Win in Chinese Courts

Front matter

T Win in Chinese Courts

Practice Guide to Civil Litigation in China

A Springer y

Foreword

As an Australian lawyer with over 30 years of experience specializing in insolvency and dispute resolution, it is becoming increasingly more common, in the current economic downturn, for me to see disputes with Chinese investors in local ventures, particularly in real estate, mining and infrastructure sectors. Although cross-border insolvency laws and enforcement are fairly well developed and understood in Australia, there is much uncertainty when such laws interact with investment agreements governed by Chinese local law and its civil litigation or CIETAC arbitration systems. As liquidators and other insolvency appointees representing the interests of third-party creditors, they usually are looking for certainly and the most fair, efficient and timely determination of those claims to secure the best or highest return. For this reason, Australian insolvency practitioners have traditionally avoided the mysterious and unfamiliar Chinese dispute resolution system instead preferring to have such claims determined by their local proof of debt and other insolvency procedures and forcing foreign creditors to submit to those laws.

However, in a recent large Australian mining investment dispute, our liquidator client was dragged into CIETAC by Chinese state-owned investors following the making of the first emergency order which restrained the liquidator from making any distributions, except to priority employee claims, pending a final CIETAC determination. In this matter, I had the pleasure of working with Chenyang in successfully resisting those proceedings and subsequent attempts to appeal the CIETAC determination on the public policy grounds of alleged fraud.

Chenyang was able to alleviate the liquidator’s concerns by his commercial and common-sense approach by throwing light on the Chinese dispute resolution system. One of Chenyang’s strengths is his ability to translate into English and explain the differences in meaning, terminology and legal system. That was particularly critical in our dispute which concerned the interpretation of specific wording in a Chinese investment agreement and how CIETAC arbitrators weighed different kinds of evidence. It was particularly surprising that even in a civil contractual dispute between two investing parties, how much weight is given to the agreement itself, while investigations and studies with little or no credence being given to oral statement from the interested contracting parties themselves which was not treated as a vi Foreword kind of evidence at all. As far as I can see, arbitrations in different jurisdictions share common features in many aspects, but such experience showed how important it is to distinguish and understand those differences.

Based on such experience, I am quite curious about the civil litigation in China which has so many differences from those in Australia and many other countries, and a concise and straightforward handbook written by my Chinese counterparts will be of great help as I can foresee. This practical guide is exactly what I expect. It will serve as a valuable tool for foreign lawyers and practitioners in enlightening them to the Chinese dispute resolution system and assist in alleviating any perceptions as its fairness and efficiencies. I believe this guide will be helpful to its readers, especially those who need to know the Chinese civil litigation in short time and easy ways.

Preface

With China’s continuous expansion of its opening-up policy, more foreign investments and trades are being attracted to China, and the foreign-related cases filed by Chinese courts are increasing dramatically. From 2016 to September 2021, more than 330,000 commercial and maritime cases with foreign-related elements were heard and closed by courts in China, and the number of other foreign-related civil cases (including intellectual property cases) is quite big as well. In addition, the enforcement of court judgment in China, including tracking and recovering properties of the losing party, is becoming more and more impressive and effective with the help of online information system. Therefore, filing a case in China is both a good option for the plaintiff and a serious alert for the defendant.

However, as a Chinese lawyer specializing in cross-border dispute resolution for more than ten years, I become aware of the fact that the civil litigation system in China is still quite mysterious and unfamiliar to many foreign lawyers. Some people even call it a “black box” and advise others to avoid participating in litigation in China, either actively or passively.

In fact, China has developed a mature and full-scale civil litigation system with sophisticated statutes and provisions, which can effectively support foreign parties to resolve dispute in China. Unfortunately, such information is often neglected by my counterparts due to lack of systematic summary and necessary interpretation, and many disputes resolvable in China remain unsettled for a long time.

To fill such information gap, this guide tries to present a comprehensive roadmap of civil litigation system in China. It will start from some basic concepts of Chinese judicial system (such as the court system, case numbering, hierarchical trial system) and go through the whole process and most aspects of a civil litigation case (such as jurisdiction, case filing, service of court documents, evidence rules, process of trial, enforcement of judgments and court costs).

