China's judiciary guides commercial and maritime affairs in global waters

Reporter's note: China's unwavering commitment to embedding the rule of law in its foreign affairs underscores its dedication to broadening its legal governance framework, signaling a new era of openness at a high level. The nation's judicial system, especially the People's Courts, plays a pivotal role in fostering a legal environment conducive to international business while safeguarding national interests.

In an exclusive interview with CGTN, Wang Shumei, a member of the Adjudication Committee and the justice of China's Supreme People's Court (SPC), sheds light on how China's judiciary is responding to the unprecedented challenges and opportunities posed by profound global shifts. Justice Wang discusses the courts' endeavors in commercial and maritime adjudication to fulfill their duties and contribute significantly to the international community.

CGTN reporter: How important are China's foreign-related commercial and maritime judicial work in fostering a market-oriented international business climate that's based on the rule of law? How does this advance high-level opening up?

Justice Wang Shumei: Chinese President Xi Jinping said the rule of law is the best environment for doing business. The work of Chinese courts in foreign-related commercial and maritime trials is a vital part of efforts regarding foreign-related rule of law. Chinese courts fully leverage their role in foreign-related commercial and maritime trials to serve and support major national strategies and facilitate high-level opening up, as well as to create a market-oriented international business environment that's based on the rule of law.

It is embodied in several aspects. First, the SPC places great importance on foreign-related judicial work. We have orchestrated the foreign-related commercial and maritime trial work of courts nationwide via top-level design, aiming to support the stable and far-reaching implementation of the country's major strategies. For instance, we have issued multiple policy documents, including those aimed at serving and supporting the construction of free trade zones and free trade ports, high-quality Belt and Road cooperation, and the development of Beijing's Two Zones – the pilot free trade zone and the national comprehensive demonstration zone for expanding opening up in the services sector. These documents underscore the commitment to equally protect the legitimate rights and interests of both Chinese and foreign parties, thus playing an indispensable role in aiding the country's major strategies by navigating high-level opening up and fostering a good legal environment.

Secondly, we have enhanced the quality and efficiency of foreign-related adjudication by perfecting our judicial rules and improving the system for the application of foreign-related laws. For instance, in recent years, we have issued 35 judicial interpretations to apply the Foreign Investment Law. Additionally, we have formulated judicial interpretations related to the application of international treaties and international practices, including those for the ascertainment of foreign laws and those concerning independent guarantees to support Chinese enterprises' going global. These judicial interpretations serve to unify adjudication rules and improve the quality and efficiency of foreign-related judiciary.

Thirdly, we uphold the legal rights and interests of both Chinese and foreign parties through equal protection and fair adjudication. In recent years, we have concluded a large number of typical and exemplary cases. I can give a few examples, such as one where the SPC's International Commercial Court ruled in a dispute between a domestic pharmaceutical company and an Italian pharmaceutical company. After careful deliberation, the SPC determined that the Italian company had failed to fulfill its obligations to recall, thus bearing the corresponding liability for infringement. 

In addition, when our Shanghai court heard a dispute involving a U.S. citizen's application for confirmation of the shareholder status of an enterprise in China, we determined that the U.S. citizen was entitled to the shareholder status of the company in accordance with the law. These cases illustrate that Chinese courts protect the legal rights and interests of both Chinese and foreign parties equally. Over the years, by handling these cases, we have established a fair image of China's foreign-related judiciary, continuously expanding the credibility and influence of our foreign-related judicial system.

Lastly, we would like to specially introduce the two International Commercial Courts established by the SPC in 2018. Following their establishment, we also formed an International Commercial Expert Committee to advise for the International Commercial Courts, effectively acting as a think tank. Moreover, we established a diversified mechanism for resolving international commercial disputes, composed of various arbitration and mediation institutions. This mechanism has been operating well, and last year we launched a platform, allowing for the digital processing of all our cases. Since the establishment, the International Commercial Courts have handled a number of cases with significant impact, achieving very positive outcomes.

CGTN reporter: Chinese courts often emphasize the use of  'Eastern Experience' in addressing the concerns of both domestic and foreign parties. How is this principle applied in the handling of international commercial disputes?

