceptance of a case would result in inefficient outcomes and penalties which might be opposite to justice, the courtroom could refuse to train jurisdiction on the grounds that it’s not the suitable discussion board.
Unrealized by many worldwide students and practitioners,[1] China has been adopting (formally or informally) the doctrine of discussion board non conveniens for greater than 30 years, first by way of a couple of courtroom judgments, then offered in judicial interpretations issued by the Supreme Individuals’s Court docket of PRC (“SPC”), which is binding for all Chinese language courts, and finalized within the 2024 Civil Process Legislation of PRC. This text introduces the historical past of Chinese language regulation adopting the doctrine of discussion board non conveniens previously years, and the event of China’s regulation revision in 2023.
I. Judicial Observe Earlier than Laws or Judicial Interpretation
Chinese language courts first utilized the doctrine of discussion board non conveniens in a sequence of instances within the Nineteen Nineties. For example, in Jiahua Worldwide Restricted, Ruixiang Restricted v. Yongqiao Enterprise Restricted, Zhongqiao Nationwide Items Funding in 1995,[2] the SPC deemed it inappropriate for the unique trial courtroom to just accept the case, although the connection components are adequate to ascertain jurisdiction, solely based mostly on the appellants having consultant places of work and attachable property within the courtroom’s location, thus dismissing the 2 plaintiffs’ lawsuits in opposition to the 2 defendants. Moreover, within the case of Sumitomo Financial institution v. Xinhua Actual Property Restricted in 1999,[3] the Supreme Individuals’s Court docket explicitly utilized the doctrine of discussion board non conveniens as a stand rule for the primary time, although missing any provision in Chinese language legal guidelines again then: since each events to the case had been authorized individuals registered in Hong Kong, the place of signing and efficiency of the concerned settlement was in Hong Kong, and the events selected Hong Kong regulation because the governing regulation for the settlement, the Supreme Individuals’s Court docket, contemplating the comfort of litigation, dominated that it was extra applicable for the Hong Kong courtroom to have jurisdiction, and the Guangdong Provincial Larger Individuals’s Court docket shouldn’t settle for the case.
From these two early judicial practices, it may be seen that the courts appropriately centered on whether or not the courtroom was “applicable” or appropriate to just accept the case, simply as many overseas courts did, and seeing the “comfort” requirement within the doctrine of discussion board non conveniens as just one aspect of the coin. Nevertheless, later laws and teachers misunderstood discussion board non conveniens, many Chinese language students and practitioners didn’t notice the purpose is to find out whether or not the courtroom is “applicable” for the case primarily due to its title accommodates “conveniens”, however noticed it as a instrument to search out whether or not different courts will probably be extra “handy” or economically environment friendly for the courts, ignored the equity and justice necessities on this doctrine.[4]
II. Judicial Interpretations issued by the Supreme Individuals’s Court docket of PRC
In Article 11 of the 2005 Minutes of the Second Nationwide International-related Business and Maritime Trial Work Convention,[5] SPC offered seven circumstances for making use of discussion board non conveniens, specializing in whether or not the Chinese language courtroom would face “vital difficulties in figuring out information and making use of legal guidelines” and whether or not a overseas courtroom can be extra “handy” for the trial. In 2014, the SPC issued the Interpretations of the Supreme Individuals’s Court docket on the Utility of the Civil Process Legislation of the PRC,[6] which outlined six circumstances for making use of discussion board non conveniens in Article 532,[7] primarily in line with Article 11 of the 2005 Minutes, nonetheless specializing in the comfort of the courtroom in listening to the case somewhat than its appropriateness.
Such a provision on discussion board non conveniens precipitated 4 issues in apply.
