October 2023
Jolene Chen and Teresa Huang
The 5th Session of the Standing Committee of the Fourteenth National People’s Congress passed the Decision on Amending the Civil Procedure Law of the People’s Republic of China (referred to as the Civil Procedure Law (2023 Amendment)) on September 1, 2023. This Civil Procedure Law (2023 Amendment) will come into effect on January 1, 2024. This revision introduces 19 amendments specifically addressing foreign-related civil litigation procedures and makes significant adjustments to the procedural rules for foreign-related civil and commercial cases. This article will provide a brief overview of these changes.
First, Article 279 of the Civil Procedure Law (2023 Amendment) introduces two additional scenarios that are under the exclusive jurisdiction of Chinese courts. In addition to the pre-existing jurisdiction of the People’s Courts of the People’s Republic of China over disputes arising from Sino-Foreign Equity Joint Venture Contracts, Sino-Foreign Co-operative Joint Venture Contracts, or Sino-Foreign Co-operative Contracts for the Exploration and Exploitation of Natural Resources performed within the People’s Republic of China, the Civil Procedure Law (2023 Amendment) now includes two new exclusive jurisdiction scenarios as follows: (a) litigation related to the establishment, dissolution, or liquidation of legal persons or other entities within the territory of the People’s Republic of China, along with disputes concerning the validity of resolutions made by such legal persons or entities; (b) litigation arising from disputes related to the examination of the validity of intellectual property rights granted within the territory of the People’s Republic of China.
Secondly, concerning jurisdiction agreements in foreign-related cases, Article 277 of the Civil Procedure Law (2023 Amendment) broadens the scope of the original provision in the Civil Procedure Law regarding the “jurisdiction of the people’s court in the place where the dispute is substantially connected.” In the case of foreign-related civil disputes, even if the location substantially connected to the dispute is outside the territory of China, it explicitly confirms that the parties can still agree to the jurisdiction of Chinese courts.
Thirdly, Article 283 of the Civil Procedure Law (2023 Amendment) refines the methods of service in foreign-related cases, aiming to address the issue of “difficult service” in such cases. The key improvements are as follows: (a) It explicitly states that any litigation agent appointed by the person to be served in the case is responsible for accepting the service. (b) It introduces provisions for serving a sole proprietorship established within China by the person to be served, removing the requirement that branch offices must have the “right to accept service” to receive service. (c) It includes provisions for serving a person who is a foreigner or stateless person and serves as the legal representative or principal person in charge of a legal person or other organization established within the territory of the People’s Republic of China, and is a co-defendant with that legal person or organization. (d) It adds provisions for serving a foreign legal person or organization if its legal representative or principal person in charge is within the territory of the People’s Republic of China. (e) It introduces provisions for alternative methods of service agreed upon by the person to be served, except where such methods are prohibited by the laws of the person’s home country. (f) The period for service by public notice has been reduced from three months to sixty days, and service is deemed to have been completed.
Fourthly, Article 280 and Article 281 of the Civil Procedure Law establish the general principles for handling parallel proceedings, as well as the conditions under which the People’s Courts can make rulings to terminate proceedings, make exceptions, or resume proceedings in cases already accepted by foreign courts. This provision effectively reconciles jurisdictional conflicts between Chinese courts and foreign courts, ensuring that the rights and interests of the parties are granted full and effective legal remedies.
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