New justice

A special court dedicated to dealing with financial disputes is expected to open by the end of this year in Pudong New District, Shanghai. When it does it could boost the district's status as the financial and commercial hub in China.

The court, the first of its kind, will be affiliated with People's Court of Pudong New District.

The special court is awaiting approval from higher authorities, says Yuan Guoji, an official with Financial Services Office of Pudong New Service.

The People's Court of Pudong New District and the Financial Services Office of Pudong New District, were the major designers of the new court and Yuan has been involved in the preparations.

The special court comes at a time when legal cases related to financial affairs are seeing a dramatic rise in Pudong, from 127 in 2005 to more than 1,500 last year, according to official statistics.

However, most companies and institutions as well as individuals involved in the cases have been frustrated by the lengthy procedures, which are largely due to a lack of professionals and judges specializing in financially related legal disputes.

In addition, China's legal system has failed to keep pace with Pudong where complex transactions involving many different parties are giving rise to increasing legal disputes.

Many, especially futures companies, have been forced to seek legal services in Hong Kong and Singapore.

The special court is seen an effort by local authorities as to create a better legal environment for the increasing number of financial institutions in Pudong.

The district is already home to the Lujiazui Finance and Trade Zone, the Shanghai Stock Exchange, and a skyline that includes the symbolic Oriental Pearl Tower, the Jin Mao Building, and the Shanghai World Financial Center.

Since Pudong began developing as a new economic development zone in 1990, local governments have introduced a slew of innovations and special policies, for instance, the establishment of the Shanghai Financial Arbitration Committee, to boost the district's economic and commercial clout.

Shanghai Executive Vice-Mayor Feng Guoqin has suggested "improving legislation and regulations within the financial center, establishing special courts for financial arbitration, strengthening enforcement of financial laws to provide a legal supportive environment".

The new court will be named The Sixth Civil Trial Chamber of People's Court of Shanghai Pudong New District.

The court would follow the establishment of an arbitration court specializing in financial disputes last December.

Resolving financial disputes through arbitration is a common practice outside of the Chinese mainland and often preferable to litigation.

The new court could handle a much broader scope of financial disputes than arbitration.

The Fifth Civil Trial Chamber of People's Court of Shanghai Pudong New District already exists, as a special court dealing with real estate disputes.

The new court will handle cases involving less than 50 million yuan.

According to Chinese law, the Shanghai Intermediate People's Courthouse must handle cases involving more than 50 million yuan.

Judges in the special court will be initially selected from the Pudong People's Court and a recruitment campaign will then be launched to look for financial and legal professionals.

The jurisdiction of the special court would include commercial affairs in securities, banking, funds and trusts.

CBW News

(China Daily 10/06/2008 page10)