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I. An Imperfect Improvement: The New Conflict of Laws Act of the People's Republic of China*

Published online by Cambridge University Press:  28 November 2011

Zhengxin Huo
Zhengxin Huo
Affiliation:
Zhengxin HUO is an Associate Professor of Law, of School of International Law, at China University of Political Science and Law (CUPL); Deputy Director of the Institute of Private International Law of CUPL; Member of China Law Society; Member of Chinese Society of Private International Law.
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Extract

On 28 October 2010, the Standing Committee of the Eleventh National People's Congress adopted China's first statute on the Conflict of Laws: the ‘Act on the Application of Laws over Foreign-related Civil Relationships’ (‘Conflicts Act’).1 The adoption was an historic event in Chinese legislative history, as it indicates China has modernised its conflict-of-law rules after many years of unremitting efforts made by legislators and scholars. More importantly, it means that ‘a socialist legal system with Chinese characteristics’ has been successfully established, and allows China to claim to have a systematic legal system.2

Type
Current Developments: Private International Law
Information
International & Comparative Law Quarterly , Volume 60 , Issue 4 , October 2011 , pp. 1065 - 1093
Copyright
Copyright © British Institute of International and Comparative Law 2011

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References

1 Zhonghua Renmin Gongheheguo Shewai Minshi Falvguanxi Shiyongfa, Act on the Application of Laws over Foreign-related Civil Relationships (2010) (PRC); Zhonghua Renmin Gongheguo Zhuxi Ling, Order of the President of The People's Republic of China, No 36, available at <http://www.npc.gov.cn/huiyi/cwh/1116/2010-08/28/content_1593162.htm>.

2 At the 15th National Congress of the Communist Party of China, the rule of law principle was established as a fundamental principle for the administration of the country, and in order to implement the principle the Party put forward a legislative plan pursuant to which the socialist legal system with Chinese characteristics would be shaped up by 2010. To ensure the accomplishment of the legislative plan, the National People's Congress, China's supreme legislature, has accelerated legislation after 2005. See Zhongguo Gongchandang Dishiwuci Quanguo Daibiaodahui Wenjian Huibian, Collection of Documents of the Fifteenth National Congress of the Communist Party of China, 5–6 (1997); See also HUO, Z, ‘China's Codification of Conflicts Law: Latest Efforts’ (2010) 51 Seoul LJ 279Google Scholar, 283.

3 See J Basedow, ‘The Recent Development of the Conflict of Laws: Some Comparative Observations’ in J Basedow and others (eds), Japanese and European Private International Law in Comparative Perspective (Mohr Siebeck 2008).

4 Chen, TP, ‘Private International Law of the People's Republic of China: An Overview’ (1987) 35 Am J Comp L 445CrossRefGoogle Scholar.

5 Zhonghua Renmin Gongheguo Minfa Tongze [GPCL] Chapter 8 (1986) (PRC). The GPCL was adopted at the Fourth Session of the Sixth National People's Congress on 12 April 1986, coming into force on 1 January 1987, and is still effective at present, assuming a prominent role in the area of civil law in China. Structurally, the GPCL has devoted an entire chapter to regulating the conflict of laws (ie Chapter Eight, Application of Laws to Civil Matters Involving Foreign Element), where nine articles can be found.

6 Zhonghua Renmin Gongheguo Haishangfa [Maritime Act] (1993) (PRC).

7 Zhonghua Renmin Gongheguo Minyong Hangkongfa [Civil Aviation Act] (1996) (PRC).

8 Zhonghua Renmin Gongheguo Hetongfa [Contract Act] (1999) (PRC).

9 For detailed discussion see W CHEN, ‘The Necessity of Codification of China's Private International Law and Arguments for a Statute on the Application of Laws as the Legislative Model’ <http://www.tsinghua.edu.cn/docsn/fxy/tclr/issue/.../CHEN%20Weizuo.pdf>.; X Zhao (ed), Guoji Sifa [Private International Law] (Press of China University of Political Science and Law 2011) 56.

10 See Han, D (ed), Guoji Sifa [Private International Law] (China Higher Education Press 2001) 17Google Scholar; Chinese Society of Private International Law, ‘Model Law of Private International Law of the People's Republic of China’ in P Sarczvic and P Volken (eds), Yearbook of Private International Law (Kluwer 2001).

