The doctrine of forum non conveniens (an inconvenient forum) means a court that has accepted a foreign-related case believes that a court in another jurisdiction is more convenient to adjudicate the case, and thus waives its jurisdiction over the case.
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Jingtian & Gongcheng
The doctrine of forum non conveniens was provided in article 11 of the Notice of the Supreme People’s Court on Issuing the Minutes of the Second National Working Conference on Foreign-Related Commercial and Maritime Trials, issued in 2005, and article 532 of the Interpretation of the Supreme People’s Court on Application of the Civil Procedure Law of the People’s Republic of China, implemented in 2015. According to the above-mentioned provisions and judicial practice, to apply the doctrine of forum non conveniens, all of the following conditions should be met:
The defendant raises a jurisdiction, or forum non conveniens, challenge
This condition comes as the procedural premise for applying the doctrine of forum non conveniens. If the defendant does not raise an objection to jurisdiction, or a defence of forum non conveniens in his or her response, the court generally will not take the initiative in applying the doctrine to decline jurisdiction.
The court accepting the case has jurisdiction over it
Unlike provisions in the above-mentioned minutes, the judicial interpretation does not take “the court accepting the case has jurisdiction over it” as a precondition for applying the doctrine of forum non conveniens. Nevertheless, after the judicial interpretation was implemented, the judicial practice still follows that the doctrine rests on the premise that the court accepting the case has jurisdiction over it. Otherwise, the court may directly reject or dismiss the case without further examining whether there are any inconvenient forum factors.
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Jingtian & Gongcheng
No consensual or exclusive jurisdiction rests with the PRC court
There is no dispute in practice about understanding the following two conditions on application of the doctrine, namely, “there is no agreement between the parties that chooses a PRC court as the court of jurisdiction”, and “the case is not subject to exclusive jurisdiction of a PRC court”. The absence of an agreement choosing a PRC court as the court of jurisdiction includes the circumstance in which a PRC court is chosen as the court of jurisdiction under an agreement, but the agreement is determined to invalid.
No interests of the Chinese state, citizens, legal persons or other organisations are involved
In practice, courts frequently refuse to apply the doctrine of forum non conveniens on the ground that this requirement is not met. Moreover, the court often decides on whether the case involves the interests of the PRC, and any Chinese party, according to nationality or habitual residence. For example, in Case [2016] Lu Min Xia Zhong No. 245, since the defendant was a domestically incorporated legal person, the court decided that the defendant had a direct stake in the result of the case and thus the doctrine of forum non conveniens should not apply. In Case [2016] Su Min Xia Zhong No. 180, the court held that although the party concerned resided in the Philippines for a long time, he was still a Chinese citizen, so the case certainly involved Chinese citizen’s interests, and dismissed the forum non conveniens defence.
The PRC court faces major difficulties in adjudicating the case
As for ascertainment of this requirement, the judicial interpretation requires satisfaction of two conditions, namely, the main facts in dispute did not occur in the PRC, and the PRC laws do not apply to the case. In practice, the court has great discretion as to whether this requirement is met, especially whether the main facts in dispute occurred in the PRC.
In addition, even if the main facts in dispute occurred overseas, and the case is governed by foreign laws, the court does not necessarily determine that it faces major difficulties in adjudicating the case. Nowadays, the ease of transportation and information transmission has greatly reduced inconveniences caused by geography and language, and there are no major difficulties in fact finding or law application.
A foreign court has jurisdiction over, and is more convenient to adjudicate, the case
The existing foreign parallel proceedings do not constitute an inconvenience for the domestic court to adjudicate the case. For example, in Case [2018] Zui Gao Fa Min Xia Zhong No. 261, the court held that whether the Hong Kong court already accepted the case did not affect the mainland court’s jurisdiction over it, and whether the mainland court should accept the case should be decided according to the specific circumstances of the case.
In practice, in addition to the above-mentioned fact finding and law application, the court will consider many factors such as the defendant’s response, service of documents, collection of evidence, witness testimony, etc., to determine whether it is more convenient for foreign courts to adjudicate the case, and make a final decision from the perspective of protecting the rights and interests of the parties concerned. “Whether the court judgment can be enforced” is an important consideration.
For example, in Case [2015] Hu Gao Min Er (Shang) Zhong Zi No. S7, the defendant’s property available for enforcement was subjected to attachment measures in the PRC. The court held that because the mutual legal assistance treaty between the PRC and Singapore did not include the recognition and enforcement of court judgments, even if the claimant won the case at the Singapore court, it would be difficult to effectively enforce the defendant’s property in the PRC, so the Singapore court was not a more convenient court to adjudicate the case.
The Supreme People’s Court, in the dispute over agency contract between a law firm and Xiamen Huayang Color Printing Company, also held that the domestic court was the more convenient forum on the ground that the subject matter of enforcement was located in mainland China.
Zhang Guanglei is a partner and Cai Xiaoxia is an associate at Jingtian & Gongcheng. Zhang is also an arbitrator of Hong Kong International Arbitration Centre
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E-mail: zhang.guanglei@jingtian.com
