Editor's Note: The Third Seminar of the International Commercial Expert Committee of the Supreme People's Court and Reappointment Ceremony of the First Group of Expert Members was held successfully on Augest 25, 2022. Over 40 experts from more than 20 countries and regions focused on the theme of the Development, Challenges and Countermeasures of Cross-Border Commercial Disputes during the seminar. Extensive and in-depth discussions were held within the framework of four specific issues. The texts of speeches delivered by the participants would be posted on the CICC's website. 

ADVICES ON CHINESE COURTS HOW TO USE PROFESSIONAL INSTITUTIONS TO ASCERTAIN FOREIGN LAW

XIAO Yongping* and QIU Nianxuan**

Abstract: Under the background of the Belt and Road Initiative, perfecting the mechanism of the proof of foreign law in China is of great significance to promote international dispute settlement. Through studying the judgments of Chinese courts using the institution rendering law finding services to identify foreign law, this paper finds that there are divergences of understanding of the criteria for determining the admissibility of the institution rendering law finding services, the wrong division of responsibility for the burden of services by the institution rendering law finding services, and the lack of interpretation of the adjudication instruments in practice. In this regard, some suggestions are made as follows: Firstly, to determine the admissible of foreign law's findings by clarifying the nature of the different kinds of institution and their coordinate functions. Secondly, to adhere to the principle of uniformity of rights and responsibilities in determining the duty to prove foreign law, to refer to the appraisal fee to share the foreign law identification fee between the parties. Finally, to make it clear that the finding of foreign law may not replace the judge's interpretation and reasoning, and the judgments need to record all foreign law finding, analysis and reasoning processes.

Key words: Institution Rendering Law Finding Services, Admissibility, Fees of the prove of the foreign law, Analysis and Reasoning in Judgments

The joint construction of the Belt and Road Initiative (BRI) has promoted the vigorous development of cross-border trade and commercial activities, creating opportunities for the economic development of China and the countries along the Belt and Road. With the development of foreign-related civil and commercial exchanges, the number of foreign-related disputes is increasing day by day.[1] The proof of foreign law is the premise and basis for the correct application of foreign law. Establishing an effective mechanism to prove foreign law is conducive to enhancing the credibility of Chinese courts. Proof by professional institutions is a new way to prove foreign law in foreign-related litigations in China in recent years. At present, the academic community believes that the proof of foreign law by professional institutions is highly recommended, and suggest courts at all levels pay attention to and actively use this method.[2] However, the academic community has not conducted in-depth research on the system of proof of foreign law by professional institutions. In particular, the empirical research regarding professional institutions in foreign-related trials is still insufficient. This article uses empirical research to retrieve the cases of Chinese courts using professional institutions to prove foreign law through websites such as the China Judgment Document Site, PKULaw, Wolters Kluwer Law Database, etc. and summarizes the general picture of professional institutions participating in the proof of foreign law in the process of foreign-related litigations, identifying problems in practice and making corresponding suggestions for improvement.

I. Choice of the Samples and Statistics of the Cases

The research samples of this article come from the China Judgment Document Site, PKULaw, and Wolters Kluwer Law Database. Keywords such as "Center for Proof of Foreign Law", "Institution for Proof of Foreign Law", "Professional Institution for Proof", "ECUPL Center for Proof of Foreign Law", "WHU Center of Ascertainment of Foreign Law", and "The Foreign Law Ascertainment and Research Center of CUPL" were searched, and all searched cases were reviewed. As of August 31, 2021, a total of 45 judgments from 23 cases of various types involving Proof by professional institutions were retrieved.[3]

This article adopts the empirical research method, combining the typology method and analyses of typical cases. The above-mentioned 23 cases were studied case by case, and statistical analysis was carried out according to the applicable case types, the introduction channels of professional institutions, and the specific application of proof of foreign law results. The findings are as follows.

1. Types of the cases

There is a wide range of cases in which Chinese courts used the professional institutions to prove foreign law, including maritime disputes, equity transfer disputes, sales contract disputes, testamentary inheritance disputes, tort liability disputes, among other types of cases. As shown in Figure 1, maritime disputes account for the largest proportion. Seven cases involve professional institutions to ascertain foreign law, accounting for 31% of the total, which reflects the difficulty of handling maritime disputes and the necessity in practice for the court to seek assistance from professional institutions in proof of foreign law. In addition, equity transfer disputes account for 22%, and sales contract disputes account for 13%. The three mentioned types of cases account for 2/3 of the total, and other cases that used professional institutions to prove foreign law are in smaller proportion.

Figure 1: Proportion of Different Types of Cases

2. Types of professional institutions

Types of involvement of professional institutions refer to how these institutions participate in proof of foreign law in practice, and their involvement can be primarily classified into three types: court-entrusted, court-entrusted at the party's request, and party-entrusted. As shown in Figure 2, in most of the Proof cases where professional institutions are involved, the institutions are court-entrusted. Only two of the remaining cases reveal institutions entrusted by the party concerned, leaving all other cases with institutions entrusted by the court at the party's request. Obviously, the vast majority of professional institutions involved in the proof of foreign laws are entrusted by the court, whether directly or at the party's request.