11 The National People's Congress is elected for a term of five years. The National People's Congress is in session once a year for not more than two weeks. It establishes a standing committee to exercise its authority when it is not in session. See Lin, F, Constitutional Law in China (Sweet & Maxwell 2000) 63–64Google Scholar; Zhengxin, H, ‘A Tiger without Teeth: The Antitrust Law of The People's Republic of China’ (2008) 10 Asian Pac Law Pol J 36Google Scholar.

12 See Zhu, W, ‘China's Codification of the Conflict of Laws’ (2008) 3 Journal of Private International Law 283, 306Google Scholar.

13 Under the Legislation Law of the PRC, a bill which has been put on the agenda of the Standing Committee session shall in general be deliberated three times in the current session of the Standing Committee before being voted on, and it needs a simple majority of the members of the Standing Committee for its adoption as a national law. After its adoption by the NPC Standing Committee, it will be signed and promulgated by the President of State. See Li Fafa [Law on Legislation] (promulgated by the Standing Comm Nat'l People's Cong., 15 March 2000, effective 1 July 2000) arts 40, 41 (PRC).

14 They are the General Principles, Property Law, Contract Law, the Law of Personality Rights, Marriage Law, Adoption Law, Succession Law, the Law of Tort and the Law on the Application of Law of Foreign-related Civil Relationship respectively in numerical order, among which Book One, Book Two, Book Four, Book Eight and Book Nine are new complements, and the third, fifth, sixth and the seventh books are just four ready-made laws inserted in the Draft, without any amendments. Zhu (n 12) 306.

15 See <www.npc.gov.cn/huiyi/cwh/1116/2010-08/28/content_1593162.htm>.

16 Zhonghua Renmin Gongheguo Wuquanfa [Property Act] (2007) (PRC); Zhonghua Renmin Gongheguo Qinquanzerenfa [Tort Liability Act] (2009) (PRC).

17 <http://www.news.sina.com.cn/o/2009-12-27/083016839719s.shtml>.

18 Detailed discussion on the draft, see Huo (n 2) 280–322.

19 See <http://www.npc.gov.cn/huiyi/cwh/1116/2010-08/28/content_1593162.htm>.

20 Under the Legislation Law of the PRC, a bill which has been put on the agenda of the Standing Committee session shall in general be deliberated three times in the current session of the Standing Committee before being voted on, and it needs a simple majority of the members of the Standing Committee for its adoption as a national law. After its adoption by the NPC Standing Committee, it will be signed and promulgated by the President of State. See Law on Legislation (n 13) arts 40, 41.

21 See Quanguo Renda Changweihui Gonggao [Bulletin of Standing Comm. Nat'l People's Cong, 30 August 2007] (PRC), <http://www.npc.gov.cn/wxzl/gongbao/2007-10/09/content_5374672.htm>.

22 Under the Chinese scholarship, civil law has both broad and narrow definitions. In its broad sense, civil law is body of law that governs proprietary and personal relationship between the parties that have equal status. In this respect, commercial law is a part of civil law. However, in its narrow sense, civil law refers to the section of private law excluding the area that shall be regulated by commercial law; and commercial law in this context is defined as the branch law of that governs company, insurance, bankruptcy, negotiable instruments, and admiralty. As civil law in its broad sense includes such an extensive coverage, law professors in China now usually embrace the narrow scope of civil law. Thus a typical Chinese textbook on civil law would include contract law, family law, tort law, property law only. This view has also been endorsed by the Chinese legislators, which is reflected by the structure of the General Principle of Civil Law of the PRC. See Law Institute of the Chinese Academy of Social Science (ed), Faxue Cidian [Law Dictionary] (China Law Press 2004) 425, 646.

23 See HAN (n 10) 18.

24 Chinese Society of Private International Law (n 10) 349–390.

25 See Xiao, Y and Huo, Z, ‘Ordre Public in China's Private International Law’ (2005) 53 Am J Comp L 653CrossRefGoogle Scholar, 675.

26 Even today, some of Chinese legislators are still of the opinion that the application of foreign law is an offence of China's sovereignty. See Zhu (n 12) 306.

