Shenzhen Qianhai Cooperation Zone People's Court
White Paper on Commercial Trials involving Hong Kong, Macao, Taiwan and Foreign, Factors
(2015-2020)
Foreword
Since the 18th National Congress of the Communist Party of China (CPC), in the face of the profound adjustment of the world economic structure, the new CPC Central Committee and the General Secretary Xi Jinping have made major strategic deployments to promote a new pattern of comprehensive opening-up, insisting on the promotion of reform, development and innovation through opening-up. This year, Shenzhen is celebrating its 40th anniversary. Over the past forty years, from a special economic zone to one of the core drives of Guangdong-Hong Kong-Macao Greater Bay Area, and a Pilot Demonstration Area of Socialism with Chinese Characteristics, Shenzhen held high the banner of reform and opening-up: it was born, thrived and empowered attributed to the very purpose. With the gradual advancement of making new ground in pursuing opening-up, Shenzhen is seeing more frequent cross-border investment while foreign economic and trade exchanges are becoming more active. In particular, the implementation of the “dual zone driven” development strategy will eventually help Shenzhen attain higher achievement while expanding opening-up, innovation, reform and development.
General Secretary Xi Jinping pointed out that the rule of law guarantees the best environment for business. Foreign-related commercial activities are becoming more frequent. As a result, the number of relevant cases accepted by the people's courts is increasing year by year, and new types of cases have continued to emerge, causing higher expectations and requirements for judicial work. Shenzhen Qianhai Cooperation Zone People's Court has centralized jurisdiction over first-instance commercial cases involving Hong Kong, Macao, Taiwan and Foreign, Factors (hereinafter:HMTF-related commercial cases) in Shenzhen. The court upholds consistently the concepts of openness, inclusiveness, equal protection, freedom of contract, and autonomy of will; follows actively the high standards of international economic and trade rules; gives full play to its functions in commercial trials involving HMTF-related commercial trials while playing an important role in guiding and regulating investment and trade behaviors; responds actively to the diverse judicial needs of parties inside and outside the region; protects the legitimate rights and interests of Chinese and foreign parties equally while making active efforts to create a legal, international, and convenient business environment. Two of the major judicial reform efforts made by Qianhai Court, “To Meet the New Requirements of the Belt and Road Initiative and Explore New Paths to Resolve Commercial Disputes” and “An Innovative Resolution System for Diversified Cross-Border Commercial Dispute to Achieve Overall Efficiency Improvement”, were selected into “The People's Court Judicial Reform Case Selection” by the Supreme People's Court and made public to the society.
Qianhai Court issued the “White Paper on Commercial Trials involving Foreign, Hong Kong, Macao and Taiwan Factors (2015-2020)” (hereinafter referred to as the “White Paper”), summarizing comprehensively and indicating the fact that Qianhai Court is performing its functions with fairness and effectiveness in HMTF-related commercial trials, and enhancing China International credibility in terms of international jurisdiction, and serving the country’s higher purpose of making new grounds in pursuing opening-up. It is hoped that the White Paper will provide a visible path for the public who care about and support the work of the Qianhai Court with regard to HMTF-related commercial trials, and boost the confidence of commercial subjects in and outside the territory with our effort to promote the rule of law and optimize the business environment. It is also an effort to accumulate experience and strength to accelerate the construction of a first-class court with international influence and social credibility.
1. The summary and characteristics of HMTF-related commercial cases from 2015 to July 2020
Qianhai Court began accepting cases on February 2, 2015. As of July 2020, Qianhai Court has accepted a total of 31,554 civil and commercial cases, of which 9,463 are HMTF-related commercial cases, accounting for 29.99% of civil and commercial cases accepted, with a total of 7,763 concluded. Among the HMTF-related commercial cases, 6,692 involve parties from Hong Kong SAR, accounting for 70.71%; 115 involve parties from Macao SAR, 1.22%; 900 involve parties from Taiwan, 9.51%; 1,756 involve parties from other countries, 18.56%.
(1)The growing caseload indicates Shengzhen has picked up its pace in making new grounds in pursuing opening-up
From February 2015 to January-July 2020, Qianhai Court has accepted 611, 1,583, 1,600, 1,775, 2,183, and 1,711 commercial cases, respectively. The number of HMTF-related commercial cases is showing an increasing trend on yearly basis. In particular, the HMTF-related commercial cases accepted in 2016 increased by 159% compared to 2015, and the amount of the subject matter involved increased by 302%, indicating that Shenzhen’s continuous deepening of reform and opening-up, and accelerating construction of an open economic system in line with international standards have made greater achievements.
(2)The number of Hong Kong-related commercial cases accepted ranking the first in the country indicates the cooperation and exchanges between Shenzhen and Hong Kong are deepening
From February 2015 to July 2020, Qianhai Court has accepted a total of 6,692 Hong Kong-related commercial cases, accounting for 70.71% of the total number of HMTF-related commercial cases. From 2015 to July 2020, there were 457, 1211, 1120, 1227, 1548, and 1129 Hong Kong-related commercial cases, showing an overall upward trend. Among them, case numbers in 2016, 2018, and 2019 increased by 164.99%, 9.55%, and 26.16% respectively. According to statistics, the number of Hong Kong-related commercial cases accepted by Qianhai Court ranks first in the country. As the construction of the Guangdong-Hong Kong-Macao Greater Bay Area continues, Shenzhen is serving as one of the central cities and taking the lead with special actions for Shenzhen-Hong Kong cooperation such as the construction of the Qianhai Shenzhen-Hong Kong Modern Industry Cooperation Zone and Qianhai & Shekou Free Trade Zone (FTZ), drawing lessons from free trade port policies while promoting the system reforms in terms of rules, regulations, management, and standards, which will continue to improve the level of cooperation between Shenzhen and Hong Kong, and make every effort to be the main front in the construction of the Greater Bay Area. As of June 2020, a total of 11,700 Hong Kong-funded enterprises registered in Qianhai Cooperation Zone with a registered capital totaled 1.31 trillion yuan, and the Hong Kong capital in actual use is USD 20.3 billion, accounting for 89.9% of the actual foreign investment in Qianhai. Qianhai has become the region connected to Hong Kong with the closest and most successful collaboration.
(3)The number of other countries and regions involved in the acceptance of cases increasing indicates Shenzhen’s prominent role as the bridgehead for The Belt and Road Initiative and its advantages of opening up to the outside world as a frontier
As of July 2020, Qianhai Court has accepted a total of 1,756 Hong Kong-related commercial cases, accounting for 18.56% of the total number of HMTF-related commercial cases. From 2015 to July 2020, there were 90, 192, 284, 340, 400, and 450 cases accepted respectively, showing a significant upward trend. The parties involved in the cases were from the countries and regions in Asia, Europe, Africa, South America, North America, and Oceania. In 2018, the parties involved in foreign-related commercial cases accepted by Qianhai Court were from more than 20 countries and regions. As of July 2020, the number of countries and regions has increased to 88 , including 270 involving the United States, 120 involving Canada, 91 involving South Korea, 79 involving Japan, 78 involving Singapore, 68 involving Malaysia, 62 involving Australia, 48 involving Italy, 45 involving Germany, 36 involving Indonesia, 35 involving Vietnam, and 25 involving Russia. The growth of the number of countries and regions involved in the parties indicates that China's foreign economic and trade activities are expanding both in terms of depth and relationship. In addition, the foreign-related cases accepted by Qianhai Court involved 34 countries and regions along the Belt and Road, reflecting China’s increasing economic and trade exchanges boosted by the initiative with countries along the route.
(4)The involved causes are complicated and diversified, which reflects the growing prosperity of Shenzhen’s foreign trade
The HMTF-related commercial cases accepted by Qianhai Court involved a total of 165 causes of action, and the types of cases were complex and diverse. They were mainly disputes caused by international commercial transactions, involving cross-border transactions, offshore transactions, and cross-border transportation, including sales contract disputes, transportation contract disputes, loan contract disputes, commission contract disputes, credit card disputes, and equity transfer disputes, accounting for 67% of the total number of commercial disputes involving Hong Kong, Macao and Taiwan, and Foreign, Factors (HMTF-related commercial disputes). First, there are considerable cross-border disputes over private lending. As of July 2020, Qianhai Court has accepted a total of 3,327 HMTF-related private lending cases, accounting for 35.16% of the total number of HMTF-related commercial cases, which reflects, to a certain extent, the increase in trade between domestic and foreign commercial entities and the vigorous financial needs of commercial entities, indicating a highly active capital market. Second, financial cases account for a fairly large proportion. As of July 2020, Qianhai Court accepted a total of 1,460 HMTF-related commercial cases, accounting for 15.43% of the total, including430 financial loan contract disputes involving micro-credit company, 340 loan contract disputes,268 credit card disputes, 112 disputes over the right of recovery, and 70 financial lease contract disputes. The financial industry is one of the important and characteristic industries of Shenzhen’s opening to the outside world. With the improvement of financial planning and facilities such as Qianhai Shenzhen-Hong Kong Fund Town, Futian-Shenzhen International Financial Street, and the guidance of Shenzhen’s financial reform policies, the financial industry in Shenzhen is showing good momentum of growth. With the construction of the Belt and Road Initiative, the Guangdong-Hong Kong-Macao Greater Bay Area and the Pilot Demonstration Area of Socialism with Chinese Characteristics, efforts to further the opening-up of financial industry has been intensified, and the financial business involving foreign financial institutions and natural persons increased steadily, resulting in corresponding increase of related financial disputes. Third, service contract disputes maintained a steady upward trend. As of July 2020, Qianhai court has accepted 200 contract disputes and service contract disputes in HMTF-related commercial cases. From 2015 to July 2020, they were 19, 27, 30, 41, 45, and 38 case respectively, showing a trend of yearly increase. The cases involved foreign agency, overseas agency and other fields, including 29 import and export agency contract disputes, 10 cross-border tourism contract disputes, etc. While conducting cross-border commercial trade activities, domestic and foreign commercial entities usually have limited understanding of commercial customs and policies. As a result, choosing intermediary contracts and service contracts for assistance is more convenient for commercial activities involving foreign, Hong Kong, Macao and Taiwan factors. Fourth, disputes involving cross-border transportation contracts have increased on yearly basis. As of July 2020, among the HMTF-related commercial cases accepted by Qianhai Court, a total of 591 cases of transportation contract disputes, international cargo transportation contract disputes, and freight forwarding contract disputes have been received. From 2015 to July 2020, there were 13, 60, 72, 101, 156, and 189 cases respectively, shown a yearly upward trend, indicating the fact that there is considerable amount of trade activities between domestic and foreign commercial entities and frequent international cargo transportation.
(5)The diversified dispute resolution mechanism brings public satisfaction
Judging from the way of case concluded, 974 IPR settlements accounted for 13.41% of the cases; 1824 cases were decided to be dismissed, accounting for 25.11%. From 2015 to July 2020, the number of the HMTF-related commercial cases withdrew was 119, 356, 539, 520, 857, and 407, respectively, with withdrawal rate of 57.8%, 45.6%, 35.7%, 35.1%, 39.8%, and 35.1%. Except for the small case base in 2015 and 2016, the withdrawal rate in other years showed a steady upward trend. In January 2018, Qianhai Court established the Belt and Road International Commercial Court-Connected and Mediation to jointly build a dispute resolution platform with mediation agencies inside and outside the region, and continuously improve the diversified resolution mechanism for cross-border commercial disputes, and the diversified dispute resolution work has achieved remarkable results.
2. To establish and improve an institutional system in line with internationally accepted rules to provide services to ensure Shenzhen's high-level opening-up
(1) Adhering to the judicial concepts of fairness, efficiency, equal protection, openness and transparency to create a fair and competitive market environment
Qianhai Court insists on judicial openness and inclusiveness, protects the freedom of transactions, safeguards the interests of commercial entities in accordance with the law, and fully respects the agreement and free choice between the parties. The court adheres to the principle of judicial prudence and moderation, taking judicial trial as the last line of defense in resolving foreign-related commercial disputes, insisting on the neutral position of judgment, respecting the parties' right to choose in commercial activities, and fully guaranteed the autonomy of will in accordance with the law in the process of judicial trial in aspects such as case jurisdiction, application of proper law, contract content, and liability for breach of contract.
