Civil Procedure Law amendments impact provisions on negotiated jurisdiction

Among the recent amendments to the Civil Procedure Law implemented since 1 January 2013, a significant revision has been made in respect of negotiated jurisdiction in domestic civil cases. The original article 25 reading: “the parties to a contract may agree in the written contract to choose the people’s court of the place where the defendant is domiciled, where the contract is performed, where the contract is signed, where the plaintiff is domiciled, or where the subject matter of the contract is located to be the competent court” has been revised to the current article 34 reading: “the parties in a contractual dispute or other dispute over rights and interests in property may agree in writing to choose the people’s court of a place which has an actual connection with the dispute, such as the place where the defendant is domiciled, where the contract is performed, where the contract is executed, where the plaintiff is domiciled, or where the subject matter of the contract is located, to be the competent court.”

The amended Civil Procedure Law draws on the provisions concerning foreign-related negotiated jurisdiction of article 242 of the original Civil Procedure Law, bringing in the concept of “actual connection” within the scope of negotiated jurisdiction, giving parties in domestic cases a greater freedom of choice. With this change, there are no longer any marked differences in negotiated jurisdiction in domestic and foreign-related cases, with legislators deleting the original article 242, but adding the unified provision on negotiated jurisdiction to article 34 of the new Civil Procedure Law.

Negative impact

The new provisions of article 34 have received wide-ranging praise, being seen as one of the key bright spots in the recent amendments to the Civil Procedure Law. However, the author recently discovered while handling a jurisdiction opposition case that the act of unifying the provision on domestic and foreign-related negotiated jurisdiction has benefited parties in domestic cases, but paradoxically could have a negative impact on parties to foreign-related agreements.

Vincent Mu is a senior associate at Martin Hu & Partners