Foreign-related preliminary questions in cross-border disputes

In private international law, if resolution of the disputed question is conditional on first resolving another question, the disputed question may be called the “main question” or “principal question”, and the question that needs to be resolved first may be called the “preliminary question”. Judicial adjudication of preliminary questions in China has yet to draw much attention, and its drawbacks in terms of resolution method, procedure, effectiveness, remedies, etc., have hindered judicial practice. In this article, the first part of a series, we will present two examples to analyze foreign-related preliminary questions in cross-border dispute cases.

Case 1: The Chinese court trying the principal question had no jurisdiction over the preliminary question, so an application was made to suspend the trial

Company ‘A’ was a wholly foreign-owned enterprise (WFOE) established and existing under the laws of China. Its British Virgin Islands (BVI) parent removed ‘S’ (the authorized representative and signatory of the BVI company) by way of a written resolution of the directors of the BVI company (the initial resolution), specifically authorizing a new person to sign for, and on behalf of, the BVI company two letters of removal and appointment, removing ‘K’ (the chairman of the board and legal representative of company A) and director S.

Yvonne Lu is a counsel at Martin Hu & Partners