Preface

With China's accession to the World Trade Organization (WTO), the corresponding wave of globalization is driving the rapid development of dispute resolution in foreign-related civil and commercial cases in Mainland of China, and it is getting more and more common that Chinese courts hear foreign-related civil and commercial cases.

This series of articles will share topics such as jurisdiction, entrusted litigation, evidence, notice, and execution of foreign-related civil and commercial cases in Mainland of China. And this article will focus on analyzing and studying the jurisdiction of foreign-related civil and commercial cases.

How to determine whether a dispute is a foreign-related case

Interpretations of the Supreme People's Court on Several Issues Concerning Application of the Law of the People's Republic of China on Choice of Law for Foreign-Related Civil Relationships (I) stipulates that: Where a civil relationship falls under any one of the following circumstances, the people's court may determine it as foreign-related civil relationship: 1.where either party or both parties are foreign citizens, foreign legal persons or other organizations or stateless persons; 2. where the habitual residence of either party or both parties is located outside the territory of the People's Republic of China; 3. where the subject matter is outside the territory of the People's Republic of China; 4. where the legal fact that leads to establishment, change or termination of civil relationship happens outside the territory of the People's Republic of China; or 5. other circumstances under which the civil relationship may be determined as foreign-related civil relationship. In practice, as long as any of the above elements are satisfied, the dispute can be identified as a foreign-related case.

In addition, according to Article 551 of Interpretations of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China and Article 5 of Provisions of the Supreme People's Court on Certain Issues Concening Jurisdiction over Civil and Commercial Cases Involving Foreign Elements, the people's courts may apply the special provisions on foreign-related civil procedures with reference to civil litigation cases involving the Hong Kong and Macao Special Administrative Regions and Taiwan.

Jurisdiction in foreign-related cases

Subject Matter Jurisdiction

1. Major foreign-related cases are under the jurisdiction of the Intermediate People's Court

Article 17 of the Civil Procedure Law stipulates that "unless otherwise stipulated in the Law, basic people's courts shall have jurisdiction as courts of first instance over all civil cases." and Article 18 thereof stipulates that "intermediate people's courts shall have jurisdiction as courts of first instance over the following types of civil cases: 1. major cases involving foreign parties；2. cases with significant impact in the areas over which the courts exercise jurisdiction; and 3. cases determined by the Supreme People's Court to come under the jurisdiction of the intermediate people's courts." However, ordinary foreign-related cases are still under the jurisdiction of the courts of first instance.

As to what constitutes a "major foreign-related case", Article 1 of the Interpretations of the Civil Procedure Law stipulates that major foreign-related cases shall include cases whose subject matter in dispute is of a large amount, cases of complicated circumstances, and cases of significant impact, such as a case where one side thereto has a large number of parties concerned.

2. Centralized jurisdiction for some cases

Provisions of the Supreme People's Court on Some Issues Concerning the Jurisdiction of Civil and Commercial Cases Involving Foreign Elements stipulates that the following civil and commercial cases involving foreign elements shall be subject to the jurisdiction of specified people's courts: (1) cases on disputes over contracts or torts involving foreign elements; (2) cases on disputes over letters of credit; (3) cases on application for revocation, recognition and compulsory enforcement of international arbitration award; (4) cases on examination of the effectiveness of the relevant clauses of civil and commercial arbitration involving foreign elements; (5) cases on application for recognition and compulsory enforcement of the civil and commercial judgments and orders rendered by foreign courts. The specified people's courts include: (1) the people's court of an economic and technological development zone (such a zone shall be established under the approval of the State Council); (2) the intermediate people's court at the locality of a provincial or autonomous regional capital or a municipality directly under the Central Government; (3) the intermediate people's court of a special economic zone or a city directly under the State planning; (4) any other intermediate people's court designated by the Supreme People's Court; (5) the higher people's court. The scope of regional jurisdiction of the above said intermediate people's courts shall be determined by the higher people's court at their locality. When the jurisdiction of cases on civil and commercial disputes involving parties from Hong Kong or Macao Special Administrative Region or Taiwan Region shall also be handled by the courts with reference to these Provisions.

Combined with Notice of the Supreme People's Court on the Clarification of the Criteria for Subject Matter Jurisdiction of Foreign-Related Civil and Commercial Cases of the First Instance and Related Issues of Centralized Management and Notice of the Supreme People's Court on the Adjustment of the Criteria for the Jurisdiction of Civil Cases of the First Instance by the High People's Court and the Intermediate People's Court, author sorted out the criteria for subject matter jurisdiction of High People's Court and the Intermediate People's Court for the first instance in foreign-related civil and commercial cases and listed as follows.

Note: cities with independent planning include Shenzhen, Qingdao, Ningbo, Dalian and Xiamen; Special Economic Zones include Hainan, Shenzhen, Zhuhai, Shantou, Xiamen, Kashgar and Horgos.

Territorial jurisdiction

1. Contract or property dispute litigation

With regard to the determination of the court of jurisdiction for foreign-related civil contract disputes, if the defendant is a nature person in Mainland of China/ a legal person in Mainland of China/ an overseas person who has a residence permit or other proof that his or her habitual residence is in Mainland of China, he or she may sue in the place of domicile or habitual residence of the defendant in accordance with the provisions of Article 21(1) of the Civil Procedure Law.

