After the Guiding Opinions (I and II) of the Supreme People’s Court on the Proper Trial of Civil Cases Involving the Novel Coronavirus, the Supreme People’s Court issued the Guiding Opinions (III) (the “Guiding Opinions (III)”) on 8 June 2020. The Guiding Opinions (III) focuses on the applicable laws to be applied in foreign-related commercial or maritime cases and carrier contracts, all of which have been greatly affected by the epidemic. This article will briefly cover the main points.
If a foreign enterprise or organization is unable to submit identification documents, power of attorney, or evidence in time due to the inability to complete notarization, authentication or related formalities as a result of an epidemic or epidemic prevention measures, an application may be filed to postpone the submission. If the people’s court believes that the postponement is reasonable and the submissions are related to the facts to be verified, the application shall be approved.
For those who are unable to submit a reply, file an appeal or apply for recognition and enforcement of a legally effective judgment or ruling rendered by a foreign court or foreign arbitral award due to an epidemic or epidemic prevention and measures, an extension or a request to suspend the statute of limitations may be filed in accordance with the provisions of the Civil Procedure Law, and the People’s Court shall approve of such application.
The Guiding Opinions (III) specifically provide that if foreign law applies, the people’s court should properly apply the statutory provisions or case law details concerning force majeure rule in such foreign law and shall not rigidly apply them per their understanding of the force majeure provisions in China law.
The Guiding Opinions III also provide for the application of law in foreign-related commercial cases. For example, in letter of credit disputes, since Article 36 of the International Chamber of Commerce’s Uniform Customs and Practice for Documentary Credits (UCP600) provides for force majeure as follows: “A bank assumes no liability or responsibility for the consequences arising out of the interruption of its business by Acts of God, riots, civil commotions, insurrections, wars, acts of terrorism, or by any strikes or lockouts or any other causes beyond its control. A bank will not, upon resumption of its business, honor or negotiate under a credit that expired during such interruption of its business.” Therefore, if a case is governed by UCP600, the refusal to honor or negotiate a letter of credit due to an interruption of a bank’s business is not considered force majeure unless the parties agree otherwise.
For smart courts adjudicating cases online, the Guiding Opinions (III) stipulate in handling foreign-related commercial or maritime disputes that are related during the epidemic while the epidemic is ongoing, the people’s court shall actively open up a green channel for litigation and fully utilize the benefits of the establishment of smart courts in adhering to an organic integration of online and offline services, optimize cross-domain litigation services, improve the online litigation service process and operating guidelines, and ensure that every aspect of online litigation are regulated with clear guidelines and are easy to follow.
Lastly, the Guiding Opinions (III) may be applied to cases involving Hong Kong, Macau and Taiwan.