The Supreme People's Court of the People’s Republic of China Released Guiding Opinions on Unifying the Application of Laws and Strengthening Similar Case Retrieval

On July, 27th, in order to unify the application of laws and enhance the judicial credibility, the Supreme People's Court of the People’s Republic of China released the Guiding Opinions on Unifying the Application of Laws and Strengthening Similar Case Retrieval (for Trial Implementation)( hereinafter referred to as "the Opinions"), which will be implemented on a trial basis on July 31st, 2020.

The Opinions consist of 14 articles in total, specifying the scope of application, the subjects and platforms of retrieval, the scope and methods of retrieval, the settlement of legal disputes, and the construction of trial case database, and emphasizing the judges’ duty to refer to guiding cases and to other types of cases, with a view to achieve the uniform application of laws.

The Opinions specify four circumstances where similar cases shall be retrieval. The first is where the case is to be submitted to the professional (presiding) judge session or the adjudication committee for discussion; the second is where there is no clear judgment rules or uniform judgment rules have not been formed; the third is where the president and chief judges of the people's court requires to retrieve similar cases according to the authority of trial supervision and administration; and the fourth is where there is any other reason for retrieving similar cases.

The Opinions indicate that the scope of similar cases to be retrieved generally includes guiding cases released by the Supreme People's Court; typical cases released and cases with effective judgment rendered by the Supreme People's Court; reference cases released and cases with effective judgments rendered by the high people's court of a province (autonomous region or municipality directly under the Central Government); and cases with effective judgments rendered by a people's court or the people's court at the next higher level. Except for guiding cases, cases in the past three years shall be retrieved preferentially; if a similar case has been discovered in retrieval in the previous sequence, similar cases may no longer be retrieved.

Where any case retrieved is a guiding case, the people's court concerned shall make judgment by reference to such case, except for any conflict with new laws, administrative regulations or judicial interpretations or any case that is replaced by a new guiding case. Where other types of cases are retrieved, the people's court concerned may use them as reference for judgment. Where there are inconsistencies in the application of laws in the retrieved similar cases, the people's courts may, in accordance with the provisions of the Implementing Measures of the Supreme People's Court on Establishing the Mechanism for Resolving Differences in the Application of Law and other laws, resolve the differences in the application of law by comprehensively considering such factors as the level of the courts concerned, the judgment time and whether the cases were discussed by adjudication committees. Where a public prosecution organ or a party concerned in a case or the defender or legal representative thereof submits a guiding case as the ground for accusation (prosecution), the people's court shall respond whether it has referred to the guiding case or not in the reasoning for the judgment document and give reasons therefor; where other similar cases are submitted as the ground for accusation (prosecution), the people's court may respond by giving explanations or otherwise.

Belarus’s accession to the United Nations Convention on International Settlement Agreements Resulting from Mediation (the "Singapore Convention on Mediation")

On July 20, 2020, Belarus submitted the instrument of ratification of the United Nations Convention on International Settlement Agreements Resulting from Mediation (hereinafter referred to as the "Convention") to Headquarters of the United Nations, whereby it became the fifth State Party to the Convention.

According to the content of the Convention, the Convention comes into force six months after the third contracting state accedes to the Convention. As the third contracting party, Qatar, acceded to the Convention on March 12, 2020, the Convention will come into force as of September 12, 2020. And as the instrument of ratification submitted by Belarus comes into force on July 15, 2020, the Convention will come into force for Belarus as of January 15, 2021.

Declaration of New Co-Chairman by HKIAC 

On 5 June 2020, with the unanimous consent of the HKIAC Council, Debevoise & Plimpton Law Firm's co-chair for international dispute resolution, the International Bar Association’s former Chairman, Mr. David W. Rivkin, and Mr. Yuan Guoqiang, former Director of the Hong Kong Department of Justice, were appointed as co-chairs of the HKIAC. The appointment has come into effect on June 15, 2020.

Wenzhou Intermediate People's Court revoked the arbitral award of which the procedure was illegal and reported the case to the Supreme People's Court via the high people’s court

Relevant Provisions:

Article 34 of the Arbitration Law of the People's Republic of China provides, “An arbitrator shall be withdrawn from the case and the parties concerned shall have the right to request such withdrawal for any of the following reasons:

……(3) the arbitrator has some other relationship with the parties to the case or their agents which may affect the case to be arbitrated fairly…….”

Article 3 of the Provisions of the Supreme People's Court on Issues relating to the Reporting and Review of Cases Involving Judicial Review of Arbitration provides, “For a non-foreign-related case involving judicial review of arbitration or a case not involving Hong Kong, Macao or Taiwan Region as provided for in Paragraph 2, Article 2 hereof, if the high people's court intends to agree with the intermediate people's court or the specialized people's court on the proposed ruling of the invalidity of an arbitral agreement, or not to enforce or to revoke an arbitral award issued by a domestic arbitration agency, under the following circumstances, it shall report to the Supreme People's Court for review; and the final ruling shall be rendered based on the review opinions given by the Supreme People's Court.

(1) The domiciles of the parties to the case involving judicial review of arbitration are in different provincial administrative regions;

(2) Not to enforce or to revoke the arbitral award issued by a domestic arbitration agency on the ground of "contrary to social and public interests.”

