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Comments on the Supreme People’s Court’s Interpretation No. 1 on the Private International Law Act of the PRC

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Abstract

In January 2013 the Supreme People’s Court (SPC) published its first judicial interpretation on the 2010 Private International Law Act (PILA). The main aims of this Interpretation are to clarify the meaning of several rules, to facilitate judicial practice and to enhance legal security in private international law contexts. In order to achieve this, the Interpretation contains rather detailed provisions, often directly addressing certain issues that raised concerns among the courts when applying the PILA. In addition, the SPC went beyond simple explanation and also created a number of rules that could not be found in the Act. These cases mostly concern issues that had been discussed by the legislator and among academia before the enactment of the PILA, but which were finally not included. The article will show that despite several points of critique, the SPC has successfully engaged in finding solutions to existing deficiencies or potential problems in the PILA.

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Notes

  1. The author takes the freedom to deviate from most translations that speak of the “Act on the application of law” or the “Law on the application of law” or similar versions. As the new law is not dealing with the application of law but the determination of the applicable law this choice is taken only for the sake of better understanding, not claiming grammatically perfect translation.

  2. 中华人民共和国涉外民事关系法律适用法, in Gazette of the Standing Committee of the National People’s Congress [全国人民代表大会常务委员会公报] 2010, Nr. 7, S. 640 ff.; Chinese-English in: CCH Asia Pacific [Hrsg.]: CCH China Laws for Foreign Business, Business Regulations, Volume 1–5, Hongkong 1985 ff., 19–870; a compilation of the several drafts during the legislative process: Huang (2011a); for the legislative history of the act: Pissler 2012, p. 1 ff.; Zeng 2010, p. 2; see also: Ma 1995, p. 334 ff.; China Society of Private International Law [中国国际私法学会], Model Law of Private International Law of the People‘s Republic of China [中华人民共和国国际私法示范法], Beijing 2000 (Chinese/English); on the implications of that model law on the area of contract law: Gebauer 2008, pp. 62–70; another academic draft from 2006 can be found in Zhao and Du 2006, pp. 642–657; on the legislative draft of 2002: Zhu 2007, p. 283 ff.

  3. 最高人民法院关于认真学习贯彻执行《中华人民共和国涉外民事关系法律适用法》的通知 (Notice of the SPC on Earnestly Studying and Implementing the “Act of the People’s Republic of China on the Applicable Law to Foreign-Related Civil Relationships”), of December 2, 2010, e.g. in: China Trial Guide, Guide on Foreign-Related Commercial and Maritime Trial [涉外商事海事审判指导], Fourth Civil Chamber of the SPC (ed.) 2010, vol. 2, p. 90 f.

  4. 最高人民法院关于适用〈中华人民共和国涉外民事关系法律适用法〉若干问题的解释(一)(Interpretation (I) of the SPC on several questions concerning the application of the “Act of the People’s Republic of China on the Applicable Law to Foreign-Related Civil Relationships“ [最高人民法院关于适用〈中华人民共和国涉外民事关系法律适用法〉若干问题的解释(一)]), e.g. in: People’s Court Daily [人民法院 报] January 7, 2013, p. 6.

  5. The prior notice therefore served the important purpose of allowing the SPC to become informed about difficult issues arising in the lower courts and thus to react to the most important uncertainties Zhang 2013, p. 6.

  6. Judicial interpretations by the SPC are primarily meant to interpret laws in order to harmonize judicial practice and to promote a similar outcome of similar cases in the lower courts. Courts use and refer to those interpretations by the SPC in the same manner as they do with laws. On many occasions the SPC is overstepping the barriers of interpreting existent law and is, de facto, creating new law. This situation, however, is one that is not met with much opposition in the legal community. See: Finder 1993, pp. 164 ff.; for the relevant questions on the legal basis and binding character of such interpretations by the SPC, see comprehensively: Ahl 2007, p. 251 ff.