The court also follows strictly the principles of maintaining equal legal status, equal rights protection and equal development opportunities of parties from different countries, regions, market entities, different ownership entities, and different industry stakeholders, treats all commercial entities fairly, and protects equally the legitimate rights and interests of domestic and foreign enterprises in accordance with the law, and accurately grasp the patterns regarding the occurrence of and proper response to commercial disputes involving foreign, Hong Kong, Macao and Taiwan factors. By unifying the trial criteria, commercial entities can form reasonable expectations of their own commercial activities then regulate accordingly.
(2)Fully aligning with globally-accepted rules to help enhance the attractiveness of the business environment and the ability to allocate resources
In HMTF-related commercial cases, the parties involved tend to choose the commercial rules familiar to all parties to adjust their legal relations. International conventions and practices provide uniform standards for entities engaged in international commercial activities. Qianhai Court fully complies with international commercial rules and trail concepts with openness and tolerance, equal protection, and freedom of contract, exploring actively mechanisms that is in line with the Guangdong-Hong Kong-Macao Greater Bay Area, promoting actively the establishment of an institutional system that is in line with internationally accepted rules, understands accurately and fully comply to international treaties, practices, and treaty obligations, so as to guarantee the freedom and safety of transactions and enhance the confidence of Chinese and foreign investors. As of July 2020, Qianhai Court has applied international conventions to the trial of 10 cases, providing international legal guarantees for high-level opening-up and development.
Montreal Convention has been applied to conclude cases such as J Company v. H Company over Transportation Contract Dispute, and Plaintiff Pei v. K Company over Freight Forwarding Contract Dispute. The court is capable of applying laws accurately while there is different between the civil law of the People's Republic of China and the international treaties concluded or participated by China. The court is abided by the obligations of the treaty, so as to enhance the international and interregional credibility of China by establishing justice with fair and efficient trials. In the case of D Company v. P Company over International Goods Sales Contract Dispute: according to the United Nations Convention on Contracts of International Sales of Goods, the trade background was fully considered, and the fundamental breach of contract was identified with caution to show respect for the autonomy of the will and encourage future transactions, giving Chinese enterprise confidence to actively participate in international trade activities. In the case of F Company v. Y Company and X Company over International Goods Sales Contract Dispute, the accurate application of the United Nations Convention on Contracts of International Sales of Goods guarantees the right of foreign companies to request goods refund and to have the equal lawful rights, and strengthens the confidence of foreign companies engaging in trade activities with Chinese companies.
(3) Building a comprehensive and systematic framework for the ascertainment and application of extraterritorial laws to fully protect the right of parties to freely choose applicable laws in accordance with the law.
According to the Survey Report on the Application of Hong Kong Laws in Qianhai’s Hong Kong-related Contracts by the National Bureau of Statistics, 75.3% of the companies value a fair and just legal environment when investing in Qianhai, and about 76.5% of the companies expressed their willingness to cooperate with the previous Hong Kong-funded enterprises registered in Qianhai Cooperation Zone and sign contracts applicable to Hong Kong laws.
In response to the judicial needs of foreign commercial entities, Qianhai Court has established a systematic and comprehensive mechanism for the ascertainment and application of foreign laws. The court has established comprehensive and adequate guidelines for the determination of Hong Kong-related factors, which has identified over 30 of them, guaranteeing Hong Kong laws are applied to the maximum and extraterritorial laws are fully recognized. The court has also established a complete system of extraterritorial legal identification mechanisms by formulating the Measures for the Determination of Extraterritorial Laws, which clearly regulates the contents, subjects, channels and procedures, guaranteeing the accuracy of ascertainment. The court has also established, based on research standards applicable to extraterritorial laws and an appearance system for those with expertise in the ascertainment of extraterritorial laws, clarifying how to fully display the contents requiring ascertainment in the judicial documents. At the same time, the court gave full play to the advantages of Hong Kong jurors' familiarity with laws and industry rules in Hong Kong or other countries or regions, so as to ensure the applicable laws are ascertained and accurately applied. The court has contracted to build the Hong Kong, Macao, Taiwan and Foreign Law Ascertainment Research Base of the Supreme People's Court, and organized the Supreme People's Court Law Ascertainment and Application Seminar to give full play to the frontier functions of extraterritorial law ascertainment and application research. The court has strengthened in-depth cooperation with universities, research institutions, and third-party ascertainment agencies, sparing no effort in creating a Qianhai name card for the ascertainment and application of extraterritorial law.
As of July 2020, a total of 98 case trials were conducted under extraterritorial laws, of which 85 were under Hong Kong law, 2 under Macao law, 2 under German law, 1 under Norwegian law, 8 under laws of other countries and regions. Mediation of 12 cases and trial of 32 cases were conducted successful adapting to Hong Kong law, making the court with the most cases applying Hong Kong law. In the case of D Bank v. L Company over Financial Lease Contract Dispute, with the participation of jurors from Hong Kong, the case was resolved through mediation using Hong Kong law. It was the first case concluded by Qianhai Court in accordance with Hong Kong law, and was evaluated by the society as a small step for the rule of law in Qianhai, and a big step to strengthened confidence of commercial entities investing in Qianhai for judicial justice.
(4) Fully absorbing and drawing on the extraterritorial experience beneficial to our reform to build an institutional mechanism in line with international economic and trade rules
First, to improve the trial system and mechanisms compatible with an open development. Qianhai Court has drawn from the useful experience of judicial reform outside the region, and established a specialized trials organization for HMTF-related cases to promote a litigation mechanism reform involving 27 issues in 6 aspects, which has improved the trial efficiency of HMTF-related commercial cases by nearly 50%, further enhancing the international interregional credibility of the judicial system. The court has built a more complete three-dimensional and multi-layered litigation system, so as to explore the expansion of sole-judge trial system in HMTF-related commercial cases, improve online litigation rules, optimize the allocation of judicial resources, and enhance the ability of conducting exemplary HMTF-related trials. The court optimized the jurisdiction system for cases related to the export-oriented economy, and apply the Doctrine of Forum Non Conveniens correctly and actively exercises its jurisdiction over international commercial cases in accordance with the law, providing strong judicial support for Shenzhen’s construction of a new open economic system. The court has explored the mechanism of service by passing on for parties in Hong Kong-related cases, and formulated Several Provisions on the Issues concerning the Service of Judicial Documents of HMTF-Related Commercial Cases, entrusting the plaintiff or lawyer to serve the procedural legal documents to the defendant, which has solved the serving problem of Hong Kong-related cases. In the case of H Company v. R Company, a Hong Kong-related financial loan contract dispute involving 9 defendants, the plaintiff used the method of service by passing on, which has greatly reduced service time.
Second, to formulate the predictable trial rules for foreign-related cases in Hong Kong, Macao and Taiwan.The court formulated guidelines for case trials involving factoring contracts, financial lease contracts, intellectual property rights, entrusted financial management, and international cargo transportation contracts to promoted judicial standardization, so that the trial of one type of case regulates corresponding behaviors and unifies the corresponding judicial standards. Unified judgment standards stabilize the expectations of the parties and form an open and transparent business environment. In 2018, the court has released the White Paper on HMTF-Related Commercial Trials and Ten Typical Cases to the public. The cases include international trade related to the Belt and Road Initiative, international cargo transportation, foreign-related guarantee contracts, and applicable Hong Kong law judgments. The legal rights of parties inside and outside the territory are equally protected, using judicial judgments to strengthen regulation and provide guidance for these commercial entities.
Third, to help strengthen the modernization of the governance system and capabilities. The court offers full support to guarantee Shenzhen's high-level opening-up and the high-standard innovative development of the FTZ. To carry out extensive studies, in-depth researches and real implementations: in response to the problems found in the market operation and industry development during the trial, the court issued judicial advice, including Standardization of Equity Transfer and Regulation for Factoring Companies to Promote a Healthy and Orderly Development of the Factoring Industry in the Greater Bay Area, to entities such as Shenzhen Financial Development Service Office, Shenzhen Commercial Factoring Association, Shenzhen United Assets and Equity Exchange Co., Ltd, so as to promote the formation of a comprehensive supervision system to induce self-discipline of market subjects, industry autonomy, social supervision, and government regulation. The purpose is to improve the effectiveness of national governance while collaborating to prevent and defuse major risks to ensure accurate judicial services.
Fourth, to promote the construction of a business environment with integrity and compliance. The court formulated and implemented the Several Provisions on the Prevention and Punishment of Dishonest Lawsuits and Several Provisions on the Correct Judgment of Lawyers’ Fees to Promote Honest and Reasonable Lawsuits in order to strengthen the punishment for delayed litigation, malicious lawsuits, false lawsuits and other dishonest litigation activities. Attorney fees and litigation fees are utilized as leverages against these dishonest behaviors. In a Hong Kong-related company license return dispute, Qianhai Court imposed a fine of 100,000 yuan on the parties involved in the false statement in accordance with the law, which has yielded good legal and social outcome.
3. To improve the diversified international commercial dispute resolution mechanism and promote the establishment of an international commercial dispute resolution center in Qianhai
(1) To establish a professional platform for international commercial disputes to form a joint force for dispute resolution.
First, to establish a professional platform for international commercial disputes. With the guidance and support of Shenzhen Intermediate People’s Court, Qianhai Court established the Belt and Road International Commercial Litigation and Mediation Center. It has established successively cooperative relationships with 47 arbitration and mediation institutions within and outside the territory, including the Hong Kong Mediation Center, the Guangdong-Hong Kong-Macao Arbitration and Mediation Alliance, the Macao World Trade Center Arbitration Center, and the Shenzhen Court of International Arbitration, in order to create a diversified platform for international commercial dispute resolution. Qianhai Court fully respects and protects the right of parties inside and outside the territory to choose dispute resolution methods, promoting the formation of a joint force for dispute resolution in the Greater Bay Area. As of July 2020, the diversified dispute resolution center has accepted a total of 13,025 cases with 4,544 successfully mediated, giving full play to the role of an international commercial dispute resolution platform.
Second, to improve appointed mediation mechanism for specially-invited mediation organizations. The court has strengthened in-depth cooperation with specially-invited mediation organizations, formulated the Interim Provisions Concerning Specially-Invited Mediators/Organizations, and established the mechanism with long-term appointed mediator from specially-invited mediation organizations. Multiple specially-invited mediation organizations have established workshops in the diversified dispute resolution center of Qianhai Court, including International Commercial Mediation Center for the Belt & Road (BNRMC), Shenzhen Mediation Center of China Council for the Promotion of International Trade, Benchmark Chambers International & Benchmark International Mediation Center, Sincere Qianhai Law Office, etc. Mediators have been appointed to participate in dispute resolution, and help improve international, outward-oriented, and cooperative dispute resolution mechanisms for better resolution outcome. As of July 2020, mediators appointed by specially-invited mediation organizations have successfully mediated 3,029 cases.
Third, to strengthen the governance of litigation source. The court has strengthened the cooperation with companies such as Tencent Music and BYD International Leasing in the jurisdiction to jointly establish a dispute resolution mechanism. Mediators have been appointed to participate in resolving the dispute over infringement over right to network dissemination of information of Tencent, Douyin, Sing Bar, Fun Sing, Xiaomi. In 2019, mediators were involved in the mediation of more than 3,000 disputes, which further improved the overall level of social governance. To collaborate with Shenzhen Intellectual Property Protection Center to establish diversified dispute resolution stations and litigation service points to reduce and resolve conflicts and disputes from the source, improving the overall governance level of society.
(2) To strengthen the standardization of mediation work and improve the professionalism of international commercial mediations
First, to improve the construction of the mediation mechanism. The court has regarded institutionalization and standardization as the basis of regional legal governance, and formulated the Work Guidelines of the Belt and Road International Commercial Court-Connected and Mediation Center of Qianhai , including mediation rules, mediator codes, and mediation procedures to clarify mediation procedures, to improve supporting mediation mechanisms, form a systematic mediation system, and enhance the professionalism of mediation.
