Jurisdiction - China
Reports and Analysis
China – The Changing Face Of Civil Procedure Law: Effects Of The Recent Amendments.

6 November, 2012



China’s recently amended Civil Procedure Law (“CPL“) will come into force on January 1, 2013. Below we outline some of the changes, also highlighting how some of them may impact intellectual property cases in Chinese courts.


Choice of forum by agreement
Before the amendment, the CPL allows parties to a contract dispute to choose a forum, by written agreement, from a number of jurisdictions, such as the jurisdiction where the contract was executed. According to Article 34 of the amended CPL, it is now possible for parties in both contract and other property related disputes to agree on a jurisdiction in case of dispute. In addition, apart from listing the jurisdictions that parties may choose from as before, the wording of Article 34 also indicates that parties may choose other jurisdictions that have an actual connection with the dispute (although it does not clearly defined what “actual connection” means). All in all this means that there will be added possibilities to consider in terms of the choice of forum in property related disputes, including IP disputes.
Representatives (Agent ad litem)
The amended CPL removes from Article 58 that a “citizen approved by the court may be entrusted as a party’s agent ad litem.” Before the amendment, the courts could allow non-lawyers, including trademark agents and patent agents, to represent a party in IP disputes. After the amendment, to represent a party in court in an IP dispute, a trademark agent or patent agent who is not a lawyer would need recommendation from a “relevant social organization”. At this point it is hard to predict the implication of this change, but without further clarification, it may become harder for non-lawyers to represent parties in IP cases.
Forms of evidence and deadlines
In terms of forms of evidence, article 63 now explicitly provides for electronic evidence. Although Chinese courts in general have accepted electronic evidence in practice prior to the amendment, the formal recognition, and possible future judicial interpretations, may help to standardize the way electronic evidence is treated by the courts. With regard to deadlines to submit evidence, the amended Article 65 provides that a fine may be imposed on a party that refuses to provide or does not provide a good reason for delayed submission. It also clarifies that courts can determine, based on the reasons provided for a delayed submission, whether to admit the evidence or not. However, it remains to be seen how this new addition will be applied in practice. Although this seems to afford some leeway in terms of missed deadlines, the parties to a case should always strive to submit their evidence on time.
Judicial appraisals and experts
Regarding judicial appraisals, Articles 78-79 of the amended CPL specifies that the expert who conducted the appraisal must testify in court when the opposing party has objections concerning an appraisal, and that the opposing party may apply to the court to allow other experts to comment on the appraisal. Although not explicitly stated, this means that the expert who conducted the appraisal will likely be subject to crossexamination and/or questioning by another expert(s), as required by some courts before the amendment.
New methods of service
Except for rulings, judgments and mediation statements, going forward, it will be possible to serve documents also by fax, email and other ways when the party to the service agrees to such service methods. (CPL, Article 87.) This helps to make litigation more efficient.
Summary (“small-claims”) procedure
The amendments also provide for a summary procedure in cases that are relatively minor with clear facts and a value of less than 30% of the annual average wage in the province of the court of jurisdiction. In such summary cases, the first instance is the final instance with no option to appeal. In some cases, the parties to a case may also choose voluntarily to adopt a summary procedure. This should take some of the work load involving minor issues off the courts and make the process more efficient.
Public interest litigation
As part of China’s push to safeguard public interest, the amendments include a right for “institutions and relevant organizations” to file litigations where rights and interests of the public are harmed. (CPL, Article 55.) Such cases include, for example, environmental or consumer protection cases. This is a positive development, especially in light of the many product quality or environmental scandals in recent years.
Interim measures
In China, courts may order asset preservation during or before litigation if it considers that a party to the case may, for example, conceal its assets to avoid enforcement of a judgment. The amended CPL (articles 100-101) adds enforcement strength in that it allows the courts to issue orders or bans directed toward the action or non-action of the parties to the litigation. The new amendment also allows the parties to apply for such measures. In practice this should mean that the courts have more teeth with regard to steering the behaviour of the parties in order to ensure a fair and transparent trial.
Heavier fines for obstructions
Articles 114-115 provide for higher fines that can be imposed by the court on persons and entities for various kinds of obstruction of justice, including refusal or obstruction of investigation and evidence collection and refusal to assist the court in the execution of a judgment. For individuals, the fine has gone up to a maximum of RMB100,000 from RMB10,000; and for entities it has gone up from RMB10,000-30,000 to RMB50,000-1,000,000. The increased fines ought to discourage obstructions of justice and is welcome.
Publicly available rulings and judgments
Article 156 of the CPL provides that the public shall have access to legally effective judgments or orders, except for judgments and orders that involve state secrets, commercial secrets, or personal privacy. This is a significant change because until now, courts in China generally only publish a small portion of their decisions, and the public has no access to unpublished decisions. While this change is intended to improve
public access to jurisprudence, it remains to be seen whether the courts will fully comply with this provision in practice.
It is clear that the objective of many of the amendments is to increase efficiency of the PRC civil procedure. Although the amendment is not specifically directed to IP litigation, we consider that it has a positive overall effect on IP related cases. It is expected that additional judicial interpretation will be released and it remains to be seen how the changes will be applied in practice. We will continue to follow this matter closely and report on any significant developments.

For further information, please contact:
Deanna Wong, Partner, Hogan Lovells
Rae Yan, Partner, Hogan Lovells
Feng Zhen, Partner, Hogan Lovells
William Fisher, Partner, Hogan Lovells




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