First, based mostly on the provisions of Article 532(4) of the 2014 Interpretations, as soon as a case includes the pursuits of the Chinese language state, residents, authorized individuals, or different organizations, the courtroom will rule to train jurisdiction over the case. The courtroom over-applies this clause to justify its jurisdiction, with out evaluating the appropriateness (generally even nor the comfort) of Chinese language courts with overseas courts, and even when the events to the case are Chinese language nationals or the information are related to China, the courtroom tends to rule that it has jurisdiction over the case.
Secondly, as a result of lack of clear clarification of the time period “comfort” within the 2014 Interpretations, the courtroom’s requirements had been obscure when decoding and making use of discussion board non conveniens. There are instances the place the courtroom arbitrarily determines that it’s “inconvenient” to listen to the case as a result of the relevant regulation is overseas regulation and the information of the case occurred overseas, thus rejecting jurisdiction.[8] This method not solely fails to argue the appropriateness of overseas courtroom jurisdiction but in addition unduly restricts one’s personal jurisdiction. Completely different courts could apply this provision with a scope of discretion both too broad or approach too slender , therefore failing to attain the legislative objective of “having probably the most applicable courtroom train jurisdiction”.
Thirdly, irrespective of whether or not in frequent regulation jurisdictions or civil regulation jurisdictions, when making use of the doctrines of discussion board non conveniens or lis pendens, the overseas courts upholding the jurisdiction is a crucial consideration for home courts to reject the train of 1’s personal jurisdiction. Nevertheless, Chinese language courts have repeatedly exercised jurisdiction over instances even when overseas courts have already taken the instances and even delivered judgments, inflicting parallel litigation and a number of judgments.[9]
Lastly, when the authorized necessities in Article 532 of the 2014 Interpretations is met, absolutely the rejection of the lawsuit is simply too inflexible and rigid , leaving no room for the courtroom’s discretion in numerous instances. If the overseas courtroom refuses to train jurisdiction, the events who had been rejected by Chinese language courts should re-file the lawsuits, which can result in a rise in prices and a considerably delay of justice.
III. The Improvement within the 2024 Civil Process Legislation of PRC
In response to the issues in apply, the Civil Process Legislation of the PRC which got here into impact on 1 January 2024, launched discussion board non conveniens in Articles 281 and 282.[10] Article 281 is about to search out the extra handy courtroom to listen to the case, and Article 282 proposes 5 circumstances for the appliance of discussion board non conveniens, which to some extent resolves the earlier sensible dilemmas and responds to the criticisms from the academia.
First, Article 282(1) of the 2024 Civil Process Legislation of PRC restricts the willpower of “comfort” to instances the place “it’s evidently inconvenient for a individuals’s courtroom to strive the case and for a celebration to take part in authorized proceedings since primary information of disputes within the case don’t happen throughout the territory of the Individuals’s Republic of China”, avoiding the state of affairs the place courts decide that the doctrine of discussion board non conveniens ought to be utilized merely as a result of the events agree to use overseas regulation or there’s proof located or disputes occurred overseas, thereby excessively narrowing jurisdiction.
Secondly, the brand new regulation deleted the over-broad exclusion normal in Article 532 (4) of the 2014 Interpretations by stating that “the nationwide curiosity, or the curiosity of any citizen, authorized individual or another group of the Individuals’s Republic of China”, as an alternative, Article 282 (4) supplies that “not involving the sovereignty, safety, or public curiosity of the Individuals’s Republic of China”, avoiding the state of affairs the place Chinese language courts train jurisdiction merely as a result of the events are of Chinese language nationality or the case information are related with China, and narrowing the exclusion from obscure “nationwide curiosity” to clearer “nationwide sovereignty, safety, or public curiosity”, thus higher balancing the “equity” necessities throughout the doctrine of discussion board non conveniens.
Lastly, Article 282 paragraph 2 provides that after the Chinese language courtroom utilized the discussion board non conveniens exception to dismiss the motion, if the overseas courtroom refuses to train jurisdiction or doesn’t take crucial measures to listen to the case or doesn’t conclude the case inside an affordable interval, the Chinese language courtroom shall settle for the case, safeguarding the procedural rights of the events. This new provision resolves the issue mirrored in Article 532 of the 2014 Interpretations and related apply the place the get together can solely begin over the motion earlier than the individuals’s courtroom.