With titles in form of questions or containing key elements of corresponding sections, I understand this guide to be a “dictionary” to easily learn about specific topics of civil litigation in China. Or else, it can also serve as a highly simplified and condensed textbook to learn about civil litigation in China in less than half a day. I hope this guide can answer the most frequently asked questions from legal

Vii viii Preface practitioners, scholars, students and others who are interested in civil litigation in China.

To avoid misunderstanding, here are some notes for readers. The term “China” in this guide, unless otherwise defined, refers to Mainland China and does not include Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan region. This guide does not discuss criminal or administrative litigation in China, and “civil” litigation in this guide includes commercial litigation and intellectual property litigation. Although maritime litigation is categorized as civil litigation in China, it cannot be fully covered by this guide due to its particularity in procedures. This guide is prepared based on laws, judicial interpretations, other provisions and information effective as of December 2022, which may be updated from time to time. The reference provisions enumerated in the end of each section are those closely related to the section, rather than a complete list of all relevant provisions. Some contents are prepared based on personal or peer experience, rather than official or authoritative literatures. This guide does not constitute any legal opinion or service to any person. Given my personal experience and ability are limited, mistakes and inaccuracies are unavoidable in this guide. If you find them, please feel free to contact me and I am more than happy to correct them.

At last, I would like to thank Ms. Meng Yu and Mr. Guodong Du, who have strongly encouraged me to write this guide and shared many of their brilliant ideas and helpful comments. I would also like to thank Mr. Haibin Lin, who has made great efforts to polish the writing of this guide. Their help and contribution are indispensable for the publication of this guide. Finally, please allow me to express my gratitude to Springer, my family, and those supporting me as always.

That is all. Hope you find this guide useful and enjoy reading it.

Beijing, China Chenyang Zhang

1.1

1.4

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China’s Hierarchical Trial System for Civil Cases —2 ao ee) aie garda pniweter creer ideridase peceeds 1.2.2 Simple and Small Claim Cases Are Closed After

Ihe Fist INMance ices see eiseardvaniiaaaenearesca 1.2.3 After the Final Trial of a Case, the Parties May

also Apply for Retrial ..i..cs<csee sees edveavaee ces 1.2.4 After the Application for Retrial Is Dismissed,

the Parties May also Apply to the Procuratorate

for ee ROMA 5 pcadeduectidebeinaseieasionecessa 1.2.5 After the End of the “2 + 1 + 1” Procedure,

the Parties May Still Be Entitled to Petition

AO UES conn nage Sexes oaeed deentineetiageseteseesd 1.2.6 Cases that Are not Subject to the “2 + 1 + 1”

Procedure 2) 223i .22gictaekscabasgede creda raade ide Case Numbering System of Chinese Courts—‘“Secret Siena m Case NMED. oc ican ends hewerheavdsgaveesepeees Cause of Action—Index List of Chinese Case Classification .... 1.4.1. The Development of Cause of Action in Civil Cases ... 1.4.2 How to Determine the Cause of Action in the Case .... 13,1 Fee Rates of Chinese Couns ..cns5scasssaeisaseisess

BNR Fe

1.5.2 Sp cial Circumstances of Fee Reduction/

The Place Whe ere t Connecting 2.2.3. The Place V agi

225 The Pies Where the Com Connecting Factor for Co haat

Objection to Ju

2.3.2 The Court May also Examine the Jurisdiction Issue Ex Officio in csd seers snaes baad 2.3.3 Case Transferring . peeks Peharhaderesiaridios ces

3.1 Preparations Before Bringing a Lawsuit—Formality 3.1.1 Cert s of Subject Qu on— “Who aa T and “Who Represents Me” c..1.02424520see0et eee es 3.1.2 Aiii of sien T Is M Lawyer” 3.1.3 iti A: 1. ‘a 321. I Pence fC PPM: oes ikeckateoksletaere Oe order Online Case Peia 3.3.1 The Composition of Colleg | 3.3.2 No Jury in China—What Is 4.1 Basic Methods for Service of Court | Demmi in Chins Hees 410 Personal Servite: cuss ccaesnr acs daeeriacentaee eens 4.1.2 vice by nie Besed Court Docnnients 4.1.4 4.1.5 ervice by Publicat 4.2 How to Tackle “Difficulty i in Ef cting Service of Court Pomen Siac pont a deka ied hoe EER 4.2.1. Reform Measures for “Difficulty i in Rifecting 4. 3 e diated EE ET T TETE 4.3 4.3.3 Service Through Dake Channels béenbake teas 4.3.4 AAEE e PPE PEE AEAEE E T P E sand 4.3.6 licatic : 4.4 How Do i oni rene Foreign Courts in Jenie on

