3.1 Preparations Before Bringing a Lawsuit—Formality Documents for Foreign Parties

3.1.1 Certificates of Subject Qualification—“Who Am I” and “Who Represents Me”

To participate in China’s civil litigation, foreign natural persons need to submit passports or other equivalents proving their identities as certificates of subject qualification.

As to foreign companies and other institutions, the certificates of subject qualification are more complex, which include:

  1. (1)

    Business license, or the certificate document on good standing issued by enterprise registration authority;

  2. (2)

    Documents certifying the status of the legal representative or the authorized representative (e.g. the company’s bylaws, resolution of the board of directors, and etc.);

  3. (3)

    Documents certifying the identity (“identity certificate”) of the legal representative or the authorized representative, including his/her name and position; and

  4. (4)

    Passport or other identity documents of the legal representative or the authorized representative.

The above documents mainly concern ‘legal representative’ (法定代表人) and ‘authorized representative’ (授权代表人), so it is necessary to clarify these two concepts. Chinese companies or foreign companies all need a natural person, on behalf of the company, to sign the litigation documents and to participate in litigation. Each Chinese company has a registered ‘legal representative’, who is entitled to represent the company to participate in litigation without the need for additional authorization. If a foreign company has a legal representative, he or she may also participate in the litigation on behalf of the company. In order to certify his or her status, the foreign company generally needs to submit its bylaws or other similar documents. As for the foreign company without a legal representative, it is required to specifically empower an ‘authorized representative’ to participate in the lawsuit. In this respect, the foreign company needs to submit a related board resolution made pursuant to its bylaws.

It is noteworthy that Chinese courts also require an “identity certificate” of the legal representative or the authorized representative. This certificate generally contains only a single sentence, such as ‘A certain person holds a certain position in the company, he/she is also the legal representative/the authorized representative of that company’. This may seem superfluous; however, such simple, repetitive documents must not be omitted.

The above materials should be signed by the directors or the secretary of the company, etc., according to the foreign local law and the company bylaws. It should be noted that China emphasizes great importance to the seal. Therefore, it is recommended that foreign companies affix their seals on all the documents, even if these seals are merely decorative and not legally effective in their own country.

3.1.2 Power of Attorney—“Who Is My Lawyer”

To participate in litigation in Chinese courts, foreign companies often need to appoint Chinese lawyers, and hence need to submit the power of attorney to the courts. The power of attorney shall be signed by the legal representative or the authorized representative as described above, and preferably stamped with the company seal.

If the company does not mandate a lawyer, then the legal representative or the authorized representative need to participate in the litigation in person.

3.1.3 Notarization and Authentication—“My Documents Are Authentic”

In addition to the requirements on content, Chinese courts also require the formality documents be notarized, authenticated and translated. Understanding the purpose of such requirements will be helpful to prepare documents correctly.

3.1.3.1 What Are Notarization and Authentication

Most of the subject qualification documents and the authorization procedures of foreign companies are formed outside the territory of China. In order to confirm the authenticity of these materials, Chinese laws require that the content and the formation process of the materials be notarized by a local foreign notary (the step of “notarization”), and then be authenticated by the Chinese embassy or consulate in that country so as to certify that the signature or seal of the notary is true (the step of “authentication”). Only then can the materials become effective.

In practice, the steps of notarization and authentication are usually as below:

  1. (1)

    “Notarization” by a local foreign notary;

  2. (2)

    Certification by foreign government officers that the identity and signature of the notary are authentic; and

  3. (3)

    “Authentication” by the Chinese embassy or consulate in that country that the identity and signature of foreign government officers are authentic. The attached picture above is a sample of the Chinese Embassy and Consulate’s authentication documents. It only certifies that “Both the seal of the United States Department of the State, and the signature of the assistant authentication officer CHANA TURNER in the previous documents are authentic”; and the authority that issued the instruments should be responsible for their content.

figure a

If China has entered into a treaty with a certain country, then the certification process should be carried out in accordance with the treaty.

3.1.3.2 The Content of Notarization

As introduced previously, “authentication” is merely for certifying that the signature or seal of the notary is true, while “notarization” is the key to certify the authenticity of the documents. According to our experience, the notarized letter must at least indicate the following content.

