The Civil Procedures Law (“CPL”) of the People’s Republic of China was substantially amended in late 2012. The Interpretations now clarify several issues not specified in the CPL more comprehensively than any other CPL- related judicial interpretations to ensure a unified and consistent implementation of the CPL nationwide.
The Interpretations’ main features regarding civil litigation procedures are as follows:
- They further clarify the jurisdiction of courts to hear cases, particularly regarding disputes over contracts. To reduce uncertainty when determining the place of performance of a contract under which both parties are subject to material obligations, the Interpretations state that if the parties do not agree on the place of performance, it will be where the disputed obligation is performed.
- They reestablish the principles for determining the place of performance of online purchase agreements, specifying that (1) if the object of the purchase agreement is delivered via internet, the place of performance will be the purchaser’s place of residence; (2) if the object of the purchase agreement is delivered by other means, the place of performance will be the place of receipt; and (3) if the parties agree in writing on the place of performance, this agreement will prevail.
- They illustrate the principles for determining burden of proof and stipulate that the claimant will be liable if it cannot produce admissible evidence proving its claim before the judgment is issued.
- They provide a more precise definition of electronic data, which is now recognized as acceptable evidence under the CPL. Electronic data refers to information that is formulated or saved in electronic form, including emails, electronic data exchanges, online chat records, blogs, mini blogs, SMS, electronic signatures and domain names.
- They establish the procedures and timeframes for submitting evidence. The Interpretations relax the time constraints, allowing the court to accept evidence submitted after a deadline if it is considered related to the material facts of the case.
- They further clarify the status of expert in a civil proceeding, defined under the CPL as a “person with professional knowledge,” and establish that the parties can appoint one or two experts to attend the hearing, who can only participate in aspects of the hearing that are related to their professional activity.
- They establish criteria for determining the probative value of evidence and stipulate that the court (1) must coordinate the parties to clarify and debate on whether —and to what extent— the presented evidence has probative value, and (2) issue its judgment based on the laws, logical reasoning and rules of thumb.
- They relax the requirements on the guarantee for preservation measures. They also allow the court to determine the amount of guarantee the applicant must provide, which previously had to equal the amount of the assets or obligations to be preserved.
The Interpretations also introduce several arbitration-related provisions, which we highlight below:
- The facts recognized in a binding arbitration award granted by an arbitration commission need not be proven again with evidence and can be directly adopted by the court, unless the other party provides enough evidence to rebut them.
- If, before the first hearing, the court’s jurisdiction is challenged on the grounds of a valid arbitration agreement between the parties to the dispute, the court will review the issue and not accept the case where (1) the arbitration institution or another court has already upheld the validity of the arbitration agreement; (2) the parties did not challenge the validity of the arbitration agreement before the first hearing in the arbitration; or (3) the court concludes that the arbitration agreement is valid.
- The court’s decision to reject the enforcement of a domestic arbitral award under the CPL cannot be challenged or reviewed. In these cases, the parties can enter into a new arbitration agreement to arbitrate the dispute again or submit their dispute to the court.
- If a court grants preservation measures requested by a party in an arbitration procedure before a foreign-related arbitration institution in China, the applicant must provide a guarantee. However, the court can exempt the applicant from providing a guarantee if it considers this unnecessary.
- To enforce a foreign arbitral award in China, the applicant must first apply for the recognition of the award (a foreign arbitral award cannot be enforced until the court acknowledges its compliance with law).
The Interpretations will prevail if any discrepancy arises regarding any other judicial interpretations issued by the SPC.
Date of issue: January 30, 2015. Effective date: February 4, 2015