  7. Due to the relatively short time since the coming into effect of the PILA, the SPC deemed it sensible to first address general issues (mainly chapter one) but to wait a bit longer before interpreting the special part (chapters two to seven), see Zhang 2013, p. 6.

  8. See Huo 2010, p. 8; Tu 2011, p. 563 (565); Du 2011 S. 1 ff.

  9. Para. 178 最高人民法院关于贯彻执行《中华人民共和国民法通则》若干问题的意见(试行)(GPCL-Opinions 1988) of January 26, 1988; Gazette of State Council [国务院公报] 1988, p. 65 ff.

  10. Even before promulgation of the PILA the courts occasionally referred to domicile or a business subsidiary’s location outside of China as a valid and relevant foreign element, Guo and Xu 2008, p. 135.

  11. Habitual residence is the connecting factor in §§ 11–15, 19–26, 28–33, 41, 42, 44–47 of PILA. References to nationality are all subsidiary and can still be found in §§ 21–26, 29, 30, 32 and 33 PILA.

  12. See Zhang 2013, p. 6.

  13. See for the tendency of the courts to directly apply Chinese law Du 2011, p. 108; He 2011, pp. 5–9.

  14. See for the lack of quality and experience among parts of the judiciary when handling international private law cases: Huo 2010, p. 55.

  15. Gazette of the State Council [国务院公报] 2000, p. 112 ff.

  16. The SPC Notice of 2010, mentioned earlier (see footnote 3), already contained an identical provision in its para. 3.

  17. In the first 100 relevant cases that were decided after April 2011, available on the databases of www.ccmt.org.cn, www.westlawchina.com and www.chinalawinfo.com, only one court, to the best of the author’s knowledge, denied the application of the PILA on the grounds of its lacking a retroactive effect, see 国际金融公司与浙江玻璃股份有限公司、冯光成金融借款合同纠纷案 (International Finance Corporation v. Zhejiang Glas Corporation ltd., Feng Guangcheng banking loan contract dispute), November 2, 2011, 浙江省绍兴市中级人民法院 (Intermediate People’s Court of Shaoxing City), reference number: (2010) 浙绍商外初字第76号.

  18. E.g. in a 2011 tort case the Shanghai High Court based its decision on both § 273 Maritime Trade Law (the relevant rule in force at the time in question) and (presumably incorrectly) on § 44 PILA, see. 东京海上日动火灾保险株式会社与 P.T.德加卡特·劳埃德(柏斯若)船舶碰撞损害赔偿纠纷案 (Tokio Marine & Nichido Fire Insurance Co., Ltd. v. P.T. Djakarta Lloyd (Persero) ship collision damages dispute), August 25, 2011, 上海市高级人民法院 (High People’s Court Shanghai), reference number: (2010) 沪高民四(海)终字第198号. Even though both provisions primarily use the connecting factor of the place of the unlawful act, § 44 PILA allows the parties to choose the applicable law after the occurrence of the unlawful act. Therefore, the granting of a choice of law (based on § 44 PILA) in this case would have been wrong (the parties did not chose the law, though).

  19. These can be found, for example, in the 中华人民共和国民法通则 (General Principles of Civil Law) (GPCL) of April 12, 1986, Gazette of the State Council [国务院公报] 1986, p. 371 ff., 中华人民共和国继承法 (Succession Law) 10 April 1985, 中华人民共和国海商法 (Maritime Trade Law) of November 7, 1992, 中华人民共和国民用航空法 (Civil Aviation Law) of October 30, 1995 or 中华人民共和国票据法 (Negotiable Instruments Law) of May 10, 1995 amended as of August 28, 2004; see the overview at Du 2011, p. 41.