Second, to implement ‘similar mediation for similar cases’ mechanism. In response to commercial cases requiring professional background, the court has formulated mediation guidelines for six types of disputes, including sales contracts, private lending, and construction contracts, as well as 22 case factors including financial leases, intellectual property rights, and equity transfer to improve the professionalism and efficiency of international commercial mediation.
Third, to improve the mechanism for mediator selection and performance. The court adheres to the high standards for the selection of mediators, and recruits mediators with professional backgrounds in finance, international trade, intellectual property, and information according to the characteristics of cases to promote professionalism in the resolution of commercial disputes. The court has improved the training of mediators and the ability to resolve disputes through regular legal lectures, mediation observations, special seminars, and experience exchange sessions.
(3) To strengthen the mechanism of convergence between litigation and non-litigation to achieve pre-dispute management
First, to implement a guidance and promotion mechanism for pre-mediation of commercial disputes. The court insists on putting the non-litigation dispute resolution mechanism ahead. It is stipulated that except for cases whose nature is not suitable for mediation, all other cases shall be included in the Shen Rong Diversified Platform for mediation procedures. The court established a neutral third-party evaluation mechanism, where third-party legal experts issue evaluation reports on the results of the case, and guide the parties to choose dispute resolution methods rationally. So far, the mechanism has been applied to 4 Hong Kong-related cases, one of which is a guarantee contract dispute. After being assessed by a neutral third-party expert, the parties chose to withdraw the lawsuit voluntarily. The case was selected as a model case for legal services relating to Guangdong-Hong Kong-Macao Greater Bay Area. The mechanism for the burden of litigation fees and lawyers' fees will be improved, and the mediation mechanism will be strengthened. In a contract dispute, the plaintiff rejected reasonable mediation plan without justifiable reasons. According to the Opinions of the Supreme People's Court on People's Courts Further Deepening the Reform of Diversified Dispute Resolution Mechanism, Qianhai Court ruled that the plaintiff is shall bear litigation costs, which leads the parties to choose more rational and pertinent solutions to resolve disputes.
Second, to improve the linking mechanism between litigation and non-litigation. A pre-mediation mechanism for eligible cases shall be established. Mediation agreement reached needs timely judicial confirmation. If a mediation agreement is not reached at the expiration of the mediation period, the case shall be promptly transferred for filing. The process tracking of cases shall be strengthened. For cases where the parties are still willing to mediate during litigation, they will be transferred to the diversified dispute resolution center. The concept of efficient and convenient dispute resolution runs through the entire litigation process. An undisputed fact record mechanism shall be established, where the parties do not need to provide evidence on recorded facts during the litigation process to improve the efficiency of court trials. Undisputed mediation plan recognition mechanism shall be built, so as to actively promote the two parties to reach a mediation agreement or reduce disputes.
Third, to strictly implement the judicial confirmation system. According to the pilot program of the Supreme Court’s civil procedure reform, the scope of judicial confirmation shall be expanded in accordance with the law. The international commercial mediation agreement agreed by the parties to be under the jurisdiction of Qianhai Court shall be included in the scope of judicial confirmation, and the role of the people's court in providing judicial protection for non-litigation dispute resolution shall be brought into full play. As of July 2020, 471 judicial confirmation cases have been processed. In a Hong Kong-related processing contract dispute case, the court confirmed the mediation agreement reached in Hong Kong in accordance with the law, which facilitated the settlement of disputes between the parties.
Fourth, to promote the marketization and socialization of mediation work. Collaborating with Shenzhen Municipal Bureau of Justice and Shenzhen Lawyers Association, the court established a working mechanism for lawyers to participate in litigations and mediations. All lawyers participating in mediation have at least 5 years of professional experience and good professional ethics. The court formulated and implemented the Provisions on Lawyers’ Mediation Work, clarifying the procedures for lawyers to participate in mediation, and improve the standardization of mediation by lawyers. As of July 2020, a total of 148 lawyers and mediators have been selected to participate in mediation, and 891 cases have been successfully mediated. Mediation organizations shall provide paid mediation services according to the needs of the parties, and greatly promote the sustainable development of mediation organizations and work. As of July 2020, mediation organizations have collected mediation fees based on negotiation from the parties in 96 cases, totaling more than 900,000 yuan, and the maximum amount of individual mediation fees is more than 140,000 yuan.
(4) To rely on smart courts to build innovative mediation models and continuously improve convenience for the resolution of cross-border disputes
First, to develop Online + Offline Mediation for Cross-border Disputes. The court shall fully use Shenzhen Court’s “Combined Diversified Platform” and Qianhai Court’s 5G remote video mediation room through entrusted and appointed mediation methods, to expand the use of online mediation platforms, strengthen cross-border online mediation, and support Hong Kong, Macao and foreign mediators to carry out online mediation work through multiple channels such as email, WeChat, and telephone in accordance with the communication habits and needs of overseas parties. From February to July 2020, Qianhai Court conducted a total of 3,258 online mediation cases through WeChat, telephone, and email. In a dispute over a lease contract in which the defendant is a Hong Kong resident, the diversified dispute resolution center of Qianhai Court adopted the joint mediation model with Mainland Mediator + Hong Kong Mediator, and carried out online mediation for the case and facilitated the parties to reach a mediation agreement, and then the judge conducted online judicial confirmation for the agreement using remote video mediation platform, resulting in quick resolution of Hong Kong-related disputes.
Second, to explore the model of extraterritorial mediation + interterritorial judicial confirmation. With respect to the choice of mediation location, mediation method and mediators, the court shall fully respect the right of the parties to make choices, and guarantee the autonomy of will between the parties. Through cooperation with foreign mediation agencies, the court shall provide convenient and economic mediation methods for parties outside the territory. In a Hong Kong-related commercial contract dispute, a Hong Kong regional mediator was entrusted to organize a mediation between the two parties in Hong Kong, and the mediation statement was confirmed by the judge. The cross-border mediation model was successfully, and the international and interregional commercial mediation agreement was also included in the application of judicial confirmation, where disputes could be resolved in a one-stop manner.
Third, to actively expand remote judicial collaboration. Qianhai Court is the first in the country to set up public legal service platform for the Belt and Road Initiative, establishing legal database, case database and expert database for countries and regions along the Belt and Road. The court invited thousands of legal professionals to provide free online legal consultation services. Currently, the service of the platform has covered laws, regulations, and relevant cases and documents of 31 major countries and regions along the Belt and Road, providing more diverse and convenient legal services for commercial entities along the Belt and Road.
4. To establish a diversified professional team for HMTF-related commercial trials, and enhance the professionalism of dispute resolution
(1) To improve the construction of a new type of professional trial organization and improve the level of trial professionalism
First, to centralize the jurisdiction of HMTF-related commercial cases. Shenzhen Intermediate People's Court has been promoting concentrated management of HMTF-related commercial case, a coordinated effort to reform the trial of HMTF-related cases. Qianhai Court began to accept first instance HMTF-related commercial cases in Shenzhen in accordance with the law in February 2015, turning the trial of such cases from comprehensive to professional, and from decentralized to unified. Centralized jurisdiction has effectively promoted the unification of international and interregional commercial trial organizations, adjudication standards, judicial procedures, and judicial services, providing solid guarantee for the improvement of quality and efficiency for HMTF-related commercial case, as well as predictable, stable and transparent judicial guidelines for parties inside and outside the region.
Second, to establish a professional trial organization. In view of internationalization, complexity, and expertise involved in HMTF-related commercial cases, judges with the background of common law and familiarity with international law and international economic and trade rules and profound trial experience regarding intellectual property, finance, and international trade are selected by Shenzhen Intermediate People's Court, since the beginning of Qianhai court, to form collegiate panel for HMTF-related commercial cases and the Belt and Road commercial trials. These judges are dedicated to hearing HMTF-related commercial cases, improving the professionalism of case trials. Currently, there are 6 judges with master degrees in common law. Qianhai court established an expert advisory committee to attract experts in the fields of finance, insurance, international trade, and intellectual property rights to provide professional advice for complex and difficult cases.
Third, strengthen the demonstration effect of court judgments. The court keeps close to the development of new characteristics of international economic and trade, respond actively to areas and issues of concern to commercial entities inside and outside the region, using trial guidelines and typical cases as example to give full play to the important value of judicial adjudication in establishing behavioral rules and regulating market behaviors. The court has issued successively 6 batches of typical cases, 52 in total, including 15 HMTF-related commercial cases, and cases related to Guangdong-Hong Kong-Macao Greater Bay Area and Free Trade Zones. Cases such as the Neutral Third-Party Evaluation for Hong Kong-related Cases and ICBC Asia’s Petition for Enforcement were selected as typical cases of servicing and guaranteeing the development of Guangdong-Hong Kong-Macao Greater Bay Area and Free Trade Zone. A compilation of typical Cases named Reflections on Several Major Issues in the Thinking and Method of Civil and Commercial Judgment - Analysis on the Judgment of 22 Selected Cases was published by Law Press in 2019, which has included several articles involving HMTF-related commercial cases applicable to the doctrine of forum non conveniens.
(2)To improve jury system for jurors from Hong Kong to strengthen judicial transparency and credibility in HMTF-related commercial trials
First, to appoint expert jurors from Hong Kong for trials with high standard. From 2016 to 2018, 32 Hong Kong jurors were selected successively to participate in the trial of Hong Kong-related cases, and 20 of them were expert jurors from Hong Kong. They were divided into 5 groups according to the categories of finance, trade, accounting, equity, and intellectual property to enhance the professionalism of the trials, eliminating the influence of foreign parties on judicial credibility due to differences in system concepts and living environments.
Second, to standardize the mechanism of expert jurors from Hong Kong participating in trials. Qianhai Court has formulated the Guidelines for Jurors from Hong Kong Participating in Trials, which provides normative guidelines for jurors from Hong Kong participating in trials, improving the jurors’ familiarity of mainland laws and trial procedures. In terms of how to summarize the focus of dispute, the rules of evidence, the burden of proof, and the rules of court trials, the judge will provide prompt and guidelines to the jurors from Hong Kong, who will independently exercise their right to vote on the determination of facts and the application of law, improving the efficiency of court trials. The jurors from Hong Kong have the advantage of being familiar with the trading habits and industry conditions of the parties in Hong Kong or outside the territory, providing support for law ascertainment, evidence determination, so as to promote more legal,reasonable and effective resolution of disputes. As of July 2020, jurors from Hong Kong have participated in 423 cases.
Third, to improve the performance guarantee mechanism for jurors from Hong Kong. Qianhai Court formulated the Administrative Measures for People's Jurors from Hong Kong and established a sound performance guarantee mechanism. Also, the court built a communication and interactive platform to collect and feedback the opinions and suggestions put forward by jurors from Hong Kong in a timely manner. Jurors from Hong Kong are to be recommended to participate in the Hong Kong-related trial practice seminars held by higher courts to continuously improve their ability to perform their duties.
(3) To establish an international team of mediators to improve the professionalism of mediation
First, to introduce foreign and Hong Kong, Macao and Taiwan mediators. HMTF mediators to participate in the resolution of commercial cases shall be selected and appointed. Professionals with finance, intellectual property, Internet and other expertise will account for a certain percentage to continuously meet the practical resolution needs of HMTF-related cases. At present, a total of 74 HMTF mediators have been recruited, accounting for 39.4% of all specially-invited mediators, including 56 from Hong Kong, 5 from Macao, 3 from Taiwan, and 10 from foreign countries. To promote the sharing of diversified dispute resources in the Guangdong-Hong Kong-Macao Greater Bay Area. Currently, Guangdong Free Trade Zone Court is available to share the resources of specially-invited mediators from Hong Kong and Macao.
