China International Commercial Court – European Chinese Law Research Hub

China’s Highest Court and “Foreign-Related Rule of Law”

31. March 2024

A new paper by Susan Finder

The main entrance of the Supreme People’s Court of China in Beijing ^{Photo by Rneches}

How does the Chinese political-legal system operate in the Xi Jinping era? This article published in the China Law and Society Review provides a detailed discussion of the poorly understood operations of the Supreme People’s Court (SPC) including its intricate interactions with central Party and state institutions, against the background of strengthened Party leadership. It provides insights into specific aspects of the Party’s leadership of the judiciary and its implications, usually unseen functions and operations of the SPC, and the link between Party policy, the judiciary, and the development of Chinese law.

I focus on the roles of the SPC in supporting “foreign-related rule of law” as an example of how the work of China’s highest court has evolved in the Xi Jinping New Era to support more robustly major national strategies. The article examines functions of the SPC little explored previously, because some are only partially transparent. I first summarize developments concerning the strengthening of Party leadership over political-legal institutions, because those have a direct and indirect impact on the SPC’s foreign-related judicial work. I highlight the greater focus on the SPC’s leadership’s fulfillment of political obligations and responsibility to the Party leadership. Providing appropriate judicial support for national strategies is an important way in which the SPC as a political-legal institution fulfills its political obligations to the Party leadership.

The SPC functions identified as most important in developing foreign-related rule of law are, first, policy-making and guidance of the lower courts; second, “law-making;” third, case hearing and selection; and fourth, coordinating and cooperating with central Party and state institutions. The characterization of the functions is original to this article. The non-case hearing functions are linked in some way to hearing cases and are ones the SPC has always performed.

In contrast to most apex courts globally, the work of the SPC in supporting “foreign-related rule of law” is more focused on policy-making and influencing legal and judicial policies; providing guidance to the lower courts, what this article describes as “law-making”; and coordinating and cooperating with other central Party and state institutions, rather than making judicial decisions.

First, part of the SPC’s role is to create, amend, and implement judicial policy in response to or in anticipation of the impact of changes in Party and state policy or other social, economic, or legal changes. One of the principal ways in which the SPC publicizes new or amended judicial policy is by issuing judicial policy documents. These documents guide and inform the lower courts about new or readjusted judicial policy and inform related central Party and state institutions about these developments. They also signal to the Party leadership that their initiative is being implemented. In some areas of law, the SPC leads the legal and judicial policy initiative, while in others, it provides its expertise when other institutions take the lead. The policy documents and any typical cases issued in addition to or in lieu of a policy document contain both political and substantive guidance intended to guide lower court judges both in frontline and leadership roles. These documents may not be cited in court judgments or rulings but may have an impact on judicial thinking.

Second, an important but less-understood part of the role of the SPC in contributing to the development of China’s foreign-related legal system is “law-making.” This characterization is meant to convey the SPC’s contribution to legislation described by the SPC as “actively cooperating with foreign-related legislation” (积极配合涉外立法), not as a formal assertion that the SPC makes law. This contribution takes several forms, not all of them formalized in law. The first type is provided by the Legislation Law which authorizes the SPC to submit legislative bills to the National People’s Congress (NPC), and the NPC Standing Committee. The second type is by drafting and issuing judicial interpretations, as authorized by the Organic Law of the People’s Courts and the Legislation Law. The SPC has the authority to issue meeting minutes (conference summaries) and similar documents which have a less certain formal authority but are highly persuasive in practice.

Two other types lack specific legislative authority but are important ways in which the SPC contributes to legislation, particularly foreign-related legislation: providing support to the NPC and the NPC Standing Committee when it drafts legislation; and providing support to the Ministry of Justice and other Party and state institutions when those institutions draft legislation that is eventually submitted to the NPC or the NPC Standing Committee. These two ways combine the SPCs indirect law-making role with its cooperation role. The extent to which the SPC participates in “law-making” in foreign-related matters is not entirely clear because related documents are made public sparingly.

The people’s courts are a highly political professional institution, and a highly professional political institution (人民法院是政治性很强的业务机关，也是业务性很强的政治机关)

Official SPC media channels

Third, the SPC decides some cases involving foreign-related commercial law and issues some cases as guidance, either as guiding or typical cases. It decides some cases relating to arbitration through an administrative procedure, others through retrial or second instance procedures, and others when certain selected SPC judges sit as panels of the China International Commercial Court. Additionally, the SPC issues cases as guiding, or more often typical cases as a form of guidance. The SPC occasionally issues guiding cases but more often issues typical cases to provide political and substantive guidance for the lower courts, sometimes linked to a policy document.