5.2

33 5.4 5.5

5.6

5.8

4.4.1 Assistance in Service Under the Hague Service Convention ... ibpaeddue 4.4.2 Assistance in Service ides! Bilateral Treaties errs

Pretrial Prepaniiie. ee ‘ 5 Sil Defense and Presentation of Evidence sà

525 No worthy Points i in Cout Hearing HHPI NES Second-Instance Procedurë 2.s.:c00cseucs ened ivsenteaned eae

Summary | eee bees S61 What Is Summ To 5.6.2 tween S

6.1

6.2

6.3

Standard of Proof STEERER e 6.1.1 Most To-Be- Poved Fact Sub to “Preponderance of the Evidence”

Standard 612 aaan — 3e-

Burden of Poot. 6.2.1 Gaz

6.2.3 6.2.4 Time Limit for | nti

63.1 What Is Time Limit ~~ Presenting Evidence .

6.4

6.5

6.6

6.8

6.9

632 Howi to Determine the Time Limit for Presenting i at Late Bedst Precoution: vied se Evidence 22... 66.00 0ese008 ep iii Dooa Some Special Circu nO ee

6.5.2 hes to eet pee a Wims to Te ; Can a lippa Be ir aa Ao x in Court

China?_E pert Assistant tise eeuse tes ees

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6. Ta 1 Are Sret Re adi gs sAd | Courts? . area en 6.7.2 What Kind of Recordings Ate Unlikely i Be

67.3 How to | Collet Evid 6.8.1

6.8.2 Strengthen the V 6.8.3 spr i : 6. 8.4

6.9.4 How Does the Technical Examination Officer hi wae nnidpdiaindadbebeciee Oe 6.10 1 f

Costs of Apprais: ee meh wee (ese ieesetereatg. 200 6.11 Evidence Investigation and Collection by the Cont tee ae to me Presentation

6.12

110 6.13 110 110

Comparison Pawan Evidence Pre: ervation and | = idence E and Collection

111 112

113 113 to the Evidence Tese pr oeg patomnecian T 6.14.3 How to Apply to the Court for an Evid Presentation Order . Mebib beimenceosebas UTE itd Applicaton im Prictiee 2 vessciasavdes saaspcardeacsa MMS

6.15 6. 15. 1

6.15.2 6.15.3 we sentation . sbi Request a Non-public Court Trial or Evide nce

6.15.4 e Court Orders the Parties to > Present

6155 y 1 Wusubiritted Evidence? .

Basic Prosediies i ior Stari Litigation for Securitie: l 7.5.3 Special Requirements fou Sening Representative TT for leaa alae

| nterest nepra aa pika 8.6 The Court May Intervene in the Legal Froosndingt with a More Proactive Manner r.rissssocrercrriidcrercinest xvi Contents

9.1 Property Preservation—The Key to Prevent Defendants

10 Entipesmoni 10. 2

10.3

10.4 10.5

10.6

10.7

11 Settlement and Mediation

11.1 Lizz

11.3 11.4

10.7.3 Other Rules Stipulated by the Conference

10.7.4 Practice and Future Prospett ;

Mediation Organized by Organizations Other Than

(OWE EPET E ELSES TATE E eve tasgs babs SEYS or Self-admission in Settlement and Mediation ETTET AN

The Difference Between Setilement wd Mediation soepi see xvii

About the Author

Chenyang Zhang is a partner of Tian Yuan Law Firm. Chenyang Zhang specializes in dispute resolution, including litigation, arbitration and alternative dispute resolution. In addition, Mr. Zhang is experienced in commercial background investigation and evidence collection. Prior to joining Tian Yuan Law Firm, Chenyang Zhang has worked with Yuanhe Partners and King and Wood Mallesons.

