Authors: Tianshu (Susan) Lu and Yisha He
| Jurisdiction: China |
Topics: Other |
The One Belt One Road Initiative (OBOR) is China’s recent development strategy aiming at increasing the country’s economy integration and financial collaboration with the Eurasia area. The project includes investments in the infrastructural and transportation projects in over sixty countries located alongside the ancient land-trade routes stretching from China towards Europe, the Mediterranean and the Indian ocean.[1] Within the first three years after the OBOR was launched, China has entered into cooperation agreements with more than forty countries in the “Belt and Road” region.[2]
However, the booming trade volume will likely bring in more contractual disputes with countries participating in the OBOR projects, especially the public-private partnership projects. To avoid the potentially big expense litigating the disputes under a foreign jurisdiction, Chinese investors generally provide in the contracts that all disputes shall be submitted to the Chinese jurisdiction.[3] To this end, China aims to push for the establishment of an integrated dispute resolution system.
On December 2017, the Wuhan Arbitration Commission declared the establishment of the “One Belt, One Road” Arbitration Center for International Public-private Partnership Projects (the Center).[4] At its early stage, the Center mostly reviews the disputes raised between Chinese companies in OBOR infrastructure projects.[5] As a result, many of the arbitrators and members of the Center’s Expert Consultant Committee have backgrounds in construction engineering.[6] Moreover, some arbitrators of the Center are counsels from major infrastructure companies like the China Railways Corporation, China State Construction Engineering Corporation and Power Construction Corporation of China.[7] However, as many of these companies are themselves major participants in the OBOR Initiative,[8] potential issue regarding the neutrality and impartiality of the arbitrators might rise in the future.
Furthermore, in September 2017, the Supreme People’s Court of China (hereinafter the “SPC”) held a judicial conference on issues surrounding OBOR with a group of senior judges, where the SPC releases its plan to establish an international commercial court, as part of its efforts to create a brand new dispute settlement mechanism for parties from OBOR countries, and to better facilitate the resolution of cross-border disputes arising from businesses carried out under OBOR.[9] Recently, words have been spread that SPC has decided on the locations of these international commercial courts, one in Xi’an (a major city in Northwestern China) to cover commercial disputes arising from businesses along Silk Road Economic Belt, one in Shenzhen (a major city in Pearl River Delta, Southern China) to cover disputes arising from businesses along the Maritime Silk Road while borrowing talents and experience from the adjacent Hong Kong Special Administrative Region, and one in Beijing as the headquarter.[10]
The structure and the future effectiveness of the proposed international commercial courts is unclear yet. SPC has in the past embraced connections with international commercial courts in other countries, such as with Dubai International Finance Center Court[11] and with Singapore International Commercial Court[12], both of which have a panel of international judges. The Singapore International Commercial Court, with a highly-experienced and diverse panel of judges, and an increasingly sophisticated jurisprudence, is theoretically a good model for China to follow.
In addition to improving the institutional designs, in terms of adjudicating rules, SPC is also drafting a judicial interpretation on the recognition and enforcement of foreign civil and commercial judgments.[13] Judge Liu Guixiang, a senior judge at SPC and a member of SPC’s judicial committee, who spoke at September’s judicial conference, revealed that the judicial interpretation being contemplated will set out details on definition and application of the “reciprocity” standard, aiming to facilitate and make more transparent the procedures for foreign judgments to be recognized and enforced in China.[14] Moreover, SPC plans to substantiate mutual assistance and judicial cooperation with major countries around the world.
[1] Justin D’Agostino, One Belt, One Road The Impact On Dispute Resolution In Asia, Legal News & Analysis – Asia Pacific – Dispute Resolution (Oct. 10, 2017), http://www.conventuslaw.com/report/one-belt-one-road-the-impact-on-dispute-resolution/.
[2] List of Achieves of Belt and Road Initiative 2013-2016, People’s Daily, http://en.people.cn/102775/313196/index.html (last visited Feb. 3, 2018).
[3] ChiaGoAbroad, China Establishes “One Belt, One Road” Arbitration Court, http://www.chinagoabroad.com/en/article/21685 (last visited Feb. 1, 2018).
[4] Legaldaily (法制网), “Yidaiyilu” Zhongcaiyuan PPP Zhongxin Sheli (“一带一路”仲裁院PPP中心成立) (Dec. 12, 2017), http://www.legaldaily.com.cn/Arbitration/content/2017-12/12/content_7417981.htm?node=78348.
[5] Xinhua Net (新华网), Yidaiyilu”Zhongcaiyuan Sheli（“一带一路”仲裁院设立）(Nov. 1, 2016), http://www.xinhuanet.com/silkroad/2016-11/01/c_129345689.htm.
[6] Id.
[7] Id.
[8] See Silkroad News (新华丝路), Zhongguo Jianzhu Jie “Yidaiyilu” Dongfeng Tuozhan Shichang 2016 Nian Haiwai Yingshou Chao Baiyi Meiyuan (中国建筑借“一带一路”东风拓展市场 2016年海外营收超百亿美元 )(Oct. 13, 2017), http://silkroad.news.cn/2017/1013/55415.shtml; see also China-Railway (中国铁路总公司), Jiaoxiang Guoji Wuliu Pinpai Tuichu “Yidaiyilu” Jianshe (叫响国际物流品牌 助推“一带一路”建设)(Nov. 22, 2017), http://www.china-railway.com.cn/gjhz/gtjl/201711/t20171122_68429.html.
[9] News Ifeng (凤凰网), Goujian Gongzheng Gaoxiao Bianli de “Yi Dai Yi Lu” Kuajing Jiufen Jiejue Jizhi (构建公正高效便利的“一带一路”跨境纠纷解决机制) (Sep. 28, 2017), http://news.ifeng.com/a/20170928/52204518_0.shtml.
[10] Grandall Law Firm, Zhongguo Jiang Jian Yi Dai Yi Lu Zhengduan Jiejue Jigou She Quanxin Guoji Shangshi Fating (中国将建一带一路争端解决机构设全新国际商事法庭) (Jan. 25, 2018), http://www.grandall.com.cn/guoji/yiluyidaizixun/180125170611.htm.
[11] Cooperation agreement that the Shanghai Higher People’s Court and Dubai International Finance Centre Court signed in October 2016, see DIFC Courts, UAE-China trade ties deepen with landmark judicial cooperation agreement (Oct. 27, 2016), http://difccourts.ae/uae-china-trade-ties-deepen-landmark-judicial-cooperation-agreement/.
[12] Memorandum of understanding on legal and judicial cooperation between the SPC and Singapore Supreme Court, signed in August 2017, see Supreme Court of Singapore, Inaugural Singapore-China Legal and Judicial Roundtable (Aug.t 21, 2017), https://www.supremecourt.gov.sg/news/media-releases/inaugural-singapore-china-legal-and-judicial-roundtable.
[13] See supra note 9.
[14] Id. Recognition and enforcement of foreign judgments has presented many problems for foreign parties involved in China-related disputes. For further discussions, see Vivienne Bath, Overlapping Jurisdictions and the Resolution of Disputes Before Chinese and Foreign Courts, YEARBOOK OF PRIVATE INTERNATIONAL LAW: VOLUME XVII – 2015/2016, A. Bonomi, G.P. Romano, Verlag Dr. Otto Schmidt KG, Germany, 2017.