Incoterms_® and Commercial Contracts

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1. Introduction to civil litigation

According to article 18 of the Organic Law of the People’s Courts, which was adopted on July 1, 1979, the people’s courts exercise their powers independently and are not subject to interference by any administrative organ, public organization or individual.¹

The people’s courts apply the law equally to all, regardless of ethnic status, race, sex, occupation, family background, religious belief, education, property status and length of residence.²

Cases are heard in public except when they involve State secrets and private affairs of individuals.³

A primary feature of the judicial system in contemporary China is the inquisitorial process. Courts in China conduct investigations and collect evidence.⁴ During hearings, judges take an active role in questioning the litigants and witnesses.

Chinese judges routinely conduct conciliation between the litigants.⁵ They are expected to participate willingly in the process.

In Chinese courts, substantial justice and fairness are emphasized.

People’s courts at all levels practice democratic centralism.⁶

Chinese courts sit in panels and only the simplest cases are decided by a single judge.⁷

Juries are not used in China. But judges are joined on panels by public assessors who generally have other professional occupations. Judges are expected to have “adequate knowledge of the law”. ⁸

Parties to judicial proceedings may challenge judges for partiality.⁹

Judges are personally liable for derelict behaviour, including corruption and favouritism.

Parties have a right of appeal against the judgment of the court of first instance to the next higher level of court and the second court’s decision is not subject to further appeals.¹⁰ Judgements are, however, subject to revision in the event of definite error.¹¹

China has a four-level court structure: the basic people’s courts, the intermediate people’s courts, the high people’s court and the Supreme People’s Court (SPC).¹² The level of court with original jurisdiction rises in proportion to the importance of the case. The first three levels are organized along the lines of the administrative regions. The basic courts are established in each county and autonomous county and in each urban district.¹³ Intermediate courts are established at the prefectoral-level (including autonomous prefectures), in provincial capitals (and cities under direct control of the governments of provinces or autonomous regions), and in municipalities directly under the central government.¹⁴ The high courts are instituted for each province, autonomous regions and municipality directly under the central government.¹⁵ The SPC sits at the apex and supervises the courts at all levels.¹⁶

In addition, there are several special people’s courts with specific jurisdiction, including maritime courts, military courts, railway transportation courts and forestry courts.

In general, each of the various levels of people’s courts has at least three divisions: criminal, civil, and economic. Examples of additional divisions include the Intellectual Property Tribunals attached to the Beijing Municipal Intermediate and High Courts.

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Chinese courts do not practice the rule of precedent and their judgments need not specifically address the arguments of the parties.

Only Chinese lawyers may represent parties in proceedings before the people’s courts.¹⁷ Hearings before Chinese courts are conducted in Chinese but, when minorities who live in concentrated communities are involved, their languages may be adopted.¹⁸

Foreign parties have the same rights and obligations as Chinese parties in proceedings before the people’s courts, which does not prevent the application of a special procedural regime when cases are foreign-related.¹⁹

1.1. Legal framework

The first formal code of civil procedure in Chinese history was prepared in 1902 under the auspices of the Emperor Guangxu. It was intended to improve China’s legal system as an argument to obtain the extinction of extraterritorial privileges. The Nationalist Government adopted a civil procedure law in 1936, which was never generally implemented, before being abolished after the inception of the People’s Republic of China (PRC). During the 1950s, the NPC drafted a civil procedure law but it was never promulgated.

The primary legislation governing civil litigation in contemporary China is the Civil Procedure Law that was adopted in 1991. The law is composed of four parts: general provisions, trial procedure, enforcement procedure and special provisions for foreign-related civil procedures.

On October 28, 2007, the Standing Committee of the NPC amended the Civil Procedure Law with effect from April 1, 2008. Considering that as many as one million civil judgments rendered in 2006 remain unenforced, a major focus of the amendments to increase the effectiveness of judgment recovery.

Apart from the Civil Procedure Law, certain provisions in the Constitution, as well as the Law on the Organization of People’s Courts and the Special Procedure for Maritime Lawsuits, make direct or indirect references to civil procedure.

Statutes are supplemented by a series of judicial interpretations issued by the Supreme People’s Court (the SPC), of which the major ones in recent years concerning the Civil Procedure Law are the following:

• the Opinions of the SPC on Several Issues concerning the Application of the Civil Procedure Law, adopted at the 528th Session of the Judicial Committee of the SPC and issued on July 14, 1992, No.22 Judicial Issues (1992);
• Several Provisions of the SPC concerning the Application of Summary Procedures in Trials of Economic Cases, adopted at the 602nd Session of the Judicial Committee of the SPC and issued on November 16, 1993, No.35 Judicial Issues (1993);
• Several Provisions of the SPC on Applying Ordinary Procedures to the Trial at First Instance of Economic Cases, adopted at the 602nd Session of the Judicial Committee of the SPC and issued on November 16, 1993, No.34 Judicial Issues (1993);
• Several Provisions of the SPC concerning the Strict Implementation of the Civil Procedure Law in Economic Trials, issued on December 22, 1994, No.29 Judicial Issues (1994); [Page1099:]
• Several Provisions of the SPC concerning the Reform of the Means of Civil and Economic Trials, adopted on June 19, 1988 at the 995th Session of the Judicial Committee of SPC, No.14 Judicial Interpretations (1998);
• Several Provisions of the SPC concerning Evidence in Civil Litigation, adopted on December 6, 2001 at the 1201st Session of the Judicial Committee of SPC, No.33 Judicial Interpretations (2001);
• Provisions of the SPC on Several Problems concerning Jurisdiction over Foreign-related Civil and Commercial Cases, adopted on December 25, 2001 at the 1203rd Session of the Judicial Committee of the SPC, No.5 Judicial Interpretations (2002);
• Interpretations of the SPC on Problems of Jurisdiction and Applicable Law in Trademark Cases, adopted on December 25, 2001 at the 1203rd Session of the Judicial Committee of the SPC, No.1 Judicial Interpretations (2002); and
• Several Provisions of the SPC concerning the Application of Summary Procedures in the Trial of Civil Cases, adopted on July 4, 2003 at the 1280th Session of the Judicial Committee of SPC, No.15 Judicial Interpretations (2003).