The applicant CCCC First Highway Engineering Bureau Co., Ltd. (hereinafter referred to as " First Highway Bureau") and the respondent Tianbei Investment Group Co., Ltd. (hereinafter referred to as "Tianbei") signed the Cooperation Agreement in 2016 for the cooperative development of the highway engineering project within Zhejiang Province. During the process of cooperation, due to a dispute between the two parties over the amount of investment funds, Tianbei Company submitted the dispute to Wenzhou Arbitration Commission for arbitration, which upheld the claim of Tianbei Company (requesting the First Highway Bureau to repay the investment funds) by rendering the Wen Zhong Cai Zi [2017] No.162 award. First Highway Bureau requested Wenzhou Intermediate People's Court to revoke the aforesaid arbitration award on the grounds that the arbitration award went against the social public interests or the composition of arbitration tribunal or the arbitration procedure did not comply with the legal procedure. The core disputes in this case [(2018) Zhe Min Te No.63] are: whether the composition of the arbitral tribunal or the arbitration procedures violate the statutory procedures; and whether the arbitral award violates the public interests.

Court’s View:

The Court revoked the above arbitration award for the following reasons:

a) Although the First Highway Bureau is a state-owned transportation engineering unit, it shall respect the spirit of contract when participating in civil activities as an equal market player. It should not equate its interests with the public interests of the society, and in the case of its breach of contract, it also needs to bear the responsibility for breach of contract.;

b) The agent of Tianbei and arbitrator Chen Xuezhi once worked in the same law firm, but in the arbitration of the arbitration case involved, the fact was not disclosed, which affected the exercise of the party's right to challenge to some extent, and belonged to the circumstance that might affect the fair ruling.

According to the Provisions of the Supreme People's Court on Issues relating to the Reporting and Review of Cases Involving Judicial Review of Arbitration, if an intermediate people's court rules to vacate an arbitration award, it shall report the matter to the higher people's court for review; if the higher people's court agrees with the vacancy and if the case involves "public interests", it shall report the matter to the Supreme People's Court for review. Therefore, the examination result of this case by the Supreme People's Court is still needed.

Xiamen Maritime Court’s Acknowledgement of the Asymmetric Jurisdiction Clause in Port-related Guarantee Contract

On July 14, 2010, Hong Kong A shipping company and Hong Kong B marine transportation company entered into the Bareboat Charter Party [which is the amendment to the standard Bareboat Charter Party of the Baltic International Maritime Conference (BIMCO) (BARECON2001)], stipulating that Party B chartered Party A’s ship. The three paragraphs A, B, and C of Article 30 of the contract are clauses concerning the settlement of disputes by arbitration, but the two parties have deleted the three paragraphs and only retained Article 30, paragraph D (this paragraph stipulates that: In the case of arbitration initiated in Article A or B or C, either party may serve the other party at any time with a written notice of choosing to submit the dispute or part of the dispute to mediation, so as to require the other party to agree to mediation). Article 49 is a clause on law and jurisdiction. Article 49.2 stipulates that "subject to Article 49.4, the Hong Kong court has the exclusive right to resolve any disputes arising from this charter party and related to this charter party. Jurisdiction", Article 49.4 stipulates that "Article 49 is only for the benefit of the shipowner. Therefore, the shipowner shall not be prevented from sueing in any other court with jurisdiction over disputes." At the same time, the defendant Shi and others provided guarantees for the debts of the aforementioned bareboat charter contract. The guarantee contract stipulates that the guarantor agrees to the exclusive jurisdiction of the Hong Kong courts, and at the same time, it is agreed that the shipowner shall not restrict the shipowner's lawsuit against any individual guarantor for relief in any other courts and/or in multiple jurisdictions simultaneously. Thereafter, when the dispute over the charter party arose, the parties instituted legal proceedings and, on the strength of the legal relationship of the guarantee, brought a lawsuit against all the guarantors mentioned above to the Xiamen Maritime Court. The guarantor raises an objection to the jurisdiction of the Xiamen Maritime Court. The core dispute in this case [(2020) Min 72 Min Chu Civil Ruling No. 239] is: the dispute resolution mechanism stipulated in the main contract corresponding to the guarantee contract is mediation (arbitration plus mediation). In this case, whether the court has jurisdiction; Whether the asymmetric jurisdiction clause in the contract involved in this case is valid.

Court’s View:

The Court rejected the defendant's application for objection to jurisdiction on July 8, 2020 for the following reasons:

a) According to Article 30D, the premise for mediation of disputes is that the dispute has entered the arbitration procedure. The "Bareboat Charter Contract" signed by both parties in this case deletes Article 30 A/B/C clauses, and the parties did not reach an agreement on arbitration, so the conditions for mediation in the arbitration procedure cannot be fulfilled. The defendant’s grounds for objection that the case should be submitted to arbitration or mediation and excluded from the jurisdiction of the Xiamen Maritime Court were unfounded;

b) The bareboat charter contract and the guarantee contract involved in this case both agreed on asymmetric jurisdiction clauses, that is, only when the shipowner (creditor) chooses a Hong Kong court to sue, the Hong Kong court enjoys exclusive jurisdiction and the charterer (guarantor) must obey the agreement of exclusive jurisdiction, while the right of the shipowner (creditor) to choose a court other than Hong Kong to sue is not excluded. The agreement does not violate the provisions of the Civil Procedure Law of China and should be deemed valid;

c) The defendant in this case is a resident of Mainland China, and the case involves interests in the Mainland, so this case does not comply with the principle of "court inconvenience" stipulated by law. The defendant’s grounds for disagreement regarding the inconvenience of jurisdiction and the prior litigation in Hong Kong courts were not established.

This case is also the first ruling made by the Xiamen Maritime Court to confirm the validity of the asymmetric jurisdiction clause.

This Newsletter is produced by ZLWD International Business Committee and for your reference only.

Editorial Board: Wei LIN  Simon TANG  Philip DUAN  Ellen WANG  Yuming LI  Lingling GUO

Hao LIU  Ning NING

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