The Office held a press conference on the “Opinion on the Establishment of ‘The Belt and Road’ International Commercial Dispute Settlement Mechanism and Institutions”. [Photo by Zong Chao/China.com.cn]

The State Council Information Office (SCIO) held a news conference at 10:00 on Thursday, 28 June 2018, at the Press Room of the State Council Information Office. Liu Guixiang, a Member of the Supreme People’s Court Adjudication Committee, was invited to introduce the "Opinion on the Establishment of the ‘The Belt and Road’ International Commercial Dispute Settlement Mechanism and Institutions”, and to answer questions from reporters.

Information Office Information Bureau Deputy Director Xiang Yanchun presided over the press conference. [Photo by Zong Chao/China.com.cn]

Xiang Yanchun, Deputy Director of the Information Bureau of SCIO: Good morning, ladies and gentlemen! Welcome to the press conference of the SCIO. Yesterday, the General Office of the State Council published the "Opinions on the Establishment of the ‘The Belt and Road’ International Commercial Dispute Settlement Mechanism and Institutions” (hereinafter the “Opinion”). In order to help everyone better understand the relevant situation, today, we are very pleased to invite Mr. Liu Guixiang, a Member of the Supreme People’s Court Judicial Committee, to brief you on the “Opinions” and to answer your questions. Also attending today’s press conference is Mr. Zhang Yongjian, Director of the Fourth Civil Division of the Supreme People's Court and the Deputy Director of the First Circuit Court of the Supreme People’s Court. I would like to invite Mr. Liu Guixiang to introduce the “Opinion” first.

Liu Guixiang, Member of the Supreme People’s Court Judicial Committee. [Photo by Zong Chao/China.com.cn]

Liu Guixiang, Member of the Supreme People’s Court Judicial Committee: Thank you. Good morning, everyone!

The “Opinion on the Establishment of ‘The Belt and Road’ International Commercial Dispute Settlement Mechanism and Institutions” published by General Office of the State Council, has aroused widespread attention both at home and abroad. I would like to give a brief introduction of the relevant situation of the “Opinion” and the implementation of the “Opinion” by the Supreme People's Court.

In 2013, President Xi Jinping initiated the Belt and Road Initiative. The “Belt and Road” carries forward the road with the spirit of the ancient silk road of cooperation and win-win, and is a road that promotes the creation and implementation of a Community with a Shared Future for Humanity. Over the past five years, the joint construction of the "Belt and Road" has gradually changed from initiative to action, from concept to practice, has already had a positive effect on over 140 countries and regions, and has forcefully promoted the facilitation and liberalization of world trade and investment. The construction of the “Belt and Road” relates to a large number of transnational commercial activities, with the deepening of the Initiative, it is very important to create a stable and predictable business environment under the rule of law for the construction of the “Belt and Road”.

Against this background, in the first half of 2017, the Supreme People's Court drafted the first draft of the "Opinion" on the basis of full investigations and discussions. After repeatedly soliciting the opinions of the central and local departments concerned, the Supreme People's Court reached a consensus through repeated communication and consultation. After several revisions, the draft was submitted to the Leading Group for Deepening Overall Reform of the 19th CPC Central Committee (hereinafter as “the Leading Group for Deepening Overall Reform”) for examination and approval by the CPC Political Legal Committee. On January 23, 2018, President Xi Jinping himself chaired the meeting of the Leading Group for Deepening Overall Reform, which considered and adopted the “Opinion”. The “Opinion” is the first important document for the reform and innovation of International Commercial Dispute Settlement Mechanism and Institutions. It establishes the basic principle, concrete scheme and organizational guarantee for establishing the “Belt and Road” International Commercial Dispute Settlement Mechanism and Institutions. It is of great practical significance and far-reaching historical significance for the creation of fair, just, specialized, efficient, transparent, convenient and low-cost international commercial dispute resolution mechanism, the continuous optimization of the “Belt and Road” business environment under the rule of law, and the construction of a new platform for international legal cooperation.

In the past month, the Supreme people's Court has basically completed all preparatory work for the “Belt and Road” International Commercial Dispute Settlement Mechanism and Institutions in accordance with the requirements of the “Opinion”. I would like to elaborate on three specific points:

The first point is the establishment of International Commercial Court. The “Opinion” calls for the Supreme People's Court to establish the First International Commercial Court in Shenzhen, Guangdong and the Second International Commercial Court in Xi’an, Shaanxi. 