Second, to improve the joint mediation model with mainland mediator + extraterritorial mediator or judge + mediator. In order to reduce the value conflicts caused by different jurisdictions and cultural concepts, the pertinence and credibility of dispute resolution have been effectively improved. As of July 2020, HMTF mediators have successfully mediated 660 cases, 625 of which have been achieved by mediators from Hong Kong. In a copyright dispute case, the mainland and foreign mediators were entrusted by the court to reach a mediation agreement through video conference connecting Qianhai and Beijing.
Third, to regulate the performance management of extraterritorial mediators. The recruitment, management and evaluation of HMTF mediators shall be regulated, and the training of extraterritorial mediators regarding judicial system and professional ethics shall be strengthened to ensure that extraterritorial mediators understand the commercial laws and mediation rules in the domain, as well as the industrial norms and professional knowledge in their fields, so as to further improve their ability to resolve disputes.
5. To improve modern litigation service system and intelligent court application system to enhance the sense of judicial gain by parties inside and outside the territory
(1) To establish a one-stop modern litigation service system to improve the inclusive and convenient litigation service
A modern litigation service system that is centralized and efficient for diversified dispute mediation while being convenient, intelligent and accurate, open and interactive shall be established. An intelligent one-stop litigation service center to realize litigation services featuring one-stop, one-network, one-number, and one-time, to continue to enhance the people's sense of judicial gain shall be established with high standard. A special window shall be set up for Guangdong, Hong Kong and Macao with multilingual services, providing judicial services such as cross-border dispute mediation, legal service, litigation counseling, and cross-domain case filing for foreign parties. After the opening of the new litigation service center in November 2019, as of July 2020, a total of 46 cross-regional filing has been processed.
(2) To set up special cross-border judicial services to improve the professional accuracy of litigation services
Special litigation services shall be set up in the Guangdong-Hong Kong-Macao Greater Bay Area to provide cross-domain litigation services such as cross-domain signing of authorizations, case filing, document service, and file review for parties in Hong Kong and Macao, using 5G Internet to provide remote video authorization and entrusted notary services. During the epidemic, the court provided remote video authorization and entrusted notary services for parties in Hong Kong, and handled the paperwork of entrusting a lawyer to represent the plaintiff, reducing greatly the litigation costs of foreign parties and protecting effectively the legitimate rights and interests of foreign parties in a timely manner. In December 2019, Qianhai Court signed a litigation service cooperation agreement with Guangzhou Nansha Court and Zhuhai Hengqin Court to establish a linkage mechanism for cross-domain case filing, cross-domain mediation, cross-domain trial, and sharing of judicial resources, build a FTZ Judicial Service Circle to standardize and unify the judicial service standards of the FTZ, and enhance the judicial protection effect while improving the level of social governance in the FTZ.
(3) To strengthen the use of Internet technology and build a new online + offline mode of integrated judicial system
The application of information technologies such as big data, cloud computing, artificial intelligence, and blockchain in the judicial field shall be explored, in order to create a new all-round model integrating mediation, trial, execution, filing, serving, providing evidence, opening court sessions, enforcement process, litigation service hall, litigation service hotline and litigation service network, offering a new service model with Internet + Intelligent Justice for the entire judicial process through the Internet. Online case filing, online inquiry, electronic delivery, remote mediation, online court hearing, and online enforcement shall be fully implemented, and the use of mobile micro court APP named ‘fingertip litigation’ for cell phones shall be promoted, and travel needs in litigation matters shall be reduced or eliminated. The full use of online litigation services truly enabled Qianhai Court with 24-hour auto-court function, providing full time, full coverage, and full expertise litigation services. During the epidemic, Qianhai Court relied on information technology to improve the standardized online litigation model for the whole process from filing to enforcement, keeping up both epidemic prevention and judicial work without closing litigation services and interrupting trial enforcement, which has greatly enhanced the people's judicial experience and sense of gain. All litigation services are available online. From February 3 to July 2020, 7,678 cases were filed online, accounting for 75.96% of the total number of cases filed. In a leasing contract disputes in which the defendant is a Hong Kong resident, online mediation and online judicial confirmation were used to quickly resolve Hong Kong-related disputes. An online trial model supported by the Shenzhen Mobile Micro Court has been implemented: a total of 554 online court trials has been carried out, protecting effectively the legitimate rights and interests of the parties.
6.To improve the model of cross-domain judicial cooperation and exchange, and create a reputation built on the rule of law for the construction of socialist rule of law
(1) To establish a platform for foreign cooperation and exchange to showcase the achievements of socialist rule of law with Chinese characteristics
Following the Supreme People's Court’s instruction of One Center and Two Bases, Qianhai Court hosted the Supreme People's Court Law Ascertainment and Application Seminar, and organized the Qianhai Legal Intelligence Forum and the International Commercial Mediation Forum to gather legal wisdom inside and outside the territory, so as to promote cross-regional and cross-border legal research, exchanges and cooperation, facilitate the normalization of judicial exchanges, and enhance mutual judicial assistance and trust. Since 2016, Qianhai Legal Intelligence Forum has been successfully hosted for four times, and it has become a high ground in Qianhai for the gathering of knowledge, open exchanges, and mutual assistance and sharing, and helps Shenzhen build a window to showcase the achievements of the rule of law.
(2) To strengthen international exchange and cooperation, and continue to improve judicial trust
Qianhai Court continues to deepen exchanges and cooperation with Hong Kong and other extraterritorial judicial institutions, so as to learn from the useful experience of judicial systems in different jurisdictions, and enhance the recognition and mutual trust in the rule of law. In recent years, Qianhai court has received visits of scholars from universities and legal professionals from outside the region, including Judge of the High Court of the United Kingdom, President of the Court of Dubai International Financial Center, Chief Justice of Hong Kong Court of Final Appeal, President of Macao Court of Final Appeal, the Secretary of Justice of Hong Kong, and invited people from Hong Kong and Macau, including representatives of the National People’s Congress and CPPCC members of Hong Kong, to participate in Qianhai Court’s Open Day, showcase the achievements of socialist rule of law with Chinese characteristics. The court has also received visits from the China-Africa legal talent exchange project seminar to jointly promote the construction of the rule of law between different cultures and different legal systems.
(3) To carry out legal personnel training and exchanges, and improve the ability to resolve international commercial disputes
The court has organized 5 sessions of Common Law Judgment Thinking Seminar, inviting judges of the Singapore International Commercial Court and Hong Kong Senior Counsel to share knowledge and skills related to common law judgments and the ascertainment and application of Hong Kong extraterritorial laws, so as to enhance judicial personnel's understanding of common law. The court has also sent 36 judicial officials to Hong Kong and Macao to participate in the Judicial Forum of Mainland China, Taiwan, Hong Kong and Macao, the Belt and Road Initiative and Cross-border Commercial Dispute Resolution Development Trend Seminar. They were also sent to the Chinese University of Hong Kong for study and exchange, and the Hong Kong Department of Justice, the High Court, Hong Kong International Arbitration Center and other departments and institutions for seminars to improve their international vision and skills of HMTF-related commercial trials. The court organized part of the training courses for the 2017 Advanced Training Course for Chinese Commercial Mediator Qualification Certificate - Hong Kong Bar Association Training Course. The Hong Kong Bar Association's practicing barristers and Qianhai court judges conducted judicial exchanges on international commercial mediation, and enhanced the consensus on the resolution of international commercial disputes. Between 2018 and 2019, Qianhai court has received a total of 27 law students (2 batches) from Hong Kong for internship, which has improved Hong Kong youth's understanding of the Mainland's judicial system, their sense of national belonging and national identity.
7. To always put political construction in the first place, and strive to improve the level of revolutionization, regularization, specialization, and professionalization of the judicial team
(1) To always put the party’s political construction in the first place to guarantee the correct political direction for HMTF-related commercial trials.
The court always adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly studies and implements the spirit of General Secretary Xi Jinping’s important speech to Guangdong and important instructions to Shenzhen, unswervingly adhering to the party’s absolute leadership, constantly enhancing the ‘four consciousnesses’, insisting on ‘four matters of confidence’, and ensuring ‘two upholds’. The court studies earnestly and implements General Secretary Xi Jinping’s speeches on perfecting the foreign-related legal system and building a new pattern of opening-up in the report of the 19th National Congress of the Communist Party of China, celebrating the 40th anniversary of reform and opening up, and other important speeches, and improves political stance in the HMTF-related commercial trials. The court always adheres to the correct political direction and upholds the party’s absolute leadership over the work of the people’s courts, and strictly implements decisions by the party committees at all levels and higher courts, and serves actively to ensure the overall situation of social and economic development. The court strictly implements the ideological accountability system, and resolutely resists and refutes all kinds of erroneous thoughts and views involving westernization and differentiation, takes a clear stance and stand firm in the face of issues of principle and cardinal questions of right and wrong, and resolutely safeguards ideological security in the field of HMTF-related commercial trials.
(2) To improve the management mechanism of judicial team and enhance the standardization of the team
The court strictly implements the general requirements for party building in the new era, and unswervingly implements the requirements for strict governance of the party and court in an all-round way, and effectively embodies the “two safeguards” in the actual actions of serving the overall situation, serving the people, and impartial justice. The court has strengthened party building: to develop and implement the Accountability List for Enforcing Strict Party Self-Governance, set up party branches in the HMTF-related trial teams to strengthen the standardization of the party branch, carry out themed Party Day events featuring service guarantee and opening-up, so as to enhance the integrated development of party building and HMTF-related trials and improve working skills lead by party building. The court has strengthened the efforts to combat corruption within the party and maintained clean governance while continue to improve management and supervision system for the judicial team. The court has strengthened the evaluation of judicial personnel: to formulate and implement the Comprehensive Evaluation Measures for Judicial Personnel, Rules for Implementation of the Evaluation of Political Thought Construction and the performance evaluation methods for judges and judge assistants, so as to scientifically determine the reasonable workload of judges in handling cases and the weight coefficient of foreign-related cases, and give full play to the guiding and incentive role of the evaluation. The court has formulated and improved the Guide to Judicial Conduct for Judges and Guide to Judicial Work for Judge Assistants to strictly regulate the behavior of judicial personnel on and off duty, and improve the standardization and professionalism of the judicial team.
(3) To improve training of the judicial team and enhance professional capabilities for HMTF-related Trials
Benchmarking against the standards of first-class international courts, Qianhai Court has improved the training model of judicial personnel, carried out various training courses such as ideological and political education, disciplinary education, professional ethics education, and judicial competence training. With regard to the characteristics of HMTF-related commercial trials, the court organized Common Law Judgment Thinking Sessions, and judicial personnel to participate in cross-border commercial dispute resolution seminars to continuously improve their international vision for HMTF-related commercial trials. The court carried out English training sessions, hiring foreign teachers to teach judicial personnel in English to improve their language skills. The court also carried out special civil code study and training seminars to help the judicial personnel learn new laws and judicial interpretations in time, sparing no efforts in building a judicial team with international vision, excellent professionalism, and high moral character, so as to provide a solid talent support for making new grounds in pursuing opening-up.
Conclusion
General Secretary Xi Jinping pointed out that Guangdong is not only an important window for the world to know the achievements generated by China's reform and opening-up, but also an important window for the international community to observe the country's reform and opening up. Located in the special zone – the Qianhai & Shekou FTA within the special zone – Shenzhen Special Economic Zone, Qianhai Court bears the responsibility to show the achievements of China's rule of law. The year of 2020 marks the 40th anniversary of the establishment of the Shenzhen Special Economic Zone, and the 10th anniversary of Qianhai Shenzhen-Hong Kong Modern Industry Cooperation Zone. It is also a crucial year for the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and Shenzhen to build a Pilot Demonstration Area of Socialism with Chinese Characteristics. Standing at a historical starting point, Qianhai Court will always adhere to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as guidance, under the steadfast leadership of the Party Committee and the strong guidance of the courts at a higher level, with the construction of the Guangdong-Hong Kong-Macao Greater Bay Area as the outline, and the Shenzhen Pilot Demonstration Zone as the general traction and requirements, adhere to openness, inclusiveness, reform and guidance to improve the overall working mechanism of service and guarantee economic and social development, and build a complete diversified international cross-border dispute resolution platform and mechanism to ensure that parties either involve in international or interregional commercial cases have the right to choose and apply extraterritorial laws. The court will continue to explore actively the mechanism that are in line with the rules of Guangdong-Hong Kong-Macao Greater Bay Area and the high standards of international economic and trade rules, improve the jurisdiction system for international commercial cases, and further improve the operation of judicial power with judicial accountability as the core and a modern people-centered litigation service system, establish a litigation system that conforms to the progress of the times and technological development, and a modern and intelligent court application system, sparing not efforts to create a world-class business environment protected by the rule of law and provide support to ensure the development in the new era.