Except in the simplest cases, cases in first instance are heard by panels consisting of at least three judges (in odd numbers) or of a combination of judges and people’s assessors. The judges and people’s assessors enjoy the same rights.²⁰

Appeals are heard by panels of judges.²¹

Panels can reach decisions unanimously or by majority opinion, provided that the opinions of the minority are recorded in the court record.²²

Where a case needs to be retried, a new panel is formed for the retrial.²³

The parties have no discretion to choose the form of trial for their cases.

1.2. Treaties

In 1991, China adhered to the Convention on the Service abroad of Judicial and Extra-judicial Documents in Civil and Commercial Matters and, in 1997, it joined the Convention on the Collection of Evidence abroad in Civil and Commercial Matters. As of 2002, around twenty countries²⁴ had signed bilateral agreements with China on civil judicial assistance, including provisions on reciprocal service, collecting evidence, mutual recognition and enforcement of judgments.

The provisions of China’s international treaty commitments prevail over conflicting provisions of the Civil Procedure Law.²⁵

1.3. Foreign-related civil proceedings

Foreign-related civil cases are governed by special provisions of the Civil Procedure Law contained in its Part Four. Any matter not covered in Part Four is governed by the other provisions of the Law.²⁶

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2. Jurisdiction

Lawsuits must be filed in courts with jurisdiction according to the rules of original jurisdiction and of territorial competence and subject to compliance with any applicable mandatory rules.

The parties to a contract may agree in their written contract to attribute jurisdiction to the people’s courts where the plaintiff or the defendant has its domicile, where the contract is signed, where the contract is to be performed, or where the object of the contract is located, provided that the provisions regarding jurisdiction by forum level and exclusive jurisdiction are not violated.²⁷

2.1. Original jurisdiction

The basic courts have original jurisdiction over civil cases unless otherwise provided by the law.²⁸

Intermediate courts have original jurisdiction over major cases involving foreign interests, cases that have a major impact on the area under their jurisdiction and cases under heads of jurisdiction attributed to them by laws and regulations or by the SPC.²⁹

The high courts have jurisdiction as courts of first instance over civil cases that have a major impact on the areas under their jurisdiction.³⁰

The SPC only has jurisdiction as the court of first instance over civil cases that have major impact on the whole country or that it considers it necessary to put on trial.³¹

2.2. Territorial jurisdiction

In the absence of agreement otherwise, the following principles apply.

Lawsuits may be brought at the defendant’s domicile; if the latter has a habitual residence elsewhere, the courts at that place are competent.³³

Lawsuits brought in tort may also be brought before the courts at the place of occurrence of the tort. In tort actions brought in product liability, the courts at the place of manufacture of the litigious products, as well as those at any place of their sale may also be seized.

Lawsuits initiated in contract fall under the jurisdiction of the people’s court in the place where the defendant is domiciled or where the contract is performed.³⁴

In disputes about sales contracts, the competent court is at the place of performance, which is presumed, in the absence of agreement otherwise, to be the place of delivery. None of the stipulated places where the goods may be intended to transit, such as where the goods are inspected, or where the goods are installed or tuned, is regarded as a place of performance. In addition, if the parties change the stipulated place of performance, the last agreed place governs jurisdiction.³⁵

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With respect to work contracts, the place where the work is performed is the place of performance.³⁶

As to leasing contracts (including financial leases), the place where the leased property is located is considered to be the place of performance.³⁷

Contracts for investment in exchange for draws on future production are considered to be performed at the place where the party receiving the investment performs its major contractual obligations.³⁸

Where lawsuits are initiated over insurance contracts, the parties may seize a people’s court where the defendant is domiciled or where the insured object is located.³⁹ If the insured object in dispute is a conveyance, the competent court is that where the conveyance is registered. Where the insured objects are goods in transit, the competent courts are those located at their destination or those where the insured event occurs.⁴⁰

Lawsuits over bills fall under the jurisdiction of the people’s court where the bills are to be paid or where the defendant is domiciled.⁴¹ If the place of payment is not stipulated on the bill, the competent courts are those where the drawee (including its agents for payment) is domiciled or maintains its major place of business.⁴²

Lawsuits initiated over contracts for transportation by rail, road, water, or air are subject to the jurisdiction of the people’s court where the carriage began or ended or where the defendant is domiciled.⁴³

2.3. Exclusive jurisdiction

Article 34 of the Civil Procedure Law attributes exclusive jurisdiction to certain people’s courts with respect to specified types of cases.

Lawsuits initiated over immovable property must be brought before the people’s court where the property is located.

Lawsuits concerning harbour operations are under the jurisdiction of the people’s court in the place where the harbour is located.⁴⁴

Contracts that are not foreign-related may not contain clauses attributing jurisdiction to foreign courts or authorities.

When the parties to a dispute have concluded a valid arbitration agreement, the courts will not entertain their actions unless none of parties to the arbitration agreement invokes it.

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3. Service

In China, legal documents become effective on the date of service.

In principle, personal service of the defendant is required and the recipient must sign and date the receipt.⁴⁵

If the recipient is an individual, and in the event of his/her absence, personal service is effected by delivering the documents to an adult member of his/her family living with him/her. If the recipient of the service is a legal person or any other organization, personal service requires delivery to their legal representatives or principal personnel or the personnel in charge of receiving such documents. If the recipient has designated an agent to accept service on its behalf and has so informed the people’s court, the documents may be served on the agent.⁴⁶

Where personal service is not possible, documents may be served by mail or with the assistance of other people’s courts or that of other organs.⁴⁷ The date on the receipt of service or on the return receipt for service by mail is deemed to be the date of service. If the court fails to deliver documents by all of these measures, the document will be served by public announcement. Sixty days after the public announcement, the documents are deemed to have been served.⁴⁸

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4. Property preservation and preliminary execution

Where the execution of a judgment may become impossible or difficult because of the acts of either party or for any other reason, the people’s courts may, at the request of an interested party, order measures for the preservation of property. Upon receipt of the application from the party, the court may request it to provide surety and, if the applicant fails to do so, the application is rejected.⁴⁹

Any interested party whose lawful rights and interests are in urgent danger of suffering irreparable harm may, before filing a lawsuit, apply ex parte to the people’s court for property preservation measures. The applicant must provide a surety, otherwise the application will be rejected.⁵⁰

In urgent cases, the people’s court will within 48 hours render orders that are immediately executory. Property preservation is limited to the scope of the claim or to the property relevant to the case. These measures may include placing under seal and seizures.⁵¹

However, property preservation measures will be cancelled when the party against which the application is made provides a surety or where the interested party fails to file a case in court within 15 days⁵² after the property preservation measures were ordered.⁵³