According to the working arrangements, the International Commercial Court will be officially inaugurated at the end of June. International Commercial Courts will primarily accept international commercial disputes that arise between equal commercial entities, where the parties choose the jurisdiction of the International Commercial Courts, and the judgment of the first instance shall be final in accordance with the law. A few days ago, the Adjudication Committee of the Supreme People's Court considered and adopted the judicial interpretation “Provisions of the Supreme People’s Court on Several Issues Regarding the Establishment of the International Commercial Court”, defining the scope of cases to be heard by national commercial courts and the relevant contents of the trial mechanism.

The second point is about the tripartite dispute settlement mechanism. In order to satisfy the practical demands of the parties for diversified dispute resolution, according to the wishes of the parties, the International Commercial Court may entrust the members of the International Commercial Expert Committee and the international commercial mediation institutions to mediate international commercial disputes, fully making use of mediation for dispute resolution. Qualified domestic arbitration institutions with good international reputation should be supported by the International Commercial Court to provide international commercial arbitration concerning the “Belt and Road”. Our People’s Court will provide judicial support according to law for international commercial arbitration and mediation in the form of property preservation and evidence preservation, etc. The International Commercial Court guides and supports the parties to adopt a diversified dispute resolution mechanism to promote the establishment of a diversified dispute resolution mechanism collaborating litigation, mediation, and arbitration.

The third point is about the International Commercial Expert Committee. The International Commercial Expert Committee is a major institutional innovation of the “Opinion”. The Committee members to be selected include experts and scholars from China and countries along the route of the "Belt and Road". They should come from different legal systems, countries and regions, and be an international, representative, neutral and professional committee. The expert committee members selected should have a solid foundation in the fields of international trade law, international investment law and fields, and their prestige in judicial and arbitration practice should be generally recognized. An expert committee member may accept authorizations from the International Commercial Court; preside over mediations; interpret rules governing international commercial transactions and provide expert advice on the identification and application of extraterritorial laws. The Supreme People's Court is researching the formulation of the work rules for the Expert Committee.

In addition, the “Opinion” embodies three distinct characteristics: first, upholding the principle and concept of “Discussion, Cooperation and Sharing”. The International Commercial Dispute Settlement Mechanism highlights the inclusive and openness of internationalization; second, upholding the principle and concept of party autonomy, the method to resolve and the applicable law of commercial disputes shall be decided by party autonomy; third, upholding the principle and concept of openness, justice and efficiency. The dispute settlement mechanism shall fully reflect a high degree of openness and transparency, and promote fairness and justice as well as reflecting  efficiency, convenience and low-cost.

Next, my colleagues and I would like to answer your questions.

Xi Yanchun: Thanks for Mr. Liu Guixiang’s introduction. Now we are entering into the Q&A session. Please inform us which news organization you belong to before asking questions. 

Reporter from China Radio International: Can you give us a specific introduction of the scope of the cases before the International Commercial Court and how to define international commercial cases?

Liu Guixiang: According to the judicial interpretation that we are about to issue soon, the scope of cases accepted by the International Commercial Court mainly includes four categories: first, the first instance international commercial cases over which parties have chosen the jurisdiction of the Supreme People’s Court according to Article 34 of the Civil Procedure Law, with an amount of subject matter in dispute over 300,000,000 Chinese Yuan; second, the first instance international commercial cases over which high people’s courts have jurisdiction but which they consider should be tried by the Supreme People’s Court and for which approval has been obtained; third, the first instance international commercial cases that have a significant impact on the entire country; fourth, within the framework of the International Commercial Dispute Settlement Mechanism, applications for property preservation, setting aside or enforcement of international commercial arbitral awards in arbitration cases. 

The reporter asked how to define international commercial cases. There are two conditions in the definition: firstly, the international commercial cases are civil and commercial disputes between equal entities; the second condition is that these cases should have foreign elements. For example, one of the parties is a foreigner, a stateless person, a foreign enterprise or other organization, or one of the parties has a habitual residence outside the territory of the People’s Republic of China, or the subject matter in dispute is outside the territory of the People’s Republic of China. In addition, the commercial cases involve foreign elements such as legal facts that create, modify, or terminate the commercial relationship arises outside the territory of the People’s Republic of China also can be determined to be international commercial cases. One point that we would like to make clear to all the reporters in particular is that, we have excluded two other types of cases: the trade or investment disputes between countries, and investment disputes between the host country and the investor. These two categories are settled in accordance with existing international dispute settlement rules.

Reporter from Xinhua News: would you please give us a detailed briefing on the International Commercial Expert Committee, including how the expert committees will be selected, and what is the working mechanism of this committee?