General Secretary Xi Jinping pointed out that the rule of law guarantees the best environment for business. Foreign-related commercial activities are becoming more frequent. As a result, the number of relevant cases accepted by the people's courts is increasing year by year, and new types of cases have continued to emerge, causing higher expectations and requirements for judicial work. Shenzhen Qianhai Cooperation Zone People's Court has centralized jurisdiction over first-instance commercial cases involving Hong Kong, Macao, Taiwan and Foreign, Factors (hereinafter:HMTF-related commercial cases) in Shenzhen. The court upholds consistently the concepts of openness, inclusiveness, equal protection, freedom of contract, and autonomy of will; follows actively the high standards of international economic and trade rules; gives full play to its functions in commercial trials involving HMTF-related commercial trials while playing an important role in guiding and regulating investment and trade behaviors; responds actively to the diverse judicial needs of parties inside and outside the region; protects the legitimate rights and interests of Chinese and foreign parties equally while making active efforts to create a legal, international, and convenient business environment. Two of the major judicial reform efforts made by Qianhai Court, “To Meet the New Requirements of the Belt and Road Initiative and Explore New Paths to Resolve Commercial Disputes” and “An Innovative Resolution System for Diversified Cross-Border Commercial Dispute to Achieve Overall Efficiency Improvement”, were selected into “The People's Court Judicial Reform Case Selection” by the Supreme People's Court and made public to the society.
Qianhai Court issued the “White Paper on Commercial Trials involving Foreign, Hong Kong, Macao and Taiwan Factors (2015-2020)” (hereinafter referred to as the “White Paper”), summarizing comprehensively and indicating the fact that Qianhai Court is performing its functions with fairness and effectiveness in HMTF-related commercial trials, and enhancing China International credibility in terms of international jurisdiction, and serving the country’s higher purpose of making new grounds in pursuing opening-up. It is hoped that the White Paper will provide a visible path for the public who care about and support the work of the Qianhai Court with regard to HMTF-related commercial trials, and boost the confidence of commercial subjects in and outside the territory with our effort to promote the rule of law and optimize the business environment. It is also an effort to accumulate experience and strength to accelerate the construction of a first-class court with international influence and social credibility.
1. The summary and characteristics of HMTF-related commercial cases from 2015 to July 2020
Qianhai Court began accepting cases on February 2, 2015. As of July 2020, Qianhai Court has accepted a total of 31,554 civil and commercial cases, of which 9,463 are HMTF-related commercial cases, accounting for 29.99% of civil and commercial cases accepted, with a total of 7,763 concluded. Among the HMTF-related commercial cases, 6,692 involve parties from Hong Kong SAR, accounting for 70.71%; 115 involve parties from Macao SAR, 1.22%; 900 involve parties from Taiwan, 9.51%; 1,756 involve parties from other countries, 18.56%.
(1)The growing caseload indicates Shengzhen has picked up its pace in making new grounds in pursuing opening-up
From February 2015 to January-July 2020, Qianhai Court has accepted 611, 1,583, 1,600, 1,775, 2,183, and 1,711 commercial cases, respectively. The number of HMTF-related commercial cases is showing an increasing trend on yearly basis. In particular, the HMTF-related commercial cases accepted in 2016 increased by 159% compared to 2015, and the amount of the subject matter involved increased by 302%, indicating that Shenzhen’s continuous deepening of reform and opening-up, and accelerating construction of an open economic system in line with international standards have made greater achievements.
(2)The number of Hong Kong-related commercial cases accepted ranking the first in the country indicates the cooperation and exchanges between Shenzhen and Hong Kong are deepening
From February 2015 to July 2020, Qianhai Court has accepted a total of 6,692 Hong Kong-related commercial cases, accounting for 70.71% of the total number of HMTF-related commercial cases. From 2015 to July 2020, there were 457, 1211, 1120, 1227, 1548, and 1129 Hong Kong-related commercial cases, showing an overall upward trend. Among them, case numbers in 2016, 2018, and 2019 increased by 164.99%, 9.55%, and 26.16% respectively. According to statistics, the number of Hong Kong-related commercial cases accepted by Qianhai Court ranks first in the country. As the construction of the Guangdong-Hong Kong-Macao Greater Bay Area continues, Shenzhen is serving as one of the central cities and taking the lead with special actions for Shenzhen-Hong Kong cooperation such as the construction of the Qianhai Shenzhen-Hong Kong Modern Industry Cooperation Zone and Qianhai & Shekou Free Trade Zone (FTZ), drawing lessons from free trade port policies while promoting the system reforms in terms of rules, regulations, management, and standards, which will continue to improve the level of cooperation between Shenzhen and Hong Kong, and make every effort to be the main front in the construction of the Greater Bay Area. As of June 2020, a total of 11,700 Hong Kong-funded enterprises registered in Qianhai Cooperation Zone with a registered capital totaled 1.31 trillion yuan, and the Hong Kong capital in actual use is USD 20.3 billion, accounting for 89.9% of the actual foreign investment in Qianhai. Qianhai has become the region connected to Hong Kong with the closest and most successful collaboration.
(3)The number of other countries and regions involved in the acceptance of cases increasing indicates Shenzhen’s prominent role as the bridgehead for The Belt and Road Initiative and its advantages of opening up to the outside world as a frontier
As of July 2020, Qianhai Court has accepted a total of 1,756 Hong Kong-related commercial cases, accounting for 18.56% of the total number of HMTF-related commercial cases. From 2015 to July 2020, there were 90, 192, 284, 340, 400, and 450 cases accepted respectively, showing a significant upward trend. The parties involved in the cases were from the countries and regions in Asia, Europe, Africa, South America, North America, and Oceania. In 2018, the parties involved in foreign-related commercial cases accepted by Qianhai Court were from more than 20 countries and regions. As of July 2020, the number of countries and regions has increased to 88 , including 270 involving the United States, 120 involving Canada, 91 involving South Korea, 79 involving Japan, 78 involving Singapore, 68 involving Malaysia, 62 involving Australia, 48 involving Italy, 45 involving Germany, 36 involving Indonesia, 35 involving Vietnam, and 25 involving Russia. The growth of the number of countries and regions involved in the parties indicates that China's foreign economic and trade activities are expanding both in terms of depth and relationship. In addition, the foreign-related cases accepted by Qianhai Court involved 34 countries and regions along the Belt and Road, reflecting China’s increasing economic and trade exchanges boosted by the initiative with countries along the route.
(4)The involved causes are complicated and diversified, which reflects the growing prosperity of Shenzhen’s foreign trade
The HMTF-related commercial cases accepted by Qianhai Court involved a total of 165 causes of action, and the types of cases were complex and diverse. They were mainly disputes caused by international commercial transactions, involving cross-border transactions, offshore transactions, and cross-border transportation, including sales contract disputes, transportation contract disputes, loan contract disputes, commission contract disputes, credit card disputes, and equity transfer disputes, accounting for 67% of the total number of commercial disputes involving Hong Kong, Macao and Taiwan, and Foreign, Factors (HMTF-related commercial disputes). First, there are considerable cross-border disputes over private lending. As of July 2020, Qianhai Court has accepted a total of 3,327 HMTF-related private lending cases, accounting for 35.16% of the total number of HMTF-related commercial cases, which reflects, to a certain extent, the increase in trade between domestic and foreign commercial entities and the vigorous financial needs of commercial entities, indicating a highly active capital market. Second, financial cases account for a fairly large proportion. As of July 2020, Qianhai Court accepted a total of 1,460 HMTF-related commercial cases, accounting for 15.43% of the total, including430 financial loan contract disputes involving micro-credit company, 340 loan contract disputes,268 credit card disputes, 112 disputes over the right of recovery, and 70 financial lease contract disputes. The financial industry is one of the important and characteristic industries of Shenzhen’s opening to the outside world. With the improvement of financial planning and facilities such as Qianhai Shenzhen-Hong Kong Fund Town, Futian-Shenzhen International Financial Street, and the guidance of Shenzhen’s financial reform policies, the financial industry in Shenzhen is showing good momentum of growth. With the construction of the Belt and Road Initiative, the Guangdong-Hong Kong-Macao Greater Bay Area and the Pilot Demonstration Area of Socialism with Chinese Characteristics, efforts to further the opening-up of financial industry has been intensified, and the financial business involving foreign financial institutions and natural persons increased steadily, resulting in corresponding increase of related financial disputes. Third, service contract disputes maintained a steady upward trend. As of July 2020, Qianhai court has accepted 200 contract disputes and service contract disputes in HMTF-related commercial cases. From 2015 to July 2020, they were 19, 27, 30, 41, 45, and 38 case respectively, showing a trend of yearly increase. The cases involved foreign agency, overseas agency and other fields, including 29 import and export agency contract disputes, 10 cross-border tourism contract disputes, etc. While conducting cross-border commercial trade activities, domestic and foreign commercial entities usually have limited understanding of commercial customs and policies. As a result, choosing intermediary contracts and service contracts for assistance is more convenient for commercial activities involving foreign, Hong Kong, Macao and Taiwan factors. Fourth, disputes involving cross-border transportation contracts have increased on yearly basis. As of July 2020, among the HMTF-related commercial cases accepted by Qianhai Court, a total of 591 cases of transportation contract disputes, international cargo transportation contract disputes, and freight forwarding contract disputes have been received. From 2015 to July 2020, there were 13, 60, 72, 101, 156, and 189 cases respectively, shown a yearly upward trend, indicating the fact that there is considerable amount of trade activities between domestic and foreign commercial entities and frequent international cargo transportation.
(5)The diversified dispute resolution mechanism brings public satisfaction
Judging from the way of case concluded, 974 IPR settlements accounted for 13.41% of the cases; 1824 cases were decided to be dismissed, accounting for 25.11%. From 2015 to July 2020, the number of the HMTF-related commercial cases withdrew was 119, 356, 539, 520, 857, and 407, respectively, with withdrawal rate of 57.8%, 45.6%, 35.7%, 35.1%, 39.8%, and 35.1%. Except for the small case base in 2015 and 2016, the withdrawal rate in other years showed a steady upward trend. In January 2018, Qianhai Court established the Belt and Road International Commercial Court-Connected and Mediation to jointly build a dispute resolution platform with mediation agencies inside and outside the region, and continuously improve the diversified resolution mechanism for cross-border commercial disputes, and the diversified dispute resolution work has achieved remarkable results.
2. To establish and improve an institutional system in line with internationally accepted rules to provide services to ensure Shenzhen's high-level opening-up
(1) Adhering to the judicial concepts of fairness, efficiency, equal protection, openness and transparency to create a fair and competitive market environment
Qianhai Court insists on judicial openness and inclusiveness, protects the freedom of transactions, safeguards the interests of commercial entities in accordance with the law, and fully respects the agreement and free choice between the parties. The court adheres to the principle of judicial prudence and moderation, taking judicial trial as the last line of defense in resolving foreign-related commercial disputes, insisting on the neutral position of judgment, respecting the parties' right to choose in commercial activities, and fully guaranteed the autonomy of will in accordance with the law in the process of judicial trial in aspects such as case jurisdiction, application of proper law, contract content, and liability for breach of contract.
The court also follows strictly the principles of maintaining equal legal status, equal rights protection and equal development opportunities of parties from different countries, regions, market entities, different ownership entities, and different industry stakeholders, treats all commercial entities fairly, and protects equally the legitimate rights and interests of domestic and foreign enterprises in accordance with the law, and accurately grasp the patterns regarding the occurrence of and proper response to commercial disputes involving foreign, Hong Kong, Macao and Taiwan factors. By unifying the trial criteria, commercial entities can form reasonable expectations of their own commercial activities then regulate accordingly.