The people’s court may order provisional execution at the request of the parties concerned where it is necessary to avoid serious effects on the life or the business of the petitioner or if the relationship of rights and obligations between the parties is definite and the party against which the application is made is capable of fulfilling its obligations. The court may request petitioners to provide surety lest their petitions be turned down.⁵⁴

Parties dissatisfied with any property preservation order or provisional execution order may apply, once only, for reconsideration but their execution is not thereby suspended.⁵⁵

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5. Trial procedures

Other than as required under applicable treaties or as specially provided in Part Four of the Civil Procedure Law, trial procedures are the same for Chinese and foreign parties. Chinese is the language used in trials before the people’s courts; foreign parties may obtain at their expense translations of the proceedings such as they are recorded in Chinese.⁵⁶ Legal persons are represented in court by their legal representatives; for instance, the chairman of the board of directors represents his/her company.⁵⁷ Other organizations are represented by the persons who exercise the principal responsibilities over the organization.⁵⁸ In disputes involving partnerships, all their partners are parties, unless they designate a single partner to represent them.

5.1. Proceedings before courts of first instance

5.1.1. Ordinary procedure

Other than a small number of cases conducted under summary procedures, most civil cases are tried under the ordinary procedure.

To commence a suit, the plaintiff files with a people’s court that has jurisdiction over the matter a written statement of claims against an identified defendant containing concrete demands and facts and reasons on which the claims are based.⁵⁹ The court must make a decision on whether to accept the case within seven days. If the case is rejected, the plaintiff may file an appeal.⁶⁰

If the court decides to accept the case, it is responsible for serving notice of the action and a copy of the statement of claims on the defendant. The latter is not required to submit a statement of defence but, if it chooses to do so, its reply must be filed within 15 days from receipt of the statement of claims.⁶¹ If the defendant is not domiciled in China, the time limit for submitting a defence is extended to 30 days from receipt of the statement of claims.⁶²

The people’s court constitutes a panel of judges and informs the parties thereof within three days of accepting the case.⁶³ After examining the materials, the court may decide to undertake investigations or collect evidence.⁶⁴ If a party that must participate in a joint lawsuit defaults, the people’s court notifies it to do so.⁶⁵

If the panel finds that the facts are manifest and that the legal relationship is definite, it may, with the consent of the parties, conduct conciliation. If the conciliation is successful, a conciliation statement is prepared and it is binding on the parties.⁶⁶ If the conciliation fails or the court does not consider that conciliation is appropriate, the court sets a hearing date.⁶⁷ All the parties and other participants in civil cases are notified at least three days before any hearing. If a case is to be heard in public, the names of the parties, the cause of action and the time and location of the hearing will be announced publicly.⁶⁸

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At the beginning of the proceedings, the parties are entitled to request the withdrawal of any court personnel including judges, people’s assessors, clerks, interpreters, expert witnesses and inspectors for any of the following reasons:

• he/she is a party or a near relative of a party to the case or a near relative of an agent ad litem in the case;
• he/she has a personal interest in the case; or
• he/she has some other relationship with a party to the case that could influence the impartial handling of the case.⁶⁹

If the reason for the challenge becomes known only after the beginning of the proceedings, the request may be raised prior to the end of the debates.⁷⁰

Pending the decision on the withdrawal and unless emergency measures are required, the party concerned must temporarily suspend its participation in the proceedings.⁷¹

The court renders its decision within three days and, if a party is not satisfied, it may apply, but only once, for reconsideration. During the period of reconsideration, the person who has been requested to withdraw does not suspend his/her participation in the proceedings.⁷²

Unless otherwise provided by law, the parties must produce evidence to support their arguments.⁷³

Evidence must be submitted within the time limits set down in the notice on producing evidence that is served simultaneously with the notice of action.⁷⁴ If the party bearing the burden of proof fails to present evidence on time, it assumes the consequences.⁷⁵

Litigants and their agents ad litem have access to the materials relating to the case and may copy such materials and other legal documents.⁷⁶

People’s courts may undertake investigation or collect evidence themselves under the following circumstances:

• where the facts concern the national interest, the public interest or private interests; and
• where the facts investigated have no relation to a dispute before the court.⁷⁷

In addition, the people’s courts may undertake investigations or collect evidence at the request of a litigant or its agent ad litem in these situations:

• where the evidence is in the possession of national departments and only the people’s court is entitled to collect it;
• where the evidence concerns State secrets, commercial secrets or personal privacy; and
• where, for objective reasons, the litigant and its agent ad litem are unable to obtain the evidence themselves.⁷⁸

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Such requests are raised no later than seven days before the time limit for producing evidence.⁷⁹ Where there is a likelihood that evidence may be destroyed or lost or become difficult to obtain at a later date, the people’s court may, on its own initiative or at the request of the parties, issue orders for its preservation.⁸⁰

In general, the types of admissible evidence include documentary evidence (in principle, originals), physical evidence, audio-visual materials, testimony of witnesses, statements by interested parties, expert conclusions and records of inspections.⁸¹

When evidence originates from abroad, it must be authenticated by a notary public or by the Chinese embassy or consulate in the source country.⁸² When documentary evidence in a foreign language is presented, it must be accompanied by a Chinese translation.⁸³

A party may have a witness appear in court to give testimony if it applies to the people’s court no later than ten days before the deadline for presenting evidence and obtains the approval of the court.⁸⁴ When it would be truly difficult to appear in court, a witness may, with the approval of the people’s court, submit a written deposition.⁸⁵ All evidence is verified before it can be taken as a basis for ascertaining a fact.

The party involved may appear in person or may be represented by an agent ad litem. Nevertheless, if a plaintiff has been served with a legal summons and refuses unreasonably to appear in court, or leaves a hearing without permission, the court may consider the complaint to have been withdrawn. If the defendant is absent or leaves a hearing without a legitimate reason, the court may render a judgment by default.⁸⁶

At the opening of the hearing, the parties are informed of the court’s rules and their rights and liabilities in connection with the litigation. The parties are asked whether or not they wish to apply for the withdrawal of any court personnel.⁸⁷ If a party does so, the trial may be postponed.⁸⁸

The trial is comprised of stages of instruction and of debate.

The instruction stage is conducted in the following order:

• statements by the parties;
• after informing them of their rights and obligations, the witnesses are heard and the written statements of absentee witnesses are read;
• presentation of documentary evidence, material evidence and audio-visual material;
• reading of expert reports; and
• reading of records of inspection.⁸⁹

With the permission of the court, the parties m ay put questions to witnesses, expert witnesses and inspectors.

