1. Could you please briefly introduce the background and process of the formulation of “the Opinions”?

After the outbreak of the COVID-19 epidemic, the CPC Central Committee attached great importance to it. President Xi Jinping keeps a close eye on the epidemic situation and personally commands and deploys the relevant measures. He made a series of important speeches and instructions on the overall planning of epidemic prevention and control and economic and social development. It has been emphasized that the epidemic prevention and control should be done in accordance with laws and regulations, and that work should be carried out with the rule of law thinking and methods in order to resolve disputes, including contract performance, corporate debts, and labor relationships in a timely manner. President Xi Jinping’s important speeches and instructions provide a fundamental basis for the people’s courts to serve the overall situation of epidemic prevention and control and to ensure relevant judicial services. The Supreme People’s Court (“the SPC”) resolutely implements the instructions, requiring the people’s courts at all levels to give full play to their functions in civil and commercial adjudication in order to properly handle cases of epidemic-related disputes in accordance with law, and promote the prevention and resolution of conflicts and disputes in the beginning. Since the outbreak of the epidemic, the people’s courts at all levels have been working hard in the prevention and control of the epidemic and adjudication and enforcement in an orderly manner according to law.

At present, the preliminary achievements of epidemic prevention and control in China have been further consolidated. Important progress has been made for resumption of work and production, and the recovery of economic and social order accelerates. However, the epidemic continues to spread globally. The risks of the world economy going downwards have increased, and instability and uncertainty have become significantly more severe. The COVID-19 epidemic is a major public health emergency that has the fastest spreading speed and the widest range of infection, and is the hardest to prevent and control since the founding of the People’s Republic of China. It will inevitably exert serious negative impacts on the development of economy and society, triggering conflicts and disputes. Civil and commercial adjudication is the “barometer” of a nation’s economic and social development and the “main battlefield” where judicial services serve economic development. In face of the “big test” brought by the epidemic, the people’s courts should maintain firm confidence, face up to difficulties and take the initiative to provide powerful judicial services and guarantees for the overall planning of the epidemic prevention and control and the economic and social development. In order to promptly guide the people’s courts at all levels to properly handle civil cases involving the epidemic, safeguard the legitimate rights and interests of the people, maintain social and economic order as well as social fairness and justice, the SPC organized experts to draft the Opinions.

The Opinions addresses the generally concerned question of application of law regarding civil and commercial disputes, and is drafted on the basis of the Notice on Consistently Implementing the Spirit of the Third Meeting of the Overall Law-Based Governance of the Central Committee Properly handle Trial and Enforcement During the Period of Prevention and Control of the COVID-19 epidemic (“the Notice”) issued by the Supreme People’s Court on 14 February. For drafting the Opinions, the SPC has set up a working group, and has successively solicited opinions from relevant departments, authoritative experts and scholars, and also consulted the Commission of Politics and Law of the CPC Central Committee, the Legislative Affairs Commission of the Standing Committee of the National People’s Congress, the Supreme People’s Procuratorate, the National Health Commission, the Ministry of Human Resources and Social Security. The Opinions has been considered and adopted by the 342^nd meeting of the Civil Trial Adjudication Committee of the SPC, and is promulgated for implementation today.

In the next step, we will continue to conduct in-depth research on major and difficult issues in civil cases relating to the epidemic, conscientiously summarize our trial experience, issue follow-up judicial policies or release typical cases to strengthen the guidance to local courts in a timely manner, and actively respond to society’s concerns.

2. Could you please briefly introduce the contents of the Opinions?

There are ten articles in the Opinions, involving giving full play to judicial service guarantee, accurate applying force majeure rule, proper handling of contractual disputes and labor disputes cases according to law, awarding punitive damages, suspension of the limitation of action and extension of the time limit of litigation, and strengthening legal aid and supports to enterprises. To sum up, it covers mainly four aspects:

The first is the emphasis on the importance of diversified dispute resolution. The impact of the epidemic can be found in almost every aspect of the economy and the society, especially on various civil and commercial activities. In order to effectively protect the legitimate rights and interests of the parties affected by the epidemic, the Opinions requires that the judicial work of the people’s courts must be extended to the sources of disputes, which indicates that courts should actively participate in the governance of sources of disputes, insist on placing the alternative dispute resolution mechanism at the forefront, and fully emphasize the role of mediation, so as to properly resolve various disputes arising from the epidemic. For civil cases that enter into the litigation procedure, the laws must be accurately applied, the interests of all parties should be balanced, and the decisions should be made in accordance with the law to ensure good legal and social effects.

The second is the clarification and elaboration of the rules related to force majeure. The society is generally concerned about the issue of force majeure. Based on the legislative body’s definition of the legal nature of the epidemic prevention and control, the Opinions further clarifies the characterization of the epidemic or epidemic prevention and control measures at the level of civil laws application, stipulates the application of force majeure rule in relevant civil cases, especially in cases related to contractual disputes, and emphasizes that it is necessary to apply the rules in accordance with the law and to avoid abuse of it in order to actively encourage trade and minimize the impacts on the normal economic order.