Liu Guixiang: may I ask Judge Zhang Yongjian to reply?

Zhang Yongjian, Diretor of the Fourth Civil Division of the Supreme People's Court and Deputy Director of the First Circuit Court of the Supreme People’s Court. [Photo by Zong Chao/China.com.cn]

Zhang Yongjian, Director of the Fourth Civil Division of the Supreme People’s Court and Deputy Director of First Circuit Court of the Supreme People’s Court of China said: let me answer this question. In accordance with the requirements of the “Opinion”, the Supreme People's Court shall take the lead in the formation of the International Commercial Expert(s) Committee. The Committee of International Commercial experts has the following characteristics:

First, professionalism. The members of the Committee include a number of scholars and experts from China and other countries, with considerable proficiency in relevant legal fields and international and national laws, especially the laws related to investment and trade.

Second, universal representativeness. Experts shall come from different legal systems, countries and regions, which shows a universal representativeness. In addition, the work of expert committee has a strong discipline. The Supreme People's Court is formulating the work rules for expert committees, including selection conditions and working procedures, in accordance with the requirements of the "Opinion". After the establishment of the Committee, its duties include providing expert advice, relevant legal advice, information regarding international law or the law of the relevant jurisdiction, as well as foreign law determination opinion. Another important duty of the Expert Committee is to accept the authorization to mediate in relevant cases from the International Commercial Court based on the consent of the parties. Therefore, the Committee has a number of duties. Thank you.

Reporter from Hong Kong Cable TV: did you just mention that the International Commercial Court will apply the laws of different jurisdictions according to the choice of the parties’ mutual consent, or will it only be the law of the countries along the route of the "Belt and Road"? Maybe an American company is involved in the "Belt and Road" investment, it wants to choose American law to resolve disputes, how to protect its rights under this circumstance? Does the Expert Committee include people from other countries other than those along the route of "Belt and Road"? Moreover, how to ensure the neutrality of the Expert Committee and how to convince them that it will not favour China's interests?

Zhang Yongjian: The International Commercial Expert Committee has universal representativeness. Judging from the preliminary selection list, it includes candidates from a number of countries, which does not rule out countries such as the United States, as mentioned by the reporter. In terms of the choice of law, both General Principles of The Civil Law of The People's Republic of China and the Law on the Application of the Law Applicable to Foreign-related Civil Relations of the People’s Republic of China have very clear stipulations. The law chosen by the parties is the law that should be applied in dealing with relevant cases. As long as the choice of the parties conforms to the provisions of the law, the application of the relevant foreign law shall not be excluded.

Liu Guixiang: Moreover, when it comes to the application of foreign law, no matter which country's law, the principle of party autonomy is respected. If a certain law could be chosen to be the applicable law according to the Law on the Application of the Law Applicable to Foreign-related Civil Relations of the People’s Republic of China, we should show respect to the choice of the parties. Besides, in settlement of international commercial disputes, the court should find the chosen foreign law when it is chosen by the parties concerned as the applicable law, so as to apply the foreign law correctly.

Reporter from China Daily: we want to find out exactly what kind of mechanism is the International Commercial Dispute Settlement Mechanism that has just been mentioned. How does it work?

Liu Guixiang: I would like to briefly introduce this dispute settlement mechanism. In fact, this dispute settlement mechanism integrates mediation, arbitration, litigation and other diversified dispute resolution methods into one platform, which can offer the parties more options to resolve their disputes in diversified ways. The parties can choose to bring the case to the International Commercial Court, to go to an arbitral institution to settle disputes based on their own wishes according to their agreements or choose to resolve disputes through mediation. When the International Commercial Court is chosen, it means that the dispute will be settled in a time-saving, cost-effective, speedy and convenient way with a final and biding judgment. If the parties choose mediation, the International Commercial Expert Committee or the entrusted relevant international commercial mediation institutions will help to mediate the disputes. When the parties reach a mediation agreement after mediation, the International Commercial Court may issue a conciliation statement or make a judgment according to the contents of that agreement and serve the judgment according to the parties concerned. Once served, the judgment or mediation statement shall enter into force immediately as the binding judgment or mediation statement issued by the Supreme People's Court. Thus, we can see that the mediation is effectively connected with the International Commercial Court. When a party has chosen arbitration, he may, for his convenience, request the International Commercial Court to provide property preservation, evidence preservation, etc. After the arbitral award was made, he can apply to the International Commercial Court for setting aside the award which he considers to be violating relevant laws and regulations, and on the contrary, he can also apply for the award enforcement by the International Commercial Court. In conclusion, the above elements collaborating together form a "one-stop" dispute settlement mechanism.

