For these reasons, Chinese courts virtually always disregard U. Chinese courts, however, are much less likely to enforce foreign arbitral awards obtained by default. Expect your case to be tried on the documents. It typically makes sense to provide for English language arbitration and as many foreign arbitrators as your Chinese counter-party will accept. If suing a Chinese company in the United States does not make sense, pursuing litigation in China may.
Foreign companies can and do win cases against Chinese companies in Chinese courts.
Laws of the People's Republic of China
Before suing in a Chinese court, though, it is important to understand some basics about its court system. Though suing in China is usually possible, it obviously should not be done without a better understanding of what it will actually entail. For example, if a company executes a contractual obligation poorly because of an incompetent or uncaring employee, a U. A Chinese court, on the other hand, might either not find liability or severely limit the damages, believing it unfair to penalize a company for the incompetence of one employee.
Third, Chinese courts prohibit nearly all discovery. Companies suing in China without a strong case at the outset seldom prevail. Fifth, settlement is rare in Chinese business litigation matters. Sixth, Chinese courts rarely issue large damage awards, no matter the case.
Professional Ethics of Chinese Judges
Chinese companies generally operate at low margins and Chinese courts are loath to badly harm a functioning business or to cause layoffs. In particular, Chinese judges are hesitant to award damages for lost profits or for pain and suffering. Chinese courts simply do not award the sort of damages available in a U. Seventh, though the ability to collect on judgments in China is improving, it is still not near to the level of the United States or most of Europe.
Effect of public proceedings
Chinese courts often lack the authority and fail to receive the assistance from other law enforcement agencies necessary to force collection on their judgments. All Rights Reserved. Trade Agreements. Trade and Economic Relations.
A new Chinese option – A recent SPC interpretation
Transportation and Logistics. Transportation Planning. United States. March Sarah Carlin Ames. Richard D. Claire Hawkins. Jeffrey Qiong Li. Brian A.
- CIVIL PROCEDURE LAW OF THE PEOPLE'S REPUBLIC OF CHINA;
- Beat the Drum Slowly.
- The Outcast;
- From the Traditional to the Modern: Mediation in China.
Sara P. Donald B.
Law of the People's Republic of China
Robert B. Daniel J. All Rights Reserved. After more than 30 years of endeavour, the People's Republic of China has established, through enactments by the National People's Congress and its Standing Committee, a rather complete legal system with constitution, civil and commercial law, criminal law, administrative law, economic law, procedural law, etc.
In the s, the Weiquan movement began in the PRC, seeking to advance citizens' rights partly by petitioning for enforcement of existing laws, and partly through activism. Lawyers in the movement have seen some court victories, but in other cases they and their families have been ostracized and even tortured for their activities. It establishes the framework and principles of government, and lists the fundamental rights and duties of Chinese citizens.
In practice, however, although these "fundamental rights" include "freedom of speech, of the press, of assembly, of association, of procession and of demonstration" the enforcement of these rights and other elements of the Constitution are subject to the discretion of the Communist Party's leadership. Unlike some civil law jurisdictions such as Germany , China does not systematically lay down general principles in its constitution which all administrative regulations and rules must follow. The principles of legislation and the validity and priority of law, rule and administrative regulations are instead listed in the Legislation Law , constitutional provisions, basic laws and laws enacted by the National People's Congress and its standing committee, regulations issued by the State Council and its departments, local laws and regulations, autonomous-zone regulations, legal explanations and treaty norms are all in theory incorporated into domestic law immediately upon promulgation.
Signed international treaties are in practice automatically incorporated into PRC law, and they are superior to the relevant stipulations of PRC laws. However, the PRC reserves the right to make reservations regarding provisions of a treaty. Unlike common law jurisdictions, there is no strict precedential concept for case law and no principle of stare decisis. In addition, there is no case or controversy requirement that would require the Supreme People's Court to limit its decisions to actual cases, and the SPC does issue general interpretations of the law.
In practice, lower people's court judges attempt to follow the interpretations of the laws decided by the Supreme People's Court. In addition, unlike common law jurisdictions, higher courts have the power of supervision and guidance, which means that on their own initiative they can reopen a case that has been decided at a lower level. Courts in the PRC do not have a general power of judicial review which enables them to strike down legislation.
However under the Administrative Procedure Law of the People's Republic of China , they do have authority to invalidate specific acts of the government. In cases where there is a conflict of laws, the process to resolve this conflict is outlined in the Legislation Law of the People's Republic of China , in which an interpretation is requested by the legislative body that is responsible for the law.
