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Litigation procedure in China court

Time:2014-03-13 Hit:286


Litigation procedure in China court

  To choose litigation means adopting the most formal approach to dispute resolution, as it would involve the parties coming before a Court seeking a determination of their respective rights and obligations under the relevant agreement.

   The People's Court is the judicial organ of the PRC and exercises judicial power on behalf of the State. The hierarchy is as follows: (i) The Supreme People's Court based in Beijing, the highest coup in the land; (ii) The Higher People's Court, at the highest level within a province (China has 23 provinces)' autonomous region (China has five autonomous regions)'* or municipality (China has four municipalities, i.e. Beijing. Tianjin, Shanghai and Chongqing); (iii) Intermediate People's Courts, at the highest level within a city or prefecture (at this level, there are also specialist courts, such as maritime courts and railway courts, and (iv) Basic People's Courts, at county or city-district level. The Supreme People's Court is responsible for interpreting the law, administering the judicial system and deciding the more critical cases. In interpreting big the law, the Supreme People's Court formulates and issues judicial interpretations of the law, which have legal effect. With the intensification of economic reform in China, litigation has been used increasingly to solve disputes arising from complex business transactions. The govern litigation is the CPL (plus the Contract Law, and other relevant laws. Foreign related if one of the lawsuits is a foreigner, Stateless person, or foreign enterprise or organization; the object in dispute is located in a foreign country, or the facts creating or terminating the legal relationship between the litigants took place outside China. The CPL provides that the provisions in an international treaty that China has concluded or to which China is a signatory will take precedence over domestic law, except for those provisions about which China has made reservations. Whether litigation outside China is available will depend on various factors, including whether parties have agreed that a foreign court has jurisdiction over the dispute or, if not, whether the foreign court is prepared to assert jurisdiction. In practice, most Chinese parties would be heavily resistant to agreeing that a foreign court has jurisdiction.

  Civil Proceedings: Article 40 of the Civil Procedure Law (revised. 2007) states that Civil cases of first instance shall be tried in a people's court by a collegial bench consisting of both judges and assessors or of judges alone. The numbers of members a collegial bench shall be odd. Civil cases to which summary procedure is applied shall be tried by a single judge alone.

  According to Article 135 of the GPCL, except as otherwise stipulated by law, the limitation of action regarding applications to a people's court for protection of civil rights shall be two years. However, a limitation of action shall begin when the entitled person knows or should know that his/her rights have been infringed upon. The people's court shall not protect his/her rights if 20 years have passed since the infringement. Under exceptional circumstances, the people's court may extend the limitation of action (Article 37, GPCL). The rules governing civil proceedings (i.e., litigation) involving foreign elements are contained in Chapters 23 to 27 of the Civil Procedure Law." It is essential to underline that a people's court shall use the spoken and written languages commonly used in the People's Republic of China to adjudicate civil cases involving foreign elements. 

  When foreign nationals, stateless persons, or foreign enterprises or organizations need to appoint lawyers for filing or responding to a lawsuit in a people's court, they shall appoint the lawyers of the People's Republic of China only.

  Article 240 also states that any power of attorney mailed or forwarded from outside the territory of the People's Republic of China by a foreign national. Stateless Person, or an international enterprise or organization that has no domicile in the People's Republic of China to appoint a lawyer or any other person of the People's Republic of

China as an litigation representative must be authenticated by a notary office in the country where that person, enterprise, or organization has domicile and confirmed by the Chinese embassy or consulate stationed in that country or shall go through the notary formalities stipulated in the relevant bilateral treaties between China and that country before a power of attorney becomes effective.

  With regard to the question of jurisdiction, it is necessary to remember that a lawsuit brought against a defendant who has no domicile In the People's Republic of China concerning a contract dispute or other disputes over property rights and interests, if the contract is signed or performed within the territory of the People's Republic of China, or the object of the action is within the territory of the People's Republic of China, or the defendant has detainable property within the territory of the People's Republic of China, or the defendant has its representative agency, branch or business agent within the territory of the People's Republic of China, or under the jurisdiction of the people's court located in the place where the contract is signed or performed, the subject of the action is located, the defendant's detainable property is located, the infringing act takes place, or the representative agency, branch or business site’s agent is located. This represents the main rule, but there are other articles dealing with jurisdiction. Namely Articles 242, 243; however, in this context, it is worth recalling the contents of Article 244;  It could directly interest a foreign investment: it states that if lawsuits brought for disputes arising from the performance of contracts for Chinese-foreign equity joint ventures. Chinese-foreign contractual joint ventures or Chinese-foreign cooperative exploration and development of the natural resources in the People's Republic of China shall be under the jurisdiction of the people's courts of the People's Republic of China. These elements delineate only the civil proceedings involving a foreign element, however, to complete the panorama, it is also necessary to spend a few words on the procedure of the second instance; it is always possible to challenge the decision of the court if not satisfied with the result.

  The Civil procedure Law in its Chapter 14 (from Articles 147 to 159) regulates the procedure of the second instance.

   As a general rule, if a party disagrees with a judgment rendered by a local people's court of the first instance, he/she shall have the right to file an appeal with the people's court at the next higher level within 15 days from the date when the written judgment is served. A people's court of second instance shall review the facts and the law used in an appellate case. When adjudicating an appeal from a judgment, the people's court shall make a final decision within three months after the appeal was accepted for adjudication of the second instance. Any extension of the term necessitated by special circumstances shall be subject to the approval of the president of the court. The judgments and rulings of a people’s court of second instance shall be final.




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