The third is the protection of the rights of workers and consumers. In order to protect the lawful rights and interests of workers, including fair employment, the Opinions proposes that the people’s courts will not support the employer’s request to terminate the employment relationship merely on the ground that the employee is a confirmed case of COVID-19, a suspected case of COVID-19, an asymptomatic confirmed case of COVID-19, a legally quarantined person or that the employee comes from a region with a relatively severe epidemic. In order to protect the legitimate rights and interests of consumers, the Opinions clearly states that the people’s courts shall support a consumer’s claim for punitive damages when such a claim is made in accordance with relevant laws and regulations.

The fourth is the protection of the interests related to limitation period and litigation rights according to law. The epidemic or epidemic prevention and control measures may exert certain impacts on the interests related to limitation period and litigation rights. In order to effectively protect relevant substantive and procedural rights of the parties, the Opinions clearly stipulates the suspension of the limitation period and the extension of the time limit for litigation according to law.

In addition, the Opinions also specifically stipulates the matters of ensuring the unified application of law in civil cases related to the epidemic, and clearly requires that the functions of the professional judges’ meeting and adjudication committee should be fully utilized.

3. According to the Opinions, what are the specific requirements for the application of force majeure rule?

The application of force majeure is the top priority of the Opinions. It is of great significance to correctly understand the impacts of the epidemic or epidemic prevention and control measures on civil legal relationships, especially on performance of contract, and apply force majeure rule accurately for properly hearing civil cases related to the epidemic according to law, for safeguarding the legitimate rights and interests of the parties, and for maintaining the order of trade and society. Based on the viewpoints of relevant parties, the academic, and practice experience, the Opinions makes clear that the epidemic or epidemic prevention and control measures can be considered as force majeure event. In terms of specific application, the Opinions emphasizes on making full use of existing laws and regulations to provide clear guidelines for properly handling civil cases related to the epidemic, especially on performance of the contract, and also to set up a “firewall” against the abuse of force majeure rule.

The first is the insistence on the principle of encouraging trade. The principle of encouraging trade in the Contract Law should be applied consistently and specific to the impact of the epidemic or epidemic prevention and control measures on the performance of contract, in order to minimize the damages to the parties and the impacts on market order, and assist and promote the resumption of work and production as well as economic and social development. For this reason, the Opinions describes that a party’s request to terminate the contract on grounds of difficulties in performing the contract will not be supported by the people’s courts. When it is possible to continue to perform the contract, the people’s courts shall earnestly strengthen mediation and actively guide the parties to continue to perform the contract. At the same time, the Opinions differentiates the modification and termination of contract. If it is possible to modify the contract, the parties are encouraged not to terminate the contract. When it is obviously unfair for one party to continue to perform the contract, and that party requests amendments to the terms of contract, such as performance period, performance method, payment amount, etc., the people’s courts shall make a decision on a case-by-case basis. When the purpose of the contract cannot be realized as a result of the epidemic or the epidemic prevention and control measures, the people’s courts will not support the request to terminate the contract. In addition, Article 3 of the Opinions also states the factors that can be taken into consideration when determining whether the continued performance of the contract is possible, and encourages the performance of the contract as much as possible.

The second is the emphasis on the priority of parties’ agreement. This is the embodiment of the principle of party autonomy in the contract law. On the one hand, the parties can agree on the exemption of liability or modification or termination of the contract in the case of force majeure. As long as the agreement does not violate the mandatory laws or public order and good customs, it should be respected. On the other hand, when disputes occur, the parties are encouraged to renegotiate. The function of mediation should be given play to in the dispute resolution. In terms of legal consequences, after the parties agree to modify the contract, they should perform the modified contract and will not be supported by the people’s courts if they still claim for partial or full exemption of liabilities.

The third is the application of law in a strict manner. Force majeure, as an exemption prescribed by law, accurately applied can be conducive to reducing the burdens on the parties, which also keeps in line with the principle of fairness. However, abuse of it may lead to great damages to the order of trade. Therefore, the application of force majeure must be carried out in strict accordance with the law. It shall only be applied when it should be applied. In the specific application, firstly, it is necessary to accurately understand the constitutive elements of force majeure. When “the constitutive elements of force majeure are complete”, force majeure shall be applied. Secondly, it is necessary to accurately understand the relationship between lex specialis and lex generalis. In addition to the General Provisions of Civil Law and the Contract Law, where other laws and administrative regulations have special provisions on force majeure, such provisions shall prevail. Thirdly, it is necessary to accurately understand the causation and causative potency between the epidemic and the inability to perform the contract, and to take a comprehensive consideration of the impact of the epidemic on different regions, industries, and cases. Fourthly, it is necessary to accurately understand whether the parties have attributable causes. For instance, it should be determined when the contractual obligations cannot be fulfilled due to the epidemic, whether one party has fulfilled its obligation of timely notification, and whether the other party has taken necessary measures to prevent further losses. Fifthly, it is necessary to accurately understand the conditions for termination and modification of contract, and to strictly apply the statutory reasons for contract termination.