Chenyang Zhang has extensive experience in commercial litigation, bankruptcy/insolvency matters and intellectual property. Chenyang Zhang’s clients include large-scale Chinese enterprises such as Sinopec, CNOOC, Industrial and Commercial Bank of China, Capital Airport Group, Cinda Investment, as well as trading and investment enterprises from the USA, Germany, Australia, India, Turkey, Brazil, UAE, Thailand, Malaysia, Singapore and other countries or regions. Chenyang Zhang has represented his clients in over one hundred cases before the Supreme People’s Court of China, other local courts, as well as arbitral institutions such as China International Economic and Trade Arbitration Commission.

Cases and experiences of Chenyang Zhang can be found in the case list below.

Chenyang Zhang obtained his LL.B. in 2011 and LL.M. in 2013 from China Foreign Affairs University respectively. Chenyang Zhang’s working languages include Chinese (Mandarin, native) and English (fluent).

XX

About the Author

A Selection of Chenyang Zhang’s Cases and Experiences

Representing an Australian mining company in the arbitration proceeding for a dispute on coal source exploration and investment agreement against a large state-owned coal mining company of China. More than 500 million RMB was involved in this case.

Representing enterprises from the USA, Germany, Singapore, UAE, Qatar, South Africa and etc. to collect debts against enterprises in mainland China.

Participating in a series of disputes on real estates between a real estate company and its Japanese shareholder. More than 300 million RMB was involved in this case.

Participating in a series of arbitration proceedings for disputes on the agreements about investing in Africa as executed by a subsidiary investment company of a state-owned company. More than 300 million RMB was involved in this case.

Representing a world-renowned manufacturer of elevator in a dispute on elevator purchase contract against a large retail enterprise. Around 20 million RMB was involved in this case.

Participating in the arbitration proceeding for a dispute on agriculture products sale and purchasing agreement between a Thai agriculture company and a trade company in Jiangsu Province. More than 20 million RMB was involved in this case.

Representing a well-known US retailer in a series of arbitration proceedings for disputes on sale and purchasing agreements.

Participating in a series of patent infringement disputes between a multinational household appliance company and an equipment manufacturing company in Zhejiang Province. More than 30 million RMB was involved in this case.

Representinging a number of entities affiliated to Chinese Academy of Sciences to dissolve poorperforming enterprises they invested in.

About the Author e Serving as a PRC law expert witness in an international trade-related arbitration case heard by Hong Kong International Arbitration Center.

Publications

The Nationality of the Arbitral Award of International Commercial Arbitration, graduation thesis for master of laws

Implication on Judging the Validity of Guarantee Contract from the Regulation of Foreign Exchange Administration for Cross-Border Guarantee, see Minsheng Weekly of People’s Daily

Rules on Private Sector Borrowing Shall Apply to Entrustment Loans, see Minsheng Weekly of People’s Daily

A series of introductions on the judicial system of China, see: https://www.chinajusticeobserver.com/con tributors/chenyang_zhang

Lectures and Seminars

Enforcing foreign judgments in China, lecture on following webinars:

“Germany-China Debt Collection: Enforcing Foreign Judgments and Arbitral Awards” held by China Justice Observer on May 27, 2022

“Portugal-China Debt Collection: Enforcing Foreign Judgments” held by China Justice Observer on October 11, 2022

How to Collect Your Debt in China, lecture on following webinars:

“Turkey-China Debt Collection” held by China Justice Observer on 20 October 2022

“Ttaly-China Debt Collection” held by China Justice Observer on 24 October 2022

“Nigeria-China Debt Collection” held by China Justice Observer on November 21, 2022 e-mail: zhangchenyang @tylaw.com.cn; zhangchenyang.legal @aliyun.com

Abbreviations

SPC

CPL

CPL Revision Draft 2022

Judicial Interpretation of CPL

Judicial Interpretation on Civil Evidence

The Supreme People’s Court of the People’s Republic of China PARAR icra A RRR Be Civil Procedure Law of the People’s Republic of China (Latest revision: 2021)

