Resolution of Commercial Disputes in China

1. Resolution of Commercial Disputes in China Vivienne Bath Senior Lecturer and Director of the Centre

2. Commercial Disputes in China • Four levels of people’s courts: basic; intermediate; high; supreme • Foreigners involved mainly at intermediate level and higher • Rules of civil procedure call for cases to be heard in domicile of defendant • Parties may choose governing law (except for joint ventures and resource development projects)

3. Commercial Disputes in China • Parties may exclude jurisdiction of courts in favour of arbitration • Parties may choose a Chinese or foreign court in cases “involving foreign interests” (but enforcement a problem) • Parties may NOT choose a foreign court for cases involving JVs or natural resource development or exploration contracts

4. Commercial Disputes in China • Summary • Historical lack of confidence in Chinese courts • Availability of arbitration (inside and outside China) • Perceived availability of enforcement of arbitration awards (local and foreign)

5. Commercial Disputes in China • Developments • More, better-trained Chinese lawyers • Judges Law – better qualified Chinese judges • Increase in litigation by Chinese citizens, necessarily involves foreigners • Improved credibility of litigation as opposed to arbitration

6. Commercial Disputes in China • Issues • Considerable variation in quality of judges and courts on a regional basis • Proliferation of legislation • Heavy case load for judges across China • Local protectionism? • Uneven benefits of litigation

7. Commercial Disputes in China • Increased use of litigation generally • Use of litigation strategically • Use of litigation as a means of intimidation • Litigation in domain disputes and IP cases • Litigation in connection with arbitration clauses • Litigation by foreign investment enterprises