IV. Conclusion
Typically talking, the 2024 Civil Process Legislation of PRC represents a profitable enchancment, it exhibits the stability of equity and comfort within the new guidelines and serves the necessities of discussion board non conveniens. Nevertheless, it nonetheless has room for additional refinement to align extra intently with the unique intent of discussion board non conveniens.
On the one hand, in most typical regulation jurisdictions, the equity requirement of discovering probably the most applicable discussion board additionally contains the potential for oppressive or vexatious litigation, abuse of judicial course of, or “actual injustice” to the events if the case is heard by the home courtroom, somewhat than public curiosity offered in Article 282(4). A greater method seeks to establish probably the most applicable discussion board for attaining justice in each single case.
However, as a result of misunderstanding of discovering probably the most “handy” discussion board, regardless that Articles 281 and 282 take into account each comfort and equity necessities, they fail to synthesize these elements right into a single requirement of “appropriateness”. This results in a fragmented consideration of “comfort” and “equity” by the courts when making use of the provisions, somewhat than understanding them as two sides of the identical coin within the service of discovering probably the most applicable discussion board.
* Arvin LUO Fuzhong, Doctoral Candidate at Tsinghua College, Visiting Analysis Affiliate at HKU, LL.M. (Cornell), Bachelor of Legal guidelines (ZUEL). The creator might be contacted through [arvinluo@outlook.com]. I prolong the gratitude to Prof. Dr. Dr. CHEN Weizuo from Tsinghua College for his insightful commentary concerning the misunderstanding surrounding discussion board non conveniens in Chinese language laws, Prof. Dr. Matthias Weller and Prof. Dr. iur. Matthias Lehmann for his or her extraordinary lectures within the Hague Programs in Hong Kong and their steering for me to draft this essay, and Mr. Achim Czubaiko for his detailed and thorough recommendation.
[1] The newest article concerning the discussion board non conveniens in Chinese language regulation is printed in 2024, gave an outline of the event from judicial apply to authorized provisions, however lacked theoretical evaluation and touch upon the explanations and penalties of the transformation of such improvement. Earlier than that, solely 2 articles had been dedicated to the apply of discussion board non conveniens in China till 2014. See Liang Zhao, Discussion board Non Conveniens in China: From Judicial Observe to Legislation, 11 The Chinese language Journal of Comparative Legislation 1 (2024); Chenglin Liu, Escaping Legal responsibility through Discussion board Non Conveniens: ConocoPhillips’s Oil Spill in China, 17 U. PA. J.L. & Soc. CHANGE 137 (2014); Courtney L. Gould, China as a Appropriate Different Discussion board in a Discussion board Non Conveniens Movement, 3 TSINGHUA CHINA L. REV. 59 (Fall 2010).
[2] Supreme Individuals’s Court docket (1995) Jing Zhong Zi No. 138 Civil Ruling.
[3] Supreme Individuals’s Court docket (1999) Jing Zhong Zi No. 194 Civil Ruling.
[4] Chinese language theories and legal guidelines translated discussion board non conveniens as “Bu Fang Bian Fa Yuan”, which suggests “a courtroom that’s not handy to settle the dispute”. Prof. Dr. Dr. CHEN Weizuo insists that it ought to be named as “Fei Shi Dang Fa Yuan”, which suggests “a courtroom that’s not applicable to settle the dispute”.
[5] Fa Fa [2025] No. 26.
[6] Fa Shi [2015] No. 5.
