2 March, 2013
On January 7, 2013, the Supreme People’s Court released the Interpretations of the Supreme People’s Court on Certain Issues Related to the Application of the “Law of the People’s Republic of China on Application of Laws to Foreign-Related Civil Relations” (I) (the “Interpretations“), which became effective on the same day.
The Interpretations address certain main issues for the implementation of the Law the People’s Republic of China on Application of Laws to Foreign-Related Civil Relations (the “Law“). They define five conditions under which a court can recognize a civil relation as a foreign-related civil relation and provide for the retrospective effect of the Law where there was no applicable law at the time of occurrence of the event and the methods to deal with conflicts between the Law and other laws. The Interpretations also allow the parties concerned to choose or change governing law by agreement before the closure of court debate of the first instance. As for the “compulsory provisions” in Chinese laws, the Interpretations define them clearly as regulations involving the protection of labor rights and interests, food or public health safety, environmental safety, financial safety including foreign exchange control, anti-monopoly and anti-dumping and other regulations which should be deemed as compulsory provisions. In terms of governing law for a foreign-related arbitration agreement, if the parties concerned have not chosen the governing law, and have not agreed on the arbitration institution or the place of arbitration, or if the agreement is not clear about this, the court can apply Chinese laws to determine the effectiveness of the arbitration agreement.
The full Chinese text of the Interpretations is available here.