(2)Fully aligning with globally-accepted rules to help enhance the attractiveness of the business environment and the ability to allocate resources
In HMTF-related commercial cases, the parties involved tend to choose the commercial rules familiar to all parties to adjust their legal relations. International conventions and practices provide uniform standards for entities engaged in international commercial activities. Qianhai Court fully complies with international commercial rules and trail concepts with openness and tolerance, equal protection, and freedom of contract, exploring actively mechanisms that is in line with the Guangdong-Hong Kong-Macao Greater Bay Area, promoting actively the establishment of an institutional system that is in line with internationally accepted rules, understands accurately and fully comply to international treaties, practices, and treaty obligations, so as to guarantee the freedom and safety of transactions and enhance the confidence of Chinese and foreign investors. As of July 2020, Qianhai Court has applied international conventions to the trial of 10 cases, providing international legal guarantees for high-level opening-up and development.
Montreal Convention has been applied to conclude cases such as J Company v. H Company over Transportation Contract Dispute, and Plaintiff Pei v. K Company over Freight Forwarding Contract Dispute. The court is capable of applying laws accurately while there is different between the civil law of the People's Republic of China and the international treaties concluded or participated by China. The court is abided by the obligations of the treaty, so as to enhance the international and interregional credibility of China by establishing justice with fair and efficient trials. In the case of D Company v. P Company over International Goods Sales Contract Dispute: according to the United Nations Convention on Contracts of International Sales of Goods, the trade background was fully considered, and the fundamental breach of contract was identified with caution to show respect for the autonomy of the will and encourage future transactions, giving Chinese enterprise confidence to actively participate in international trade activities. In the case of F Company v. Y Company and X Company over International Goods Sales Contract Dispute, the accurate application of the United Nations Convention on Contracts of International Sales of Goods guarantees the right of foreign companies to request goods refund and to have the equal lawful rights, and strengthens the confidence of foreign companies engaging in trade activities with Chinese companies.
(3) Building a comprehensive and systematic framework for the ascertainment and application of extraterritorial laws to fully protect the right of parties to freely choose applicable laws in accordance with the law.
According to the Survey Report on the Application of Hong Kong Laws in Qianhai’s Hong Kong-related Contracts by the National Bureau of Statistics, 75.3% of the companies value a fair and just legal environment when investing in Qianhai, and about 76.5% of the companies expressed their willingness to cooperate with the previous Hong Kong-funded enterprises registered in Qianhai Cooperation Zone and sign contracts applicable to Hong Kong laws.
In response to the judicial needs of foreign commercial entities, Qianhai Court has established a systematic and comprehensive mechanism for the ascertainment and application of foreign laws. The court has established comprehensive and adequate guidelines for the determination of Hong Kong-related factors, which has identified over 30 of them, guaranteeing Hong Kong laws are applied to the maximum and extraterritorial laws are fully recognized. The court has also established a complete system of extraterritorial legal identification mechanisms by formulating the Measures for the Determination of Extraterritorial Laws, which clearly regulates the contents, subjects, channels and procedures, guaranteeing the accuracy of ascertainment. The court has also established, based on research standards applicable to extraterritorial laws and an appearance system for those with expertise in the ascertainment of extraterritorial laws, clarifying how to fully display the contents requiring ascertainment in the judicial documents. At the same time, the court gave full play to the advantages of Hong Kong jurors' familiarity with laws and industry rules in Hong Kong or other countries or regions, so as to ensure the applicable laws are ascertained and accurately applied. The court has contracted to build the Hong Kong, Macao, Taiwan and Foreign Law Ascertainment Research Base of the Supreme People's Court, and organized the Supreme People's Court Law Ascertainment and Application Seminar to give full play to the frontier functions of extraterritorial law ascertainment and application research. The court has strengthened in-depth cooperation with universities, research institutions, and third-party ascertainment agencies, sparing no effort in creating a Qianhai name card for the ascertainment and application of extraterritorial law.
As of July 2020, a total of 98 case trials were conducted under extraterritorial laws, of which 85 were under Hong Kong law, 2 under Macao law, 2 under German law, 1 under Norwegian law, 8 under laws of other countries and regions. Mediation of 12 cases and trial of 32 cases were conducted successful adapting to Hong Kong law, making the court with the most cases applying Hong Kong law. In the case of D Bank v. L Company over Financial Lease Contract Dispute, with the participation of jurors from Hong Kong, the case was resolved through mediation using Hong Kong law. It was the first case concluded by Qianhai Court in accordance with Hong Kong law, and was evaluated by the society as a small step for the rule of law in Qianhai, and a big step to strengthened confidence of commercial entities investing in Qianhai for judicial justice.
(4) Fully absorbing and drawing on the extraterritorial experience beneficial to our reform to build an institutional mechanism in line with international economic and trade rules
First, to improve the trial system and mechanisms compatible with an open development. Qianhai Court has drawn from the useful experience of judicial reform outside the region, and established a specialized trials organization for HMTF-related cases to promote a litigation mechanism reform involving 27 issues in 6 aspects, which has improved the trial efficiency of HMTF-related commercial cases by nearly 50%, further enhancing the international interregional credibility of the judicial system. The court has built a more complete three-dimensional and multi-layered litigation system, so as to explore the expansion of sole-judge trial system in HMTF-related commercial cases, improve online litigation rules, optimize the allocation of judicial resources, and enhance the ability of conducting exemplary HMTF-related trials. The court optimized the jurisdiction system for cases related to the export-oriented economy, and apply the Doctrine of Forum Non Conveniens correctly and actively exercises its jurisdiction over international commercial cases in accordance with the law, providing strong judicial support for Shenzhen’s construction of a new open economic system. The court has explored the mechanism of service by passing on for parties in Hong Kong-related cases, and formulated Several Provisions on the Issues concerning the Service of Judicial Documents of HMTF-Related Commercial Cases, entrusting the plaintiff or lawyer to serve the procedural legal documents to the defendant, which has solved the serving problem of Hong Kong-related cases. In the case of H Company v. R Company, a Hong Kong-related financial loan contract dispute involving 9 defendants, the plaintiff used the method of service by passing on, which has greatly reduced service time.
Second, to formulate the predictable trial rules for foreign-related cases in Hong Kong, Macao and Taiwan.The court formulated guidelines for case trials involving factoring contracts, financial lease contracts, intellectual property rights, entrusted financial management, and international cargo transportation contracts to promoted judicial standardization, so that the trial of one type of case regulates corresponding behaviors and unifies the corresponding judicial standards. Unified judgment standards stabilize the expectations of the parties and form an open and transparent business environment. In 2018, the court has released the White Paper on HMTF-Related Commercial Trials and Ten Typical Cases to the public. The cases include international trade related to the Belt and Road Initiative, international cargo transportation, foreign-related guarantee contracts, and applicable Hong Kong law judgments. The legal rights of parties inside and outside the territory are equally protected, using judicial judgments to strengthen regulation and provide guidance for these commercial entities.
Third, to help strengthen the modernization of the governance system and capabilities. The court offers full support to guarantee Shenzhen's high-level opening-up and the high-standard innovative development of the FTZ. To carry out extensive studies, in-depth researches and real implementations: in response to the problems found in the market operation and industry development during the trial, the court issued judicial advice, including Standardization of Equity Transfer and Regulation for Factoring Companies to Promote a Healthy and Orderly Development of the Factoring Industry in the Greater Bay Area, to entities such as Shenzhen Financial Development Service Office, Shenzhen Commercial Factoring Association, Shenzhen United Assets and Equity Exchange Co., Ltd, so as to promote the formation of a comprehensive supervision system to induce self-discipline of market subjects, industry autonomy, social supervision, and government regulation. The purpose is to improve the effectiveness of national governance while collaborating to prevent and defuse major risks to ensure accurate judicial services.
Fourth, to promote the construction of a business environment with integrity and compliance. The court formulated and implemented the Several Provisions on the Prevention and Punishment of Dishonest Lawsuits and Several Provisions on the Correct Judgment of Lawyers’ Fees to Promote Honest and Reasonable Lawsuits in order to strengthen the punishment for delayed litigation, malicious lawsuits, false lawsuits and other dishonest litigation activities. Attorney fees and litigation fees are utilized as leverages against these dishonest behaviors. In a Hong Kong-related company license return dispute, Qianhai Court imposed a fine of 100,000 yuan on the parties involved in the false statement in accordance with the law, which has yielded good legal and social outcome.
3. To improve the diversified international commercial dispute resolution mechanism and promote the establishment of an international commercial dispute resolution center in Qianhai
(1) To establish a professional platform for international commercial disputes to form a joint force for dispute resolution.
First, to establish a professional platform for international commercial disputes. With the guidance and support of Shenzhen Intermediate People’s Court, Qianhai Court established the Belt and Road International Commercial Litigation and Mediation Center. It has established successively cooperative relationships with 47 arbitration and mediation institutions within and outside the territory, including the Hong Kong Mediation Center, the Guangdong-Hong Kong-Macao Arbitration and Mediation Alliance, the Macao World Trade Center Arbitration Center, and the Shenzhen Court of International Arbitration, in order to create a diversified platform for international commercial dispute resolution. Qianhai Court fully respects and protects the right of parties inside and outside the territory to choose dispute resolution methods, promoting the formation of a joint force for dispute resolution in the Greater Bay Area. As of July 2020, the diversified dispute resolution center has accepted a total of 13,025 cases with 4,544 successfully mediated, giving full play to the role of an international commercial dispute resolution platform.
Second, to improve appointed mediation mechanism for specially-invited mediation organizations. The court has strengthened in-depth cooperation with specially-invited mediation organizations, formulated the Interim Provisions Concerning Specially-Invited Mediators/Organizations, and established the mechanism with long-term appointed mediator from specially-invited mediation organizations. Multiple specially-invited mediation organizations have established workshops in the diversified dispute resolution center of Qianhai Court, including International Commercial Mediation Center for the Belt & Road (BNRMC), Shenzhen Mediation Center of China Council for the Promotion of International Trade, Benchmark Chambers International & Benchmark International Mediation Center, Sincere Qianhai Law Office, etc. Mediators have been appointed to participate in dispute resolution, and help improve international, outward-oriented, and cooperative dispute resolution mechanisms for better resolution outcome. As of July 2020, mediators appointed by specially-invited mediation organizations have successfully mediated 3,029 cases.
Third, to strengthen the governance of litigation source. The court has strengthened the cooperation with companies such as Tencent Music and BYD International Leasing in the jurisdiction to jointly establish a dispute resolution mechanism. Mediators have been appointed to participate in resolving the dispute over infringement over right to network dissemination of information of Tencent, Douyin, Sing Bar, Fun Sing, Xiaomi. In 2019, mediators were involved in the mediation of more than 3,000 disputes, which further improved the overall level of social governance. To collaborate with Shenzhen Intellectual Property Protection Center to establish diversified dispute resolution stations and litigation service points to reduce and resolve conflicts and disputes from the source, improving the overall governance level of society.
(2) To strengthen the standardization of mediation work and improve the professionalism of international commercial mediations
First, to improve the construction of the mediation mechanism. The court has regarded institutionalization and standardization as the basis of regional legal governance, and formulated the Work Guidelines of the Belt and Road International Commercial Court-Connected and Mediation Center of Qianhai , including mediation rules, mediator codes, and mediation procedures to clarify mediation procedures, to improve supporting mediation mechanisms, form a systematic mediation system, and enhance the professionalism of mediation.
Second, to implement ‘similar mediation for similar cases’ mechanism. In response to commercial cases requiring professional background, the court has formulated mediation guidelines for six types of disputes, including sales contracts, private lending, and construction contracts, as well as 22 case factors including financial leases, intellectual property rights, and equity transfer to improve the professionalism and efficiency of international commercial mediation.
