China Esquire

Weekend review again. This week, Brad Luo at China Business Law Blog did a post entitled “Amount in Controversy and Jurisdiction Redefined by the SPC”. Apparently, the Supreme People’s Court released new guidelines for what courts a litigant may bring his, her, or its case in depending upon the amount in controversy. (see here for the full Chinese text)

Here is a bit of what Brad translated:

A. Beijing

Beijing Higher People Court as first instance court:

The amount in controversy must exceed 2,000,000,000.00 200,000,000.00 Yuan, or

the amount in controversy must exceed 1,000,000,000.00 100,000,000.00 Yuan and one of the parties in dispute must be domiciled outside this jurisdiction (outside Beijing, parties from Hong Kong, Macau, or other countries).

Beijing intermediate courts (including Railway Intermediate) as first instance courts:

The amount in controversy must exceed 50,000,000.00 Yuan, or

the amount in controversy must exceed 50,000,000.00 20,000,000.00 Yuan and one of the parties in dispute must be domiciled outside this jurisdiction (outside Beijing, parties from Hong Kong, Macau, or other countries).

B. Shanghai

Same as Beijing

C. Guangdong Province

Higher People’s Court as first instance court:

The amount in controversy must exceed 3,000,000,000.00 300,000,000.00 Yuan;

the amount in controversy must exceed 2,000,000,000.00 200,000,000.00 Yuan and one of the parties in dispute must be domiciled outside this jurisdiction (outside Beijing, parties from Hong Kong, Macau, or other countries);

Cases with substantial impact on the entire province; or

Any cases that the Court deems it should exercise first-instance jurisdiction.

Intermediate courts:

1. Guangzhou, Shenzhen, Foshan, and Dongguan Intermediate courts:

The amount in controversy should be between 3,000,000,000.00 300,000,000.00 and 50,000,000.00 Yuan; or

The amount in controversy should be between 2,000,000,000.00 200,000,000.00 and 40,000,000.00 Yuan and one of the parties in dispute must be domiciled outside this jurisdiction (outside Beijing, parties from Hong Kong, Macau, or other countries).

2. Zhuhai, Zhongshan, Jiangmen, and Huizhou intermediate courts:

The amount in controversy should be between 3,000,000,000.00 300,000,000.00 and 30,000,000.00 Yuan; or

The amount in controversy should be between 2,000,000,000.00 200,000,000.00 and 20,000,000.00 Yuan and one of the parties in dispute must be domiciled outside this jurisdiction (outside Beijing, parties from Hong Kong, Macau, or other countries).

3. All of the rest intermediate courts in Guangdong:

The amount in controversy should be between 3,000,000,000.00 300,000,000.00 and 20,000,000.00 Yuan; or

The amount in controversy should be between 2,000,000,000.00 200,000,000.00 and 10,000,000.00 Yuan and one of the parties in dispute must be domiciled outside this jurisdiction (outside Beijing, parties from Hong Kong, Macau, or other countries).

How does this alleviate anything? Good question. It does bring some certainty as Brad noticed:

Personally, I am very surprised to see rules that detailed on jurisdiction in China since many rules are intentionally vague for civil law jurisdictions. As a result of these rules, there would be, presumably, less uncertainty with respect to finding the right court to sue in China. But, I am wondering what prompted the promulgation of these rules. I also wonder what these rules would have on forum shopping in China. Does anyone out there know?

I don’t know for certain, but I am pretty sure that this will only encourage forum shopping. Who wouldn’t want to have home court advantage where your client is actually a good friend of the judge? If I were litigating in China, I would want that. So expect the forum shopping.

I am glad that the Chinese courts are moving toward a straight-forward and open civil procedural law. But this makes me wonder: is it really necessary to have three courts of first instance? California used to have two at the state trial level: municipal (now the limited civil jurisdiction) and superior (not unlimited civil jurisdiction). But for the sake of cost-cutting, Chief Justice Ronald George tried to do away with such a split. And it worked. Federal courts have been like this for some time now: one large district level court, and not many subdivisions.

Isn’t much easier to just file with one lower court and not have to worry about process? Isn’t justice more served by having a larger roster of judges who can be assigned to various types of cases at random? I would think so. Promulgating civil procedure rules is a step in the right direction. But perhaps someone should consider: does this structure make sense?

Just my thoughts on this post.

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