Witnesses are heard outside each other’s presence.

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Not all evidence is admissible. In particular, evidence communicated during a failed mediation effort may not be used by the opposing party during subsequent judicial proceedings.⁹⁰

The parties may request new investigations, expert evaluations or inspections subject to the approval of the people’s court.

During the court investigation, the judges may question the parties and witnesses.

In addition, the parties may present new evidence during a hearing.⁹¹ However, “new” evidence refers only to evidence discovered after the deadline for presenting evidence or that cannot be produced in time because of objective reasons even though the court has extended the limit.⁹²

After the instruction stage, the plaintiff and his agent ad litem may make statements, as the defendant and his agent ad litem may respond.

Then a debate is conducted between the parties.

At the end of the debate, the presiding judge asks each side to present its final arguments, with the plaintiff going first, and then the defendant.⁹³

Where conciliation of the parties is possible prior to the rendering of a judgment, the court may initiate the effort; if conciliation proves to be unsuccessful, a judgment is made without delay.⁹⁴

The clerk makes a written record of the entire court proceedings. If the parties or other participants in the proceedings consider that there are omissions or errors in the record of their statements, they have the right to apply for additions or corrections. If such additions or corrections are not made, the request is nevertheless recorded in the file. The court record is signed or sealed by the parties and other participants in the proceedings. Refusal to do so is recorded in a note attached to the file.⁹⁵

The probative value of evidence is determined by application of the following principles of priority:

• public documents emanating from the State or its ramifications rank highest among documentary evidence;
• material evidence, archives, experts’ conclusions, examination records, that are notarized or registered rank above other documentary evidence, audiovisual material and witnesses’ testimony;
• original evidence prevails over reproduced or secondary evidence;
• direct evidence is more persuasive than indirect evidence; and
• evidence provided by witnesses with family relationships with any of the parties ranks below other witnesses’ testimony.

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The court must announce its judgment publicly even if the case was not tried publicly. Where the court announces its judgment after the hearing, a written report must be prepared within ten days. Where the rendering of the judgment is postponed to a specific date, the written report must be issued immediately after the announcement. The court is required to inform the parties of their right to appeal, the time period for appealing and the proper court to which to appeal.⁹⁶

In general, a civil case tried by the ordinary procedure at first instance is closed within six months from the filing date, which may be extended six months with the approval of the president of the court, but any further extension must be reported to the people’s court at the next higher level for approval.⁹⁷

5.1.2. Summary procedure

Summary procedures are an alternative at first instance in the basic courts. They are available in simple civil cases where the facts are evident, the rights and obligations are definite, and the disputes are minor.⁹⁸ The parties to a case brought in ordinary proceedings may petition the court to exercise its discretion to employ the summary procedure.⁹⁹ However, if any of the parties disagree with the application of the summary procedure regardless of the court’s assent to the request, or if the court considers the application of summary procedure inappropriate, the ordinary procedure is maintained. ¹⁰⁰

Summary procedures are not available in cases such as retrials or when the defendant cannot be personally served.¹⁰¹

Parties and their agents ad litem in summary proceedings may request the court to undertake investigations and/or collect evidence and they may, at any time before the expiration of the time limit for producing evidence, apply for summonses ordering the appearance of witnesses.¹⁰²

Simple civil cases are tried by a single judge and the rigour of the procedures is somewhat relaxed.¹⁰³ For example, if the facts are clear and the rights and obligations definite after the parties present their statements, the judge may, with the consent of the parties, conduct conciliation directly.¹⁰⁴

Unless the court considers it inappropriate, its judgments are announced at a public hearing.¹⁰⁵

The court is expected to close a summary proceeding within three months from filing of the case.¹⁰⁶ If the court finds it necessary to change a summary proceeding into an ordinary proceeding, the decision must be made within this three-month limit.¹⁰⁷

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5.2. Appeals

If a party intends to contest a judgment of a people’s court of first instance, it must file an appeal with the people’s court at the next higher level within 15 days from the date on which the written judgment was served. To contest an order from a people’s court of first instance, an appeal must be filed within ten days from the date on which the written order is served.¹⁰⁸

However, if the party has no domicile in China, the time periods to appeal against judgments or orders of first instance are 30 days from the date on which the judgments or orders are served.¹⁰⁹ Unless otherwise provided by law, a people’s court of second instance applies the ordinary procedure for trials on first instance.¹¹⁰

Parties may file their appeals with the people’s court that originally tried the case, though direct submissions to the people’s court of second instance are not prohibited by law.¹¹¹ The respondent has the right to submit a defence within 15 days after receiving a copy of the appeal.¹¹² If the respondent has no domicile in China, the deadline is extended to 30 days from receipt of the copy of the appeal. Where it is impossible to submit a defence within the time prescribed by law, the respondent may request an extension.¹¹³

On appeal, the court does not review facts and laws that have no relation to the matters subject to the appeal, unless the judgment has violated mandatory regulations, public interests or interests of third parties.¹¹⁴ The respondent may request modifications of or supplements to the judgment of first instance that the appeal court may reject.¹¹⁵

The appeal court may form a panel to conduct a hearing or it may render a judgment or issue an order without a hearing.¹¹⁶ Where a party produces new evidence or where the court considers it necessary to review the evidence, the panel conducts a trial. Where the facts are clear, the court may render a decision directly after questioning the parties.¹¹⁷

The only new evidence that is admissible on appeal is that discovered after the trial or that which the trial people’s court refused to collect pursuant to a timely request of the party but which the appeal court agrees to collect. If a hearing is held, new evidence may be produced before or during the hearing. If the panel does not conduct a hearing, any new evidence is presented within the period determined by the people’s court.¹¹⁸

If the facts were correctly ascertained and the law was correctly applied in the original judgment, the appeal will be rejected and the original judgment confirmed.

If the law was incorrectly applied in the original judgment, it will be amended in accordance with the law.

If in the original judgment the facts were incorrectly ascertained or were not clearly ascertained and the evidence was inconclusive, the judgment will be cancelled and the case will be remanded to the original people’s court for retrial¹¹⁹ or the appeal court may amend the judgment after investigating and clarifying the facts.