27 See ibid 284; <http://www.npc.gov.cn/huiyi/cwh/1116/2010-08/28/content_1593162.htm>.

28 In the general part, questions are examined which are important for the code as a whole, questions can be, so to say, taken out of brackets in analysing rules and institutions which form the content of the separate themes of the special part. Usually, the general provisions of a modern code of private international law concerns the purpose, the scope, the principles of the code, and the pervasive problems such as characterisation, dépeçage, renvoi, proof of foreign law, evasion of law and ordre public reservation occur frequently in determining the applicable law. See Kahn-Freund, XX, The Growth of Internationalism in English Private International Law (Magnes Press 1960) 155Google Scholar.

29 GPCL (n 5) arts 142 and 150.

30 Zhu (n 12) 284.

31 Huo, Z, Private International Law in China (China Law Press 2010) 55Google Scholar.

32 See Yu, S, Xiao, Y, and Wang, B, ‘The Closest Connection Doctrine in the Conflict of Laws in China’ (2009) 8 Chinese J of Int'l L 423–439CrossRefGoogle Scholar.

33 Conflicts Act (n 1) art 2.

34 ibid art 6.

35 ibid art 19.

36 ibid; detailed discussion on this art, see III.E of this article.

37 ibid art 126; GPCL (n 5) art 150.

38 Conflicts Act (n 1) art 19.

39 Such as art 5 (ordre public reservation), art 4 (the direct application of mandatory rules) of the Conflicts Act, detailed discussion, see infra.

40 Such as art 194 of ‘Guidelines of the Supreme People's Court on Implementing the GPCL’ stipulates: ‘The litigant's act to evade the compulsory or prohibitory legal norm of this country shall not take effect to apply to the foreign laws.’ Zuigao Renmin Fayuan Guanyu Shiyong Zhonghua Renmin Gongheguo Minshisusongfa Ruogan Wenti de YIjian [Supreme People's Court, Opinions on Application of the Civil Procedure Law of the People's Republic of China] 92 Zuigao Renmin Fayuan Gongbao 22 [Bulletin of Supreme People's Court] art 194 (1992) (PRC) (‘Opinions on CPL’).

41 See Li, S, Guoji Sifa [Private International Law] (Wuhan University Press 2001) 37Google Scholar.

42 The GPCL has confirmed the principle of the superiority of international convention. Art 142(2) of the GPCL provides as follows: ‘If any international treaty concluded or acceded to by the People's Republic of China contains provisions differing from those in the civil laws of the People's Republic of China, the provisions of the international treaty shall apply, unless the provisions are ones on which the People's Republic of China has announced reservations.’ GPCL (n 6) art 142(2).

43 ibid art 150.

44 See Xiao and Huo (n 25) 672–674.

45 GPCL (n 5) art 142.

46 Xiao and Huo (n 25) 676–677.

47 Zuigao Renmin Fayuan Guanyu Shiyong Zhonghua Renmin Gongheguo Minfatongze Ruogan Wenti de Yijian [Supreme People's Court, Opinions on Application of the General Principle of Civil Law of the People's Republic of China], 92 Zuigao Renmin Fayuan Gongbao 22 [Bulletin of Supreme People's Court] (1988) (PRC) [‘Opinions on GPCL’].

48 Collins, L (ed), Dicey & Morris on the Conflict of Laws (13th edn, Sweet & Maxwell 1999) 73Google Scholar. This is also the standpoint shared by most Chinese scholars, see Han (n 10) 127; Li (n 41) 60.

49 See KH Suk, ‘The New Conflict of Laws Act of the Republic of Korea’ in P Sarczvic and P Volken (eds), Yearbook of Private International Law (Kluwer 2003).

50 Chinese Society of Private International Law (n 10) 349–390; Huo (n 2) 281.

51 See Panagopoulous, G, Restitution in Private International Law (Hart 2000) 33Google Scholar.

52 Opinions on GPCL (n 47) art 195.

53 See Panagopoulous (n 51) 30.

54 ibid.

55 eg the characterisation that the Chinese court made in the case of Retrial Concerning Releasing Cargo Without Bill of Lading: American President Shipping Company v Feida Appliance Factory, Feili Company & Changcheng Company, for its final judgment made by the Supreme People's Court, see Zhu (n 13) 288.

