Basic text of the presentation:
As part of a very lengthy and burdensome process of accession to the World Trade Organisation, which at last took place on December 11, 2001, after 15 years of negotiations, the People’s Republic of China changed no fewer than 9 thousand laws and regulations, in order to adapt the municipal legal environment to the accepted standards of the international community. This was done in an efficient manner and the resulting effort was undeniably positive.

However, one of the areas in which updating was (and still is) necessary and has still to be effected in that of conflict of laws. In many countries, such as in all European Union and in Latin America, there has been one single treaty or legal statute dealing with this important area for international business for several decades.

This is not so in China, where the matter is covered by a number of different statutes and court opinions, starting in 1986, with the Civil Code, enacted only ten years after the end of the so-called Cultural Revolution. The Civil Procedure Law of 1991 also has scattered dispositions on conflicts of laws, as well as the Contracts Law of 1999. In addition, the Supreme People’s Court issued in 1988 its “Opinions on Several Questions Concerning Implementation of the General Principles of Civil Procedural Law”, which contributed to clarify obscure points in the extant legislation and to set uniform guidelines for use by lower courts.

The Civil Procedure Law of China allows parties to elect a court, national or foreign, as well as to the parties to a foreign economic, trade, transport or maritime transaction to elect an arbitration clause in the relevant contract. However, as the concept of forum non conveniens has yet to be fully absorbed by Chinese legal culture, difficulties may be encountered in civil litigation with a view to enforcing a choice of forum clause in the Chinese judiciary.

On the other hand, the Civil Procedure Law of China (art. 34) expressly indicates that the Chinese courts will have exclusive jurisdiction when the object of the dispute is i) a real estate property located in China; ii) a matter deriving from harbour operations; iii) related to a probate, when the competent court will be that of the domicile of the deceased. Moreover, article 246 of the Civil Procedure Law of China determines the exclusive jurisdiction of Chinese courts in matters deriving from Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures, or Chinese foreign cooperative exploration and development of natural resources.

Both the Civil Code of 1986 and the Contracts Law of 1999 recognise the legal principle of autonomy of will and thus allow the parties to a contract o choose the law to govern inter alia the respective obligations and their performance. However, the autonomy is limited and the choice will be invalid if made against the norms of public and social order of China. The choice must be made in writing and must not be in violation of the conflict norms of China.

In case there is no choice of law clause, then the so-called principle of “closest relationship” will be applied. As the term is not defined in law, the General Principles will apply in different ways to different types of contracts. For example, a contract for the international sale of goods may have the closest relationship with the buyer’s jurisdiction if concluded at the buyer’s offices or in accordance with the buyer’s specifications. For a contract of technology, the jurisdiction will be that of the transferee. For services contract, the jurisdiction will be that in which they were rendered.

Attempts are under way in China to rationalise the country’s norms regulating conflicts of laws in a single body of legislation. One such effort is the Model Law of Private International Law of the People`s Republic of China. The intricacies and sundry legal implications of China’s extraordinary insertion in the global economy require an updating of the relevant legislation on conflict of laws.

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