In order to provide convenience to the parties through effective collaboration, we have adopted specific working methods. For example, the arbitration institutions and the mediation institutions may set up offices in the seat of International Commercial Court to jointly provide convenience to the parties. We have also established an information-working platform through which the parties can exchange relevant evidence, etc. The International Commercial Court can even provide litigation convenience to parties by supporting electronic service of process, court hearings, etc. through the information platform, which would save litigation time, shorten the period of litigation, so as to achieve convenience, speed and low-cost effect.

Reporter from Shenzhen TV: this time the Supreme People's Court has made two important decisions. One is to set up the First International Commercial Court in Shenzhen and the other is to set up the Second International Commercial Court in Xi'an. I would like to ask Judge Liu, what is the background behind the decision this time? In addition, what are the reasons for choosing these two cities? How will the International Commercial Courts of these two cities further operate?

Zhang Yongjian: let me answer this question. According to the “Opinion”, the Supreme People's Court has set up the First International Commercial Court in Shenzhen and the Second International Commercial Court in Xi'an. Shenzhen has a special status: it neighbors Hong Kong and Macao and takes a cutting edge position in China’s Reform and Opening Policy. It means the number of foreign-related cases is accordingly large in Shenzhen and the whole Guangdong-Hong Kong-Macau Greater Bay Area. Besides, Shenzhen is the important economic supporting point of the “Belt and Road” Maritime Silk Road. Due to the above considerations, the First International Commercial Court was decided to be set up Shenzhen. Xi'an is one of the starting points of the ancient Silk Road. From the point of view of data and statistics, the number of the economic activities radiating from Xi’an to Central and Eastern Europe is increasing, which means the number of relevant disputes and cases is accordingly increasing. For that reason, the Second International Commercial Court was set up in Xi'an.

According to the Judicial Interpretation just adopted, the operation of the International Commercial Court will be carried out through a diversified dispute settlement mechanism platform introduced by Mr. Liu just now. Thank you. 

Reporter from China Global Television Network (CGTN): many foreign media have expressed doubts about China's intention to establish the "Belt and Road" dispute settlement institutions, saying it is challenging the existing international mediation institutions and is intended to replace them. What’s your opinion? In addition, how can these dispute settlement institutions ensure impartiality and fairness to all participating States?

Liu Guixiang: With the increasing number of global trade and international commercial activities at present, the number of international commercial disputes is accordingly increasing. What the equal entities to these disputes want is that their disputes can be settled as soon as possible. The dispute settlement mechanism we set up is mainly for constructing a platform to provide speedy and convenient dispute resolutions to the parties. As a matter of fact, many countries are also working in this field. For example, Singapore, Kazakhstan, the United Arab Emirates and other countries have set up institutions to resolve international commercial disputes. Our dispute settlement mechanism is a member of this big family, and is not in conflict with the existing international mediation institutions. As the number of international commercial disputes grows, more institutions are needed to resolve them, and our dispute settlement mechanism also meets this demand.

On the other hand, even though we have set up such a mechanism, we still need to respect and support the existing institutions for dispute settlement. For example, the relevant statements or legal instruments issued by those institutions should be recognized and enforced in China in a timely manner according to the provisions of international treaties.

Xi Yanchun: please continue to ask questions if you have any other concerns.

Reporter from Lianhe Zaobao, Singapore: there are two questions: first, in the past five years, what are the main cross-border trade and investment disputes between the enterprises involved in the construction of the “Belt and Road”? Second, if the “going-out” Chinese enterprises had any commercial disputes in Southeast Asian countries, has any consideration been given to the introduction of third parties including Singapore to participate in the mediation of commercial disputes? Thank you.

Liu Guixiang: in view of the dispute settlement mechanism, including question whether there should be a third-party mediation of international commercial disputes, in fact, it has a series of measures and mechanisms to deal with this question. On one hand, the experts and scholars as the members of International Commercial Expert Committee from different countries and regions can be chosen to preside over the mediation. On the other hand, as far as I know, many arbitrators of international arbitration institutions are from China and other countries, and can be chosen in dispute resolution. Such measures would be sufficient to ensure the participation of relevant experts, scholars or individuals from third-party States in the activities of international commercial mediation. Thank you.

The scene of the press conference. [Photo by Zong Chao/China.com.cn]

Xi Yanchun: do you still have any concerns? If not, this is the end of today's press conference, thank you again to the two presenters, and thank you all for coming!

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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.