ClCC: New approach to resolving cross-border disputes

The Provisions of the Supreme People’s Court on Several Issues Concerning the Establishment of International Commercial Courts, which the Supreme People’s Court released on 27 June and enacted from 1 July, provides the legal basis and support for the operation of China International Commercial Courts (CICC). On 29 June 2018, the First International Commercial Court and the Second International Commercial Court of the Supreme People’s Court formally started operations in Shenzhen and Xi’an, respectively.

JURISDICTION

Pursuant to the Provisions, the CICC shall have jurisdiction over: (1) international commercial disputes with a subject matter valued at RMB300 million (US$43.6 million) or more, in connection with which the parties have elected and agreed to submit to the jurisdiction of the Supreme People’s Court; (2) international commercial cases over which higher courts have jurisdiction in the first instance, but which are escalated, as higher courts deem fit, with approval of the Supreme People’s Court; (3) international commercial disputes with significant nationwide impact; and (4) cases that, as agreed between the parties, are to be resolved through arbitration by international commercial arbitration bodies prescribed in article 11 of the provisions and in connection with which the parties have applied with the CICC for preservation relating to arbitration proceedings, or revocation or enforcement of international commercial arbitration awards.

A case is considered an international commercial dispute if it meets any one of the following conditions: (1) one or both parties in the case are foreigners, stateless persons, or foreign enterprises or organizations; (2) one or both parties in the case have a usual place of residence outside the People’s Republic of China; (3) the subject matter is situated outside the PRC; and (4) the legal facts that give rise to, change or lead to extinction of commercial relations take place outside the PRC.

Craig Zhou and Chris Wang are associates at MHP Law Firm