CHR ARREARS ) (2021F Ba KET)

Draft of Revision of the Civil Procedure Law of the People’s Republic of China (published in December 2022)

CH ARREARS (EER) ) (20224712 FA 8 Afi)

Interpretation of the Supreme People’s Court on the Application of the Civil Procedure Law of the People’s Republic of China (Latest revision: 2022)

(Bri A RRB Tia A< PARRARI >K] IRIE) (2022 FR — KET) Provisions of the Supreme People’s Court on Evidence for Civil Procedure (Latest revision: 2019, Fa Shi Pea No. 19)

X xxiii

XXIV

Judicial Interpretation on Property Preservation

Conference Summary 2022

Abbreviations

Provisions of the Supreme People’s Court on Several Issues Relating to Handling of Property Preservation Cases by People’s Courts (Revised in 2020, Fa Shi [2016] No. 22) (Bei ARIK BERT A Re bt DPE REREAD LE WUE) (2020 FT, TARE (2016) 22*7) Conference Summary of the Symposium on Foreign-Related Commercial and Maritime Trials of Courts Nationwide (Promul ated in 2022) CEMAES Ib ey SE Se R A i CS AIEEE) (2022 EDM)

=

=

HY

Chapter 1 A) Some Basic Concepts and Systems get

Abstract Before we start to explore specific aspects and procedures of civil litigation in China, it is necessary to look through some basic concepts and systems under the Chinese law first. This chapter will cover such aspects as China’s 4-level court system, how many instances will a civil case go through, how cases are numbered and what information does the case number reveal, what is cause of action and its functions, how much court fee do the parties need to pay, and an overview of the whole process of civil litigation in China. At last, a brief introduction to Chinese lawyers’ role and function is presented as well. We hope this chapter could help readers build a framework of China’s civil litigation system and go through other sections of this book more efficiently.

1.1 China’s Court System—Magnificent 4-Level Pyramid

On the basis of Chinese traditional judicial system, recent years have seen many newly established Chinese courts. Therefore, it seems difficult for those who are unfamiliar with China’s court system to have a comprehensive understanding of the Chinese court system. In this regard, we depict this latest structure of China court hierarchy.

1.1.1 The 4-Level System of Chinese Courts

Chinese courts are divided into 4 levels and presidents of Chinese courts at different levels are elected by the people’s congress (the organ of state power exercising legislative powers, etc.) at corresponding level as below:

e The Supreme People’s Court (SPC) (whose president is elected by the National People’s Congress)

e High people’s court (whose president is elected by provincial people’s congress)

e Intermediate people’s court (whose president is generally elected by municipal people’s congress)

© The Author(s) 2023 1 C. Zhang, Win in Chinese Courts, https://doi.org/10.1007/978-98 1-99-3342-6_1 e Primary people’s court (whose president is generally elected by people’s congress at county-level and district-level)

According to our incomplete statistics based on information from the official website of the SPC (https://www.court.gov.cn/), China Court Trial Online (http:// tingshen.court.gov.cn/) and other information sources, nowadays there are approximately 3531 courts in Mainland China, including the SPC, about 32 high people’s courts, 413 intermediate people’s courts and 3085 primary people’s courts.

In addition, it is often seen in news that China has newly established some “‘tribunals”. These “tribunals” are not independent courts, but only integral parts of the courts. The judgments made by the tribunals are deemed as those made by the courts to which they belong. For example, The First Intermediate People’s Court of Beijing Municipality established Beijing Bankruptcy Tribunal, the ruling of which is deemed as aruling rendered by The First Intermediate People’s Court of Beijing Municipality.

1.1.2 The Classification of Chinese Courts

Chinese courts can be divided into three categories: the SPC, local courts, and specialized courts.

The SPC is the judicial organ at the highest level in China. In addition to hearing specific cases, the SPC is also responsible for formulating judicial interpretations. Judicial interpretations are a set of rules formulated to harmonize the courts’ understanding of specific legal provisions and to unify the trial standards. In practice, they have equal effect to the law.

The SPC currently has a total of 33 permanent divisions. Most divisions are based in Beijing headquarter, while some are located in other cities, including six circuit courts and two international commercial courts.