Figure 2: Number of cases under different types of professional institution involvement (unit: copies)

3. Adoption of the proof results of foreign laws

After professional institutions ascertain the relevant foreign laws, a written report, such as a foreign law proof opinion or proof report, will be delivered to the court to determine the exact content of the foreign law concerned in the case. In practice, there are four major types of judicial adoption of the proof opinion: first, where there is no objection from both parties concerned, the court adopts the professional institution's proof opinion. Second, where one party concerned raises an objection, the court chooses to adopt the professional institution's proof opinion. Third, where the judgment does not contain whether an objection is raised, the court adopts the professional institution's proof opinion. Fourth, the court partly adopts the proof opinion. As shown in Figure 3, in most cases, the court fully adopts the proof opinions given by professional institutions, leaving only one case in which the court merely partly adopts the proof opinion offered by a party-entrusted professional institution. The available data reveals that proof opinions given by court-entrusted professional institutions are generally recognized by the courts.

Figure 3: court's acceptance of foreign law proof opinions (unit: cases)

II. The Drawbacks in Judicial Practice

The involvement of foreign law proof by professional institutions has largely changed the status quo where it is difficult for Chinese courts to ascertain foreign laws in practice and has promoted the reasonable settlement of foreign-related disputes, thus improving both judicial and social effects in general. However, an analysis of the abovementioned judgments reveals that a lack of rules over proof by professional institutions in China has spawned a range of drawbacks, including the vague criteria for determining the admissibility of the opinions of professional institutions, the omission of analysis and reasoning of proof opinions in judgments, and the unclear rules over which party should bear the fees for proof. 

1. Vague criteria for determining the admissibility of professional institutions

The professional institutions are responsible for proof of foreign law in China were established relatively late. As a result, there is no normative document determining the admissibility of the opinions given by these institutions. The China International Commercial Court (CICC) has listed five such institutions on its website: Wuhan University Center of Ascertainment of Foreign Law, ECUPL Center for Proof of Foreign Law, the Foreign Law Ascertainment and Research Center of CUPL, the Supreme People's Court ASEAN Legal Research Base, and BCI & BIMC.[4] The former four institutions were established by universities with a strong research on international law. The BCI & BIMC, formerly known as Benchmark Chambers International, is an independent non-profit organization registered under the Civil Affairs Bureau of Shenzhen Municipality, guided by the Justice Bureau of Shenzhen Municipality. In addition to the above five, there are other institutions, such as "The Belt and Road" Proof of Foreign Law (Southwest) Center, Shanghai Maritime University Center for Proof of Foreign Law, Laws of Taiwan Region Proof Center of the Graduate Institute for Taiwan Studies of Xiamen University, Laws of Countries of the BRI Proof Center, and the Shanghai Oriental Foreign Law Discerning Center, etc. It is not clearly stipulated in the laws of China whether the proof results issued by the above proof institutions are admissible in practice, and whether the proof reports issued by different professional institutions have the same effects in terms of admissibility. Thus, the understanding and practice of the courts of China vary greatly in practice.

For examples, in cases such as the contract dispute between an engineering and technology limited company in Jiangsu, a Hong Kong limited company and an aviation limited company, and the succession dispute between the two Zhous, the parties all challenged the admissibility of the proof opinions made by the lawyers engaged by the other parties. In the case of the Jiangsu engineering and technology company, the defendant argued that the proof report submitted by the plaintiff was not issued by a foreign law proof institution recognized by the Supreme People's Court and thus, could not be confirmed as legitimate. While the Guangzhou Intermediate People's Court referred to the contents of the proof report, it did not give a clear answer to the defendant's challenge that the proof report was not legitimate because it was not issued by a foreign law proof institution recommended by the Supreme People's Court.[5] In the case of the two Zhous, the court directly determined that the lawyer's opinion was not legitimate, and therefore did not accept it.[6] In practice, when faced with objections, all courts decided the proof reports issued by the abovementioned five institutions as admissible. For examples, in the maritime dispute case between Global Fantasy S.A. and a shipping company, when the defendant challenged the admissibility of the report issued by BCI & BIMC, the court explained that "BCI & BIMC is a professional institution recognized by the Supreme People's Court to ascertain the regional laws of Hong Kong, Macau and Taiwan and foreign laws, and therefore, its proof report over the Panama laws shall be considered as an applicable reference in this case."[7] In the civil loan dispute between Chen and Lin and Fang, Shantou Intermediate People's Court of Guangdong Province held that "BCI & BIMC is entrusted to consult Hong Kong legal experts to ascertain the law and issue a proof opinion, and the procedure is in compliance with the law. As one of the five foreign law proof institutions recognized by the CICC, BCI & BIMC is a professional institution recognized by the Supreme People's Court to ascertain the regional laws of Hong Kong, Macau and Taiwan and foreign laws, and its major business is extraterritorial law proof. Therefore, it is a qualified institution."[8]  It can be concluded that the Chinese courts are inconsistent in their understanding of the criteria for the admissibility of foreign law proof institutions. Other than the five institutions recognized by the Supreme People's Court, no statement of admissibility is made for any other institution, even if it is recognized by the courts themselves.