Third, to improve the mechanism for mediator selection and performance. The court adheres to the high standards for the selection of mediators, and recruits mediators with professional backgrounds in finance, international trade, intellectual property, and information according to the characteristics of cases to promote professionalism in the resolution of commercial disputes. The court has improved the training of mediators and the ability to resolve disputes through regular legal lectures, mediation observations, special seminars, and experience exchange sessions.
(3) To strengthen the mechanism of convergence between litigation and non-litigation to achieve pre-dispute management
First, to implement a guidance and promotion mechanism for pre-mediation of commercial disputes. The court insists on putting the non-litigation dispute resolution mechanism ahead. It is stipulated that except for cases whose nature is not suitable for mediation, all other cases shall be included in the Shen Rong Diversified Platform for mediation procedures. The court established a neutral third-party evaluation mechanism, where third-party legal experts issue evaluation reports on the results of the case, and guide the parties to choose dispute resolution methods rationally. So far, the mechanism has been applied to 4 Hong Kong-related cases, one of which is a guarantee contract dispute. After being assessed by a neutral third-party expert, the parties chose to withdraw the lawsuit voluntarily. The case was selected as a model case for legal services relating to Guangdong-Hong Kong-Macao Greater Bay Area. The mechanism for the burden of litigation fees and lawyers' fees will be improved, and the mediation mechanism will be strengthened. In a contract dispute, the plaintiff rejected reasonable mediation plan without justifiable reasons. According to the Opinions of the Supreme People's Court on People's Courts Further Deepening the Reform of Diversified Dispute Resolution Mechanism, Qianhai Court ruled that the plaintiff is shall bear litigation costs, which leads the parties to choose more rational and pertinent solutions to resolve disputes.
Second, to improve the linking mechanism between litigation and non-litigation. A pre-mediation mechanism for eligible cases shall be established. Mediation agreement reached needs timely judicial confirmation. If a mediation agreement is not reached at the expiration of the mediation period, the case shall be promptly transferred for filing. The process tracking of cases shall be strengthened. For cases where the parties are still willing to mediate during litigation, they will be transferred to the diversified dispute resolution center. The concept of efficient and convenient dispute resolution runs through the entire litigation process. An undisputed fact record mechanism shall be established, where the parties do not need to provide evidence on recorded facts during the litigation process to improve the efficiency of court trials. Undisputed mediation plan recognition mechanism shall be built, so as to actively promote the two parties to reach a mediation agreement or reduce disputes.
Third, to strictly implement the judicial confirmation system. According to the pilot program of the Supreme Court’s civil procedure reform, the scope of judicial confirmation shall be expanded in accordance with the law. The international commercial mediation agreement agreed by the parties to be under the jurisdiction of Qianhai Court shall be included in the scope of judicial confirmation, and the role of the people's court in providing judicial protection for non-litigation dispute resolution shall be brought into full play. As of July 2020, 471 judicial confirmation cases have been processed. In a Hong Kong-related processing contract dispute case, the court confirmed the mediation agreement reached in Hong Kong in accordance with the law, which facilitated the settlement of disputes between the parties.
Fourth, to promote the marketization and socialization of mediation work. Collaborating with Shenzhen Municipal Bureau of Justice and Shenzhen Lawyers Association, the court established a working mechanism for lawyers to participate in litigations and mediations. All lawyers participating in mediation have at least 5 years of professional experience and good professional ethics. The court formulated and implemented the Provisions on Lawyers’ Mediation Work, clarifying the procedures for lawyers to participate in mediation, and improve the standardization of mediation by lawyers. As of July 2020, a total of 148 lawyers and mediators have been selected to participate in mediation, and 891 cases have been successfully mediated. Mediation organizations shall provide paid mediation services according to the needs of the parties, and greatly promote the sustainable development of mediation organizations and work. As of July 2020, mediation organizations have collected mediation fees based on negotiation from the parties in 96 cases, totaling more than 900,000 yuan, and the maximum amount of individual mediation fees is more than 140,000 yuan.
(4) To rely on smart courts to build innovative mediation models and continuously improve convenience for the resolution of cross-border disputes
First, to develop Online + Offline Mediation for Cross-border Disputes. The court shall fully use Shenzhen Court’s “Combined Diversified Platform” and Qianhai Court’s 5G remote video mediation room through entrusted and appointed mediation methods, to expand the use of online mediation platforms, strengthen cross-border online mediation, and support Hong Kong, Macao and foreign mediators to carry out online mediation work through multiple channels such as email, WeChat, and telephone in accordance with the communication habits and needs of overseas parties. From February to July 2020, Qianhai Court conducted a total of 3,258 online mediation cases through WeChat, telephone, and email. In a dispute over a lease contract in which the defendant is a Hong Kong resident, the diversified dispute resolution center of Qianhai Court adopted the joint mediation model with Mainland Mediator + Hong Kong Mediator, and carried out online mediation for the case and facilitated the parties to reach a mediation agreement, and then the judge conducted online judicial confirmation for the agreement using remote video mediation platform, resulting in quick resolution of Hong Kong-related disputes.
Second, to explore the model of extraterritorial mediation + interterritorial judicial confirmation. With respect to the choice of mediation location, mediation method and mediators, the court shall fully respect the right of the parties to make choices, and guarantee the autonomy of will between the parties. Through cooperation with foreign mediation agencies, the court shall provide convenient and economic mediation methods for parties outside the territory. In a Hong Kong-related commercial contract dispute, a Hong Kong regional mediator was entrusted to organize a mediation between the two parties in Hong Kong, and the mediation statement was confirmed by the judge. The cross-border mediation model was successfully, and the international and interregional commercial mediation agreement was also included in the application of judicial confirmation, where disputes could be resolved in a one-stop manner.
Third, to actively expand remote judicial collaboration. Qianhai Court is the first in the country to set up public legal service platform for the Belt and Road Initiative, establishing legal database, case database and expert database for countries and regions along the Belt and Road. The court invited thousands of legal professionals to provide free online legal consultation services. Currently, the service of the platform has covered laws, regulations, and relevant cases and documents of 31 major countries and regions along the Belt and Road, providing more diverse and convenient legal services for commercial entities along the Belt and Road.
4. To establish a diversified professional team for HMTF-related commercial trials, and enhance the professionalism of dispute resolution
(1) To improve the construction of a new type of professional trial organization and improve the level of trial professionalism
First, to centralize the jurisdiction of HMTF-related commercial cases. Shenzhen Intermediate People's Court has been promoting concentrated management of HMTF-related commercial case, a coordinated effort to reform the trial of HMTF-related cases. Qianhai Court began to accept first instance HMTF-related commercial cases in Shenzhen in accordance with the law in February 2015, turning the trial of such cases from comprehensive to professional, and from decentralized to unified. Centralized jurisdiction has effectively promoted the unification of international and interregional commercial trial organizations, adjudication standards, judicial procedures, and judicial services, providing solid guarantee for the improvement of quality and efficiency for HMTF-related commercial case, as well as predictable, stable and transparent judicial guidelines for parties inside and outside the region.
Second, to establish a professional trial organization. In view of internationalization, complexity, and expertise involved in HMTF-related commercial cases, judges with the background of common law and familiarity with international law and international economic and trade rules and profound trial experience regarding intellectual property, finance, and international trade are selected by Shenzhen Intermediate People's Court, since the beginning of Qianhai court, to form collegiate panel for HMTF-related commercial cases and the Belt and Road commercial trials. These judges are dedicated to hearing HMTF-related commercial cases, improving the professionalism of case trials. Currently, there are 6 judges with master degrees in common law. Qianhai court established an expert advisory committee to attract experts in the fields of finance, insurance, international trade, and intellectual property rights to provide professional advice for complex and difficult cases.
Third, strengthen the demonstration effect of court judgments. The court keeps close to the development of new characteristics of international economic and trade, respond actively to areas and issues of concern to commercial entities inside and outside the region, using trial guidelines and typical cases as example to give full play to the important value of judicial adjudication in establishing behavioral rules and regulating market behaviors. The court has issued successively 6 batches of typical cases, 52 in total, including 15 HMTF-related commercial cases, and cases related to Guangdong-Hong Kong-Macao Greater Bay Area and Free Trade Zones. Cases such as the Neutral Third-Party Evaluation for Hong Kong-related Cases and ICBC Asia’s Petition for Enforcement were selected as typical cases of servicing and guaranteeing the development of Guangdong-Hong Kong-Macao Greater Bay Area and Free Trade Zone. A compilation of typical Cases named Reflections on Several Major Issues in the Thinking and Method of Civil and Commercial Judgment - Analysis on the Judgment of 22 Selected Cases was published by Law Press in 2019, which has included several articles involving HMTF-related commercial cases applicable to the doctrine of forum non conveniens.
(2)To improve jury system for jurors from Hong Kong to strengthen judicial transparency and credibility in HMTF-related commercial trials
First, to appoint expert jurors from Hong Kong for trials with high standard. From 2016 to 2018, 32 Hong Kong jurors were selected successively to participate in the trial of Hong Kong-related cases, and 20 of them were expert jurors from Hong Kong. They were divided into 5 groups according to the categories of finance, trade, accounting, equity, and intellectual property to enhance the professionalism of the trials, eliminating the influence of foreign parties on judicial credibility due to differences in system concepts and living environments.
Second, to standardize the mechanism of expert jurors from Hong Kong participating in trials. Qianhai Court has formulated the Guidelines for Jurors from Hong Kong Participating in Trials, which provides normative guidelines for jurors from Hong Kong participating in trials, improving the jurors’ familiarity of mainland laws and trial procedures. In terms of how to summarize the focus of dispute, the rules of evidence, the burden of proof, and the rules of court trials, the judge will provide prompt and guidelines to the jurors from Hong Kong, who will independently exercise their right to vote on the determination of facts and the application of law, improving the efficiency of court trials. The jurors from Hong Kong have the advantage of being familiar with the trading habits and industry conditions of the parties in Hong Kong or outside the territory, providing support for law ascertainment, evidence determination, so as to promote more legal,reasonable and effective resolution of disputes. As of July 2020, jurors from Hong Kong have participated in 423 cases.
Third, to improve the performance guarantee mechanism for jurors from Hong Kong. Qianhai Court formulated the Administrative Measures for People's Jurors from Hong Kong and established a sound performance guarantee mechanism. Also, the court built a communication and interactive platform to collect and feedback the opinions and suggestions put forward by jurors from Hong Kong in a timely manner. Jurors from Hong Kong are to be recommended to participate in the Hong Kong-related trial practice seminars held by higher courts to continuously improve their ability to perform their duties.
(3) To establish an international team of mediators to improve the professionalism of mediation
First, to introduce foreign and Hong Kong, Macao and Taiwan mediators. HMTF mediators to participate in the resolution of commercial cases shall be selected and appointed. Professionals with finance, intellectual property, Internet and other expertise will account for a certain percentage to continuously meet the practical resolution needs of HMTF-related cases. At present, a total of 74 HMTF mediators have been recruited, accounting for 39.4% of all specially-invited mediators, including 56 from Hong Kong, 5 from Macao, 3 from Taiwan, and 10 from foreign countries. To promote the sharing of diversified dispute resources in the Guangdong-Hong Kong-Macao Greater Bay Area. Currently, Guangdong Free Trade Zone Court is available to share the resources of specially-invited mediators from Hong Kong and Macao.
Second, to improve the joint mediation model with mainland mediator + extraterritorial mediator or judge + mediator. In order to reduce the value conflicts caused by different jurisdictions and cultural concepts, the pertinence and credibility of dispute resolution have been effectively improved. As of July 2020, HMTF mediators have successfully mediated 660 cases, 625 of which have been achieved by mediators from Hong Kong. In a copyright dispute case, the mainland and foreign mediators were entrusted by the court to reach a mediation agreement through video conference connecting Qianhai and Beijing.
Third, to regulate the performance management of extraterritorial mediators. The recruitment, management and evaluation of HMTF mediators shall be regulated, and the training of extraterritorial mediators regarding judicial system and professional ethics shall be strengthened to ensure that extraterritorial mediators understand the commercial laws and mediation rules in the domain, as well as the industrial norms and professional knowledge in their fields, so as to further improve their ability to resolve disputes.
