Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Law of the People's Republic of China on Foreign-Related Civil Relations (I)

Fa Shi [2012] No. 24

December 28, 2012

(Adopted at the 1563rd meeting of the Judicial Committee of the Supreme People's Court on December 10, 2012)

The Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Law of the People's Republic of China on Foreign-Related Civil Relations (I) which was adopted at the 1563rd meeting of the Judicial Committee of the Supreme People's Court on December 10, 2012 and is hereby promulgated, and shall come into effect on January 7, 2013.

For the purpose of correctly trying foreign-related civil cases, pursuant to the provisions of the Law of the People's Republic of China on the Application of Law in Foreign-related Civil Relations, issues in connection with the application of the Law by the people's court are hereby interpreted as follows:

Article 1 Under any of the following circumstance, the people's court may determine a civil relation as a foreign-related civil relation:
1. Where either party or both parties are foreign citizens, foreign legal persons or other organizations or stateless persons;
2. Where the habitual residence of either party or both parties locate outside the territory of the People's Republic of China;
3. Where the subject matter is outside the territory of the People's Republic of China;
4. Where the legal fact that leads to establishment, change or termination of the civil relation happens outside the territory of the People's Republic of China; and
5. Other circumstances that may be determined as a foreign-related civil relation.

Article 2 For a foreign-related civil relation happened before the implementation of the Law on the Application of the Law on Foreign-Related Civil Relations, the people's court shall determine the applicable laws in accordance with relevant laws and regulations at the time when such foreign-related civil relation happens; in case of no applicable laws at such time, the applicable laws may be determined with reference to the Law on the Application of the Law on Foreign-Related Civil Relations.

Article 3 Where the Law on the Application of the Law on Foreign-Related Civil Relations and other laws have different provisions on applicable laws for the same foreign-related civil relation, the Law on the Application of the Law on Foreign-Related Civil Relations shall prevail, except for special provisions in the laws on business such as the Negotiable Instruments Law of the People's Republic of China, the Maritime Law of the People's Republic of China and the Civil Aviation Law of the People's Republic of China and in the laws on intellectual property.
Where other laws instead of the Law on the Application of the Law on Foreign-Related Civil Relations have provided for the applicable law of any foreign-related civil relation, such other laws shall prevail.

Article 4 Where the application of law of any foreign-related civil relation involves the application of any international treaty, the people's court shall allow the application thereof in accordance with Paragraph 2, Article 142 of the General Principles of Civil Law of the People's Republic of China, Paragraph 1, Article 95 of the Negotiable Instruments Law of the People's Republic of China, Paragraph 1, Article 268 of the Maritime Law of the People's Republic of China and Paragraph 1, Article 184 of the Civil Aviation Law of the People's Republic of China, except for those international treaties on intellectual property that have been or are required to be transformed into domestic laws.

Article 5 Where the application of law of any foreign-related civil relation involves the application of any international common practice, the people's court shall allow the application thereof in accordance with Paragraph 3, Article 142 of the General Principles of Civil Law of the People's Republic of China, Paragraph 2, Article 95 of the Negotiable Instruments Law of the People's Republic of China, Paragraph 2, Article 268 of the Maritime Law of the People's Republic of China and Paragraph 2, Article 184 of the Civil Aviation Law of the People's Republic of China.

Article 6 Where the laws of the People's Republic of China have made no explicit provisions on the choice of applicable laws on the foreign-related civil relation by the parties concerned, and the party or parties choose any law for application, then the people's court shall determine such choice as invalid.

Article 7 Where a party claims the choice of law as mentioned above to be invalid on the ground that the law chosen by the parties in the agreement has no actual connection with the foreign-related civil relation in dispute, the people's court shall not support.

Article 8 Where the parties agree to choose or change the choice of applicable law before the termination of the court debate in the first instance, the people's court shall allow so.
Where the parties invoke the laws of the same country and neither of them has raised any objection on applicable law, the people's court may determine that the parties have made choice of law applicable to the foreign-related civil relation.

