Beijing — In a landmark move, the Supreme People's Court (SPC) of China unveiled its inaugural collection of model cases focusing on the clarification and application of extraterritorial laws, following the nation's adoption of judicial interpretations in 2023 aimed at navigating international treaties and practices within overseas-related civil and commercial litigation.
"These cases, emblematic and richly instructive, play a pivotal role in bolstering the identification and elucidation of extraterritorial laws, thereby refining the jurisprudence in this domain," the SPC highlighted in its announcement.
This unveiling is seen as a significant stride toward fostering a market-driven, internationally acclaimed business environment anchored in the rule of law within China, while simultaneously elevating the global trustworthiness and clout of the Chinese judiciary.
Comprising five paradigm cases, the collection encompasses a spectrum of overseas-related civil and commercial disputes, including corporate investments, sales agreements, guarantee contracts, multimodal transportation contracts, and engineering supervision contracts. Laws from diverse jurisdictions, such as the United States, United Kingdom, Mexico, Tajikistan, and Hong Kong SAR, feature prominently.
In December 2023, the SPC issued judicial interpretations delineating the applicability of international treaties and practices in China's overseas-related civil and commercial cases. An SPC official underscored that these interpretations equip Chinese courts with a robust framework for judiciously managing such cases, poised to elevate the caliber of China's overseas-related judicial proceedings and amplify its judicial integrity and international standing.
Reflecting on the significance of the disclosed cases, Wan Miaoyan, Director of Sichuan Dingchi Law Firm, told the Global Times that they exemplify China's judicial advancements. China's legislative framework for overseas-related civil relationships, rooted in international legal standards, embodies openness and inclusivity. The precise identification of extraterritorial laws in such cases is foundational for ascertaining the core legal facts and ensuring equitable rulings, Wan elaborated.
The judicious application of extraterritorial laws, international treaties, and customs in these cases markedly boosts the confidence and assessment of foreign investors regarding China's investment climate, trade environment, and judicial landscape, Wan observed.
In a case concerning a contractual dispute between a Hong Kong-based medical enterprise and a British counterpart, the extraterritorial laws submitted by the parties encompassed a vast array of statutes, case law, and legal literature, with substantial disagreements over the content, interpretation, and applicability of these laws. Rather than dismissing the laws as ambiguous, the presiding court meticulously analyzed and juxtaposed the submissions, leading to a prudent determination of the applicable extraterritorial law.
The SPC emphasized that broadening and diversifying methods for identifying extraterritorial laws is critical in surmounting challenges in this area. Any plausible means that facilitate the identification of extraterritorial laws should be harnessed, ensuring their accurate application to resolve disputes among parties.
Illustratively, in a financial loan guarantee contract dispute involving a Zhejiang bank branch and a Hong Kong technology company holding shares in a U.S.-registered entity, the court, upon the parties' request, engaged an extraterritorial law research center to address the complex legal issues spanning multiple jurisdictions, thereby efficiently settling multiple legal controversies in one fell swoop.
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