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If a violation of the prescribed procedures affects its validity, the judgment is cancelled and the case is remanded to the original people’s court for retrial. The parties may appeal against the judgment or order rendered in a retrial of their case.¹²⁰

The appeal court may conduct conciliation. In cases of success, a conciliation statement is drawn up and, after it has been served, the judgment of first instance is considered to have been annulled.¹²¹

The judgments and orders of an appeal court are final.¹²²

Appeal courts are expected to render a final judgment within three months from filing of the appeal against a judgment and within 30 days on appeals from orders. The president of the appeal court may allow extensions of the period in cases of necessity due to special circumstances.¹²³

5.3. Revision of definitive judgments

In Chinese civil procedure, definitive judgments are subject to review and reform in special circumstances.

This procedure may be initiated by the SPC, the people’s court at the next higher level or the president of the people’s court that rendered the legally effective judgment or order,¹²⁴ as well as by the people’s procuratorate.¹²⁵

Interested parties may also apply to the people’s court that originally tried the case or to a people’s court at the next higher level for retrial, but execution of the judgment or order is not suspended unless the court so orders.¹²⁶

To succeed, such applications for retrial must meet one of the following conditions:

• new evidence conclusively repudiates the original judgment or order;
• the evidence on which the facts were ascertained in the original judgment or order was insufficient;
• the original judgment or order was based on an error in the application of the law;
• a violation of legal procedures by the people’s court may have affected the validity of the judgment or order; and
• the judicial personnel committed embezzlement, accepted bribes, resorted to malpractice for personal benefit or distorted the law in the trial of the case.¹²⁷

The 2007 amendment to the Civil Procedure Law adds to these grounds errors in the determination of jurisdiction, errors in the composition of the court and violations of the right to a fair hearing.

To qualify as “new”, evidence must have been discovered after the original trial ended.¹²⁸

A party may also apply for retrial if there is proof that a legally effective conciliation statement violates the principle of freedom of the will of the parties or that the content of such conciliation statement is illegal.¹²⁹

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Applications by a party for a retrial must be filed within two years from the date when the judgment or order became effective.¹³⁰ The case is retried in accordance with the procedure where the judgment or order originated.¹³¹

Prior to the 2007 amendment to the Civil Procedure Law, applications for retrials were made to the court that originally heard the matter or to a court at the next higher level. The amendment provides that applications are filed exclusively before the court at the next higher level.

5.4. Summary procedure for recovering a debt

Creditors may obtain expedited execution for payments of money or payments on negotiable instruments.

To initiate the action, the creditor submits a written application to the basic people’s court with jurisdiction clearly stating the requested amount of money due or the value of negotiable instruments due, as well as the facts and evidence on the basis of which the request is made. The court informs the creditor within five days whether it accepts to judge the application.¹³²

Provided that there are no other debts in dispute between the creditor and the debtor and provided that the order of payment can be served on the debtor,¹³³ and where the rights and obligations are clear and the claim legitimate, the court issues an order of payment to the debtor within 15 days. If the application is unfounded, the people’s court rejects it.¹³⁴

The debtor must, within 15 days of receipt of the order of payment, clear the account or submit a written opposition to the people’s court. If the debtor has neither protested against, nor complied with, the order of payment within the required period, the creditor may apply to the people’s court for execution.¹³⁵

However, if the debtor submits a timely written objection, the payment order is set aside,¹³⁶ and the creditor may then initiate a lawsuit before the people’s courts.¹³⁷

This procedure does not apply when the debtor resides outside China.¹³⁸

5.5. Public invitations to assert claims

Where a negotiable bill has been stolen or lost or is missing, the last holder may, in order to avoid losing its interests, initiate procedures in a basic people’s court in the place where bill is to be paid. The written application must clearly state the main contents of the bill such as the face amount, the issuer, the holder, the endorser, and the grounds and facts on which the application is made.¹³⁹

Upon receipt of the application, the court will, within seven days, make a decision on whether to accept the case.¹⁴⁰ If the court accepts the application, it will notify the payer to suspend the payment, and it will, within three days, issue a public notice inviting interested parties to their assert claims. The time limit of the public notice is at the discretion of the court. However, it may not be less than 60 days.¹⁴¹

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Payers so notified by a people’s court must suspend their payments until the conclusion of the procedure. During the time limit of the public notice, any transfer of the rights in the bill is deemed to be null.¹⁴² When the interested party asserts claims within the time limit of the public notice, the court will conclude the procedure and notify the applicant and the payer. Both the applicant and the claimant may institute a lawsuit in the people’s court to enforce their rights.¹⁴³

If no one asserts a claim, the people’s court renders a judgment at the request of the applicant to declare the bill null and void and the applicant is then entitled to claim payment from the payer.¹⁴⁴ Such requests must be made within one month from the day following expiration of the time limit for asserting claims.¹⁴⁵

5.6. Bankruptcy of enterprises

Chapter 19 of the Civil Procedure Law was meant to regulate bankruptcy proceedings for private enterprises that were beyond the scope of the Bankruptcy Law. It became superfluous with the implementation of the new Enterprise Bankruptcy Law as of June 1, 2007 since it provides for uniform bankruptcy procedural rules for private and State-owned enterprises (SOEs). Accordingly, the 2007 amendment of the Civil Procedure Law cancels this chapter. In so far as the former rules may apply to ongoing cases, they are commented below.

The provisions of the Civil Procedure Law do not apply to non legal-person enterprises, individual businesses, lease holding farm-households and partnerships of private individuals.¹⁴⁶

If an enterprise with the status of legal person has incurred serious losses and is unable to pay its debts as they come due, the debtor or any creditor may apply to the people’s court in the place where the enterprise is located to have bankruptcy proceedings opened.¹⁴⁷

Once the court has rendered an order to open bankruptcy proceedings, the court notifies the enterprise’s known debtors and creditors within ten days and makes a public announcement.¹⁴⁸ Creditors that receive notice must, within 30 days after receiving the notice, report their claims to the court. Otherwise they will be deemed to have abandoned their claims. Creditors that are not notified have three months after the date of the announcement to file their claims.¹⁴⁹ During this period, execution and preservation measures affecting the property of the debtor are suspended.¹⁵⁰

Creditors may organize a meeting to discuss and approve a scheme for the disposition and distribution of the bankrupt’s property, or for a general settlement of the bankrupt’s debts. The people’s court may appoint liquidators, chosen among concerned State organs and individuals, to take over, order, appraise, dispose of and distribute the bankrupt’s property as well as to pursue any claims and civil actions on its behalf. The liquidators report to, and are accountable before, the people’s court.¹⁵¹

If the legal-person enterprise and its creditors reach a general settlement, it is submitted to the people’s court for approval. In the event of approval, the people’s court makes a public announcement and suspends the bankrupt’s payments. The compromise agreement becomes legally effective as of the public announcement.¹⁵²

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However, if a bankrupt enterprise and its creditors fail to reach a general settlement, the liquidators propose a scheme for the disposition and distribution of its property. Then, subject to the approval of the creditors’ meeting, the people’s court issues an order to implement the scheme for the disposition and distribution of bankrupt’s property.¹⁵³

After deduction of bankruptcy expenses from the proceeds upon liquidation of the bankrupt’s property, payments are made in the following order of priority:

• salaries of employees and labour insurance expenses;
• taxes; and
• claims by creditors, among whom secured creditors have priority.