Six circuit courts were established in Shenzhen, Shenyang, Nanjing, Zhengzhou, Chongqing, and Xi’an, which are responsible for handling cases respectively in southern, northeast, east, central, southwest and northwest part of China.! Cases from northern China, certain special types of cases, such as intellectual property,

' Circuits (provincial administrative regions) of six circuit courts:

The First Circuit Court: Guangdong, Guangxi, Hunan and Hainan.

The Second Circuit Court: Liaoning, Jilin and Heilongjiang.

The Third Circuit Court: Shanghai, Jiangsu, Zhejiang, Fujian and Jiangxi.

The Fourth Circuit Court: Henan, Shanxi, Hubei and Anhui.

The Fifth Circuit Court: Chongqing, Sichuan, Guizhou, Yunnan and Tibet.

Cases from Beijing, Tianjin, Hebei, Shandong and Inner Mongolia are heard by the headquarter of the SPC.

1.1 China’s Court System—Magnificent 4-Level Pyramid 3 maritime disputes, and foreign-related commercial disputes are handled by the SPC headquarter. The judges of the circuit court generally rotate every two years.

Two international commercial courts were established in June 2018, respectively located in Shenzhen and Xi’an. International commercial courts mainly hear first-instance international commercial cases where the amount in controversy exceeds RMB 300 million and the parties concerned are required to agree to submit to the jurisdiction of the SPC.

Itis worth noting that there are two IP-related divisions in Beijing: SPC’s “Intellectual Property Division” (MRP AN EH FRE) (i.e. the Third Civil Division) and SPC’s “Intellectual Property Court” (ALIA P VIER) established in 2019. Their names are very similar in Chinese, but their functions are different. Before 2019, all kinds of intellectual property cases were handled by the Third Civil Division. After 2019, second-instance appeals with strong technical features, such as invention patents and technical secrets, are subject to jurisdiction of the newly established Intellectual Property Court; other cases and complaints or retrial cases where the appellants or petitioners are unsatisfied with the second-instance judgments rendered by the Intellectual Property Court will still be heard in the Third Civil Division.

1.1.2.2 Local Court

Local courts usually hear most of the cases in a certain area (that is, all cases except those under the jurisdiction of specialized courts). Specifically speaking, each county and district has a primary people’s court, and each city, comprising several counties and/or districts will have an intermediate people’s court, which is the higher court of the primary people’s courts within the city. Each province, comprising several cities will have a high people’s court, which is the higher court of the intermediate people’s courts within the province. Above-mentioned courts are namely local courts.

China is composed of several provincial administrative regions, and the SPC is the higher court of high people’s courts at provincial level.

1.1.2.3 Specialized Court

Specialized courts usually hear certain types of cases in a certain area. Since China emphasizes that all political power comes from the people and serves the people, the names of Chinese courts at different levels (including the SPC and local courts) include the word “people”(\ F&). However, the word, “people” is not included in the name of the specialized court. Therefore, some people joked that the specialized courts do not serve the people. Although it is just a joke, it is an effective way to distinguish between specialized courts and local courts.

The existing specialized courts in China mainly include intellectual property courts, Internet courts, financial courts and maritime courts. These courts are mainly distributed as follows:

e Intellectual Property Courts are located in: Beijing, Shanghai, Guangzhou and Haikou Internet Courts are located in: Beijing, Guangzhou and Hangzhou Financial Courts are located in: Beijing, Shanghai and Chongqing Maritime Courts are located in: Shanghai, Guangzhou, Tianjin, Dalian, Ningbo, Xiamen, Qingdao, Wuhan, Beihai, Haikou and Nanjing

The railway transport courts and various military courts of the People’s Liberation Army of China are also specialized courts, which, however, will not be discussed here.

The level of different specialized courts varies. Among the above courts, intellectual property courts, financial courts, and maritime courts are all intermediate courts, and their corresponding higher courts are the high people’s courts where the said special courts are located. However, Internet courts are primary courts, and their higher courts are the intermediate courts where they are located.

