China / Government

Courts see more foreign legal disputes

By Zhang Yan (China Daily) Updated: 2016-01-06 07:14

Courts see more foreign legal disputes

Chinese lawyers visit Morgan, Lewis & Bockius, a law firm in Philadelphia, in November last year. The exchange with US counterparts was part of a program to train more domestic lawyers to deal with cross-border lawsuits. [Provided to China Daily]

Judges are striving to learn about overseas laws and to increase their work efficiency

Having witnessed an unprecedented rise in foreign legal disputes, China is expected to see the number continue to rise through the coming 13th Five-Year Plan (2016-20) period, one of the country's top judges told China Daily.

Driving the rise in disputes will be China's expansion of maritime power and its initiative to upgrade trade and cooperation with partners along the ancient land and maritime silk roads, said Zhang Yongjian, a judge with the Supreme People's Court.

Dealing with litigation related to foreigners is a trend and there is no sign of it ending, said Zhang, the chief judge of the SPC's No 4 Civil Tribunal, which specializes in overseas commercial and maritime trials.

Figures from the SPC show that, from 2013 to 2015, courts across the Chinese mainland concluded about 100,000 civil, commercial and maritime lawsuits involving foreign litigants-a jump of 10.4 percent from the previous three-year period. About 50,000 of those were filed by parties from Hong Kong, Macao and Taiwan.

The rest of the dispute shave involved companies and individuals from around the world, including the United States, United Kingdom, Germany, Southeast Asia and Africa, said Shen Hongyu, senior judge from the top court's No 4 Civil Tribunal.

The most likely hotbeds for disputes, she said, are low-cost, labor-intensive manufacturing companies.

Maritime disputes account for about 15 percent of all the lawsuits.

One immediate cause of the foreigner-related legal disputes is that, almost three decades after the first foreign investment companies were established in China, many are seeing their founding contracts expire, Zhang said. As a result, a spate of disputes has occurred concerning the companies' dissolution or continuation, the judge said.

Some small and medium-sized joint-venture enterprises have failed to keep up with rapid changes in technology and market trends. Some of them have seen their local partners fail to abide by terms that were mutually agreed upon with investors from the outside, and a sharp rise in cases involving their asset transfer, liquidation and bankruptcy have resulted, Zhang said.

Faced with the rising case load, Chinese judges are making an effort to learn about foreign laws and increase their work efficiency, Zhang added.

Government data show that in 2014, the Chinese mainland attracted around $112 billion in foreign direct investment and saw $80 billion in outbound direct investment.

But according to Wang Zhengzhi, senior partner from Beijing Global Law firm, China still lags behind his expectations for handling transnational lawsuits.

China also needs to raise the capability of its judges through professional training programs, he said.

David Yu, legal counsel for a Beijing-based transnational company, said he hoped to see China "further promote judicial transparency and improve efficiency".

This year, said Zhang, the senior judge, the Supreme People's Court will issue its judicial opinion on maritime disputes and its guideline for transnational commercial disputes.

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