Shanghai courts apply more foreign laws in international cases

The Shanghai High People’s Court has attempted to apply foreign laws in more civil and commercial cases involving parties from outside the country as part of the city’s efforts to create a fair and just legal environment as it goes ever more international.

The court said that more than 10 such cases have abided by foreign laws for judgment since the end of 2014, and it is elaborating the rules of how to look for relevant provisions in foreign laws and adopt them in more cases.

Since 2014, the court has established a collaboration mechanism with the Research Center for Identification of Foreign Laws at the East China University of Political Science and Law based on the latter’s advantages in teaching and research in this field. The court has also authorized the center to locate proper provisions in a foreign law to abide by in cases when both parties agree on applying a particular foreign law in a dispute.

China’s law stipulates that if both parties reach such a consensus or if the court believes a foreign law is more appropriate in a dispute according to the character of case and its details, the court can apply the foreign law in the case.

Such an effort came into being in order to provide more convenience for foreign parties involved in lawsuits as the country becomes more international, especially since the Belt and Road Initiative was proposed in 2013, the court said.

“One key point is to create a fair and just legal environment in the development of the Belt and Road Initiative,” said Guo Weiqing, the director of the court’s judicial reform office.

More than 2,600 cases of various kinds that involved a party from a country or region involved in the Belt and Road Initiative have been accepted by courts in Shanghai from October 2013 to September this year. South Korea, Singapore and Malaysia were the top three countries, according to the court.

It said that so far the application of foreign laws mainly appeared in disputes about marriage and family, inheritance, contracts, and company and maritime affairs.

For example, Shanghai’s Jing’an District People’s Court once applied a law in the State of Washington of the United States in a contract dispute over savings deposit between an individual from Taiwan and a foreign bank, and the Pudong New Area People’s Court once applied a law in Zug, Switzerland, in a dispute over international sales contract, according to the court.

Gu Quan, director of the research office at the Shanghai High People’s Court, said Shanghai courts are also considering the establishment of Chinese-English websites to offer more convenience for foreign parties.

“For example, a bilingual website of the West Hongqiao (CIIE) Tribunal, which specializes in dealing with possible lawsuits for the China International Import Expo (CIIE), began operations in October along with the establishment of the tribunal,” he said.