However, if the defendant does not have a domicile in the territory of the People's Republic of China, according to Article 272 of Civil Procedure Law of the People's Republic of China, where an action is instituted against a defendant without a domicile within the territory of the People's Republic of China concerning a dispute over a contract or rights and interests in property, if the contract was executed or performed within the territory of the People's Republic of China, or the subject matter of the action is located within the territory of the People's Republic of China, or the defendant has distrainable property within the territory of the People's Republic of China, or the defendant maintains a representative office within the territory of the People's Republic of China, the action may come under the jurisdiction of the people's court of the place where the contract was executed, the place where the contract was performed, the place where the object of action is located, the place where the distrainable property is located, the place where the tort was committed or the place where the representative office is domiciled.

In addition, for some special contracts, Article 273 of Civil Procedure Law stipulates that an action instituted for a dispute arising from the performance in the People's Republic of China of a Sino-foreign equity joint venture contract, a Sino-foreign cooperative joint venture contract or a contract for Sino-foreign cooperative exploration and development of natural resources shall come under the jurisdiction of the people's courts of the People's Republic of China.

2. Litigation regarding personal relations

For general personal relations lawsuits, Article 22 of the Civil Procedure Law provides that litigations concerning the status of persons who do not reside within the territory of the People's Republic of China shall be under the jurisdiction of the people's court located in the place where the plaintiff has his domicile, if the plaintiff's domicile is different from his habitual residence, the lawsuit shall be under the jurisdiction of the people's court located in the place of the plaintiff's habitual residence.

With regard to matrimonial proceedings, in conjunction with the provisions of Articles 13 to 17 of Interpretation of the Supreme People's Court concerning the “Civil Procedure Law of the People's Republic of China”, author have sorted out the rules on jurisdiction when both parties are of Chinese nationality and listed as follows.

Note: For the definition of overseas Chinese, please refer to Article 1 of the Regulations on Defining the Status of Overseas Chinese Returning Family Members of Foreigners.

Special circumstances: principle of inconvenient jurisdiction

After a Chinese court has accepted a party's suit, the defendant may object to jurisdiction based on the principle of inconvenient jurisdiction. Article 530 of the Interpretation of the Civil Procedure Law provides that "the people’s court may dismiss the filing of a lawsuit by the plaintiff and inform the plaintiff to bring the lawsuit with a more convenient foreign court if the following situations have been satisfied at the same time: (1) The defendant raised the request that the case shall be handled by a more convenient foreign court, or proposed oppositions to the jurisdiction; (2) The parties concerned have no agreement on selecting a court of the People’s Republic of China as the competent court; (3) The case is subject to no exclusive jurisdiction of the court in the People’s Republic of China; (4) The case involves no interests of the nation, citizens, legal entities or other organizations in the People’s Republic of China; (5) Main facts in dispute in the case has not occurred within the boundary of the People’s Republic of China, and the case shall not be governed by laws of the People’s Republic of China, due to which the people’s court may confront substantial difficulties in terms of ascertaining facts and applying laws when trying the case; (6) A foreign court enjoys exclusive jurisdiction upon the case and would try the case in a more convenient manner". The defendant could therefore raise a plea of jurisdiction before the receiving court on the ground of "inconvenient jurisdiction" of the mainland court. If the defence is established, the plaintiff's action will be dismissed. However, the conditions for the application of the inconvenient jurisdiction are more stringent and the parties have to prove that all of the six conditions set out in Article 530 have been met.

Quick search of Hunan's territorial jurisdiction in foreign-related cases

A search of the territorial jurisdiction of foreign-related cases in Hunan's prefectures shows that most civil and commercial cases of first instance involving foreign countries, Hong Kong, Macao and Taiwan are under the jurisdiction of the intermediate people's courts of the prefectures, and some district/county people's courts also confer jurisdiction over civil and commercial cases of first instance involving foreign countries, Hong Kong, Macao and Taiwan, as detailed in the following table.

CONCLUSION

In conjunction with the analysis of the jurisdiction of foreign-related cases and the understanding the differences in the jurisdiction systems, the parties to foreign-related cases may agree to choose the appropriate jurisdictional court in accordance with their specific situation, provided that the provisions of hierarchical and exclusive jurisdiction are not violated.

I. Overseas Chinese are Chinese citizens who are designated to reside abroad.

(a) "settled" means that Chinese citizens have obtained long-term or permanent residence in the country of residence, and have resided in the country of residence for two consecutive years, with a total stay of not less than 18 months within two years.

(B) Chinese citizens have not obtained long-term or permanent residency in the country of residence, but has obtained the country of residence for more than five consecutive years (including five years) legal residence status, within five years in the country of residence for a cumulative period of not less than 30 months, as Chinese nationals.

(C) Chinese citizens studying abroad (including publicly funded and self-funded) during the period of study abroad, or work abroad for official purposes (including expatriate laborers), are not considered Chinese nationals.