In practice, after a professional institution is entrusted by the court or a party, it will turn to internal or external legal experts to conduct the proof. For example, in the abovementioned maritime dispute between Global Fantasy S.A. and a shipping company, after BCI & BIMC was entrusted, the Center immediately designated a Hong Kong legal expert to conduct the proof. Therefore, proof by professional institutions and by experts is highly relevant. In a broad sense, proof by experts should include proof by professional institutions. The provision of foreign law by Chinese and foreign legal experts is a method of ascertaining that is often used in practice. With their professionalism, independence, and neutrality, experts are the most reliable channels for parties and courts alike to ascertain foreign laws.[9] The interpretation of the law by experts occupies an important position in the common law system. In British judicial practice, expert witnesses are often foreign scholars or legal practitioners who are fluent in English and familiar with laws and practices in the United Kingdom. Most importantly, they can provide persuasive information.[10] The situation in the United States, by contrast, is more flexible and has no set standards. Those who have more knowledge or experience about foreign laws than the judge can provide foreign law Proof.[11] Therefore, the admissibility of the proof by a professional institution should first be measured by the judge using discretionary power. The recommendations of the Supreme People's Court will affect the judge's judgment on the admissibility of the proof by different institutions, but it is not the only factor for consideration. We argues that the court can determine that the proof of a professional institution is highly admissible based on relevant recommendations of the Supreme People's Court, but it cannot thus determine that the legal proof opinions of other organizations or individuals are inadmissible.

2.Who shall bear the professional institutions' fees for foreign law proof

The professional institutions' fees for foreign law proof mainly refer to the service fees charged by institutions in the process of ascertaining foreign laws. For example, in the rules of Benchmark Chambers International & Benchmark International Mediation Center (BCI & BIMC) recommended by CICC, the fees for proof consist of commission fees and service fees for proof. The commission fees are charged per case; the service fees for proof are pre-collected by BCI & BIMC and transferred to the service provider or its designated payee after the proof is completed. The specific amount is determined by the service provider's charging standard.[12] In practice, according to specific circumstances stated in the judgments, service fees often range from tens of thousands of yuan to over 100,000 yuan. For example, in the case of dispute over the contract between a business limited liability company and an industrial joint stock limited company and Jiang, the fees for proof borne by the defendant amounted to 127,000 yuan.[13]

In the Chinese foreign-related judgments, the professional institutions' service fees for foreign law proof are mostly listed by the courts as legal proof fees, service fees for proof, or fees for legal advice. However, the above-mentioned fees are not included in the litigation costs listed in the Measures on the Payment of Litigation Costs of China. There are three ways in practice that courts decide who shall bear the fees for proof: first, both parties shall bear the burden jointly, generally 50% of each; second, the losing party shall bear the burden; third, the courts shall bear the burden.

Theoretically, the fees for proof shall be distributed based on the responsibility for law proof. On the distribution of responsibilities for foreign law proof, there are three main propositions internationally: factual theory, legal theory, and compromise theory. Accordingly, the responsibility for proof of foreign law may be borne by one party, the judge, or both parties depending on different countries.[14] In China, the trial period of foreign-related civil cases heard by the people's courts follows the principle of "taking facts as the basis and laws as the criteria". Both "facts" and "laws" shall be ascertained, and it is the responsibility of the people's courts to correctly apply domestic and foreign laws to judge cases.[15] According to the judicial interpretation of the Supreme People's Court, if the parties concerned do not have an agreement on the application of foreign law, the judge shall bear the main responsibility for proof of foreign law.[16] Proof of foreign law by institutions is one of the ways to ascertain foreign law, and the specific fees shall be first and foremost borne by whom responsible for proof. Therefore, when a court assumes the responsibility for ascertaining foreign law and entrusts a professional institution to ascertain foreign law, the professional institution provides relevant services to help the court to perform its duties, and the court shall bear relevant fees. However, in practice, after entrusting professional institutions, some courts rule that the fees for proof shall be borne by both parties concerned. For example, in the case of dispute over the sales contract between an industrial limited company in Hong Kong and OZ Company, the People's Court of Xuhui District, Shanghai entrusted ECUPL Center for Proof of Foreign Law to ascertain the laws of Hong Kong Special Administrative Region that shall be applied in the case and issue a legal opinion. The fees for Proof were 30,000 yuan. The company in Hongkong and OZ Company each paid half of it in advance. It was later ruled that fees for proof of this case were 30,000 yuan and shall be borne by OZ Company.[17] In this case, the company in Hongkong and OZ Company did not make an agreement on the application of foreign law. In accordance with Article 10 of the Law of the People's Republic of China on Choice of Law for Foreign-related Civil Relationships, the People's Court of Xuhui District, Shanghai shall bear the responsibility for foreign law proof. The court may request the professional institution in this case, ECUPL Center for Proof of Foreign Law, to issue a relevant legal opinion, assisting the court in fulfilling its obligation in proof of foreign law. Since the People's Court of Xuhui District was responsible for proof of foreign law in this case, and East China University of Political Science and Law accepted its entrustment to issue a relevant legal opinion, the fees for proof shall be borne by the People's Court of Xuhui District instead of the parties concerned. In this case, the parties concerned did not entrust proof of foreign law to any institutions, but they had to bear the fees of it. This situation is similar to the case where the court transfers the responsibility for proof to the parties, and it is a situation where the court evades the responsibility for proof of foreign law Similarly, in the case of a dispute over equity transfer between a company and Li, the judgment directly affirmed that "the real estate appraisal and proof of foreign law fall within the scope of the burden of proof of Dongfang Company and Sun Tiangang, and therefore, Dongfang Company and Sun Tiangang shall bear the appraisal fees and the fees for proof pre-paid by themselves".[18] In foreign-related judicial practice in China, the courts of China often transfer the responsibility for proof of foreign law to the parties concerned.[19] Professional institutions are helpful in the proof of foreign law but the courts should be prevented from requiring the parties concerned to bear the fees for proof when the proof is in their purview.