56 Kong, Q & Hu, M, ‘The Chinese Practice of Private International Law’ (2002) 3 Melbourne J of Int'l L 204Google Scholar.

57 eg Opinions on GPCL (n 47) 193(1).

58 Huo (n 2) 293–294.

59 Gabor, FA, ‘A Socialist Approach to Codification of Private International Law in Hungry: Comments and Translation’ (1980) 35 Tul LR 63Google Scholar, 75.

60 Rabel, E, The Conflict of Laws, A Comparative Study vol 1 (University of Michigan Law School 1958) 200Google Scholar.

61 Conflicts Act (n 1) arts 11, 12, 13, 15.

62 ibid art 20.

63 ibid art 12(2).

64 Chinese Society of Private International Law (n 10) 123.

65 See Conflicts Act (n 1) art 19.

66 ibid art 14 (1).

67 See, for instance, Suk (n 49) 117.

68 KH Suk, ‘Some Observations on the Chinese Private International Law Act: Korean Law Perspective’ (in English) in Chinese Academy of Social Sciences (ed), Guojifa Luntan [Forum of International Law] 7 (unpublished 2010).

69 Zhonghua Renmin Gongheguo Xintuofa [Trust Act] (2001) (PRC).

70 TMT Trading Ltd v Guangdong Light Industrial Products Import-Export (Group) Co Zuigao Renmin Fayuan Gongbao 4 [Bulletin of Supreme People's Court] 130–134 (2000) (PRC). The Higher People's Court of Guangdong Province at the first instance characterised the issue as a case concerning entrusted agency. However when appealed to the Supreme People's Court located in Beijing, it was characterised as a case concerning trust; nevertheless, the Supreme's People's Court applied the principle of good faith in the GPCL without an analysis of the choice-of-law issue.

71 See Zhu (n 12) 293.

72 Harris, J, The Hague Trusts Convention: Scope, Application and Preliminary Issues (Hart 2001) 166–169Google Scholar.

73 The Hague Convention on the Law Applicable to Trusts and on their Recognition, art 7 (1992).

74 Huo (n 2) 314.

75 For detailed discussion, see Xiao, Y and Huo, Z, ‘Family Issues in China's Private International Law’ (2009) 4 Journal of Cambridge Studies 56–71Google Scholar.

76 See Zhu (n 12) 301.

77 GPCL (n 6) art 147.

78 See Juenger, FK, Choice of Law and Multistate Justice (Special edn, Transnational 2000) 62Google Scholar.

79 Conflicts Act (n 1) arts 26, 27.

80 Under art 31 of the Marriage Act of China, divorce shall be allowed if both husband and wife are willing to divorce. Both parties shall apply to the marriage registration authority for divorce. The marriage registration authority issues a certificate of divorce after confirming that both parties are indeed willing to divorce and have made proper arrangements for their children and have properly disposed of their property. See Zhonghua Remin Gongheguo Hunyinfa [Marriage Act] art 31 (1980, revised in 2001) (PRC).

81 Under art 32 of the Marriage Act, where either the husband or wife applies to get divorced, he or she may file a suit at the Peoples’ Court for divorce. ibid art 32.

82 Conflicts Act (n 1) art 23.

83 ibid art 24.

84 In the Suggested Draft prepared by the Chinese Society of Private International Law, such problems do not exist. Regrettably, the relevant articles in the Draft were not accepted by the legislators. Under art 30(1) of the Draft, the personal relation between husband and wife shall be governed by the law of their habitual residence which the spouses have in common, and, in its absence, by the law of the place which is closest connected to them. As to the property relation between husband and wife, the Draft introduces party autonomy with certain restrictions, which provides that it shall be governed by the law expressly selected by the parties with which they have substantial relationship. In the absence of such a choice of law, the law governing their personal relation shall be applied. But so far as the immovable property is concerned, the law of the place where the immovable property is situated shall be applied. See Huo (n 2) 302.

85 Though the Act does not indicate child is always the weaker party, most Chinese scholars advocate such an opinion. They argue that compared to adults, children are usually in a disadvantaged position economically, physically and psychologically. See eg Li (n 41) 683.