Wang: Mediation is hailed as the "Eastern Experience," as you mentioned, playing a crucial role in resolving conflicts and disputes. In recent years, Chinese courts have earnestly implemented the "Fengqiao Experience" model of resolving social conflicts at the grassroots level. Thus "Eastern Experience" has also been applied to the adjudication of foreign-related cases, and has mediated some cases with typical significance.

For example, in a case handled by the International Commercial Court of the SPC which involved a dispute over corporate interest infringement between a pharmaceutical company from Zhejiang Province and an American pharmaceutical company, Chinese judges utilized the Eastern Experience. Through mediation, they facilitated a settlement between the parties. It was not just about resolving the case at hand but served as a comprehensive dispute resolution approach. This led both parties to withdraw multiple lawsuits filed in the United States and in China. The outcome was highly effective, allowing both parties to maximally repair their business cooperation relationship, showcasing the "Eastern Experience" in foreign-related cases to great effect.

Another case involved a company from Singapore and a company from Liberia, where a dispute arose between their two foreign-flagged ships in international waters. The plaintiff, the Singapore company, opted to file a lawsuit in China's Ningbo Maritime Court. Initially, there was significant opposition between the two sides. However, after the Chinese judges carefully reviewed more than 1,800 pages of evidence – mainly about disputing the extent of the loss – they transformed the parties from resistance to active cooperation with the court's mediation efforts. As they put it, they witnessed the professionalism and authority of Chinese judges, leading to a handshake and settlement between the parties. This case, where two foreign companies opted for a Chinese court to mediate a dispute occurring in international waters, demonstrates how the "Eastern Experience" facilitated a peaceful resolution, achieving excellent results.

Furthermore, in a case involving a freight forwarding dispute in Africa, the Yiwu People's Court delegated the mediation to a local Foreign Affairs Mediation Center and appointed a foreign mediator who was proficient in English and familiar with African trade. It took only three days to reach successful mediation, demonstrating high efficiency and effectiveness, earning full recognition from both parties involved.

CGTN reporter: Given all the challenges and the complexity of delivering legal documents overseas and determining foreign law, what innovative strategies have Chinese courts introduced to enhance the efficiency and quality of international commercial dispute resolutions?

Wang: Difficulty in serving documents and ascertaining foreign law are characteristics of foreign-related cases. As such, China's Civil Procedure Law does not specify a time limit for the trial of foreign-related cases. This contrasts with that for domestic cases, which have defined periods for first and second instance trials. The absence of trial time limits in foreign-related cases is precisely due to these difficulties in service and legal ascertainment. Addressing these two major issues, our courts have undertaken initiatives on two fronts regarding the challenge.

Firstly, to address the challenges of serving documents, we've implemented innovative mechanisms, such as establishing a national judicial assistance network for court services and creating an inter-departmental network with the Ministry of Justice. This setup allows for the online transfer and handling of almost all service of cases, significantly enhancing the efficiency of service processes.

Secondly, we've been promoting legislation to address the challenges of serving documents outside of jurisdiction. At the end of 2022, the SPC submitted a proposal to the Standing Committee of the National People's Congress for the review of amendments to the Civil Procedure Law. The revised Civil Procedure Law has been in effect since January 1 of this year, focusing on modifications to foreign-related litigation procedures, including significant changes in service of process. The first major change is the addition of a method for serving documents to wholly foreign-owned enterprises within the Chinese mainland. Another addition allows for direct service to the main responsible person or legal representative of the served party if they are within the Chinese mainland. Moreover, the period for service by publication has been shortened from the previously stipulated three months to now just 60 days.

Additionally, we have introduced an option to use the method of service that the recipient of the service agrees to, which significantly reduces the time required for service and improves its efficiency and effectiveness.

As for the difficulty of ascertaining foreign law, this too presents a significant challenge, as our courts often apply foreign laws in foreign-related cases. What exactly does foreign law stipulate? How should it be understood? This poses a challenge for our judges. How do we solve this problem?

Initially, we clarified some rules through judicial interpretations and minutes of meetings, but these measures were far from sufficient. Therefore, in 2023, the SPC issued relevant judicial interpretations detailing how courts should ascertain foreign laws in cases involving foreign elements, including the responsibilities, means, procedures and criteria for ascertaining such laws. These judicial interpretations provide our judges with clear guidance for handling these cases in the future.

Next, we plan to further clarify how to ascertain foreign laws promptly and accurately through the publication of judicial precedents, aiming to enhance the quality and efficiency of adjudication.

