Litigation in China
Continuing my series of interview with litigators from around the world, I’d like to share some things I learned about litigation in China from an interview with Beijing attorney, Qishi Li.
Why should you continue to read this interview with Ms. Li about litigation in China?
You do business in China and you are interested in what recourse the Chinese courts will provide if a dispute arises
You like the written interview format and other blogs refuse to use it
You’ll feel pride for finishing a task you started
Background
Qishi Li is a partner at Commerce and Finance Law Offices in Beijing. This interview has been lightly edited.
What kind of disputes you handle in your legal practice?
Most of my work is handling contract disputes. These contracts include sales of goods contracts, trade finance agreements, share purchase agreements, and leases. I also advise clients on corporation law and insolvency law.
What type of clients do you generally represent in disputes?
My clients are mainly Chinese state-owned enterprises. I also represent some Asia-based multi-national corporation clients and Chinese large private companies.
Besides Microsoft Office, what software do you use in your practice?
For dealing with documents, Microsoft Office is most frequently used. Besides that, we also use Adobe Acrobat and Evernote. For communication, WeChat is used the most.
What books and websites do you use for legal research?
The Chinese Supreme People’s Court publishes many books to explain the interpretation and application of laws. They are important materials for our research. We also pay attention to the academic articles and books written by prominent professors.
Websites are more frequently used. For laws and regulations, we normally use PKULAW, LexisNexis, and Wolters Kluwer. For cases, we normally use China Judgements Online.
Chinese Complaints
Generally speaking, how many pages are the complaints or initial pleadings you see in your work?
Generally speaking, it depends. If it is a court litigation, ideally, the complaints should be as simple and short as it can be. 3~6 pages are good enough. Because most Chinese judges work under great pressure with large workload, plain and short submissions are comparatively welcome.
If it is an arbitration, lawyers may submit relatively long pleadings, 10 pages or so.
Generally speaking, how long does it take for a case to go from complaint to judgment?
By law, six months in the first instance and then three months for an appeal. But the reality is that the duration of a case, especially in the first instance, are affected by various factors, and in most cases, it lasts for a year.
Do you electronically file complaints and other pleadings?
We do file pleadings with the court electronically. In Beijing, for example, you could send the files by a WeChat app. Many courts have their own case filing system, it really depends, there is not a uniform website. For example, the Guangzhou Tianhe Court and Tianjin Courts have different websites.
But China has thousands of courts, some courts in remote and rural areas that have not established a user-friendly system. For those courts, paper copies could be sent by courier to the court or by hand. Especially during the Covid-19 affected period, some courts only accept paper copies delivered by courier or electronic versions of files submitted on-line.
Chinese Courts (Image Credit)
Are there specialized commercial courts for commercial disputes in China?
The Supreme Court has set up a specialized court, called the China International Commercial Court (CICC). But in the lower levels of courts, there are no such specialized commercial courts.
Who decides the facts in your disputes? Is it a judge or a jury?
Theoretically, China has the system of people’s jurors. In many cases, a tribunal of three members may be composed of one or two jurors.
However, as of now, jurors really only sit to meet the quorum of a tribunal of three members. They will not actually decide any facts though they do have the power theoretically. Instead, the presiding judge will decide the facts.
Generally speaking, how is evidence exchanged between the parties? Do you get to interview the opposing witnesses?
Generally speaking, the evidence will be exchanged at an “evidence-exchange” hearing, which takes place before the trial.
We are not allowed to interview the opposing witnesses before the trial. The witness give their statement at the hearing and you can cross-examine them at the hearing.
If you win, does the other side reimburse your attorneys’ fees?
It depends. In court litigation, the answer is normally no unless the dispute arises from a contracts that has a very clear agreement that the losing party should pay attorneys’ fees. In addition, statutes allow winning parties to recover attorneys’ fees for certain causes of actions, such as web infringement, IP infringement, unfair competition, and public environmental litigation.
But in arbitration, the tribunal will normally allow claimants to recover their attorneys’ fees, regardless of the type of case or whether there is a clause in the contract expressly permitting them to do so.
Are the Chinese courts open to the public? Can ordinary people watch a commercial trial?
Yes, they are open. Any citizen with an ID card can go straight into the court and pick a court room to watch a hearing. They may not be able to, however, if the parties applied before the hearing to designate it confidential under the law. They may do this, for example, if the dispute involves commercial secrets.
In addition, more and more court trials are broadcast live on the internet. For example, in principle, hearings in the Supreme Court are to be broadcast live. Anyone may log on the court website and watch court proceedings live or on recorded video.
Do you believe that Chinese courts have a particular strength for resolving commercial disputes?
I think that this is a question that requires a comparative approach. Normally speaking, Chinese courts are more efficient than, for example, Italian courts, and less expensive than, for example, English courts. For instance, for a case where the amount in dispute is 100 million RMB (Chinese Yuan), the court fee for the trial will be about 500,000 RMB, and the same for the appeal.
How about a weakness?
China is a vast country with thousands of courts, and so judges of different courts may not apply the laws with the same understanding. So I think the shortcoming is the occasional lack of predictability .
How often do you go to the courthouse?
For the past several years, I have needed to attend about 30-40 hearings a year, including hearings in a courthouse and in an arbitration tribunal.
When you are there, do you need to wear a special robe or wig?
When we go to court, we do have a special robe.
But unless the court specifically requires the robe before the hearing, we prefer not to wear them. Thus, the fact is that we seldom wear the lawyer’s robe.
It is said that the Supreme Court will issue a regulation to require all the lawyers attending court hearings to wear the robe soon. In that case, we will need to bring the robe everywhere with us.