Article 10 of Law of the People's Republic of China on Choice of Law for Foreign-related Civil Relationships stipulates that if the parties concerned choose the applicable foreign laws by agreement, they shall provide the laws of this country, that is, the parties undertake the obligation to ascertain foreign laws. Under such circumstances, the parties can either ascertain foreign laws independently or seek professional institutions for assistance. In practice, the parties can seek assistance directly from professional institutions and legal experts to ascertain foreign laws; the court can also entrust foreign law proof to professional institutions on behalf of the parties. For example, in the equity transfer dispute between an asset management company and Chen, the parties chose the law of the British Virgin Islands as the applicable law to handle disputes. The court entrusted the ECUPL Center For Proof of Foreign Law to ascertain relevant laws. The fees were borne jointly by the plaintiff and the defendant.[20] In practice, even if the applicable foreign laws are chosen by the two parties by agreement, there are still situations where the court bears the fees of foreign law proof. In the dispute between Seaco Global Limited and Hanjin Shipping Co, Ltd over the lease contract of shipping containers, the plaintiff and the defendant chose to apply English law by agreement. The plaintiff entrusted the Tianjin Maritime Court to ascertain English law with the help of The Foreign Law Ascertainment and Research Center of CUPL .[21] Since the whole process of the trial showed no trace of the participation of the parties concerned, and the civil judgment of the case did not specify how the fees shall be shared by the parties, it was presumed that the court paid the relevant costs.

In judicial practice, some courts simply list the expenses incurred by entrusting professional institutions to ascertain service fees or consulting fees,[22] and rule that both parties or the losing party should pay for the expenses. Such practice is overly arbitrary and does not comply with China's relevant regulations on litigation costs. It should be noted that the proof fees are different from litigation costs. Litigation costs refer to the relevant fees that the parties should pay to the people's court, which do not include the fees for proof[23] since it is a professional institution that provides ascertaining services. The proof fees paid by the parties or the court based on the entrustment contractual relationship do not fall into the category of litigation costs. According to the existing regulations, litigation costs are in principle borne by the losing party.[24] Only when a fee is identified as part of litigation costs can the court determine who bears it according to the judgment. Therefore, it is inappropriate to directly rule that the losing party shall bear the proof fees.

Faced with the aforementioned predicament, some courts refer to and apply Article 29 of the Measures on the Payment of Litigation Costs to determine who shall bear the proof fees. In the maritime dispute between Global Fantasy S.A and Tortuga Navigation S.A,[25] Wuhan Maritime Court entrusted Shenzhen Benchmark Chambers International & Benchmark International Mediation Center (formerly known as Benchmark Chambers International) to assist in ascertaining the laws of the Republic of Panama in regard to the determination of ship collision liability, the basic principles of compensation for damages, the scope of compensation for damages, etc. On behalf of the plaintiff, Shanghai Wintell & Co Law Firm transferred 43,000 yuan and 27,000 yuan respectively to Benchmark Chambers International & Benchmark International Mediation Center. In terms of who bears the Proof fees in this case, Wuhan Maritime Court held that there is no legal provision relevant to the notarization and authentication fee, law proof fees, and lawyer fees in the Civil Procedure Law of the People's Republic of China and the Measures on the Payment of Litigation Costs. The dispute in this case was caused by the collision of ships. The above-mentioned litigation costs have occurred. Global Fantasy S.A actively claimed its rights and had no fault. Therefore, Tortuga Navigation S.A shall assume all the responsibilities for the collision. Global Fantasy S.A claims that Tortuga Navigation S.A shall bear the notarization and authentication fees, the proof service fees, and the lawyer fees, which do not exceed the actual expenses and remain within the necessary and reasonable scope. Given that both parties are foreign entities and the claim of Global Fantasy S.A is also in line with relevant international practices, the court thus referred to Article 29 of the Measures on the Payment of Litigation Costs, "The litigation costs shall be borne by the losing party, unless the winning party bears the costs at his free will. Where the party concerned partially wins the lawsuit and partially loses it, the people's court may, at its discretion, decide on the amounts of litigation costs to be borne by the parties respectively". Finally, the court ruled that the notarization and authentication fees, the proof service fees, and the lawyer fees shall be shared by Global Fantasy S.A and Tortuga Navigation S.A in proportion to their success in the case. This reference and application practice is reasonable in a sense, but it is not the best approach. Litigation costs are quite different from fees for proof. Litigation costs are paid to ensure the normal trial of the case, whereas the fees for proof are to help the judge or the parties to ascertain foreign laws. Unlike litigation costs which are administrative costs, fees for proof are voluntary and contractual and dispensable if the judge or the parties know the foreign law. Therefore, reference to the Measures on the Payment of Litigation Costs is not an ideal way to determine the fees for proof.

