China Releases Interpretations on Foreign-Related Civil Relations

Jan. 15 – The Supreme People’s Court of China released the “Interpretations on Several Issues Concerning the ‘Law of the People’s Republic of China on the Application of Laws to Foreign-Related Civil Relations’ (I) (fashi [2012] No. 24)” on December 28, 2012, which came into effect on January 7, 2013. Detailed information can be found below.

Determination of Foreign-Related Civil Relations

The People’s Court may determine a civil relation as a “foreign-related civil relation” under any of the following circumstances:

• Where either party or both parties are foreign citizens, foreign legal persons, or other organizations or stateless persons
• Where the habitual residence of either party or both parties is located outside the territory of the People’s Republic of China
• Where the subject matter is located outside the territory of the People’s Republic of China
• Where the legal facts that trigger, change or terminate the civil relation take place outside the territory of the People’s Republic of China
• Other circumstances that may be determined as foreign-related civil relations

Retrospective Force

For foreign-related civil relations that occur prior to the implementation of the “Law on the Application of Laws to Foreign-Related Civil Relations,” the People’s Court shall determine the applicable laws according to the relevant legislature in existence at the time when such civil relation occurs.  Where there is no applicable law at that time, the applicable laws may be determined with reference to the “Law on the Application of Laws to Foreign-Related Civil Relations.”

Choice of Law

Where the laws of the People’s Republic of China do not explicitly allow the parties concerned to choose the applicable laws for foreign-related civil relations, and the parties thereof choose the applicable laws themselves, such choice of law shall be invalidated by the People’s Court.

Where a party claims the choice of law is invalid on the grounds that the law chosen by the parties in the agreement has no actual connection with the foreign-related civil relation in dispute, such claims shall not be sustained by the people’s court.

Where the parties invoke an international treaty that is not yet binding upon the People’s Republic of China in their contract, the People’s Court may determine the rights and obligations between the parties according to the contents of the treaty, however, the part of the treaty that is in violation of the public interests or mandatory provisions of the laws and regulations of the People’s Republic of China shall be excluded.

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