  20. Wang 2011, p. 17.

  21. See Huang and Jiang 2011, p. 7f.

  22. See footnote 19.

  23. Unless the PRC has made respective reservations before joining the international treaty.

  24. Zhang 2013, p. 7.

  25. See Cao 2002, pp. 379–390 (380); Yu 2000, p. 4 f.; for the application of international treaties in the PRC legal order in general: Ahl 2009.

  26. Rejecting the possibility of a choice of international treaties: Wang 2011, who stresses that only the law of a state or jurisdiction could be chosen (“…一国家 [法区]…”), p. 26f.; also Zhao 2011, p. 305; stating a different opinion: Huang and Jiang 2011, p. 12f; Huo 2011, p. 1085; apparently also in this sense Qi 2011, p. 41.

  27. See Zhang 2013, p. 7.

  28. See § 95 II中华人民共和国票据法 (Negotiable Instruments Law) (footnote 19), § 268 II 中华人民共和国海商法 (Maritime Trade Law) (footnote 19), § 184 II中华人民共和国民用航空法 (Civil Aviation Law) (footnote 22).

  29. See Du 2011, p. 54 f.; some authors, however, exclude the UNIDROIT Principles of International Commercial Contracts from this category, referring to their character as a “restatement of law”, see Xiao and Long 2009, p. 202.

  30. See Du 2011, p. 61; Wang 2011, p. 30f; Tu 2011, p. 567.

  31. Huang and Jiang 2011, p. 13/19f giving a precise example; in this sense also Zhao 2011, p. 305, who states that the applicable law may be chosen by the parties if this freedom is explicitly granted or not explicitly excluded.

  32. Several people’s courts based their acceptance of a choice by the parties by citing solely § 3 PILA without reference to any special provision explicitly granting this freedom, see: 李飞婵与吴文亮股权转让合同纠纷 (Li Feichan v. Wu Wenliang dispute on a transfer of shares) November 16, 2011, 福建省高级人民法院 (High People’s Court of Fujian Province), reference number: (2011) 闽民终字第 681号; 上诉人宜兴市明月建陶有限公司因与被上诉人北京和风国际物流有限公司多式联运合同纠纷 (Full Moon Ceramics Ltd. of Yixing City v. Beijing Hefeng International Logistics Ltd. dispute on a multi-modal transport contract) November 17, 2011, 天津市高级人民法院 (High People’s Court of Tianjin City), reference number (2011) 津高民四终字第0169号; 陈伟雄与谢国材、谢永健、雷海敏、梁朝昱、广州文化发展中心等7人股东侵权纠纷 (Chen Weixiong v. Xie Guocai et al. shareholder rights violation dispute) November 18, 2011, 广东省广州市中级人民法院 (Immediate People’s Court of Guangzhou City), reference number (2009) 穗中法民四初字第15号; 台湾凯霖企业股份有限公司与中国银行股份有限公司江阴山观支行、江阴金潼纺织有限公司股东代表诉讼纠纷 (Taiwan Kailin Corp. v. Jiangyin Shanguan branch of Bank of China Corp. et al., shareholder representation dispute) 江苏省高级人民法院 (High People’s Court of Jiangsu Province) February 17, 2012, reference number: (2011) 苏商外终字第0071号.

  33. See Shen 2006, p. 224; Xiao and Long 2009, p. 197; Huo 2010, p. 183 with reference to judgments and literature.

  34. See § 4 I 1最高人民法院关于审理涉外民事或商事合同纠纷案件法律适用若干问题的规定 (Rules of the Supreme People's Court on the Relevant Issues concerning the Application of Law in Hearing Foreign-Related Contractual Dispute Cases in Civil and Commercial Matters) of July 23, 2007 (SPC-Rules 2007).

  35. See Sun 2011, p. 149; Wang 2011, p. 32 f.; Huang 2011b, p. 182.

  36. Seemingly only for the area of contracts: Wang 2011, p. 31f; also in the case of divorce: Huang and Jiang 2011, p. 136; without indication of the respective limits Qi 2011, p. 67f.; reasoning that a choice following the mentioned criteria should also be seen as an “explicit” choice: Huang 2011b, p. 182.

