As the Belt & Road Initiative (BRI) transformed from a vision to reality, Chinese courts are increasingly hearing complex international commercial cases.

Experts believe that judicial support is needed to provide equal protection for Chinese and foreign parties’ legitimate rights and interests and create a fair and just business environment.

As a result, in January 2018, a leading workgroup under the Central Committee of the Communist Party of China confirmed China’s international commercial dispute settlement mechanisms and institutions for the BRI in a document for the first time.

In June of the same year, Chief Justice of the Supreme People’s Court Zhou Qiang convened a meeting and adopted the judicial interpretation regarding the creation of International Commercial Courts.

On June 29, 2018, the First and Second China International Commercial Courts (CICC) were set up, the first in Shenzhen, south China’s Guangdong Province, and the second in Xi’an, Northwest China’s Shaanxi Province.

“The objective is to create a stable, transparent and efficient international dispute resolution mechanism, to lay a solid foundation for a rule-of-law-based Belt & Road Cooperation, and to boost international legal cooperation.” Shen Hongyu, Deputy Chief Judge of CICC said.

Setting Precedents for Future Cases

So far, CICC has accepted 18 international commercial cases of various types, such as disputes over share ownership, transfer of shares, distribution of company’s surplus profits, or damage to company’s interests, entrustment contract, standby letter of credit, product liability, and validity of arbitration agreement.

The foreign parties involved come from jurisdictions such as the British Virgin Islands, Italy, Japan, the Philippines, Thailand and the U.S.

“Most cases are hard ones and some are brand-new.” Xi Xiangyang, Judge of CICC said.

On May 29, 2019, the court in Xi’an opened the hearing on the first international commercial case focusing on a shareholder dispute related to Red Bull, the popular energy drink. Five months later, in October, the court in Shenzhen concluded its first case. In this case, a Chinese importer claimed damages against an Italian manufacturer for a product recall.

“The judgment in this case set some precedents. And I think it had a guiding significance,” Xi commented on the significance of the ruling.

International Commercial Expert Committee

CICC pioneered the system of the International Commercial Expert Committee, appointing 55 members from 25 countries. The members can be delegated to mediate cases and provide expert opinions on foreign law and international treaties.

The members can also offer suggestions and provide information in support of the future improvement of the CICC.

“I know that at least 1/3 of the experts come from countries with different legal systems, different cultures, and different levels of development, such as the U.S., EU, and African and Latin American countries,” Zhang Yuejiao, Expert member of International Commercial Expert Committee, said. 

“I’m sure with this combination of experts working together, we can enhance the credibility of China’s judicial system for providing fair, independent and impartial judgments.” In 2018, the CICC created an integrated dispute resolution mechanism linking litigation, arbitration, and mediation.

There is also a bilingual official website enabling companies to file cases, make payments, review materials online.

“So I think China has created a lot of new experience, particularly the creation of China’s international commercial court,” Zhang added. “I’m sure that they were also new methodologies and also a platform with multiple methodologies of resolution of disputes combining mediation, arbitration and litigation.”

“Chinese judges have been trying commercial cases for a very long time and will continue to do so. The significance of the CICC is the message it gives to the international community as China’s commitment to try these cases fairly and efficiently.” Sir William Blair, another Expert Member of the International Commercial Expert Committee, said.

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