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Jurisdiction in foreign-related legal cases clarified

The Supreme People’s Court issued the Provisions on Several Issues Concerning the Jurisdiction of Foreign related Civil and Commercial Cases (hereinafter referred to as the “Provisions”), which further the jurisdiction of foreign related civil and commercial cases to the middle and basic level people’s courts, and improved the quality and effectiveness of the trials of foreign related civil and commercial cases. The “Provisions” will come into force as of January 1, 2023. It is clarified that the first instance of foreign-related civil and commercial cases shall, in principle, be under the jurisdiction of the basic people’s courts; The intermediate people’s court has jurisdiction over foreign-related civil and commercial cases with large amount of dispute subject matter, complex case, or large number of parties to one party, or other cases that have significant influence in its jurisdiction. Among them, the intermediate people’s court has two levels of jurisdiction standards for the first instance of foreign-related civil and commercial cases: 40 million CNY and above, and 20 million CNY and above.

The general and special rules of jurisdiction for foreign-related civil actions:

The principle of territorial jurisdiction: if the contract is signed or performed in the Chinese territory, or if the subject matter of the lawsuit is in the Chinese territory, or the defendant has property available for seizure in the Chinese territory, or the defendant has a representative office in the Chinese territory, the place where the contract is signed, the place where the contract is performed, or the place where the subject matter of the lawsuit is located It can be under the jurisdiction of the court in the place where the distrained property is located, where the infringement is committed, or where the representative office is located.

The principle of exclusive jurisdiction. Litigations arising from disputes over immovable property, disputes arising from port operations, inheritance disputes, and disputes arising from contracts for Chinese foreign equity joint ventures, Chinese foreign contractual joint ventures, and Chinese foreign cooperative exploration and development of natural resources shall be under the exclusive jurisdiction of Chinese courts.

Principle of agreement jurisdiction. A written agreement may be used to select the jurisdiction of the court where the dispute is actually related. However, the parties’ jurisdiction by agreement shall not violate the provisions of China on exclusive jurisdiction and hierarchical jurisdiction.

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