China sets up cyberspace courts

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The central government approved the establishment of the first cyberspace court on 26 June, 2017. The Internet Court was established in Hangzhou, the capital of Zhejiang province and home to many technology companies, to cater to the increasing number of internet-related disputes.

Two key features of the Hangzhou Internet Court distinguish it from other courts: (1) cases are tried online; and (2) the court only hears internet-related disputes.

The setup of the Internet Court follows a successful pilot that started in April 2015, when Zhejiang Higher People’s Court confirmed three district courts in Hangzhou – Xihu, Binjiang and Yuhang – as the pilot courts to go online to hear e-commerce cases. In August 2015, the “E-commerce Online Court of Zhejiang Court” officially went online, where parties can file complaints via the internet after registration and real-name authentication. The Internet Court has accepted about 1,500 complaints since its inception.

Implications for brand owners. The establishment of the Hangzhou Internet Court is a milestone for China in this digital era and this recent development is another testing ground to demonstrating China’s sincerity towards reform. While the Internet Court offers brand owners
another option for handling online copyright and e-commerce disputes, they should check the procedures of the Internet Court, which currently remain unclear, and consider these when strategizing litigation in China.

Jurisdiction of the court. The jurisdiction of the Internet Court is limited to Hangzhou, and to civil disputes involving online shopping, online debt contracts and online copyright. Generally, the jurisdiction of the court covers specific issues governed by the Civil Procedures Law, although the extent of its applicability to the court is still unclear.

The Internet Court has jurisdiction to hear the following types of cases:

  • Online shopping contract disputes: Disputes arising from the signing or performance of a contract where a seller has made a sale offer online and a buyer has accepted the purchase commitment;
  • Online shopping product liability disputes: Disputes arising from personal injury or property damage caused by defective products bought online, and the buyer is seeking tort liability from the product seller or manufacturer;
  • Online service contract disputes: Disputes arising from the signing or performance of a contract where internet service providers provide consumers with access to third party services or content services. Disputes relating to the provision of general online services by non-internet service providers are excluded.
  • Online loan contract disputes: Disputes arising from repayment of loans and interests of financial loan contracts or small loan contracts formed online with financial or small loan institutions. Disputes arising from repayment of loans and interests of loan contracts not entered into with financial or small loan institutions are excluded;
  • Online copyright disputes: Disputes relating to the infringement of right of communication through information network of a copyright work. Excluded are disputes that include other non-copyright-related claims in addition to the infringement of right of communication through information network of a copyright work, for example, unfair competition.

Cases are handled by the Internet Court online whereby plaintiffs file complaints through the internet and evidence and case materials are submitted online by the litigants. Parties to the dispute may appear at hearings via video link and the case verdict will be delivered online.

MORE CYBERSPACE COURTS

On 19 July 2017, in collaboration with Chinese telecoms company Sina Corporation, the Xishan District Court of Kunming established the first cyberspace court in Xishan, Yunnan province – the Online Court of Xishan District. Core functions of the online court include online mediation, online filing, online payment, online trial, online cross-examination, electronic supervision, electronic services, live broadcast of court proceedings and voice recognition. It enables online dispute resolution and provides litigants with more efficient, convenient and diversified services.

Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Danian Zhang (Shanghai) at: danian.zhang@bakermckenzie.com