  1. (1)

    The business license or the certificate document on good standing: (a) the time and place of obtaining the copies; and (b) the copies are consistent with the original;

  2. (2)

    The company bylaws: (a) the time and place of obtaining the copies; and (b) the copies are consistent with the original;

  3. (3)

    The resolution of the board of directors: (a) the time and place of the resolution; and (b) the signature and seal are carried out under the witness of the notary, which are authentic and effective;

  4. (4)

    The “identity certificate”: (a) the time and place to sign the certificate; and (b) the signature and seal are carried out under the witness of the notary, which are authentic and effective;

  5. (5)

    The passport or other identity documents: the documents are authentic and effective; and

  6. (6)

    The power of attorney: (a) the time and place to sign the power of attorney; and (b) the signature and seal are carried out under the witness of the notary, which are authentic and effective.

3.1.4 Translation

All materials in foreign languages submitted to Chinese courts should be accompanied by Chinese translation (except for the cases trialed by the China International Commercial Court of the SPC). In practice, some Chinese courts even require that the translation be provided by the appointed translation agencies.

(Reference provisions and information for Sect. 3.1).Footnote 1

3.2 Bringing a Lawsuit and Case Filing

3.2.1 General Process of Case Filing

The plaintiff may submit the statement of claim either personally at the court, or by mail as allowed by some Chinese courts. In addition, Chinese courts have established online case filing platforms (including WeChat, the most popular social media in China). These channels greatly facilitate the parties to bring a lawsuit.

The court, upon receipt of the statement of claim, will examine the same and decide whether to file a case. For quite a long time, Chinese courts adopted the “case filing examination system (立案审查制)”, that is, before the case filing, the court can examine substantive issues such as the qualification of the parties, the facts and the legal relations on which the action is based, and then decide whether to file a case. This approach grants the court considerable discretion in terms of the case filing. Some courts refuse to file a case for the parties out of various unjustified reasons, which damages the litigation rights of the parties.

In order to tackle the “difficulty in case filing”, the Supreme People’s Court has made reform since 1 May 2015, changing the “case filing examination system” to the “case filing registration system”. As required by the reform, the court shall receive and examine the statement of claim submitted by the plaintiff on the spot. The court shall, upon examination of the statement of claim and satisfaction of the following conditions, file and register the case on the spot; if the satisfaction of legal conditions cannot be determined on the spot, the court is still required to make a decision on the case filing within 7 days:

  1. (1)

    The plaintiff has a direct interest in the case;

  2. (2)

    There is a known defendant;

  3. (3)

    There are specific claims, facts and reasons;

  4. (4)

    The subject matter is a civil dispute acceptable by the court, and the court has jurisdiction over the case; and

  5. (5)

    The action is not prohibited by the law due to endangering national sovereignty and territorial integrity, and the like.

After the reform of the case filing system, the “difficulty in case filing” has been effectively alleviated. Nevertheless, for more complex and foreign-related cases, judges may raise a series of questions when examining the statement of claim. Some judges may still examine the substantive issues of the case due to their previous working habits. Therefore, the on-site statement of claim submission can better facilitate communication with judges, and improve the case filing efficiency of complex cases in particular.

The court will, after the case filing, notify the plaintiff to pay the court costs (for court costs, see Sect. 1.5), and allocate the case to the corresponding tribunal and the specific case handling judge(s) according to the cause of action (for cause of action, see Sect. 1.4).

In practice, in order to alleviate the pressure brought by the litigation explosion, some courts that accept a large number of cases will first conduct a mediation after receiving the statement of claim. If the mediation fails, the court will then ordinarily file the case (for pre-trial mediation, see Sect. 11.2).

3.2.2 Cross-Border Online Case Filing—Latest Facilitation Measures for Foreign Parties

Nowadays, online case filing has been made available in many Chinese courts. But most case-filing platforms provide services only in the Chinese language. Before using such services, users are required to go through real-name authentication, which relies on China’s identity card system. Therefore, such online case-filing platforms are almost only useful for Chinese parties. If foreign parties need to file cases through the Internet, usually they need to hire a Chinese lawyer on their behalf.

On 3 February 2021, to facilitate foreign parties to submit filing materials directly, the SPC issued the Several Provisions of the Supreme People’s Court on Providing Online Case-filing Services for Foreign Litigants (最高人民法院关于为跨境诉讼当事人提供网上立案服务的若干规定), which provides an Internet platform for foreign parties to file cases with Chinese courts and streamlines the case-filing procedures from several aspects.

3.2.2.1 Case Filing Through the Mobile App

The online case-filing platform operated by the SPC for foreign parties is called “People’s Court Online Service”, an applet embedded in WeChat (China’s largest mobile social media). Therefore, if you want to use People’s Court Online Service to file a case, you must install WeChat first. And after that, a foreign party can, theoretically, file a case with a mobile phone.