This process has been criticized both by Western and Chinese legal scholars for being unwieldy and for not allowing for judicial independence and separation of powers. At the same time, the counterargument has been made that resolving legal conflicts is primarily a legislative activity and not a judicial one.
The hierarchy of regulations are. Major areas of law are substantive laws and procedural laws. The former include administrative law , criminal law , civil law or business law , and economic law. These are separated into different branches. For example, contract law is considered a branch of civil law. The latter includes civil procedure law , criminal procedure law and administrative procedure law.
Article 2 of the document states that the civil law governs personal and property relationships between natural persons and legal persons having equal status. It covers a wide range of topics, including the General Principles, marriage law , property law , contract law , copyright law , and trademark law.
From the point of view of some scholars, business law, such as corporation law , bankruptcy law , insurance law , and law on negotiable instruments , is distinguished from civil law. In contrast to other civil law jurisdictions, the PRC has not yet consolidated its civil law into a single code. However, the legislative plan is to enact the branches of civil law as separate legislation in the first place and then consolidate them into an entire Civil Code. The first part of the future Civil Code would be General Provisions which will be based on the current General Principles of Civil Law adopted in Civil procedural law advocates the principle of 'open trial' - a system in which the second instance is the final hearing, although a trial supervision system exists in civil litigation which will allow a limited number of cases being tried by the third instance.
Enforcing judgments can prove particularly difficult. China's first post substantive and procedural Criminal Code was enacted in Noteworthy features of criminal law in China include the requirement that crimes and criminal sanctions may only be governed by national laws as opposed to provincial laws or ministerial regulations. The harshness of criminal law in China is under heavy criticism or strong support, especially the insistence on capital punishment for many crimes.
China accounts for the biggest number of criminals executed in the world per year, which has raised great concern among different human rights groups and international organizations. This is distinct from the system of administrative punishments including detention for periods of multiple years and procedures which are governed under a separate system of laws and regulations.
One example of the structural barriers to the independence of courts is the Chinese Communist Party political-legal committee system, by which "the Party has the power to instruct, monitor or scrutinize courts regarding specific decisions of individual cases or categories of cases that attract attention from the Party. The State Council is authorized to promulgate administrative regulations, on social and economic sectors and affairs consistent with the laws adopted by the NPC and its Standing Committee. These laws include environmental protection law , regulations on taxation and customs, product quality law , and so on.
In these areas, the central government and its organs are superior to other parties, such as enterprises and individuals, for they exercise the power of regulation. The Administrative Procedure Law of the People's Republic of China allows legal persons to bring legal challenges against administrative actions.
The types of administrative actions that can be challenged must be "concrete actions", which include: administrative punishments such as detentions and fines , administrative coercive measures, interference with the operations of enterprises, refusal to take action or perform an obligation, unlawful demands for performance of duties, and violations of rights of the person or property rights. The review of state action is carried out in the local people's court. Court review of agency action is not permitted for state action involving national defense or foreign affairs.
Moreover, the court cannot review administrative legislation. As a matter of fact, although administrative litigation involving governments is on the rise due to citizens using legal measures to protect their property from government violation, it is still quite difficult for the court to give fair judgements or efficient execution, as the court's judges are appointed by the Communist Party and finance comes from the government.
There are two types of organs that are empowered to make legislative enactments. In theory, legislation issued by administrative organs is subordinate to that issued by state-power organs. Enactments of administrative organs must not conflict with the Constitution or law. In addition, local people's governments must ensure that their enactments comply with those issued by the State Council and its subordinate departments.
The concept of delegation of power has yet to be fully developed in the PRC legal system. For example, because it is not customary to expressly delegate power to administrative bodies to issue specific regulatory documents, they are not drafted pursuant to any specific entrustment of power in the manner of a statutory authorization of the enactment of implementing regulations.
In drafting the new laws, the PRC has declined to copy any other legal system wholesale, and the general pattern has been to issue laws for a specific topic or location. Often laws are drafted on a trial basis, with the law being redrafted after several years. This process of creating a legal infrastructure piecemeal has led to judicial decisions having more precedential value than in most civil law jurisdictions. In formulating laws, the PRC has been influenced by a number of sources, including traditional Chinese views toward the role of law, the PRC's socialist background, the German-based law of the Republic of China on Taiwan , and the English-based common law used in Hong Kong.