On 1 September 2023, the Standing Committee of the National People’s Congress of the People’s Republic of China (“PRC”) released its decision to amend the PRC Civil Procedure Law, which will take effect on 1 January 2024.
Since the above-mentioned Amendments include a few provisions which are for foreign related cases, for your better understanding, we draft this overview on such provisions:
- The Scope of the Court’s Jurisdiction
According to Article 272 of the original Civil Procedure Law, in case of a lawsuit initiated against a defendant without a domicile in the territory of the PRC due to a contractual dispute or other dispute on property rights and interests, if the contract was signed or performed within the territory of the PRC, or the subject matter of the lawsuit is within the territory of the PRC, or the defendant has property that can be seized within the territory of the PRC, or the defendant has a representative office in the territory of the PRC, the PRC Court at the place where the contract was signed or performed, or where the subject matter of the litigation is located, or where the property can be seized, or where the infringement was committed, or where the representative office is domiciled may have jurisdiction over such lawsuit.
Currently, the above Article 272 has been amended into Article 276 of the new Civil Procedure Law, which stipulates that for a foreign-related civil dispute, any lawsuit other than identity relations is brought against a defendant who does not have a domicile in the territory of the PRC, if the place of conclusion of the contract, or the place of performance of the contract, or the place where the subject matter of the litigation is located, or the place where the property is available for seizure, or the place where the tortious act is committed, or the place where the representative office has its domicile is located within the territory of the PRC, the PRC Court of the place where the contract is concluded, or the place where the contract is performed, or the place where the subject matter of the litigation is located, or the place where the property is available for seizure, or the place where the tortious act is committed, or the place where the representative office is domiciled may have jurisdiction.
In addition to the provisions of the preceding paragraph, where a foreign-related civil dispute has other appropriate links with the PRC, it may be subject to the jurisdiction of the PRC Court.
According to the two new provisions as Article 277 and Article 278 of the new Civil Procedure Law, the parties of a foreign-related dispute may agree in writing on jurisdiction of a PRC Court. Furthermore, a PRC Court shall be deemed having jurisdiction, if the relevant party has not objected to such jurisdiction but has responded with statements of defense or raised a counterclaim.
In addition, Article 279 to Article 281 of the new Civil Procedure Law has also extended the scope of exclusive jurisdiction of the PRC Court, which shall not only include the lawsuits filed for disputes arising from the performance of contracts for Sino foreign joint ventures, Sino foreign cooperative ventures, and Sino foreign cooperative exploration and development of natural resources within the territory of the PRC, but also include the lawsuits filed due to disputes over the establishment, dissolution, liquidation, and effectiveness of resolutions made by legal persons or other organizations established within the territory of the People’s Republic of China, and the lawsuits filed for disputes related to the validity of intellectual property rights granted within the territory of the PRC. If the parties enter into an exclusive jurisdiction agreement and choose the jurisdiction of a foreign court, which does not violate the provisions of the new Civil Procedure Law on exclusive jurisdiction and does not involve the sovereignty, security, or public interests of the PRC, the PRC Court may rule not to accept the lawsuit filing application, otherwise the PRC Court would have jurisdiction over the lawsuit filed by one of the parties.
Of course, the above legal analysis should not be considered as an official legal opinion issued by us, and any specific cases still need to be analyzed based on the specific background of the case before providing corresponding legal opinions.