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Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe-Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated legal practices in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. Mayer Brown Consulting (Singapore) Pte. Ltd and its subsidiary, which are affiliated with Mayer Brown, provide customs and trade advisory and consultancy services, not legal services. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
About Mayer Brown
2015
Information about the firm
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About Mayer Brown
• Leading global law firm offering local market knowledge combined with global reach.
– 20 offices in key business centers worldwide
– Unequalled global scope and scale enhanced by 2008 combination with Johnson Stokes & Master in Asia and 2009 association with Tauil & Chequer Advogados in Brazil
• Clients are the world’s largest companies
– Most of the Fortune 100, FTSE 100, DAX and Hang Seng Index companies
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Our GeographiesSignificant Presence in Americas, Europe, Asia
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Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe-Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated legal practices in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. Mayer Brown Consulting (Singapore) Pte. Ltd and its subsidiary, which are affiliated with Mayer Brown, provide customs and trade advisory and consultancy services, not legal services. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
Dispute Resolution in China
Menachem Hasofer Partner
Raymond YangAssociate
Mayer Brown JSM+852 2843 2384 +852 2843 2295 [email protected] [email protected]
29 April 2015
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe-Brussels LLP both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
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PART ONE
New Developments on Arbitration in China
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1. Overview of China-related Arbitration
1.1 PRC-seated Arbitration
not a Model Law jurisdiction / Arbitration Law 1994
Institutional Arbitration only (Article 16 )
Dual-track Regimes: Domestic vs. Foreign-related
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1. Overview of China-related Arbitration Cont.
1.2 Offshore/foreign arbitrations
Accede to NY Convention (1958) with two reservations
Convention award vs. HK, Macau, Taiwan award
Non-domestic award?
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2. CIETAC Split – The Dust Settles Down?
2.1 History
• 1954: CIETAC (China International Economic and Trade Arbitration Commission)
• 2012 : Shanghai (SHIAC) / Shenzhen (SCIA) split
• 31.12. 2014: Shanghai / Shenzhen Sub-commission reorganized
2.2 Attitude of Courts
• 2013: Notice of Supreme People’s Court
• Early 2015: latest judgments of Shanghai / Shenzhen Courts
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2. CIETAC Split – The Dust Settles Down? Cont.
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2.3 Current Status
• “Renamed” Sub-commissions – SHIAC / SCIA • “Reorganized” Sub-commissions – Shanghai / South China (Shenzhen)
2.4 Recommendation
• Disputes pending arbitration – refer to the renamed Sub-commissions • Existing contracts / new contracts
- avoid simply designating “CIETAC Shanghai / Beijing Subcommison”
- specify the exact name of the “renamed/reorganized” institution
-avoid simply designating “CIETAC Shanghai / Beijing Sub-commissions”-specify the exact name of the “renamed/reorganized” institution
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Anhui Longlide Packing and printing Co., Ltd v BP Agnati S.R.L
Arbitration clause providing ICC arbitration and "the place of jurisdiction shall be Shanghai, China", held valid
Enforcement of non-domestic award
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3. Foreign Arbitration Institutions in China – Longlide Case
4. Offshore arbitration for domestic disputes – Beijing (Chaolaixinsheng) case A contract between a PRC company and a Foreign-invested company, providing disputes shall be referred to "arbitration at the Korean Commercial Arbitration Board (KCAB) in Seoul" – held invalid
Echoes the traditional position of SPC, yet arguably a flawed decision
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5. Hybrid Arbitration Clauses – Invista Case
“Arbitration shall take place at CIETAC under the
UNCITRAL Rules”
CIETAC Rules allows hybrid clause
Held, a valid clause
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PART TWO
Civil Litigation in the PRC
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Introduction
Chinese culture and its influence on China-related dispute resolution
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1. Legal Systems of China
1.1 Civil law system
1.2 Sources of law/hierarchy
- Multilateral or bilateral treaties - Domestic Statutes
Constitution National laws Administrative Regulations Departmental Rules Local Rules
Case precedents? (SPC Interpretations + Guiding cases)
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1. Legal Systems of China cont.
1.3 Legal professions
National Bar Exam Judiciary/Procuratorate/Lawyer/Notary Public
1.4 "One country, four jurisdictions"
Mainland/Macau/Taiwan Hong Kong
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2. General Overview of Dispute Resolution in China
2.1 Negotiation
• enforceability of settlement agreements
2.2 Mediation
• Two types: institution vs. court • Enforceability
2.3 Arbitration
• PRC seated arbitration• Offshore arbitration
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2. General Overview of Dispute Resolution in China Cont.
2.4 litigation• Court Structure
Source: www.thecourt.ca, by Jiahong Yang
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2. General Overview of Dispute Resolution in China Cont.
2.5 Major legislations
• PRC Civil Procedure Law ("CPL"), 01/01/2013
• SPC Judicial Interpretations on the CPL ("SPC Interpretations"), 04/02/2015
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3. Litigation in China – When it becomes inevitable
3.1 Arbitration vs. Litigation: pros and cons – party-autonomy, flexible, confidentiality– world-wide enforcement
3.2 Where there is an arbitration agreement
– Arbitration agreement held invalid/inoperative
Stringent test for a valid arbitration clause under PRC law (Article 16) Subject matters not arbitrable
– Arbitration-related litigation
validity of arbitration agreement setting aside award refusal to enforce award
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3. Litigation in China – When it becomes inevitable Cont.
