China’s International Commercial Courts

In January we have reported about China’s plans to establish own International Commercial Courts, in particular for settling disputes alongside the New Silk Road:

Less than half a year later, the first International Commercial Courts (CICC) have already been launched in Shenzhen and Xi’an. This is another example of the breathtaking speed of the new Silk Road developments showing that this multi-billion project of the Chinese government will change not only the infrastructural, but also the legal and social landscape along the Road.

The Supreme People’s Court has already issued “Provisions on Several Issues regarding the Establishment of International Commercial Courts”, that will govern the scope of responsibilities and the operations of the new courts.

The CICC is placed at the same level as the Supreme People’s Court in China’s judicial system. Its first instance judgements are final and not subject to appeal. The Courts will primarily handle international commercial cases with claims over 300 Mio RMB as well as cases of “nationwide significance”. Cases with no actual connection to China will not fall within the scope of CICC operations.

Eight SPC judges were named for the CICC disputes. The judges will not be permanently based in Shenzhen or Xi’an but rather travel for hearings. A Committee of International Business Experts will consult the judges on applicable foreign laws. The hearings can be held in Chinese or English language.

These new courts will be further supported by a comprehensive electronic system, e.g. for evidence submissions, payment of fees or even online hearings. A notable development here is that foreign evidences do not require notarization or translation into Chinese – they will be examined directly at hearings. Another interesting feature is that the Commercial Courts will unite mediation, arbitration and litigation within one court. By now it is not clear whether foreign arbitration institutions will be included in this system, which would be a big change for the legal practice in China.

Many questions and issues regarding the practical effects of these changes are still open. What is clear is that China has taken a new huge step in shaping an international economic and social system. Western companies that plan to take part in and benefit from the giant New Silk Road projects should definitely invest some time to understand its implications.

Picture: Ambassador Zhangqian’s Visit to the Western Regions, year 138 BC; Source: Chinadiscovery

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