3.2.2.2 Streamline of the Identity Verification

When filing a case online for the first time, Chinese courts need to verify the identity of the parties. According to the new rules, Chinese courts can verify the identity of the parties through the information retained in the identity verification platform of China’s National Immigration Administration. That is, for the parties who have entry-exit record in China, the procedure of identity verification will be simplified.

If the verification cannot be done by this method, Chinese courts can also conduct manual verification on the identity materials provided by the parties online. For the specific materials to be provided, please refer to Sect. 4.1.

Although online verification does not require the parties to provide the paper originals to the court, the notarization, the authentication and other procedures are still needed.

3.2.2.3 Streamline of the Power of Attorney

Under the new rules, foreign parties can apply to Chinese courts for “online video witness”, i.e., under the witness of the judge, the party (and his/her interpreter) and the lawyer online at the same time, the party may sign the power of attorney for entrusting Chinese lawyer. If this method is adopted, there is no need for notarization, authentication and other cumbersome procedures.

3.2.2.4 Actual Operation

On the second day after the promulgation of the new rules, a Japanese citizen signed the power of attorney for entrusting Chinese lawyers through online video witness, thus completing the cross-border case filing with Fengxian Primary People’s Court of Shanghai Municipality. In addition, this platform also provides services to residents of Hong Kong, Macau and Taiwan, as well as Mainland Chinese citizens living abroad.

At present, courts in Beijing and Shanghai have already helped several overseas mainland Chinese citizens and Taiwan residents complete cross-border case filing.

3.2.2.5 Our Observation and Suggestion

According to the news disclosed so far, most of the parties using the cross-border case filing platform are natural persons who can speak Chinese. In the future, with the further improvement of the platform functions, we believe that the platform can provide convenience for more foreign parties.

At the same time, we have noticed that there are still some obstacles for foreign companies or organizations to use this platform.

First of all, regarding identity verification, China’s entry-exit system only retains the information of natural persons, and therefore foreign companies/organizations still need to prepare materials and go through notarization and authentication procedures in the traditional way for identity verification, but no paper originals are required now.

Second, if foreign companies/organizations want to simplify the procedures for entrusting Chinese lawyers, they need to designate representatives to participate in video witness, and such representatives are, in principle, required to hold notarized and authenticated POAs, which in fact causes more troubles for the parties.

In view of the above problems and questions frequently raised by judges during the filing of foreign-related cases, we would advise that foreign organizations prepare paper materials in the traditional way, and hire Chinese lawyers for case filing with the court offline. Chinese lawyers can also use their own accounts to file cases online if their foreign clients are in a tight schedule.

Generally speaking, we believe that it will be more and more convenient for foreign parties to participate in litigation in China. However, to avoid technical, communication, and other problems in case filing, it is still highly necessary to hire Chinese lawyers.

(Reference provisions and information for Sect. 3.2).Footnote 2

3.3 Determining the Adjudicatory Personnel

3.3.1 The Composition of Collegial Panel

After a case is filed, the Chinese court will determine the collegial panel of the case. The collegial panel for first-instance cases under ordinary procedures is generally composed of three persons. For complex and major cases, Chinese courts may increase the number of the panel members, provided, however, that the number of the panel members must be an odd number.

When determining the judges for a specific case, the Chinese court mostly use computer programs to randomly assign judges of the corresponding tribunal for the case. In a few cases (such as multiple cases with the same defendant and similar circumstances), the court may appoint judges directly.

There will be one undertaking judge among the members of the collegial panel. The undertaking judge is responsible for promoting the pre-trial preparations, examining the evidence, assisting the presiding judge in organizing the court trial, drafting the judgment and etc. Because of the above responsibilities, the undertaking judge is often the person who understands the case to the greatest extent. The opinion of the undertaking judge plays a critical and even decisive role in the case trial.

For purposes such as enhancing judicial credibility, China allows eligible citizens to participate in the trial as people’s assessors. Therefore, the collegial panel can be composed entirely of judges, or judges and people’s assessors. Generally, people's assessors are randomly selected from permanent residents who have reached the age of 28 within the jurisdiction of the court, but those of specific occupations (including procurator, police, lawyer, etc.) cannot serve as people’s assessors. According to the Chinese law, people's assessors enjoy the same rights, including the right to vote when evaluating cases, as judges in most cases. In terms of public interest litigation (for public interest litigation, see Chap. 8) and other influential cases, people's assessors only have the right to vote on the finding of facts but not the application of law.

In addition, in order to cope with the rapid quantity growth of cases, Chinese law stipulates that when the primary courts try cases with clear-cut facts and rights and obligations, even if the ordinary procedure is applied, they can be tried by one judge like cases under summary procedure (for summary procedure, see Sect. 5.6).