86 Zhonghua Renmin Gongheguo Shouyangfa [Adoption Act of the People's Republic of China] art 21 (1992, revised in 1998) (PRC).

87 Waiguoren zai Zhongguo Shouyang Zinü Dengjibanfa [Measures of the Registration for Foreigners to Adopt Children in the People's Republic of China], dated 25 May 1999.

88 Art 148 of the GPCL stipulates the choice-of-law rule for maintenance which prescribes the following: Maintenance shall be bound by the law of the country to which the maintenance creditor is most closely connected. GPCL (n 5) art 148.

89 Conflicts Act (n 1) art 30.

90 Huo (n 2) 304.

91 Zhonghua Renmin Gobngheguo Jichengfa [Succession Act] art 32(1984) (PRC); cf GPCL (n 6) art 149.

92 Conflicts Act (n 1) art 31.

93 It should be noted that conflict rules for interpretation of a will is also included in the previous drafts, however, it fails to surface in the latest draft. Huo (n 2) 304.

94 Conflicts Act (n 1) art 32.

95 ibid art 33.

96 ibid art 35.

97 This art provides that in disputes involving the ownership of immvoables, the law of the place where the property is situated shall apply. GPCL (n 1) art 144.

98 This chapter doe not provide an article to regulate the law governing the means of transportation. This is mainly because the Maritime Act and the Civil Aviation Act contain such articles, see Maritime Act (n 6) arts 270, 271, 272; Civil Aviation Act (n 7) arts 185, 186, 187.

99 Conflicts Act (n 1) art 36.

100 ibid art 37.

101 Switzerland's Federal Code on Private International Law (‘SFCPIL’) art 104(1) (1987).

102 ibid arts 102(2), 104(1).

103 ibid art 104(2).

104 Conflicts Act (n 1) art 38.

105 ibid art 39.

106 Suk (n 68) 12.

107 See Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary (2006).

108 See, inter alia, GPCL (n 5) art 145; Contract Act (n 8) art 126; Opinion on GPCL (n 47) art 194; Zuigao Renmin Fayuan Guanyu Shenli Shewai Minshi huo Shangshi Hetong Jiuefen Anjian Falv Shiyong Ruogan Wenti de Guiding [Supreme People's Court, Provisions on Several Issues Concerning the Application of Laws in Hearing the Cases Involving Foreign-related Civil or Commercial Contractual Disputes (‘Opinions of 2007’) 1429 Zuigao Renmin Fayuan Gongbao 14 [Bulletin of Supreme People's Court] art 6 (2007) (PRC).

109 Conflicts Act (n 1) art 41(1).

110 See Huo (n 31) 181–184.

111 The laws of the People's Republic of China shall apply to the following contracts which are performed within the territory of the People's Republic of China: (1) contracts for Chinese-foreign equity joint ventures; (2) contracts for Chinese-foreign contractual joint ventures; (3) contracts for Chinese-foreign cooperative exploration and development of natural resources; (4) contracts for transfer of shares of Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and wholly foreign-owned enterprises; (5) contracts for contracting operation of Chinese-foreign equity joint ventures or Chinese-foreign contractual joint ventures established within the territory of the People's Republic of China by foreign natural persons, legal persons or other organizations; (6) contracts for purchase of equity of shareholders of non-foreign-invested enterprises within the territory of the People's Republic of China by foreign natural persons, legal persons or other organizations; (7) contracts for subscription of the capital increase of non-foreign-invested limited liability companies or companies limited by shares within the territory of the People's Republic of China by foreign natural persons, legal persons or other organizations; (8) contracts for purchase of assets of non-foreign-invested enterprises within the territory of the People's Republic of China by foreign natural persons, legal persons or other organizations; and (9) other contracts to which the laws of the People's Republic of China shall apply under the provisions of the laws and administrative regulations of the People's Republic of China. Opinions of 2007 (n 108) art 8.

112 ibid art 3.

113 GPCL (n 1) art 150.

114 Opinions of 2007 (n 108) art 6.

115 Conflicts Act (n 1) art 41.

116 ibid art 41(2).