3.3 where there is no arbitration agreement
– Exclusive jurisdiction of PRC court real estate/properties dispute arising from port operation Inheritance disputes Chinese-foreign joint ventures Chinese-foreign joint ventures on natural resources
– Non-Exclusive jurisdiction of PRC court
Forum shopping and parallel proceedings
– Practical considerations interim measures of foreign courts/tribunals not enforceable tribunal of a PRC-seated arbitration has limited powers complex transactions involving multi-parties/contracts
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4. Choice of Foreign Law
4.1 General principles
foreign-related civil relations procedural law vs. substantive law substantive law, excluding conflict of law rules
4.2 Exclusive application of PRC laws
Chinese-foreign joint ventures (Article 126 of PRC Contract Law) Circumstances concerning public interests
4.3 Finding and application of foreign law
several ways to find the foreign law PRC law applies in default
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5. Pre-action Consideration
5.1 Jurisdiction competent courts centralised jurisdiction
5.2 Limitation period generally 2 years with exceptions when starts to run afresh
5.3 Credit investigation
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5. Pre-action Consideration Cont.
5.4 Legal representation and assistance
PRC lawyer only? legal representative vs. agent ad litem
5.5 Notarisation and legalisation
5.6 Pre-action preservatory measures
Injunctions preservation of assets
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6. Key Stages and Issues through the Proceedings
6.1 Commencement of proceedings
filing and acceptance of complaintspayment of court feesattempt mediation?
6.2 Exchange and service of court proceedings
filed by parties & served by court service out of jurisdiction
• Hague Convention• Supreme Court's Rules
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6. Key Stages and Issues through the Proceedings Cont.
6.3 Disclosure and inspection of evidence
duty to disclose alternative ways to squeeze more evidence privilege electronic evidence factual/expert witness statement
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6. Key Stages and Issues through the Proceedings Cont.
6.4 Interlocutory applications
injunctions security for costs? preliminary enforcement (interim payment)
6.5 Hearing
pre-trial review inquisitorial vs. adversarial oral testimony vs. documents only? trial with jury? adjudication committee
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6. Key Stages and Issues through the Proceedings Cont.
6.6 Judgment
summary judgment/default judgment reasoned decisions? substantive remedies
6.7 Costs
court's fees vs. parties' costsallocation of costs insurance/third-party funding
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6. Key Stages and Issues through the Proceedings Cont.
6.8 Appeal time limit suspension of enforcement
6.9 Trial supervisory procedure time limit suspension of enforcement?
6.10 Enforcement of court judgments time limit methods of enforcement
• freezing order, seizure, and order for sale• fine, detention, arrest for refusal to pay• prevention order/ prohibiting luxury consumptions
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7. Recent Judiciary Reform
7.1 Transparency of court proceedings
Open court
Party's access to information
Publication of judgments
Publicity of judgment debtors
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7. Recent Judiciary Reform Cont.
7.2 Judiciary reforms
Selection of elite judges
Specialised IP court
Circuit courts
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8. Judicial Assistance in aid of Foreign Proceedings (Indian Arbitration / litigation)
8.1 Service of proceedings
8.2 Taking of evidence
8.3 Interim orders
8.4 Enforcement of foreign judgements
8.5 Advantages of HK as the forum
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Disclaimer
• These materials are provided by Mayer Brown JSM and reflect information as of 31 March 2015
• The contents are intended to provide a general guide to the subject matter only and should not be treated as a substitute for specific advice concerning individual situations
• You may not copy or modify the materials or use them for any commercial purpose without our express prior written permission
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Q & A
Thank You
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Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe-Brussels LLP both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
![Page 35: Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices.](https://reader035.fdocuments.in/reader035/viewer/2022062421/56649dbf5503460f94ab3212/html5/thumbnails/35.jpg)
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe-Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated legal practices in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. Mayer Brown Consulting (Singapore) Pte. Ltd and its subsidiary, which are affiliated with Mayer Brown, provide customs and trade advisory and consultancy services, not legal services. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
Trends in international litigation
2015
Litigation funding
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Litigation Funding (1)
• Why do it?– Claimant, funder (maybe law firm too), share risk
– Certainty of legal budget
– Take cost off balance sheet
– May allow more claims to be funded
– Funder as a “sense check”
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Litigation Funding (2)
• Legal restrictions– Maintenance and champerty
– Control is key element
• Association of litigation funders– Code of Conduct
– Adequacy requirements
• Practical aspects– Minimum claim value
– Prospects of success
– Enforcement is key
– Use as part of a “cocktail” – CFA, DBA, ATE
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Litigation Funding (3)
• Potential scope– Litigation and arbitration
– Developed industry in many countries
– Growing in international arbitration
– Investment disputes
• Warning note– Excalibur Ventures LLC v. Texas Keystone Inc. & Ors.
– Funders held liable for costs