3.3.2 No Jury in China—What Is People’s Assessor

3.3.2.1 Powers and Duties of People’s Assessor

Although there is no jury system in China, Chinese citizens can participate in the trial by joining the collegial panel as people’s assessors. In most cases, the power of people’s assessor is the same as that of judges. During the court trial, people’s assessors may question the parties. During the after-trial deliberation, people’s assessors have the right to express their opinions and enjoy the same voting right as judges. However, in the following cases tried by the seven-member collegial panel, people’s assessors only have the right to vote on the finding of facts, excluding the application of law.

The people's assessor system bears a good original intention. However, in practice, it gets criticized from time to time for being a trumpery, that is, people’s assessors only appear in court in a symbolic sense without expressing any opinion during the trial and the after-trial deliberation, and the case trial is completely dominated by judges.

To change this awkward situation, the SPC has formulated a series of systems to help people's assessors better perform their duties. For example, people’s assessors may question the parties involved in the trial, and the presiding judge can guide people’s assessors to ask questions around the disputed issues; during the case deliberation by the collegial panel, the undertaking judge will first introduce relevant laws and evidence rules involved in the case to people’s assessors who will then give their opinions, and other judges and the presiding judge will give their opinions at last. We hope that these systems will make a better use of the people’s assessor system.

3.3.2.2 What Civil Cases Can people’s Assessor Participate In

Firstly, people’s assessors can participate in the first-instance trial only, excluding the second-instance trial (for China’s hierarchical trial system, see Sect. 1.2).

Secondly, it is up to the court to decide in which civil cases people’s assessors may participate. However, unless otherwise provided by law, people’s assessors should be invited to participate in the trial of the following cases:

  1. (1)

    Cases involving group interests and/or public interests;

  2. (2)

    Cases of widespread concern to the people or with great social influence; and

  3. (3)

    Cases whose circumstances are complex or special that require the participation of people's assessors in the trial.

Thirdly, for ordinary civil cases in which people’s assessors participate in the trial, the collegial panel is composed of 3 members, including 1–2 people’s assessors. However, for the following special civil cases, the collegial panel is composed of 7 members, including 4 people’s assessors:

  1. (1)

    Cases of public interest litigation (for public interest litigation, see Chap. 8);

  2. (2)

    Cases with great social influence of land acquisition and demolition, ecological environment protection, and food and drug safety; and

  3. (3)

    Other cases with great social influence.

Fourthly, people’s assessors should not participate in the trial of special types of cases, such as cases under special procedure, cases of recognizing and enforcing foreign divorce judgments.

3.3.2.3 Who Can Be people’s Assessor?

People's assessors must be Chinese citizens over the age of 28. Under normal circumstances, people's assessors should be high school graduates or above and are physically capable of performing their duties normally.

One of the important purposes of the people’s assessor system is to let laypersons participate in and/or supervise judicial activities. For this reason, the following persons engaged in law related occupations cannot serve as people’s assessors:

  1. (1)

    Members of the standing committee of the people’s congress and staff of the supervisory committee, the people’s court, the people’s procuratorate, the public security organ, the state security organ and the judicial administrative organ;

  2. (2)

    Lawyers, notaries, arbitrators and grass-roots legal service workers; and

  3. (3)

    Other persons who are not suitable to serve as people’s assessors due to their occupations.

In addition, people’s assessors must also support the P.R.C. Constitution, abide by law and discipline, and be decent and impartial. For this reason, people who have been subject to criminal punishment, who are dishonest judgment debtors (for dishonest judgment debtors, see Sect. 10.5) and who have violated law and discipline cannot serve as people’s assessors.

3.3.2.4 How Does the Court Select people’s Assessor

When people’s assessors are needed for the case trial, the court will randomly select candidates from the roster of people’s assessors which is also prepared mainly by random selection. The court will, in concert with the administrative organ, first randomly select five times the number of candidates from the permanent residents in the jurisdiction of the court, and then randomly select people’s assessors from the qualified candidates who are willing to serve as people’s assessors. In addition, citizens themselves can also serve as people’s assessors through voluntary application or recommendation by employers and other institutions.

The term of office of the people’s assessors is five years, and generally they may not be re-elected.

To determine the people’s assessors of a specific case, the court shall randomly select people’s assessors from the roster of people’s assessors 7 days before the court trial. The court may also select a certain number of alternate people’s assessors and determine the order of alternation. If specific types of cases (such as intellectual property cases) require people’s assessors with expertise, the court can randomly select and determine the candidates from the qualified people's assessors.

(Reference provisions and information for Sect. 3.3).Footnote 3