[7] The variety of which later modified to Article 530 after the judicial interpretation was revised in 2022, however the content material remained unchanged. Article 532 stipulated that: “The place a foreign-related civil case falls below all the next circumstances, the individuals’s courtroom could render a ruling to dismiss the plaintiff’s motion, and inform the plaintiff to institute an motion in a extra handy overseas courtroom. (1) The defendant raises a declare that the case shall be topic to the jurisdiction of a extra handy overseas courtroom, or raises an objection to jurisdiction. (2) The events do not need an settlement specifying the jurisdiction of a courtroom of the Individuals’s Republic of China. (3) The case doesn’t fall below the unique jurisdiction of a courtroom of the Individuals’s Republic of China. (4) The case doesn’t contain the nationwide curiosity, or the curiosity of any citizen, authorized individual or another group of the Individuals’s Republic of China. (5) The individuals’s courtroom has nice difficulties within the willpower of information and the appliance of legal guidelines since main information of disputes in a case don’t happen throughout the territory of the Individuals’s Republic of China, and the legal guidelines of the Individuals’s Republic of China don’t apply to the case. (6) The overseas courtroom has jurisdiction over the case and it’s extra handy for it to strive the case.”
[8] Schott Photo voltaic Holdings Ltd. v. Schott Photo voltaic Funding Ltd., Shanghai No. 1 Intermediate Individuals’s Court docket Civil (Business) First Occasion No. S17, 2014.
[9] See e.g. Chen Huanbin et al. v. Chen Weibin et al., Beijing Second Intermediate Individuals’s Court docket (2015) Civil (Business) Closing No. 6718; Worth Monetary Companies Ltd. v. Century Enterprise Ltd.& Beijing De Shi Legislation Agency, Supreme Individuals’ Court docket (2014) Civil Closing No. 29.
[10] Article 281 supplies that: “After a individuals’s courtroom accepts a case in accordance with the provisions of the previous article, if a celebration applies to the individuals’s courtroom in writing for suspending the proceedings on the bottom that the overseas courtroom has accepted the case previous to the individuals’s courtroom, the individuals’s courtroom could render a ruling to droop the proceedings, besides below any of the next circumstances: (1) The events, by an settlement, select a individuals’s courtroom to train jurisdiction, or the dispute is topic to the unique jurisdiction of a individuals’s courtroom. (2) It’s evidently extra handy for a individuals’s courtroom to strive the case.
If a overseas courtroom fails to take crucial measures to strive the case or fails to conclude the case inside an affordable time restrict, the individuals’s courtroom shall resume proceedings upon the written utility of the get together.
If an efficient judgment or ruling rendered by a overseas courtroom has been acknowledged, in complete or partly, by a individuals’s courtroom, and the get together institutes an motion in opposition to the acknowledged half within the individuals’s courtroom, the individuals’s courtroom shall rule to not settle for the motion, or render a ruling to dismiss the motion if the motion has been accepted.”
Article 282 supplies that: “The place the defendant raises any objection to jurisdiction regarding a foreign-related civil case accepted by a individuals’s courtroom below all the next circumstances, the individuals’s courtroom could rule to dismiss the motion and inform the plaintiff to institute an motion in a extra handy overseas courtroom: (1) It’s evidently inconvenient for a individuals’s courtroom to strive the case and for a celebration to take part in authorized proceedings since primary information of disputes within the case don’t happen throughout the territory of the Individuals’s Republic of China. (2) The events do not need an settlement selecting a individuals’s courtroom to train jurisdiction. (3) The case doesn’t fall below the unique jurisdiction of a individuals’s courtroom. (4) The case doesn’t contain the sovereignty, safety, or public curiosity of the Individuals’s Republic of China. (5) It’s extra handy for a overseas courtroom to strive the case.
If a celebration institutes a brand new motion in a individuals’s courtroom because the overseas courtroom refuses to train jurisdiction over the dispute, fails to take crucial measures to strive the case, or fails to conclude the case inside an affordable interval after a individuals’s courtroom renders a ruling to dismiss the motion, the individuals’s courtroom shall settle for the motion.”