Fourth, one of the unrecognized functions of the SPC is coordination with other central Party and state organs regarding specific legal issues, based on bureaucratic custom. This work is only partially visible. The SPC has coordinated and cooperated with other central Party and state institutions on a broad variety of legal matters for many years, but it appears to be little discussed in English-language literature. The coordination and cooperation take a variety of forms, and which institutions and departments are relevant depends on the matter under consideration. For example, the SPC provides support to the Ministry of Foreign Affairs or other ministries that lead treaty or convention negotiations, such as the Ministry of Commerce.

The article concludes that the SPC’s foreign-related legal expertise, as shown by the Politburo’s November, 2023 collective study session on foreign-related rule of law, has become significantly more important to China’s political leadership and other central-level Party and state institutions. Its significance to the political leadership is in its work in creating a body of foreign-related law. Given that the Party leadership increasingly stresses political leadership of the courts and political competence of members of the judiciary, carrying out the functions described above requires SPC judges dealing with foreign-related matters to have both a high degree of political consciousness and technical expertise. Why? As the SPC media often say, “the people’s courts are a highly political professional institution, and a highly professional political institution” (人民法院是政治性很强的业务机关，也是业务性很强的政治机关).

Susan Finder is a long-standing observer of the Chinese judicial system with more than 30 years of experience. She is a member of the international commercial expert committee of the China International Commercial Court (CICC) of the Supreme People’s Court and on the committee of the Shanghai International Arbitration Center. The views expressed in this article are her own, not those of either institution. She is a Distinguished Scholar in Residence at the School of Transnational Law of Peking University (Shenzhen), where she teaches about judicial reform in comparative perspective. Her blog, the Supreme People’s Court Monitor, is arguably the most authoritative scholarly resource on developments around the People’s Republic of China’s highest court. Follow her on Twitter @SPCmonitor or get in touch per email at susan.finder[at]outlook.com

China’s Law and Development: The Case of the China International Commercial Court

6. June 2021

A new paper by Weixia Gu

*Appointment of the First Batch of CICC International Commercial Experts* *Committee*

In June 2018, the China International Commercial Court (CICC) was established within China’s Supreme People’s Court. It is a top-down capacity-building effort in establishing dispute resolution infrastructure and represents the ambition to create a lex mercatoria in the context of the Belt and Road Initiative (BRI). This blogpost highlights some salient features of the CICC and sheds light on its significance in China’s Law and Development.

First, CICC installed an International Commercial Experts Committee (ICEC) to make up for the lack of non-Mainland Chinese judges among its personnel. It draws on experts from both civil law and common law jurisdictions with diverse backgrounds (Eastern, Western and African legal culture). Members of the ICEC will provide foreign legal expertise to engage in the CICC mediation work, the outcome of which could be turned into a CICC judgement equivalent to “semi adjudication.” The ICEC has two main functions: first, presiding over mediation proceedings of international commercial cases which can be converted into a CICC judgement; second, providing advisory opinions on proof of foreign law and on international treaties, international commercial rules. The ICEC is argued as emblematic of the “paradigm shift” of the Beijing Consensus which traditionally emphasises soft law in international legal ordering such as what has happened in the Belt and Road context. Scholars have argued about a rising new Chinese economic legal order that is characterized by China’s decentralized mode of trade governance through a pragmatic, incremental development policy grounded in soft law and norm-based networks (Shaffer & Gao 2020). This is shown in China’s approach toward the BRI (yidaiyilu 一带一路) as China largely relies on memoranda of understanding and soft law agreements. There is no stringent cross-border legal framework or rigid regulatory structure in China’s approach toward the BRI. The advent of the ICEC however points to a new focus on institution-building which is somewhat a departure of the previous soft-law approach. Apart from that, the ICEC also showcases a breakthrough in the Chinese legal system in light of the existing statutory impediments found in, for example, China’s Judges Law, which allows only Mainland Chinese nationals to sit on the Chinese judicial benches. It reflects a more proactive, experimental, and innovative mentality adopted by the Chinese government and judiciary in seeking to incorporate overseas judicial expertise so as to compete in the global dispute resolution market.

The CICC signifies China’s major step towards a dual-track model which places equal emphasis on both soft-law instruments and hard-law capacity-building of legal infrastructure. Second, the CICC brands itself as a “one-stop shop” for diversified dispute resolution, incorporating alternative dispute resolutions (ADRs) into conventional litigation. Under this vision, international commercial litigation, arbitration and mediation are blended and integrated to facilitate the resolution of international commercial disputes brought before the CICC. The CICC also links with China’s five most market-driven arbitration institutions – China International Economic and Trade Arbitration (CIETAC), Beijing Arbitration Commission (BAC), Shenzhen Court of International Arbitration (SCIA), Shanghai International Arbitration Centre (SHIAC), China Maritime Arbitration Commission (CMAC), and two leading commercial mediation institutions – China Council for the Promotion of International Trade (CCPIT) Mediation Center and Shanghai Commercial Mediation Centre (SCMC). If disputing parties have reached a mediation settlement agreement before the CCPIT Mediation Center or SCMC, the CICC may also make a CICC judgment based on the mediation agreement if it is requested by the parties. This conversion of the institutional mediation settlement agreement into a CICC judgment is an unprecedented arrangement, evidencing the experimental and law-positive nature of China’s approach to the BRI and the new Beijing Consensus.