Article 9 Where the parties invoke any international treaty not binding upon the People's Republic of China in the contract, the people's court may determine the rights and obligations between the parties in accordance with the content of such international treaty, provided that such international treaty is in violation of the social public interests of or mandatory provisions of the laws and regulations of the People's Republic of China.

Article 10 Under any of the following circumstances, the provisions of the laws and regulations in connection with the social public interests of the People's Republic of China, the application of which the parties cannot preclude by agreement, and that can be directly applicable to the foreign-related civil relation without guidelines on rules of conflict, may be determined by the people's court as the mandatory provisions as set forth in Article 4 of the Law of Application of the Law on Foreign-Related Civil Relations:
1. Where they relate to the protection of the rights and interests of the laborers;
2. Where they relate to food or public health security;
3. Where they relate to environment security;
4. Where they relate to foreign exchange control and other financial security;
5. Where they relate to anti-monopoly and anti-dumping; and
6. Other circumstances that shall be determined as mandatory provisions.

Article 11 Where a party deliberately produces the point of contact of the foreign-related civil relation to circumvent the mandatory provisions of the laws and regulations of the People's Republic of China, the people's court shall determine that it will not produce any validity in application of any foreign law.

Article 12 Where the settlement of foreign-related civil dispute must be on the precondition of the confirmation of another foreign-related civil relation, the people's court shall determine the applicable law in accordance with the nature of such precondition issue per se.

Article 13 Where a case involves two or more foreign-related civil relations, the people's court shall respectively determine the applicable laws thereof.

Article 14 Where the parties make no choice of law applicable to the foreign-related arbitration agreement, nor agreement on the arbitration institute or place of arbitration, or they make no explicit agreement thereon, the people's court may apply the laws of the People's Republic of China to determine the validity of such arbitration agreement.

Article 15 For place where the natural person has continuously lived for a period of not less than one year as his life center at the time of the establishment, change or termination of any foreign-related civil relation, the people's court may determine such place as the habitual residence as stipulated in the Law of Application of the Law on Foreign-Related Civil Relations, except for seeking medical treatment, labor dispatch, official duty and other similar circumstance.

Article 16 The people's court shall determine the place of incorporation and registration of the legal person as the place of registration of the legal person as stipulated in the Law of Application of the Law on Foreign-Related Civil Relations.

Article 17 Where the people's court cannot obtain any foreign law by such reasonable means as provision by the parties, methods as set forth in the international treaties binding upon the People's Republic of China and provision by Chinese and foreign legal experts, the people's court may determine such law as unascertained.
Where, pursuant to the Paragraph 1, Article 10 of the Law of Application of the Law on Foreign-Related Civil Relations, a party shall provide any foreign law but fails to provide so within the reasonable time limit as designated by the people's court without justifiable cause, the people's court may determine such law as unascertained.

Article 18 The people's court shall hear the opinions of the parties on the content of foreign law that shall apply and the understanding and application thereof, and if the parties have no objection towards the content of such foreign law and the understanding and application thereof, the people's court may confirm the same; and if the parties have any objection, the people's court shall examine such objection and then determine.

Article 19 Issues concerning application of law in connection with civil relations involving the Hong Kong Special Administration Region and the Macau Special Administration Region shall apply to these Interpretations on a reference basis.

Article 20 For foreign-related civil dispute cases happened after the implementation of the Law of Application of the Law on Foreign-Related Civil Relations, if they are not concluded after the implementation of these Interpretations, these Interpretations shall apply; if they are concluded before the implementation of these Interpretations, but the parties thereto apply for re-trial or they are determined to be retried in accordance with the trial supervision procedure, these Interpretations shall not apply.

Article 21 Where these Interpretations are inconsistent with the judicial interpretations promulgated by the Court before, these Interpretations shall prevail.