A revision of the PRC Civil Procedure Law ("CPL") that comes into force on 1 January 2013 aims to strengthen court efficiency, clarify the rules of evidence and rights of litigants, and improve judicial transparency.
One of the most relevant amendments for foreign parties is the creation of pre-arbitration interim measures and certain new types of interim measures.
- For the first time, parties are now allowed to seek pre-arbitration interim measures in support of arbitrations that will be seated in mainland China. The specific rules are essentially the same as those for pre-litigation interim measures. Pre-arbitration interim measures can be requested directly from the competent court. This differs from interim measures that are requested once the arbitration has commenced. In that case the application has to be made to the arbitration institute, which will forward the application to the competent court.
Three elements will be taken into account when judging whether the interim measures can be ordered:
- interim measures can only be ordered under the circumstances where evidence might be destroyed, assets might disappear or other prejudice might be caused
- applicants must provide security when applying for pre-arbitration interim measures for an amount to be determined by the court (taking into account the attached assets)
- the interim measures will be lifted if the applicant fails to commence litigation or arbitration within 30 days.
- New types of interim measures are created apart from existing evidence preservation and asset preservation. Under the amended CPL, courts now have the power to request a party to take action as instructed or to prohibit a party from doing something prior to the litigation or arbitration.
- Under the amended CPL, courts are now obligated to make legally effective judgments and rulings publicly available except for those involving state secrets, trade secrets or personal privacy. This is intended to facilitate legal practitioners to have access to the court's practice and the rationale of the court's decision.
The amendments of the CPL undoubtedly mark an improvement in the efficiency and transparency of the Chinese judicial system and provide more flexibility for parties. Its actual effect, especially as relates to how it will affect foreign related litigations and arbitrations, remains to be tested in practice.