4. Lack of analysis and reasoning in the judgments

A judgment is the final public product formed when the people's courts exercise judicial power on behalf of the state in determining criminal, civil, administrative, and state compensation disputes. As the "final products" of administration of justice, Judgment presents the basis and reasons for the judgment of a case, which asserts the role of adjudication in settling dispute and guiding value.[26] Strengthening analysis and reasoning in judgment is a basic requirement for producing adjudicative instruments and also is necessary for achieving the purpose of the litigation, demonstrating judicial justice, and enhancing judicial credibility.[27] An important part of China's judicial reform is to strengthen analysis and reasoning in the judgments. Guiding Opinions of the Supreme People's Court stipulate that "the judgments shall reason by centering on the application of law, reflect the reasoning process, and achieve clear logic".[28]

In a case where a professional institution is involved in proof of foreign law, the institution will refer to the specific circumstances of the case and the results of the proof to formulate legal opinions, proof reports, and other documents, such documents contain part of the analysis of facts in the case and recommendations on the application of the relevant laws. Legal opinions and proof reports are crucial to the final judgment of the court. Therefore, the specifics of proof opinions should be recorded in the judgments. However, in some cases, the court did not explain their opinions. For examples, in the maritime dispute case between Beijing Fanya Lihua Consulting Co., Ltd. and Wanxiang Supply Chain Management (Shanghai) Co., Ltd., Tianjin Maritime Court entrusted the Foreign Law Proof and Research Center of CUPL to ascertain relevant issues. But the final judgment only presented the proof results without listing the relevant legal provisions. In addition, the court should realize that that legal opinions issued by the proof institutions are only for reference in the trial and cannot replace the judge's analysis and reasoning of the law. But in some judgments, judges made decisions merely based on the roof results without further analysis and reasoning. If the judgment only states that "according to the results on proof of foreign law by the entrusted professional institution, the court approves the results and therefore decides to apply the foreign law, hence the decision is as follows", the judge's adjudicative approach fail to achieve the purposes of the litigation and demonstrate justice. This phenomenon of proof replacing trial has to some extent highlighted the role of proof institutions while undermining the actual reasoning used by the courts.

In fact, proof of foreign law involves two dimensions, that is, the provision of foreign law-related content and the determination of the application of foreign law-related content.[29] The former is the basis, the key, and main content, while the latter is an important part in the process for proof of foreign law. Expert opinion is only an auxiliary method for ascertaining foreign law.[30] It is judges' power and duty to determine the law that shall be applied to a case. The court shall make decisions by applying relevant laws through analysis and reasoning.

III. Suggestions for Improvement

In response to the above-mentioned drawbacks, we put forward the following suggestions for improvement.

1. Clarify the admissibility for proof of foreign law by professional institutions

1.1 Clarify the admissibility for the proof results of different institutions

There shall be no restrictions on foreign law proof institutions or individuals to provide proof services for courts or the parties concerned when they have the knowledge of foreign laws. In practice, proof services of foreign laws are typically based on the entrustment between the parties concerned and the proof institutions. The parties that undertake the responsibility of proof can choose an institution independently. Since there are no restrictive clauses on institutions and experts that offer foreign law proof services in the current legal rules, the court shall respect the proof opinions of different professional institutions and cannot delegitimize the opinions of other institutions. Judges do have the power to decide whether or not to adopt these opinions based on factors such as the logic of the opinions, the authority and social evaluations of the professional institutions, and the authority of the experts. Therefore, the admissibility of the professional opinions of different institutions offering proof of foreign law services shall not only depend on whether they are recommended by the Supreme People's Court, but also depend on multiple factors such as the professional level of professional institutions and the credibility of experts. In order to ensure the quality of proof of foreign law and make the institutions more professional, China should actively expand ways to ascertain foreign laws and promote healthy competition within the legal field.

1.2 Ensure the equivalence of different proof approaches

There is no priority in admissibility as to foreign law Proof opinions obtained through different approaches. Judges can choose legal opinions for references using their own judgment. Generally speaking, opinions from highly specialized ascertaining institutions are more credible than those of individuals, and proof institutions with a long-standing reputation in the field are more credible than those that have never conducted relevant businesses. However, the opinions themselves are not compulsory, and judges are entitled to decide by reference to a certain opinion or to the exclusion of all opinions based on their understanding of the issues in dispute. Generally speaking, the more detailed the foreign law information in a written opinion provided by an expert witness familiar with a certain foreign law, the more credible the opinion is. In particular, the more rigorous and adequate the arguments are, the more thorough the reasoning is, and the clearer the legal basis is, the more likely the report is to be accepted by the judge.[31]

2.Clarify the rules for the sharing of the fees for proof

Clarifying the responsibilities of courts and applicants will help the professional institutions further integrate into the foreign law proof system, further normalize the proof by these organizations, and hence promote the efficient and reasonable settlements of foreign-related disputes.