5. To improve modern litigation service system and intelligent court application system to enhance the sense of judicial gain by parties inside and outside the territory
(1) To establish a one-stop modern litigation service system to improve the inclusive and convenient litigation service
A modern litigation service system that is centralized and efficient for diversified dispute mediation while being convenient, intelligent and accurate, open and interactive shall be established. An intelligent one-stop litigation service center to realize litigation services featuring one-stop, one-network, one-number, and one-time, to continue to enhance the people's sense of judicial gain shall be established with high standard. A special window shall be set up for Guangdong, Hong Kong and Macao with multilingual services, providing judicial services such as cross-border dispute mediation, legal service, litigation counseling, and cross-domain case filing for foreign parties. After the opening of the new litigation service center in November 2019, as of July 2020, a total of 46 cross-regional filing has been processed.
(2) To set up special cross-border judicial services to improve the professional accuracy of litigation services
Special litigation services shall be set up in the Guangdong-Hong Kong-Macao Greater Bay Area to provide cross-domain litigation services such as cross-domain signing of authorizations, case filing, document service, and file review for parties in Hong Kong and Macao, using 5G Internet to provide remote video authorization and entrusted notary services. During the epidemic, the court provided remote video authorization and entrusted notary services for parties in Hong Kong, and handled the paperwork of entrusting a lawyer to represent the plaintiff, reducing greatly the litigation costs of foreign parties and protecting effectively the legitimate rights and interests of foreign parties in a timely manner. In December 2019, Qianhai Court signed a litigation service cooperation agreement with Guangzhou Nansha Court and Zhuhai Hengqin Court to establish a linkage mechanism for cross-domain case filing, cross-domain mediation, cross-domain trial, and sharing of judicial resources, build a FTZ Judicial Service Circle to standardize and unify the judicial service standards of the FTZ, and enhance the judicial protection effect while improving the level of social governance in the FTZ.
(3) To strengthen the use of Internet technology and build a new online + offline mode of integrated judicial system
The application of information technologies such as big data, cloud computing, artificial intelligence, and blockchain in the judicial field shall be explored, in order to create a new all-round model integrating mediation, trial, execution, filing, serving, providing evidence, opening court sessions, enforcement process, litigation service hall, litigation service hotline and litigation service network, offering a new service model with Internet + Intelligent Justice for the entire judicial process through the Internet. Online case filing, online inquiry, electronic delivery, remote mediation, online court hearing, and online enforcement shall be fully implemented, and the use of mobile micro court APP named ‘fingertip litigation’ for cell phones shall be promoted, and travel needs in litigation matters shall be reduced or eliminated. The full use of online litigation services truly enabled Qianhai Court with 24-hour auto-court function, providing full time, full coverage, and full expertise litigation services. During the epidemic, Qianhai Court relied on information technology to improve the standardized online litigation model for the whole process from filing to enforcement, keeping up both epidemic prevention and judicial work without closing litigation services and interrupting trial enforcement, which has greatly enhanced the people's judicial experience and sense of gain. All litigation services are available online. From February 3 to July 2020, 7,678 cases were filed online, accounting for 75.96% of the total number of cases filed. In a leasing contract disputes in which the defendant is a Hong Kong resident, online mediation and online judicial confirmation were used to quickly resolve Hong Kong-related disputes. An online trial model supported by the Shenzhen Mobile Micro Court has been implemented: a total of 554 online court trials has been carried out, protecting effectively the legitimate rights and interests of the parties.
6.To improve the model of cross-domain judicial cooperation and exchange, and create a reputation built on the rule of law for the construction of socialist rule of law
(1) To establish a platform for foreign cooperation and exchange to showcase the achievements of socialist rule of law with Chinese characteristics
Following the Supreme People's Court’s instruction of One Center and Two Bases, Qianhai Court hosted the Supreme People's Court Law Ascertainment and Application Seminar, and organized the Qianhai Legal Intelligence Forum and the International Commercial Mediation Forum to gather legal wisdom inside and outside the territory, so as to promote cross-regional and cross-border legal research, exchanges and cooperation, facilitate the normalization of judicial exchanges, and enhance mutual judicial assistance and trust. Since 2016, Qianhai Legal Intelligence Forum has been successfully hosted for four times, and it has become a high ground in Qianhai for the gathering of knowledge, open exchanges, and mutual assistance and sharing, and helps Shenzhen build a window to showcase the achievements of the rule of law.
(2) To strengthen international exchange and cooperation, and continue to improve judicial trust
Qianhai Court continues to deepen exchanges and cooperation with Hong Kong and other extraterritorial judicial institutions, so as to learn from the useful experience of judicial systems in different jurisdictions, and enhance the recognition and mutual trust in the rule of law. In recent years, Qianhai court has received visits of scholars from universities and legal professionals from outside the region, including Judge of the High Court of the United Kingdom, President of the Court of Dubai International Financial Center, Chief Justice of Hong Kong Court of Final Appeal, President of Macao Court of Final Appeal, the Secretary of Justice of Hong Kong, and invited people from Hong Kong and Macau, including representatives of the National People’s Congress and CPPCC members of Hong Kong, to participate in Qianhai Court’s Open Day, showcase the achievements of socialist rule of law with Chinese characteristics. The court has also received visits from the China-Africa legal talent exchange project seminar to jointly promote the construction of the rule of law between different cultures and different legal systems.
(3) To carry out legal personnel training and exchanges, and improve the ability to resolve international commercial disputes
The court has organized 5 sessions of Common Law Judgment Thinking Seminar, inviting judges of the Singapore International Commercial Court and Hong Kong Senior Counsel to share knowledge and skills related to common law judgments and the ascertainment and application of Hong Kong extraterritorial laws, so as to enhance judicial personnel's understanding of common law. The court has also sent 36 judicial officials to Hong Kong and Macao to participate in the Judicial Forum of Mainland China, Taiwan, Hong Kong and Macao, the Belt and Road Initiative and Cross-border Commercial Dispute Resolution Development Trend Seminar. They were also sent to the Chinese University of Hong Kong for study and exchange, and the Hong Kong Department of Justice, the High Court, Hong Kong International Arbitration Center and other departments and institutions for seminars to improve their international vision and skills of HMTF-related commercial trials. The court organized part of the training courses for the 2017 Advanced Training Course for Chinese Commercial Mediator Qualification Certificate - Hong Kong Bar Association Training Course. The Hong Kong Bar Association's practicing barristers and Qianhai court judges conducted judicial exchanges on international commercial mediation, and enhanced the consensus on the resolution of international commercial disputes. Between 2018 and 2019, Qianhai court has received a total of 27 law students (2 batches) from Hong Kong for internship, which has improved Hong Kong youth's understanding of the Mainland's judicial system, their sense of national belonging and national identity.
7. To always put political construction in the first place, and strive to improve the level of revolutionization, regularization, specialization, and professionalization of the judicial team
(1) To always put the party’s political construction in the first place to guarantee the correct political direction for HMTF-related commercial trials.
The court always adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly studies and implements the spirit of General Secretary Xi Jinping’s important speech to Guangdong and important instructions to Shenzhen, unswervingly adhering to the party’s absolute leadership, constantly enhancing the ‘four consciousnesses’, insisting on ‘four matters of confidence’, and ensuring ‘two upholds’. The court studies earnestly and implements General Secretary Xi Jinping’s speeches on perfecting the foreign-related legal system and building a new pattern of opening-up in the report of the 19th National Congress of the Communist Party of China, celebrating the 40th anniversary of reform and opening up, and other important speeches, and improves political stance in the HMTF-related commercial trials. The court always adheres to the correct political direction and upholds the party’s absolute leadership over the work of the people’s courts, and strictly implements decisions by the party committees at all levels and higher courts, and serves actively to ensure the overall situation of social and economic development. The court strictly implements the ideological accountability system, and resolutely resists and refutes all kinds of erroneous thoughts and views involving westernization and differentiation, takes a clear stance and stand firm in the face of issues of principle and cardinal questions of right and wrong, and resolutely safeguards ideological security in the field of HMTF-related commercial trials.
(2) To improve the management mechanism of judicial team and enhance the standardization of the team
The court strictly implements the general requirements for party building in the new era, and unswervingly implements the requirements for strict governance of the party and court in an all-round way, and effectively embodies the “two safeguards” in the actual actions of serving the overall situation, serving the people, and impartial justice. The court has strengthened party building: to develop and implement the Accountability List for Enforcing Strict Party Self-Governance, set up party branches in the HMTF-related trial teams to strengthen the standardization of the party branch, carry out themed Party Day events featuring service guarantee and opening-up, so as to enhance the integrated development of party building and HMTF-related trials and improve working skills lead by party building. The court has strengthened the efforts to combat corruption within the party and maintained clean governance while continue to improve management and supervision system for the judicial team. The court has strengthened the evaluation of judicial personnel: to formulate and implement the Comprehensive Evaluation Measures for Judicial Personnel, Rules for Implementation of the Evaluation of Political Thought Construction and the performance evaluation methods for judges and judge assistants, so as to scientifically determine the reasonable workload of judges in handling cases and the weight coefficient of foreign-related cases, and give full play to the guiding and incentive role of the evaluation. The court has formulated and improved the Guide to Judicial Conduct for Judges and Guide to Judicial Work for Judge Assistants to strictly regulate the behavior of judicial personnel on and off duty, and improve the standardization and professionalism of the judicial team.
(3) To improve training of the judicial team and enhance professional capabilities for HMTF-related Trials
Benchmarking against the standards of first-class international courts, Qianhai Court has improved the training model of judicial personnel, carried out various training courses such as ideological and political education, disciplinary education, professional ethics education, and judicial competence training. With regard to the characteristics of HMTF-related commercial trials, the court organized Common Law Judgment Thinking Sessions, and judicial personnel to participate in cross-border commercial dispute resolution seminars to continuously improve their international vision for HMTF-related commercial trials. The court carried out English training sessions, hiring foreign teachers to teach judicial personnel in English to improve their language skills. The court also carried out special civil code study and training seminars to help the judicial personnel learn new laws and judicial interpretations in time, sparing no efforts in building a judicial team with international vision, excellent professionalism, and high moral character, so as to provide a solid talent support for making new grounds in pursuing opening-up.
Conclusion
General Secretary Xi Jinping pointed out that Guangdong is not only an important window for the world to know the achievements generated by China's reform and opening-up, but also an important window for the international community to observe the country's reform and opening up. Located in the special zone – the Qianhai & Shekou FTA within the special zone – Shenzhen Special Economic Zone, Qianhai Court bears the responsibility to show the achievements of China's rule of law. The year of 2020 marks the 40th anniversary of the establishment of the Shenzhen Special Economic Zone, and the 10th anniversary of Qianhai Shenzhen-Hong Kong Modern Industry Cooperation Zone. It is also a crucial year for the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and Shenzhen to build a Pilot Demonstration Area of Socialism with Chinese Characteristics. Standing at a historical starting point, Qianhai Court will always adhere to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as guidance, under the steadfast leadership of the Party Committee and the strong guidance of the courts at a higher level, with the construction of the Guangdong-Hong Kong-Macao Greater Bay Area as the outline, and the Shenzhen Pilot Demonstration Zone as the general traction and requirements, adhere to openness, inclusiveness, reform and guidance to improve the overall working mechanism of service and guarantee economic and social development, and build a complete diversified international cross-border dispute resolution platform and mechanism to ensure that parties either involve in international or interregional commercial cases have the right to choose and apply extraterritorial laws. The court will continue to explore actively the mechanism that are in line with the rules of Guangdong-Hong Kong-Macao Greater Bay Area and the high standards of international economic and trade rules, improve the jurisdiction system for international commercial cases, and further improve the operation of judicial power with judicial accountability as the core and a modern people-centered litigation service system, establish a litigation system that conforms to the progress of the times and technological development, and a modern and intelligent court application system, sparing not efforts to create a world-class business environment protected by the rule of law and provide support to ensure the development in the new era.
