If parties in a foreign-related case conducted in China have agreed upon the application of a foreign law, or a foreign law is applicable according to law, then the ascertainment of such foreign law is a necessary procedure in litigation or arbitration.
Allocation of responsibility
Article 10 of the Law on the Application of the Law in Foreign-Related Civil Relationships distinguishes the bearing of responsibility for the ascertainment of a foreign law, based on the reason why such a foreign law applies: (1) where a foreign law applies based on the rules for conflicts of laws, the adjudicating body bears the responsibility; or (2) where foreign law applies based on the choice of the parties, the parties are responsible for providing the same. The law also specifies that if a foreign law is not ascertained, the domestic law of China will apply as the governing law in the trial of the foreign-related case.
As to how the inability to ascertain a foreign law is determined, article 17 of the Interpretations of the Supreme People’s Court of Several Issues Concerning the Application of the Law on the Application of the Law in Foreign-Related Civil Relationships likewise distinguishes the above-mentioned two circumstances for differential handling:
(1) where the adjudication body is responsible for ascertaining the foreign law, if the foreign law remains unobtainable through such means as provision by a party, the means specified in an international treaty, provision by Chinese or foreign legal experts, etc., it can be found to be unascertainable; or
(2) where a party is required to provide the foreign law, if it fails to do so during the reasonable period designated by the adjudication body, without a legitimate reason, it can be found to be unascertainable.
However, in cases where the parties have agreed upon the application of a foreign law, judicial practice has not completely proceeded in accordance with the above-mentioned provisions. For example, in the cases Su Jing Chu Zi No.1 (2000) and Yue 03 Min Zhong No.591 (2018), despite the failure by the parties to provide the foreign laws, the courts did not directly find that the foreign laws were unascertainable, rather they ascertained the same ex officio, or pursuant to an application by the parties.
In the case Zhe 0382 Min Chu No.1366 (2017), the court took an even more active approach by not requesting that the parties provide the South Korean law that was specified in their agreement as being applicable, and directly ascertaining and applying such law itself.
Means of ascertainment
Article 193 of the Opinions of the Supreme People’s Court on Several Issues Concerning the Thorough Implementation of the General Provisions of the Civil Code of the People’s Republic of China (for Trial Implementation), and article 8 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Establishment of the International Commercial Court both specify seven means for ascertaining a foreign law: (1) provision by the parties; (2) provision by Chinese or foreign legal experts; (3) provision by a law ascertainment service firm; (4) provision by a China International Commercial Court Expert Committee member; (5) provision by a central authority of the signatory with which China has entered into a judicial assistance agreement; (6) provision by the Chinese embassy/consulate in the country in question; and (7) provision by the embassy/consulate in China of the country in question.
Further clarified in article 51 of the Minutes of the Second National Work Conference on Foreign-Related Commercial and Maritime Adjudication, issued by the Supreme People’s Court (SPC), a party may provide a foreign statutory law or precedent by such means as a legal expert, legal service firm, industry self-regulation organization, international organization, internet, etc., and may additionally provide related legal literature, information describing the law, an expert opinion, etc.
In practice, there have also been instances where a court admitted content of a foreign law that is cited in an effective judgment or ruling from another case, for example the case of Jin Min Zhong No.263 (2018). Furthermore, if a party faces difficulties in providing a foreign law, it may, before the expiration of the time limit for the adducement of evidence, apply to the adjudication body to have it ascertain the same, for example the case of Yue 03 Min Zhong No.591 (2018).
Review and findings
There is no guarantee that a foreign law obtained by one of the above-mentioned means will be directly applied. Article 18 of the SPC interpretations specifies that the adjudication body is required to listen to the opinions of the parties on the content, understanding and applicability of the foreign law in question. If no parties have an objection, it may be directly applied; if a party objects, it is up to the adjudication body to conduct a review and render a finding.
In judicial practice, the foreign law provided by a party often takes the form of a legal opinion. When a party has an objection, the adjudication body will mainly conduct its review by taking into account the following aspects.
Qualifications of the issuer. In the case Xia Hai Fa Shang Chu Zi No.21-2 (2014), the court held that the status of the lawyers that issued the legal opinion was verifiable, that both persons were partners in a law firm, and that they had the practice qualifications of Swedish lawyers, and accordingly their legal opinion could serve as preliminary proof of the provisions of Swedish law.
Completeness of the content. In the case Lu 72 Min Chu No.1454 (2016), the court found that the legal opinion could not be deemed to ascertain the UK law on the grounds that the full content of the UK statutory law, or precedent on which the opinion’s conclusions were based, was not provided, and so the court did not apply it.
Compliance of the form. In the case Zui Gao Fa Min Zai No.196 (2018), the defendant provided only a Chinese translation of the legal opinion issued by a Mexican lawyer at first instance, failing to have the same notarized and certified, for which reason it was not admitted by the court. At second instance, the defendant submitted a notarized and certified legal opinion accompanied by a Chinese translation, whereupon the SPC held that, “with this, the Mexican law related to the dispute in this case is now ascertainable”.
Accordingly, when a party provides a foreign law, it should endeavour to avoid the impact that such factors as the qualifications of experts, flaws in content, or form of a legal opinion could have on the admissibility of the evidence.
Zhang Guanglei is a partner and Cai Xiaoxia is an associate at Jingtian & Gongcheng. Zhang is also an arbitrator of Hong Kong International Arbitration Centre