2.1 Adhere to the principle of unity of power and responsibility to determine the bearer of foreign law ascertaining obligations

The bearer of the fees for foreign law proof shall be determined following the principle of unity of power and responsibility. Article 10 of the Law of the People's Republic of China on Choice of Law for Foreign-related Civil Relationships clearly stipulates that foreign laws applicable to foreign-related civil relations shall be ascertained by the people's court, arbitral authority, or administrative organ. If any party chooses the applicable foreign laws, he shall provide the laws of this country. If foreign laws cannot be ascertained or there are no provisions in the laws of this country, the laws of the People's Republic of China shall apply. In the past, some Chinese courts evaded the obligation to ascertain foreign laws and reduced the corresponding burden, in accordance with the above-mentioned provisions, using the grounds that "foreign laws cannot be ascertained" or "there are no provisions in the laws of the country" to achieve the purpose of applying Chinese laws.[32] With the involvement of professional institutions, the situation where the Law of the People's Republic of China shall directly apply if foreign laws cannot be ascertained will be greatly reduced. When the parties concerned choose to apply foreign law without an agreement, the court shall assume the responsibility to ascertain foreign law. In this context, proof by professional institutions can assist the court in performing the above-mentioned duties. The court and the professional institution constitute the entrustment contractual relationship. The court is entitled to request the professional institution to ascertain foreign law. In this connection, it shall pay the fees for proof which shall not be borne by the parties concerned. Only when they choose to apply foreign laws by agreement, the parties concerned shall assume the responsibility for proof of foreign law. Whether the professional institution is entrusted by the parties or the court at the request of the parties, the parties concerned shall bear the fees for proof.

2.2 With reference to the appraisal fees, the parties concerned shall share the fees for proof of foreign law 

Under the circumstance where the parties concerned choose to apply foreign law by agreement and entrust professional institutions to ascertain foreign law, it is not clearly stipulated in the current laws whether the fees for proof shall be borne by the losing party, the applicant, or any party after negotiation. The aforementioned rules such as the Civil Procedure Law of the People's Republic of China and the Measures on the Payment of Litigation Costs do not include the fees for proof in the scope of litigation costs. It is therefore inappropriate to directly rule that the losing party shall bear them or that the parties concerned shall share them. Some courts choose to apply Article 29 of the Measures on the Payment of Litigation Costs, which actually treats the fees for proof as litigation costs. We believe that it is more reasonable to refer to Article 12 of the Measures on the Payment of Litigation Costs.[33] The expenses of authentication, announcement, and survey are similar to the fees for proof entrusted by the parties concerned and they all serve specific parties concerned, so they are more similar to litigation costs. Moreover, Article 12 of the Measures on the Payment of Litigation Costs is not a closed clause. Authentication, announcement, survey, interpretation, evaluation, and other matters in the process of litigation mostly serve the interests of one party. Judging from the initiation of these measures, most of them are taken by one party on his/her own initiative. Thus, they are more similar to the application of one party for law proof services. Extensive interpretation can be adopted to include the fees for proof into this clause so that the fees shall be borne by the entrusting party.

Some courts hold that the fees for proof are similar to lawyers' fees and thus should be borne by the losing party. In practice, it is still up in the air whether the lawyers' fees must be borne by the losing party. If the contract does not provide the burden of lawyers' fees, the court generally does not support the plaintiff's request for the breaching party to bear these fees.[34] Whether the losing party bears the fees for proof thus remains an open question.

3.Strengthen the analysis and reasoning in the judgment on the opinions for proof of foreign law 

3.1 Clarify that the opinions on proof of foreign law cannot replace judges' analysis and reasoning

The purpose of the analysis and reasoning in judgments is to improve the acceptability of adjudications and achieve the unity of legal effect and social effect by elucidating the process of making a judicial conclusion and the justifications therefor. The opinion of professional institutions on proof of foreign law will cover the basic facts and laws of the case in some cases, in order to enhance admissibility, but such opinion is by no means the same as the court's analysis and reasoning in judgments. Judges have the duty and discretion to decide which law shall be applied. During this process, judges will use logic, explain the facts of a case established by the adjudication and the basis and reasons therefor, demonstrate the objectivity, equity, and accuracy of the establishment of the facts of the case, explain legal principles, and state the law on which the judgment is based and the reasons for the application of the law. Judges should reason by centering on the examination and judgment of evidence and the application of law, reflect the reasoning process, and achieve clear logic, reason in light of claims and disputes taking into account the situation of the trial, and have a definite object in view.

3.2 The judgment should demonstrate the process of using the opinions on proof of foreign law 

The judgment should not only show the decision, but also the process of the judgment. As an important basis for the adjudication, judges shall present the process of using the opinions on proof of foreign law in the judgment as much as possible instead of merely going through the formalities. Specifically, they shall identify the matters entrusted to be ascertained, the process of ascertaining, the content of foreign laws and their interpretations, the results of proof, and the court's acceptance in the judgment.

The proof matters by entrustment are related to the dispute focus of the cases. In practice, there are three major types of entrusted matters. First, the court decides to apply foreign laws after review and submits it to a specialized agency for specific proof. Second, the court summarizes the dispute focus of the case and hands it over to the agency for a solution. Third, the application of the law in the whole case is ascertained by the proof institution. Under the three situations mentioned above, the court should list the specific entrusted matters in the judgment in order to clarify the ascertained content. Explaining the process of ascertaining will enhance objectivity of the judgment. Recording the content of foreign laws and their interpretations is conducive to increasing the persuasiveness of the judgment. The results for proof of foreign law are the expert opinions of the specialized agency on the dispute focus of the case or the results of the application of the law based on its professional knowledge, which constitutes the most important part of the results of the specialized agency and serves as the main reference for the court. Judges should reflect the specific ascertained terms and their connotations in the judgment. The court's adoption is the specific acceptance of the results for proof of foreign law. The court should clarify the reasons for adoption in the judgment and demonstrate the complete adjudicative approach.