From the Law and Development perspective, the establishment of the CICC exemplifies a turning point in the Beijing Consensus to move away from the heavy reliance on norm-based instruments in international legal ordering.

Third, the CICC has a guaranteed caseload. Structurally, the CICC is within the hierarchy of the Chinese domestic judiciary. It forms part of China’s Supreme People’s Court of which both the first CICC in Shenzhen and the second CICC in Xi’an are permanent branches. Flowing from this structure, it is ensured that the CICC continuously has a high caseload as the Supreme People’s Court in Beijing directly refers cases to them. In fact, the case flow under the CICC Provisions includes “other international commercial cases that the Supreme People’s Court considers appropriate to be tried by the CICC.” (Provisions of the Supreme People’s Court on Several Issues Regarding the Establishment of the International Commercial Court, Article 2(5), English here). Comparative studies show that the feature of “rooting” the international commercial courts within the domestic judicial system is similarly found in other jurisdictions, such as the Singapore International Commercial Court and the Chamber for International Commercial Disputes of the Frankfurt Regional Court in Germany.

The establishment of the CICC arguably represents a paradigm shift of the “Beijing Consensus”, which traditionally placed emphasis on informal alternatives to law (i.e. a soft-law and norm-based approach). The CICC signifies China’s major step towards a dual-track model which places equal emphasis on both soft-law instruments and hard-law capacity-building of legal infrastructure. From the Law and Development perspective, the establishment of the CICC exemplifies a turning point in the Beijing Consensus to move away from the heavy reliance on norm-based instruments in international legal ordering (such as Memorandum of Understandings, Memorandum of Agreements, Joint Statements etc. involved in the BRI) to hard-law institutional infrastructure capacity-building.

Finally, the CICC benefits from China’s accession to the Hague Convention of 30 June 2005 on Choice of Court Agreements (Choice of Court Convention) (the Hague Convention) which was signed in September 2017. Recognition and enforcement of the judgments rendered by the CICC can be facilitated via the Hague Convention.

For details, please find Weixia Gu’s forthcoming article regarding the CICC and Law and Development Study at Harvard International Law Journal here. Please also find her recent monograph, Dispute Resolution in China: Litigation, Arbitration, Mediation and Their Interactions published by Routledge in 2021 here.

Weixia Gu is Associate Professor at the Faculty of Law, University of Hong Kong and immediate past Co-Chair of the American Society of International Law (ASIL) Asia-Pacific Interest Group. Her research focuses on arbitration, dispute resolution, private international law and cross-border legal issues. Her scholarship is published by leading comparative and international law journals and cited by leading judiciaries in the world. She is the recipient of University of Hong Kong’s Outstanding Young Researcher Award and three times the awardee of China Society of Private International Law Best Research Output Prize. Her recent books include The Developing World of Arbitration (Hart, 2018); Dispute Resolution in China (Routledge, 2021); Multi-tiered Approaches to the Resolution of International Disputes (CUP, 2021). Contact her at guweixia@hku.hk.

Rule Setters for Belt and Road? China’s New International Commercial Courts

20. March 2020

In June 2018, China opened two International Commercial Courts (CICC) in Shenzhen and Xi’an, which were widely received by the international public in terms of challenging the dominance of so far mainly western-led institutions for the resolution of commercial disputes. These courts were heralded by Chinese judicial officials as innovative hubs for flexible dispute resolution that would provide crucial services needed for the further development of the BRI. Even though the unique structure of these courts as one-forum-stops for commercial dispute resolution may be considered a deviceful tool for resolving BRI disputes, their role as agents in China’s quest for a heightened influence in shaping the international economic legal order may globally be of even more significance. The Supreme People’s Court as responsible agency for the CICCs issued a normative document late in December 2019 outlining the purpose of these courts as inter alia tools for promoting China’s rising position in the international legal discourse. The CICC’s adjudicative work should therefore be measured not only from the perspective of effective and fair dispute resolution for BRI conflicts but also as part of China’s agenda in using the BRI’s entangled legalities across different jurisdictions to shape legal developments outside China.

Daniel Sprick and Nora Sausmikat have investigated the courts and their impact in terms of their influence on the global order and presented their study to the EU Parliament. You can find it here.

European Chinese Law Research Hub

Tag: China International Commercial Court

A new paper by Susan Finder

A new paper by Weixia Gu