117 See Collins (n 48) 1235.

118 See SFCPIL (n 101) art 117.

119 Conflicts Act (n 1) art 42.

120 See PA Karrer (trs), Switzerland's Private International Law (Springer 1994) 115.

121 In China, all official trade unions are attached to the Committee of the Communist Party at the corresponding level, and independent trade unions are strictly prohibited. See Zhonghua Renmin Gongheguo Gonghuifa [Trade Union Act] (1992) (PRC).

122 SFCPIL (n 101) art 121.

123 Zhonghua Renmin Gongheguo Laodong Hetongfa [Act on Employment Contracts] arts 58, 59 (2007) (PRC).

124 GPCL (n 5) art 146. Detailed discussion, see Huo, Z, ‘Choice of Law in Torts: A Chinese Approach’ (2009) 4 Journal of Cambridge Studies 82–97Google Scholar.

125 According to it, the law of the place of a tortious act covers the law of the executive place of a tortious act and the law of the place of the result of tort. The People's Court may select the applicable law in case of the discrepancy of the two laws. Opinion on GPCL (n 47) art 273.

126 Conflicts Act (n 1) art 45.

127 ibid art 46.

128 ibid art 50.

129 ibid art 44(1).

130 GPCL (n 5) art 146(2).

131 For detailed discussion, see Huo (n 124) 82–97.

132 Private International Law (Miscellaneous Provisions) Act 1995, s.10.

133 See Zhao (n 9) 369.

134 Conflicts Act (n 1) art 44(2).

135 ibid art 44(3).

136 See Huo (n 124) 316.

137 Tokizaki v Beijing Hongyun Tianwaitian Restaurant Co. Ltd. (2001)-Erzhong-Min-Chuzi-No 3311 (the first judgment of Beijing Second Intermediate People's Court); cf In Gansu Highway Administration v Yokohama Rubber Co. Ltd. (2003)-Xizhong-Jin-Chuzi-No 074 (the first judgment of Xi'an Intermediate People's Court). For detailed discussion, see Huo (n 124) 82–97.

138 Conflicts Act (n 1) art 45.

139 ibid art 46.

140 Maritime Act (n 6) art 273; Civil Aviation Act (n 7) art 189.

141 Huo, Z, Budangdeli de Guojisifa Wenti [Unjust Enrichment in Private International Law] (Wuhan University Press 2006) 1Google Scholar.

142 Medium and Small-Sized Enterprise Bank (South Korea) v Yangzhou Yingmaijie Clothing Co. Ltd (China), (2003) Ning Minwu Chuzi 15 [No 15 Civil Judgment of the Intermediate People's Court of Nanjing, Jiangsu Province, 2003].

143 Bantian Co. Ltd (Japan) v Import & Export Company of Jinan City and Qingdao Jincheng Transportation Co. Ltd (China), (2003) Ji Minsi Shuzi 41[No 41, Civil Judgment of the Intermediate People's Court of Jinan, Shandong Province, 2003].

144 Dynamic Services International Inc. (U.S.A.) v Suzhou Dixun Software C. Ltd (China), (2002) Minsan Chuzi 23 [No 23, Civil Judgment of the Intermediate People's Court of Suzhou, Jiangsu Province, 2002].

145 Zhu (n 12) 296.

146 Maritime Act (n 7) arts 270, 271, 272.

147 Civil Aviation Act (n 8) arts 185, 186, 187.

148 Zhonghua Renmin Gongheguo Piaojufa [Negotiable Instrument Contract Act] arts 96, 97, 98, 99, 100, 101 (1999, revised in 2004) (PRC).

149 According to the legislators, during the process of drafting, the conflicts statutes of some foreign countries, principally Germany, Switzerland and Japan, and the conventions of the Hague Conference of Private International Law and some Europe Union's regulations have been referred to. <http://www.npc.gov.cn/huiyi/cwh/1116/2010-08/28/content_1593162.htm>.

150 According to the Law on the Organization of the People's Court, the Supreme People's Court has the authority to give judicial interpretation under the following two circumstances: (i) the Supreme People's Court can provide interpretation when it actually tries a case, if there is a request for interpretation submitted from a Higher People's Court, and (ii) when a new law is enacted, the Supreme People's Court is entitled to give a general interpretation about how the legislation should be implemented in adjudication. Lin (n 11) 221.