Where the proceeds upon liquidation of the bankrupt’s property are insufficient to pay all the debts, they are distributed to each creditor pro-rata to the amount of its claim in the total claims.¹⁵⁴

When all the proceeds upon liquidation of the bankrupt property are distributed, the liquidators apply to the people’s court for termination of the bankruptcy proceeding.

5.7. Burden of proof

The SPC’s Several Provisions concerning Evidence in Civil Litigation of 2002 provide guidelines on the attribution of the burden of proof.

According to articles 5 and 6, where a dispute arises from a contractual relationship, the party alleging its formation and effect, its modification, termination or rescission, must prove its allegations; where the case concerns whether the contact has been performed, the performing party bears the burden of proving its performance; where a dispute arises over powers of agency, the party alleging the existence of the power must prove it.

Article 4 allocates the burden of proof in various tort situations as follows.

In patent infringement suits, the unit or individual that manufactures the identical or similar products must prove that its manufacturing method is different from the patented method.

In cases of personal injury caused by highly dangerous operations, the injuring party must prove that the victim intentionally caused and was responsible for his/her own injury.

In a suit for damages from environmental pollution, the party alleged to have caused the damage must prove any claimed legal exemption, as well as any claim of lack of causation between its act and the damage.

In claims for personal injury caused by the breakdown or collapse of a building or any other installation, or the falling of any article from a building or installation, the owner or the manager thereof is presumed to be at fault.

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Where personal injury has been caused by livestock, the animal breeder or manager bears the burden of proving that the victim or a third party was at fault.

In suits alleging personal injuries caused by defective products, their manufacturers bear the burden of proving any legal exemption.

In suits alleging personal injury caused by common dangerous acts, the persons committing such acts must prove that in any claim there is no causation between the act and the injury sustained. In tort suits alleging injury resulting from medical treatment or procedures, to avoid liability the medical institution must prove either that there is no causation between its actions and the injury or that there was no medical malpractice.

5.8. Limitation periods

Under article 135 of the General Principles of Civil Law, except as otherwise stipulated by law, suits must be brought before the people’s courts within two years from the date when the plaintiff knew or should have known of the infringement of its rights.

Article 137 of the General Principles of Civil Law provides that the limitation period is reduced to one year on claims:

• for compensation for bodily injuries;
• arising from sales of substandard goods without proper notice;
• for delays in paying rent or refusals to pay rent; and
• for loss of or damage to property left in the care of another person.

Other matters governed by special limitation periods include the Product Liability Law, which stipulates a limitation period of ten years from the first consumer sale on claims for damages caused by defective products.

Unless the people’s courts extend the deadline in special circumstances, no claim may be brought on events having occurred more than 20 years previously.¹⁵⁵

Limitation periods are suspended while the plaintiff was unable to exercise its rights because of force majeure or “other obstacles”.¹⁵⁶

Limitation periods are stopped when the claim is pressed, such as by a suit before the people’s courts.¹⁵⁷

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6. Enforcement

If a party does not respect an effective judgment, order or conciliation agreement in a civil case, the other party may apply to the original people’s court of first instance for enforcement measures, or the judge may automatically refer the matter to the execution officer for enforcement.¹⁵⁸ Prior to the 2007 amendment to the Civil Procedure Law, if any of the parties was an individual, the application had to be made within one year; if both parties were legal persons or other organizations, the time limit was six months.¹⁵⁹ Since the amendment, the time limit for submitting an application for the enforcement of civil judgments for both legal persons or other organizations and individuals is two years.¹⁵⁹

If the object of enforcement is located outside the jurisdiction of the original court, the people’s court in that location may be entrusted to enforce the execution. The entrusted court must start execution within 15 days after receiving a letter of entrustment. The entrusted court is accountable to the original court.¹⁶⁰

After receiving an application for execution, the execution officer issues an execution notice instructing the concerned party to execute the judgment or order within the specified time limit,¹⁶¹ and the party subject to execution is obliged to submit to the people’s court an inventory of property.¹⁶² If the party fails to comply with the notice, the people’s court will enforce the legal document by imposing compulsory measures on the party’s property, such as freezing and transferring its savings deposits, withholding or withdrawing its income, placing under seal, freezing or selling its property, and compulsory eviction from a building or a plot of land, etc.¹⁶³ If the party subject to execution is still unable to repay its debts from the proceeds of the execution measures, it remains obliged for the balance. Creditors may at any time apply to the people’s court for execution of any other property of the debtor until satisfaction in full of the debt.¹⁶⁴

Beyond the compulsory measures, monetary punishment is also imposed on the party in default. Parties that fail to honour a pecuniary debt within the period specified by the judgment or order incur liability for greatly increased rates of interest on the debt for the period of deferred fulfilment. Failure to fulfil other executory obligations within the required period may entail a fine for the dilatory behaviour.¹⁶⁵

Under the 2007 amendment to the Civil Procedure Law, the fines that may be imposed on those who fail to comply with civil judgments have been increased from RMB 1,000 to RMB 10,000 for individuals and from RMB 30,000 to RMB 300,000 for legal persons. If a judgment debtor attempts to transfer or conceal its property, the court may expedite the execution measures. If a court of first instance fails to implement execution measures within six months from receipt of a petition to that effect, the court at the next higher level may be solicited. The latter court may order the lower court to execute within a specific period, it may order another court at same level as the lower court to enforce the judgment or it may carry out the execution measures itself

In the course of enforcement, the parties may reach a compromise agreement on their own initiative. Such compromise is recorded by the execution officer and the parties sign or seal the record; enforcement is then suspended. If one party fails to fulfil the comprise agreement, the people’s court may, at the request of the other party, resume the execution of the judgment or order.¹⁶⁶

The party subject to execution, with the consent of the applicant for execution, may obtain a deferral of the execution subject to providing surety. The time limit for deferred execution depends on the term of the surety but it may not exceed one year. If the party subject to execution fails again to fulfil its obligations within the new time limit, the people’s court will execute the judgment against the property of the judgment debtor or that of the guarantor.¹⁶⁷

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If a third party raises an objection with respect to the object of enforcement, the execution officer examines the objection in accordance with the procedure prescribed by law. If there are serious grounds for the objection, the concerned part of the execution procedures may be suspended by the president of the court.