In addition, some local courts also have the characteristics of specialized courts. For example, although The Fourth Intermediate People’s Court of Beijing Municipality is not a specialized court, it handles almost all foreign-related commercial cases and all arbitration judicial review cases within Beijing.

1.1.3 Separate Functions of Courts at All Levels

The first-instance civil and commercial cases are heard by courts in different levels, which is mainly determined by the type of case and the amount in controversy, and the standards in different regions are also different. Take foreign-related commercial cases in Beijing courts as an example: cases that the amount in controversy is greater than or equal to RMB 5 billion shall be heard by The High People’s Court of Beijing Municipality, and other cases shall be heard by The Fourth Intermediate People’s Court of Beijing Municipality.

For a long time, the SPC is mainly engaged in trial of second-instance cases and retrial cases, and barely hears first-instance cases. After the establishment of the two International Commercial Courts of the SPC in June 2018, the SPC began accepting first-instance international commercial cases. According to relevant news reports, at least 27 cases have been filed by two international commercial courts as of August 2022.

In addition, leapfrog appeal will not be sustained in a vast majority of cases in China, and the parties can only appeal to the higher court of the first instance court. The only exception is the intellectual property case with strong professionally technical feature: even if the court of first instance is an intermediate court, the appeal

1.2 China’s Hierarchical Trial System for Civil Cases—2 + 1 + 1 5 of second instance shall be directly heard by the SPC’s “Intellectual Property Court”, rather than by the high people’s court at the provincial level. (Reference provisions and information for Sect. La)?

1.2 China’s Hierarchical Trial System for Civil Cases—2 + 1+1

China’s hierarchical trial system for civil cases can be summarized as “2 + 1+ 1”, namely:

e 2: Generally, cases shall be closed after the second instance.

e 1: Under special circumstances, the parties may also apply to a higher court for retrial of the case after the final adjudication.

e 1: After the application for retrial is dismissed by the court, the parties may also apply to the procuratorate for review of the case so that the court is requested to retry the case. But the success rate is even lower.

After the application for retrial is dismissed by the court, the parties may also apply to the procuratorate for review of the case so that the court is requested to retry the case. Even after the end of the “2 + 1 + 1” procedure, the parties may still be entitled to petition in theory. But the success rate is even lower. In addition, some cases are not subject to the “2 + 1 + 1” procedure.

1.2.1 Most Cases Are Closed After the Second Instance

The meaning of “cases closed after the second instance” is that if the parties refuse to accept the first-instance judgment, they can appeal to a higher court, and the higher

2 Constitution of the People’s Republic of China (Revised in 2018).

Organic Law of People’s Courts of the People’s Republic of China (Revised in 2018).

CPL (Revised in 2021).

Provisions of the Supreme People’s Court on Several Issues Concerning the Establishment of International Commercial Courts (Fa Shi [2018] No.11).

(HA RA BER FL [AS RAEE F PAME) (VERE (2018) 1177).

Provisions of the Supreme People’s Court on Several Issues Concerning Intellectual Property Court (Fa Shi [2018] No.22).

(a EA RIAR TAINA BUSSE TPM E) GAFE (2018) 2277).

Speech at the Third Symposium of the International Commercial Expert Committee of the SPC from Kaiyuan Tao, Vice-president of the SPC (published on 21 September 2022), see: https://cicc. court. gov.cn/html/1/218/62/164/2237.html.

ERENER -AIIE EED A (20224921 H RM).

court will conduct the second-instance trial. The second-instance judgment shall be the effective and final judgment and the parties can apply for the enforcement thereof. In addition to civil cases, criminal and administrative cases are generally also subject to the “cases closed after the second instance”.

As mentioned in Sect. 1.1, Chinese courts are divided into four levels: primary, intermediate, high and supreme. Therefore, appeals against first-instance judgments rendered by primary people’s courts should be tried by intermediate people’s courts, and so on.

Leapfrog appeals cannot be made for most cases in China, with the only exception of intellectual property cases with strong technical attribute. Depending on the amount in controversy, the court of first instance for these cases may be either the high people’s court or the intermediate people’s court. Even if the court of first instance for these cases is an intermediate people’s court, the second instance shall be directly tried by the Intellectual Property Court of the SPC rather than by a high people’s court.