IV. Conclusion

Proof of foreign law by professional institutions, as an effective method for proof of foreign law, has been widely applied in practice. The rational use of professional institutions to prove foreign law is of great significance in the refinement of the mechanism for proof of foreign law in China and the improvement of the quality of adjudication in foreign-related cases. At present, Chinese courts have encountered a series of problems such as unclear positioning of the admissibility of professional opinions, the wrong decision of which party to bear the fees for proof, and the lack of interpretation of professional opinions. It is suggested that the courts should improve the relevant rules in the following respects when applying the opinions of professional institutions on proof.

First, make it clear that proof opinions issued by different professional institutions are admissible, and that the degree of admissibility depends on a series of relevant factors, and that the differences in the approaches cannot be used as a reason for priority.

Second, for the sharing of the fees for proof of foreign law in different situations, determine which party must assume the obligation for proof of foreign law based on the principle of unity of power and responsibility. If it is determined that the fees for proof of foreign law are to be shared among the parties concerned, the court shall refer to appraisal fees.

Third, the opinions of professional institutions on proof of foreign law have a great influence over the judgment, but they should not replace the judge's analysis and reasoning in the specific application process. The court should enshrine the ascertained matters, the process of ascertaining, the content of foreign laws and their interpretations, the results of proof, and the court's acceptance.

*XIAO Yongping, Professor and director of Wuhan University Institute of International Law.

**QIU Nianxuan, Master degree candidate of Wuhan University Institute of International Law.

[1] According to the data of the ChinaInternational Commercial Court of the Supreme People’s Court, people’s courts at all levels have concluded over 330,000 cases since 2016. See “The Supreme People’s Court talks about foreign-related commercial and maritime cases: contribute a China’s solution to international dispute settlement.” The International Commercial Court of the Supreme People’s Court. Accessed on August 31, 2021, from http://cicc.court.gov.cn/html/1/218/149/156/2139.html.

[2] See Song Xixiang and Zhu Bairan (2017). A Legal Thinking on Perfecting China’s Mechanism of Proof of Foreign Law under the Belt and Road Initiative. Journal of Shanghai University of Finance and Economics, (04), 94. See Shi Jianping (2016). Proof of Foreign Law: New Thinking in the Context of the Belt and Road Initiative. Theory and Modernization, (06), 99.Li Jianzhong (2019). On Renewing the Regulations on Proof of Foreign Law in China. Science of Law (Journal of Northwest University of Political Science and Law), (01), 133.

[3] See China Judgment Document Network. Accessed on 31 August, 2021, from https://wenshu.court.gov.cn/. PKULaw. Accessed on 31 August, 2021, from http://www.pkulaw.cn/. Wolters Kluwer Law Database. Accessed on 31 August, 2021, from https://law.wkinfo.com.cn/.

[4] See on the website of the International Commercial Court of the Supreme People’s Court Foreign Law Proof Platform.Accessed on June 10, 2021.

[5] See (2017) Yue 01 Min Chu No. 114 Civil Judgment.

[6] See (2019) Hu 01 Min Shen No. 429 Civil Judgment.

[7] See (2017) E 72 Min Chu No. 1562 Civil Judgment.

[8] (2019) Yue 05 Min Zhong No. 1129 Civil Judgment.

[9] See Shi Jianping (2016). Proof of Foreign Law: New Thinking in the Context of the Belt and Road Initiative. Theory and Modernization, (06), 99.

[10] See Richard Fentiman (1998). Foreign Law in English Courts: Pleading, Proof and Choice of Law 192 (1st ed.). Oxford: Oxford University Press.

[11] See John R. Schmertz Jr. (1978). The Establishment of Foreign and International Law in American Courts,Stanford Journal of International Law, 18, 718. Quoted from Xiao Fang (2010). Proof of Foreign Law: A Comparative Study from the Chinese Law Perspective. Beijing: Peking University Press, 95.

[12] In accordance with Article 17 of Rules for Law Proof Services in BCI&BIMC in 2019 (for Trial Implementation), “the fees for Proof charged by the Center consist of commission fees and service fees for Proof. The commission fees are charged per case; the commission fees can increase accordingly if there are difficulties in delivering or contacting or needs to be addressed urgently in the process of foreign law Proof. The service fees for Proof are pre-collected by the Center and transferred to the service provider or its designated payee after the Proof is completed. The specific amount is determined by the service provider’s charging standard. If the Center assists in translation, notarization or other formalities, the relevant fees may be collected separately and settled according to actual expenses.”

[13] See (2018) Yue 0391 Min Chu No. 2921 Civil Judgment.

[14] See Xiao Yongping (2006). On the Proof and Application of Case Law in Common Law Countries. China Legal Science, (05), 115-122. 

[15] See Xiao Yongping (2002). Xiao Yongping on Conflict of Law (2nd ed.). Wuhan: Wuhan University Press, 306.

[16] Article 10 of the Law of the People’s Republic of China on Choice of Law for Foreign-related Civil Relationships: Foreign laws applicable to foreign-related civil relations shall be ascertained by the people’s court, arbitral authority or administrative organ. If any party chooses the applicable foreign laws, he shall provide the laws of this country. If foreign laws can not be ascertained or there are no provisions in the laws of this country, the laws of the People’s Republic of China shall apply.