If a definite error is found in the judgment or order, judicial revision proceedings may be commenced.¹⁶⁸

If a party or property subject to execution are not within China, the applicant may itself or through the people’s court, in accordance with the relevant provisions of the international treaties concluded or acceded to by China, or with the principle of reciprocity, request recognition and enforcement by the foreign court that has jurisdiction over the case.¹⁶⁹

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7. Foreign-related proceedings

Foreign-related cases are subject to special rules with respect to jurisdiction and they give rise to debate about the law applicable to the settlement of disputes.

According to the definition in article 170 of the SPC’s Several Opinions on the Implementation of the General Principles of Civil Law and article 304 of its Several Opinions on the Implementation of the Civil Procedure Law of 1992,¹⁷⁰ foreign-related cases are those in which:

• at least one of the parties is a foreign or stateless individual or a foreign legal person
• a civil relationship is created, modified, or terminated outside China; or
• the subject matter of the dispute is outside China.

Cases involving sino-foreign equity joint ventures, sino-foreign contractual cooperative joint ventures or exclusively foreign-owned enterprises are not ipso facto foreign-related cases since these enterprises are Chinese legal persons.

7.1 Jurisdiction in foreign-related cases

Lawsuits may be brought before the Chinese courts against foreign parties if they have their domicile or habitual residence in China.¹⁷¹

Cases may be brought against defendants who have no domicile in China in disputes about contracts or property rights and interests:

• if the contract is signed or performed in China;
• if the object of the action is located in China;
• if the defendant has property in China; or
• if the defendant has a representative office in China.

The competent people’s court is, as the case may be, at the place where the contract is signed or performed, where the object of the action is located, where the defendant’s property is located, or where the defendant’s representative office is located.¹⁷²

In Chinese conflicts rules, if a party’s domicile is unclear or uncertain, his/her habitual residence governs jurisdiction. If a party has several domiciles, the one that has the closest connection with the disputed relationship is treated as his/her domicile.¹⁷³

Where a party has more than one place of business, the one that has the closest connections with the disputed relationship governs jurisdiction. For parties without a place of business, their domiciles or habitual residences govern jurisdiction.¹⁷⁴

In matters of tort, the competent courts are those where the tort was committed.

7.1.1. Service of foreign parties

Parties located in foreign countries with which China has concluded judicial assistance agreements or international conventions are notified in accordance with their rules.

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Foreign parties may be given notice by personal service on an authorized agent ad litem, representative agency, branch or business agent empowered to receive service in China. They may also be served by the post if the law of the country where the recipient of service resides so permits; in the event that no receipt is returned 60 days after the date on which the document was posted, and provided that other circumstances indicate that the document has been received, service will be deemed to have been effected upon the expiration of the time limit. The people’s courts may also have recourse to the assistance of China’s foreign legations in countries where a Chinese party is present or they may use other diplomatic channels. Where these methods are unsuccessful, the court may serve by public notice, which will be deemed completed six months after the date on which the public notice was issued.¹⁷⁵

7.1.2. Contractual attributions of jurisdiction

Parties to contracts with foreign elements or to disputes over property rights and interests involving foreign elements may agree on the attribution of jurisdiction provided that:

• the agreement is made in writing, and
• the place where the court is located has actual connections with the matter.

By implication, Chinese parties to contracts without any foreign elements, including sino-foreign cooperative and equity joint ventures as well as wholly foreign-owned enterprises, must submit their disputes to the Chinese courts or arbitration institutions.

Where jurisdiction is attributed to a people’s court, the rules on original jurisdiction and on exclusive jurisdiction must be respected.¹⁷⁶

Parties may not avoid the jurisdiction of Chinese courts over:

• suits concerning the performance of sino-foreign equity joint venture contracts and sino-foreign contractual joint venture contracts as well as those concerning sino-foreign cooperative contracts for exploration and development of China’s natural resources;
• suits concerning immovable property located in China; or
• those concerning the operations of harbours located in China.¹⁷⁷

In judicial practice, nor may parties exclude the jurisdiction of China’s courts over the following actions:

• those concerning legal persons or organizations registered in China or that have their principal businesses there, including the validity of their incorporation, dissolution or liquidation, and such internal disputes as arise between a legal person and its shareholders or between the shareholders and directors or between the managers themselves; and
• those concerning the validity of intellectual property registered in China.

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7.1.3. Original jurisdiction in foreign-related cases

In foreign-related cases, special rules govern original jurisdiction.¹⁷⁸ The Provisions of the SPC concerning Several Problems arising in connection with Jurisdiction over Foreign-related Civil and Commercial Cases of 2002 provide that the following courts have jurisdiction as courts of first instance over foreign-related civil and commercial cases:

• courts in economic and technological development areas in cities;
• intermediate courts in provincial capitals, capitals of autonomous regions and municipalities;
• intermediate courts in special economic zones and other intermediate courts designated by SPC; and
• high courts.

The Provisions only apply to five types of cases:

• disputes arising from foreign-related contracts or torts;¹⁷⁹
• disputes arising from letters of credit;
• cases concerning the setting aside, the recognition or enforcement of international arbitral awards; and
• disputes arising from the validity of foreign-related arbitration agreements.¹⁸⁰

However, cases involving border trade, foreign-related real estate and foreign-related intellectual property are excluded from the scope of the Provisions.¹⁸¹

7.2. Applicable law

When trying foreign-related civil cases, the people’s courts determine the applicable law governing the rights and obligations of the parties in accordance with local conflict rules, which are set down in the General Principles of Civil Law as complemented by the Opinions of the SPC on Several Problems concerning the Implementation of the General Principles of Civil Law of 1988, subject to the supremacy of the provisions of conflicting international treaty commitments. In the absence of such sources, international practice may be applied.¹⁸²

The content of foreign law must be proved, which may be accomplished:

• by the parties’ production of evidence, such as expert testimony;
• by the central authorities of a State with which China has concluded a bilateral judicial assistance agreement;
• by the Chinese embassy or consulate in that foreign country; or
• by the embassy of that foreign country in China.

