Recently, the reporter learned from the First International Commercial Court of the Supreme People's Court (First International Commercial Court) that on September 18 and October 25, 2019 it has ruled on the first five cases accepted in February of this year. The judgments have been served on the parties and the above cases have been concluded. 

These first five cases are transferred from lower courts to the First International Commercial Court. The parties involved include companies from Japan, Italy, the British Virgin Islands, etc., and companies and individuals from the Mainland China, the Hong Kong Special Administrative Region and Taiwan region. All of the parties agreed on the transfer of the cases to the China International Commercial Court (CICC) and accepted that the judgement or ruling of the CICC should be final. 

The reporter learns from the legal instruments released at the official website of the CICC that, of the five concluded cases, three were on the confirmation of the validity of arbitration agreements. The relevant rulings of these three cases clarify several major legal issues and further set down the principle of the separability of an arbitration agreement. 

"These three cases receive great attention in arbitration", said Shen Sibao, Member of the International Commercial Expert Committee of the Supreme People's Court (International Commercial Expert Committee), Chairman of the International Economic Law Research Association of the Chinese Law Society and Professor of the University of Business and Economics. He told the reporter that the three rulings on the formation of the arbitration clause solved the long-standing doubts on this question within the judiciary and arbitration. 

"These rulings effectively unify the guidelines and standards for handling such cases, and demonstrate the determination and strength of the CICC to serve the 'Belt and Road' construction", Shen Sibao said. 

The First International Commercial Court has also concluded a case on product liability dispute and another on contract dispute. The case on the product liability dispute between Guangdong Bencao Medicine Group Co., Ltd. and Bruschettini S.R.L., an Italy company, is the first case where the CICC made a judgment on the merits. It is explicitly stated that the seller who has fulfilled its recall obligation when a contractual relationship has not been established, shall have the right to seek remedies in accordance with the relevant provisions concerning product recall. The judgment fully protects the rights and interests of consumers as well as the rights and obligations of market entities. 

"This case shows the ability and competence of the international commercial court in dealing with international commercial disputes. The judgment clarifies the adjudication rules for similar disputes in the future, which has strong guiding significance", said Wang Liming, Member of the International Commercial Expert Committee, and Vice President of the Renmin University of China. 

In the ruling of another case on contract dispute, the First International Commercial Court effectively regulated the practice that "the parties add a third party to the arbitration agreement as a co-defendant in order to circumvent the existing arbitration clause," and therefore provided equal protection for the legitimate rights and interests of Chinese and foreign parties. 

Shan Wenhua, Member of the International Commercial Expert Committee and Dean of the School of Law and the School of International Education of Xi'an Jiaotong University, commented that the ruling of this case was of great guiding value and revelatory significance to the parties intentionally circumventing the arbitration clause in the litigation and other courts in dealing with such cases. 

According to the Persons in Charge of the CICC, efficiency is a significant advantage of CICC. The "First Instance being Final" system stipulated in the Provisions of the Supreme People's Court on Several Issues Regarding the Establishment of International Commercial Court provides the foundation for cases to be trialed efficiently. The aforementioned cases were concluded within only a few months. Besides, the parties involved may submit their evidence in English without Chinese translation and the judges may conduct the cross-examination with consent from the other party, which saves time and reduces costs. In hearing a case, the court may also seek advice from the members of the International Commercial Expert Committee. 

"The CICC has only been in operation for recent period, but it is clear that it is very prudent to accept cases and it only chooses cases that will affect the development of relevant Chinese laws." Susan Finder, Member of the International Commercial Expert Committee and the Distinguished Scholar in Residence at the School of Transnational Law of Peking University, said it was clear from the first batch of cases that these judgments and rulings could be important "soft precedents", i.e. authoritative rulings, for judges in lower courts and legal professionals. 

It is reported that since the establishment, the First and Second International Commercial Courts have already accepted thirteen international commercial cases, the types of which include product liability, commission contract, distribution of company surplus, confirmation of shareholder's qualification, disputes over liability for damaging company's interests, confirmation of the validity of arbitration agreement. The judgments and rulings already made receive good response from the society. Some business persons say that they have added or will add into the contract a dispute resolution clause on selecting the CICC for disputes resolution. 

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最高人民法院第一国际商事法庭高效审结首批五件案件

*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.