  37. See footnote 13 above.

  38. See for the time limitations above (II.3.c).

  39. See Xiao 2010, p. 152.

  40. Supposedly this development towards flexibility will generally be welcomed, as an exhausting enumeration of all possible means of ascertainment would hardly be feasible in light of the current speed of development in information technology and communication tools, and it would rather risk hindering the courts work, see Huo 2010, 1076.

  41. Zhang 2013, p. 7.

  42. See § 10 SPC-Rules 2007 (footnote 34).

  43. § 194 GPCL-Opinions 1988 (footnote 9): “Acts by which the parties aim at circumventing mandatory or prohibitive Chinese law provisions, do not lead to the application of foreign law.”

  44. See Du 2011, p. 67 f.

  45. The use of this term can be seen as a reference to § 5 PILA and may be understood as a hint that internationally mandatory rules are seen as the positive aspect of ordre public. See Huang and Jiang 2011, p. 20 ff.; Gao 2011, p. 33 ff.

  46. Zhang 2013, p. 7.

  47. Above (footnote 43).

  48. Prior to the PILA authors have suggested that a wide range of factual scenarios could establish this intention. Examples given range from the creation of an artificial connecting factor, such as the incorporation of an enterprise in a state in which it never intended to do business or the change of residence or nationality in order to avoid the boundaries of the one-child-policy, but include the choice of a foreign law which permitted contract clauses that would not be allowed under the regime of the applicable law according to the conflict rules without that choice, see Huo 2010, p. 148.

  49. See on this issue: Deissner 2012, p. 153 ff.

  50. At least in the case of several foreign-related civil relationships in a given case, courts have already followed this method subsequent to the release of the PILA, see 李飞婵与吴文亮股权转让合同纠纷 (Li Feichan v. Wu Wenliang dispute on a transfer of shares) November 16, 2011, 福建省高级人民法院 (High People’s Court of Fujian Province), reference number: (2011) 闽民终字第681号; 上海菲尔德成衣有限公司与赵杰、朱莉公司证照返还纠纷 (Shanghai Feierde Garment Ltd. v. Zhao Jie, Zhu Li Company certificate remittance dispute) 09 February 2012, 上海市高级人民法院 (High Court of Shanghai City), reference number: (2011) 沪高民二[商]终字第48号.

  51. Whether this indicates that the scope of § 18 PILA is limited to the question of the validity of the arbitration clause is an issue that remains open. On the scope of § 18 PILA, see Pissler 2012, p. 20.

  52. See above (footnote 11).

  53. E.g. § 9 GPCL-Opinions 1988.

  54. Zhang 2013, p. 7.

  55. See Zhao, who—in his own definition published prior to the PILA-Interpretation—also includes the criterion of “center of life” but does not require a certain minimum time period, Zhao 2011, p. 306; see also the understanding of habitual residence by the European Court of Justice: ECJ of April 2, 2009 (C-523/07), 30 ff., in which the court refers to several criterion but does not mention any required period of time.

  56. 中华人民共和国公司法 [Company Law of the People’s Republic of China], October 27, 2005.

  57. See Deissner 2012, 26 ff.

  58. This is the logical consequence of the rule on the applicability of the PILA that we have already seen above as regards § 2 PILA-Interpretation (on retroactivity).

  59. See § 175 中华人民共和国民事诉讼法 [Civil Procedure Law 2012 (§ 158 of the prior CPL)].

  60. See § 198 ff. CPL 2012 (see § 177 ff. of prior CPL).

  61. See footnote 6.

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    Peter Leibküchler

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Leibküchler, P. Comments on the Supreme People’s Court’s Interpretation No. 1 on the Private International Law Act of the PRC. China-EU Law J 2, 201–216 (2013). https://doi.org/10.1007/s12689-013-0029-1

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