In the event that it is impossible to prove the foreign law, or if it contains no pertinent rules of law, the people’s courts apply Chinese law.¹⁸³

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The application of a foreign law may not result in violations of the public interest of China.

7.2.1. Capacity

According to the Opinions of the SPC on Several Problems concerning the Implementation of the General Principles of Civil Law of 1988, a foreign party may bring a civil action in China for which it would not have capacity under its national law provided that it has capacity to act under the Chinese law.¹⁸⁴

For persons with more than one nationality, their national law is deemed to be the law of their domicile or the law of the country with which they have the closest connections.¹⁸⁵ The capacity to act of a stateless person is governed by the law of the country where he/she is settled. If he/she is not settled anywhere, the law of his/her domicile determines their capacity to act.¹⁸⁶ The capacity of a foreign legal person is governed by the law of the place where it is registered.¹⁸⁷

7.2.2. Immovable property

The law of the place where the property is located governs all civil relationships affecting it including ownership, sales, leases, mortgages, and uses thereof.¹⁸⁸

The classification of property as movable or immovable is governed by the law of the place where it is located.¹⁸⁹

In Chinese law, immovable property refers to land, buildings and their fixtures, and other objects fixed on land.

7.2.3. Intellectual property

Chinese law contains no provisions defining the law applicable to intellectual property disputes.

However, in judicial practice, and according to the opinions of most legal scholars, and except as otherwise stipulated by treaties to which China is party, the existence, content and validity of patents are governed by the law of the place of the application, those of trademarks by the law of place of their registration, and those of copyrights by the law where the rights are claimed.

The existence, content and validity of other rights in intellectual property (know-how, domain names, microprocessor layout designs, etc.) may be subjected to the law of the place where the rights are registered or to that in effect where they are claimed.

The legal remedies for torts involving intellectual property are governed by the law of the place where the protection is sought.¹⁹⁰

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7.2.4. Torts

Torts are governed by the law of the place where the tort was committed or of the place where its results arise.¹⁹¹

Where the parties have the same nationality or where their domiciles are located in the same country, the laws of those places may also be adopted as the applicable law. If an act that takes place outside China is not considered as a tort according to Chinese law, the people’s courts will not treat it as such.¹⁹²

7.2.5. Contracts

The parties to a contract involving foreign interests may choose the law governing their contracts except that those for the establishment and operation of sino-foreign equity joint or contractual joint ventures and those governing sino-foreign cooperative exploration and development of natural resources to be performed within China are obligatorily subject to Chinese law.¹⁹³

The parties may choose the applicable law either at the time of concluding a contract or after the dispute has arisen, but the choice must be made before the commencement of hearings in a court.

Choices of law intended to avoid the mandatory provisions of Chinese law are deemed to be void.¹⁹⁴

In the absence of a choice by the parties, the law of the country with which the contract has its closest connections will be applied by the people’s court.¹⁹⁵ In judicial practice, the law of the State with the closest connections is identified in the light of following guidelines, which do not exclude that the law of another State might be applied if it has closer connections with the contract.

Contracts for the international sale of goods are governed by the law of the seller’s place of business at the conclusion of the contract. However, if the contract was concluded at the buyer’s place of business, or if the contract provides expressly that the seller must deliver the goods to the buyer’s place of business, or if the contract was concluded on terms defined mainly by the buyer and in response to a call for tenders, the law of the place of the buyer’s place of business applies.

Transportation contracts are governed by the law of the place of the carrier’s place of business.

The law of the place where the payment or settlement is carried out governs contracts for payments and for settlement.

The law of the issuing State or region governs the use of currency.

Bank loans and guarantees are governed by the law of the place where the lending banks or guaranteeing banks are located. Other loans and guarantees are governed by the law of the place of the domicile, habitual residence or place of business of the lender or guarantor.

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Contracts to issue, sell or transfer bonds are governed by the law of the place of the domicile, habitual residence or the place of business of the lender or guarantor.

The law of the insurer’s place of business governs insurance contracts.

Contracts for processing and those covering installation, work to order, and the like are governed by the law of the processor’s or the acceptor’s place of business.

Construction project contracts are governed by the law of the place where the project is located.

Technology transfer contracts are subject to the law of the transferee’s place of business.

Technology development contracts, technical consulting contracts, design contracts and technical service contracts are governed by the law of the commissioning party’s place of business.

Trademark transfer contracts are subject to the law of the transferor’s place of business.

Copyright transfer contracts are governed by the law of the owner’s domicile or habitual residence.

The law of the place where the work is carried out governs employment contracts.

Contracts for the supply of sets of equipment are governed by the law of the place where the equipment is installed and operated.

Agency contracts are subject to the law at the agent’s place of business.

Contracts relating to immovable property are governed by the lex situs.

Lease contracts with respect to movable property are subject to the law of the lessor’s place of business.

Consumer contracts are subject to the law of the consumer’s domicile or habitual residence.

Trust contracts may be governed by the law where the trust is managed, or by the law where the trust property is located, or by the law of the trustee’s habitual residence or place of business, or by the law of the place where the aim of the trust is fulfilled.

Contracts of bailment or warehousing are governed by the law of the place of the bailee’s or warehouser’s domicile, habitual residence or place of business.

Contracts arising in connection with a market operating as an exchange are governed by the law of the place where the exchange is located.

Auction contracts are governed by the law of the place where the auction is held.

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7.3. Enforcement of foreign judgments and orders

To enforce a foreign judgment or order in China, the party concerned may itself or through a foreign court, in accordance with the relevant provisions of the international treaties concluded or acceded to by China, or with the principle of reciprocity, request recognition and enforcement by an intermediate people’s court of China that has jurisdiction over the case. Upon receiving the application, the Chinese court will examine the judgment or order in the light of relevant treaties or on the principle of reciprocity. If the court considers that treaty commitments so require or that their own judgments would be enforced by the courts of the foreign country from which the judgment or order to be enforced originates, and provided that the judgment or order does not contradict the basic principles of the law of China nor violate China’s sovereignty or its security, social or public interests, the judgment or order will be recognized and it will be enforced, when necessary, according to the generally applicable execution procedures.¹⁹⁶

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