[17] See (2019) Hu 0104 Min Chu No. 16073 Civil Judgment.

[18] See (2015) Shen Zhong Fa She Wai Zhong Zi No. 1 Civil Judgment. 

[19] Lin Yanping and Huang Yanru (2014). The Reasons for Difficulties in Foreign Law Proof: An Empirical Analysis Based on Article 10 of the Law of the People’s Republic of China on Choice of Law for Foreign-related Civil Relationships, Law Science, (10), 116.

[20] See (2018) Hu 0105 Min Chu No. 16658 Civil Ruling. 

[21] See (2016) Jin 72 Min Chu No. 873 Civil Judgment.

[22] See (2017) Hu 73 Min Zhong No. 248 Civil Judgment, (2018) Yue 0391 Min Chu No. 2921 Civil Judgment.

[23] Article 6 of the Measures on the Payment of Litigation Costsin 2006 stipulates: "The litigation costs paid by a party concerned to the people’s court shall include: (1) case acceptance fee; (2) application fee; and (3) the traffic expenses, accommodation expenses, living expenses, and subsidies for missed work, which incurred by witnesses, authenticators, interpreters and adjustment makers for their appearing in the people’s court at designated dates." Article 7stipulates: "Case acceptance fees shall include: (1) case acceptance fees of the first instance; (2) case acceptance fees of the second instance; and (3) in the cases of post-final retrial, the case acceptance fees payable as required by the present Measures." Article 10 stipulates: "Where a party concerned applies to the people’s court according to law for the following matters, it shall pay a application fee: (1) Applying for the enforcement of a legally effective judgment, ruling or letter of mediation made by the people’s court, an award or letter of mediation made by the arbitration institution according to law, or a credit document which the public notarial institution grants the force for compulsory enforcement according to law; (2) Applying for taking preservation measures; (3) Applying for a payment warrant; (4) Applying for a public summon; (5) Applying for revocation of an arbitral award or for affirmation of the effectiveness of an arbitration agreement; (6) Applying for bankruptcy; (7) Applying for maritime injunction, general average adjustment, establishment of a limitation fund for maritime claims, maritime credit registration, or summon of priority claims to the ship; and (8) Applying for acknowledgement and enforcement of the judgment or ruling of a foreign court or the award of a foreign arbitration institution.”

[24] Article 29 of the Measures on the Payment of Litigation Costs in 2006 stipulates: "The litigation costs shall be borne by the losing party unless the winning party bears the costs at his free will. Where the party concerned partially wins the lawsuit and partially loses it, the people’s court may, at its discretion, decide on the amounts of litigation costs to be borne by the parties respectively. Where the parties to a joint lawsuit lose the lawsuit, the people’s court shall, on the basis of the interest relationship with the object of lawsuit, decide on the amounts of litigation costs to be borne by the parties respectively."

[25] See (2017) E 72 Min Chu No. 1562 Civil Judgment.

[26] Zhang Chunyi (2021). Let Adjudicative Instruments Become a Beacon of Social Value. China Audit Journal (7th ed.).

[27] See Bai Quanmin(2015, May 12). Judges and the Rule of Law. Jinan: Shandong People’s Press, 18.

[28] Article 3 of the Guiding Opinions on Strengthening and Standardizing the Analysis and Reasoning in Adjudicative Instruments stipulates that the analysis and reasoning in adjudicative instruments shall be with correction stance, legal content, and due procedure and comply with the spirit and requirements of the core socialist values; examination and judgment of evidence, establishment of facts, and application of law, reflect the reasoning process, and achieve clear logic; reason in light of claims and disputes, taking into account the situation of court trial, and have a definite object in view; and reason in moderate length according to the social impact of a case, trial procedure, stages of legal proceedings, and other conditions, reason briefly for simple cases and concisely for complicated cases, and strive to serve the purpose precisely.

[29] Song Xixiang & Zhu Bairan(2017). Legal Thinking on China’s Judicial Assistance in International Civil and Commercial Affairs in the Perspective of the Belt and Road Initiative.Journal of Shanghai University, (03), 41.

[30] Jin Zhenhua(2004). The Legal Nature of Expert Opinions.Journal of East China University of Political Science and Law, (01), 22.

[31] Hartley T C (1996). Pleading and Proof of Foreign Law: The Major European Systems Compared. International and Comparative Law Quarterly, 45(2), 271-274.

[32] See Xiao Fang (2012). Chinese Courts’ Abuse and Control of Foreign Laws Unable to be Ascertained Law Science, (02), 103.

[33] Article 12 of the Measures on the Payment of Litigation Costs in 2006 stipulates that for the expenses to be lawfully borne by the party concerned due to authentication, announcement, survey, interpretation, evaluation, auction, selling-off, warehousing, custody, transport, ship supervision, etc. in the process of litigation, the people’s court shall, in light of the principle that he who puts forward the proposal shall bear the expenses, decide that the party concerned shall directly pay the expenses to the relevant institution or entity, and the people’s court shall not charge or pay the expenses on behalf the party concerned.

[34] See (2020) Zui Gao Fa Zhi Min Zhong No. 818 Civil Judgement; (2020) Zui Gao Fa Min Zhong No. 1055 Civil Judgement; (2020) Zui Gao Fa Zhi Min Shen No. 4792 Civil Judgement.

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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.