China’s new civil procedure law was published on September 1, 2023 and takes effect as of January 1, 2024. The new law makes important amendments to its predecessor on jurisdiction over foreign defendants, internationally parallel litigation, service and evidence collection and so on.
1. Jurisdiction over foreign defendants
The new law expands Chinese courts’ jurisdiction over foreign defendants.
Under the new law, a foreign defendant may be brought into a court action in China when the underlying dispute has any other proper connection with China in addition to explicitly numerated “connection points”, such as China is the place where the disputed contract was signed off or performed, or where the alleged infringement occurred, or where the defendant’s representative agency is located, etc.
Moreover, a Chinese court may now acquire jurisdiction when parties in a related foreign dispute so agree in writing.
Further, the new law adds two types of civil disputes to the courts’ exclusive jurisdiction: disputes over an entity’s legal status, and disputes over validity of intellectual property.
2. Parallel litigations in and out of China
The new law prescribes important rules in dealing with litigations on the same subject dispute that are parallel in multiple jurisdictions.
2.1 General rule
A Chinese court’s jurisdiction over a dispute is not affected by a foreign court’s taking of the same dispute except that a Chinese court may lose jurisdiction where parties to the dispute agree to submit to a foreign court’s exclusive jurisdiction which neither runs conflict with a Chinese court’s exclusive jurisdiction nor affects China’s sovereignty, national security or public goods.
2.2. Stay and resumption of a Chinese court action
That said, when a foreign court takes a case earlier than a Chinese court does, the Chinese court may, upon a party’s petition, stay the parallel Chinese action subject to certain provisos.
Said stayed Chinese action may be resumed upon a party’s petition where (a) the foreign court does not take certain necessary measures to adjudicate the dispute; or (b) the foreign court does not conclude the dispute within a reasonable time limit.
2.3. Forum non conveniens
A Chinese court may dismiss a foreign related action and advise the plaintiff to bring an action with a more convenient foreign court instead, where the Chinese court’s jurisdiction is challenged as forum non conveniens and there is a more convenient foreign court that can adjudicate the dispute.
There are limitations to the forum non conveniens rule such as a Chinese court may waive jurisdiction only when there is no agreement between parties which submits jurisdiction to a Chinese court, and no Chinese sovereignty or national security or public interests are concerned, and China’s exclusive jurisdiction rules would not be violated.
An action dismissed by a Chinese court based on forum non conveniens may be reinstituted by a Chinese court where the foreign court refuses to take jurisdiction or fails to properly adjudicate the dispute.
3. Service outside China
The new law adds a number of channels through which a Chinese court may serve a foreign respondent which has no domicile in China, such as by serving a Chinese company that is closely associated with the foreign respondent or by electronic means or means otherwise agreed by the parties.
4. Evidence collection outside China
The new law adds specific measures that a Chinese court may collect evidence overseas subject to the home country’s legal restrictions, such as by delegating a local Chinese embassy or consulate or using instant communication tools or other measures agreed by the parties.
5. Recognition and enforcement of a foreign judgment
In addition to the traditional general principles in recognizing and enforcing a foreign court's decision, the new law provides specific circumstances where a Chinese court would refuse to recognize and enforce a foreign court’s decision, such as where the foreign court has no jurisdiction, or due process is violated or the decision was fraudulently made.
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