CGTN reporter: Last year, China successfully spearheaded the Beijing Convention on the Judicial Sale of Ships – the first United Nations International Maritime Convention named after a Chinese city. Looking ahead, how will Chinese courts demonstrate Beijing's commitment to safeguarding maritime rights, protecting marine ecosystems, and promoting maritime economic growth?

Wang: The full name of the Beijing Convention is the "United Nations Convention on the International Effects of Judicial Sale of Ships," which was adopted at the 77th session of the United Nations General Assembly in 2022. The convention is known as the Beijing Convention on Judicial Sale of Ships. The reason it's called the Beijing Convention stems from its drafting process initiated by the Comité Maritime International, which passed the draft of the convention at its 40th annual meeting held in China in 2012, initially known as the Beijing Draft. This draft was subsequently submitted to the United Nations Commission on International Trade Law (UNCITRAL) for discussion and was adopted in 2022. On September 5, 2023, the United Nations General Assembly authorized a signing ceremony in China to open the convention for signatures.

On the morning of September 5, I witnessed the signing ceremony where 15 countries, including China, Singapore, Saudi Arabia and Switzerland, were among the first group of signatories to the convention.

Chinese maritime judges have been deeply involved from the outset in the drafting of the convention, contributing rich judicial experience and legal wisdom from China. This endeavor, which culminates in the Beijing Convention, not only incorporates significant Chinese elements but also signifies the international community's recognition of China's participation in crafting and developing international legal rules.

Following the signing ceremony, the SPC and UNCITRAL co-hosted an international seminar on the convention, further interpreting and promoting it. To date, the convention has been placed at the United Nations headquarters in New York for additional signatures.

This convention fully demonstrates the significant role Chinese maritime judges play in maritime adjudication and their contribution of Chinese legal wisdom to the formulation of international rules.

China's maritime adjudication system began early, with the establishment of the first batch of maritime courts in 1984, dedicated to handling cases related to maritime, commerce, and ocean transportation. Currently, China has 11 maritime courts, whose credibility and influence in international maritime adjudication are significant. China possesses a comprehensive maritime adjudication system, and a large number of specialized laws in maritime cases, such as the Maritime Code and the Special Procedure Law for Maritime Litigation, positioning China's maritime adjudication at a high international standing.

Next, Chinese maritime judges and courts are poised to play an even greater role in several areas such as exercising jurisdiction to uphold national sovereignty and maritime rights, adjudicating to protect the marine ecological environment, and handling international maritime cargo transportation cases, which were crucial during the pandemic for the global economic recovery and we must play an even greater role in this regard in the future.

In summary, as of this year, China's maritime adjudication system has been in place for 40 years, being among the first batch of courts to conduct cross-administrative region trials and emerging alongside China's reform and opening-up. It is expected that the role of maritime adjudication in China will continue to grow significantly in the next 40 years.

CGTN reporter: Moving forward, in what key areas will Chinese courts strengthen their efforts to provide high-quality judicial services for foreign-related cases, so as to coordinate advances in both the domestic and international rule of law, and better align with the progress of Chinese modernization?

Wang: In the next phase, Chinese courts' foreign-related commercial and maritime trials will continue to advance in the following areas:

First, by leveraging our adjudicatory functions, we aim to support national initiatives such as the Belt and Road Initiative, the development of free trade zones and free trade ports, and broader opening-up efforts, ensuring the stability and long-term success of these significant national strategies.

Second, further refine the system for applying foreign-related laws, aiming to enhance the quality and efficiency of adjudication.

Thirdly, we will consistently adhere to the characteristics of foreign-related adjudication by upholding the principle of equal legal protection for both domestic and foreign parties. This includes ensuring fairness in litigation entities, statuses, procedures and the application of laws.

Fourth, we plan to invest further in the training and development of foreign-related legal talents, focusing on building a cadre of high-quality judges equipped with international perspectives.

Fifth, we aim to strengthen international judicial exchanges and cooperation, sharing China's judicial experiences globally, and actively engaging in judicial assistance to facilitate the international recognition and enforcement of Chinese judgments.

Lastly, we plan to participate more actively in the formulation of international rules, presenting China's perspectives, philosophies and wisdom on the international stage, contributing Chinese wisdom to global governance.

(Cover: Justice Wang Shumei in an interview with CGTN. /CGTN)