The fourth is the clarification of the burden of proof. In order to properly try civil cases elated to epidemic in accordance with law, the rules of burden of proof must be used accurately. The Opinions requires that the party who claims that the force majeure rule should be applied and the liability should be exempted partly or wholly shall bear the burden of proof to prove the fact that the inability to partly or fully perform its civil obligations is caused by the force majeure event. It further stipulates that if a party who fails to perform its contractual obligations due to the epidemic or the epidemic prevention and control measures and claims that it has fulfilled the obligation of timely notification shall bear the corresponding burden of proof.

4. What kind of protection does the Opinions provide for the rights and interests of workers and consumer, and to the micro, small, and medium-sized enterprises?

From the perspectives of the current situation of epidemic prevention and control and the overall landscape of economic and social development, he Opinions not only emphasizes the importance of equal protection according to law, but also specifically stipulates the protection of the rights and interests of workers and consumers, and the assistance to micro, small, and medium-sized enterprises.

In terms of the protection of workers’ rights and interests, laws have stipulated the protection of workers’ right to fair employment and prohibition of employment discrimination. On this basis, the Opinions makes clear that the people’s courts will not support the employer’s request to terminate the employment relationship merely on the ground that the employee is a confirmed case of COVID-19, a suspected case of COVID-19, an asymptomatic confirmed case of COVID-19, a legally quarantined person or that the employee comes from a region with a relatively severe epidemic. At the same time, regarding the handling of related labor dispute cases, “the Opinions requires the people’s courts shall correctly understand and apply the policies formulated by the relevant administrative departments of the State Council and the provincial people’s governments on proper handling of labor relationships during the period of epidemic prevention and control, and effectively strengthen the protection of workers’ legal rights including wages and benefits.

In terms of the protection of consumers’ rights and interests, the Opinions requires the people’s courts at all levels to award the punitive damages in accordance with law. Manufacture and selling fake or poor quality masks, goggles, protective clothing, disinfectant and other epidemic prevention items, as well as foods and medicines shall be severely published so as to maintain the social and market order and protect the legitimate rights and interests of the people.

In terms of the judicial protection of micro, small and medium-sized enterprises, the Opinions emphasizes that for enterprises, especially micro, small and medium-sized enterprises, that have been in trouble due to the impact of the epidemic, flexible property preservation measures can be adopted in litigation. For example, under the premise of protecting the rights of applicants, a “flexible sequestration measure” would be more appropriate than a “fixed sequestration measure”, as it effectively reduces the impacts on the production and operation of enterprises in financial difficulties. For enterprises which apply for property preservation, third-party guarantee, property preservation liability insurance and other flexible methods of property preservation guarantee can be adopted so as to reduce the economic burden on enterprises as much as possible, and help enterprises to resume work and production. In addition to the micro, small and medium-sized enterprises, the Opinions also stipulates that judicial protection and legal aid should be provided for individual businesses in financial difficulties. At the same time, the Opinions also requires that people’s courts should strengthen coordination with the government and relevant departments to support employers to adopt flexible working methods in accordance with laws and regulations during the epidemic prevention and control period.

In addition, the Opinions describes that the people’s courts should enhance legal aid for parties or participants in litigation affected by the epidemic who are in actual financial difficulties. Besides the exemption, reduction and suspension of litigation fee, for participants in litigation who apply for legal aid, timely measures shall be taken based on their applications

5. How to understand the provisions in the Opinions regarding the extension of time limit for litigation?

This issue is also a current concern among litigation participants. Affected by the epidemic, some parties may not be able to complete certain litigation activities within the time period prescribed by law or designated by the people’s courts, such as filing an appeal or applying for a retrial. Expiration of these periods directly affects the parties exercising their litigation rights. To this end, the Opinions specifically specifies the issue of extension of the time limit for litigation during the epidemic. In practice, it is necessary to focus on the following three points.

The first is the extension of the tempus fatale. According to the relevant laws and judicial interpretations, the period of appeal, the period of application for a retrial, the period of filing a third party revocation lawsuit, the period of filing an ex-right revocation lawsuit are tempus fatale. The provisions on suspension, interruption, and extension of the limitation of action do not apply to tempus fatale, but if the time limit expires due to force majeure according to Article 83 of the Civil Procedure Law, the parties may apply for extension of the time limit within ten days after the obstacle is removed. Whether the application would be approved or not shall be decided by the people’s court.

The second is the examination standards. For parties applying for extension of a statutory time period or a time period designated by court, the people’s court shall take into consideration the epidemic situation and the evidence provided by that party before determining whether the extension should be granted or not. For regions where the epidemic is serious, the examination standards can be appropriately relaxed according to the actual situation. As long as the evidence submitted by the parties can prove that the delay is not due to the negligence of the exercise of litigation rights, generally, the applications can be permitted.

The third is about the protection of specific subjects. If the concerned party is a confirmed case of COVID-19, a suspected case of COVID-19, an asymptomatic confirmed case of COVID-19, or a related close contact of a confirmed case of COVID-19, and the time limit for litigation expires during the quarantine period, the people’s courts shall grant the extension of time limit for litigation when an application under the above article has been made by the concerned party.  The related close contacts here include not only those who live, study and work with a confirmed case, suspected case and an asymptomatic case, but also medical personnel who are in close contact with the above three categories.

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*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.