Resolution of Commercial
Disputes in China
Vivienne Bath
Senior Lecturer and Director of
the Centre
Commercial Disputes in China
Four levels of people’s courts: basic;
intermediate; high; supreme
 Foreigners involved mainly at intermediate
level and higher
 Rules of civil procedure call for cases to
be heard in domicile of defendant
 Parties may choose governing law (except
for joint ventures and resource
development projects)

Commercial Disputes in China
Parties may exclude jurisdiction of courts
in favour of arbitration
 Parties may choose a Chinese or foreign
court in cases “involving foreign interests”
(but enforcement a problem)
 Parties may NOT choose a foreign court
for cases involving JVs or natural resource
development or exploration contracts

Commercial Disputes in China

Summary
Historical lack of confidence in Chinese courts
 Availability of arbitration (inside and outside
China)
 Perceived availability of enforcement of
arbitration awards (local and foreign)

Commercial Disputes in China

Developments
More, better-trained Chinese lawyers
 Judges Law – better qualified Chinese judges
 Increase in litigation by Chinese citizens,
necessarily involves foreigners
 Improved credibility of litigation as opposed to
arbitration

Commercial Disputes in China

Issues
Considerable variation in quality of judges and
courts on a regional basis
 Proliferation of legislation
 Heavy case load for judges across China
 Local protectionism?
 Uneven benefits of litigation

Commercial Disputes in China
Increased use of litigation generally
 Use of litigation strategically
 Use of litigation as a means of intimidation
 Litigation in domain disputes and IP cases
 Litigation in connection with arbitration
clauses
 Litigation by foreign investment
enterprises
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