China legal update: NCP Outbreak: What Enterprises Need to Know About Litigation and Arbitration Adjustments During NCP

China legal update: NCP Outbreak: What Enterprises Need to Know About Litigation and Arbitration Adjustments During NCP

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NCP Outbreak: What Enterprises Need to Know About Litigation and Arbitration Adjustments During NCP

The news that Novel Coronavirus Pneumonia (”NCP”) epidemic continue to spread across the country has prompted the PRC courts and arbitration commissions to adopt adjustments to prevent and reduce the gatherings and mobility of people. The situation is fluid and rapidly changing, and this legal update highlights the following points for your kind reference based on the polices issued through February 20, 2020.

I. Suspension of litigation services and reception of visitors

On January 30, 2020, the Supreme People’s Court (“SPC”) temporarily close the headquarters of the SPC, the first, the second, the third, the fourth, the fifth and the sixth circuit courts, and the intellectual property court. The on-site litigation services are suspended accordingly. Further, the reception places for people’s visits are closed to visitors. The resumption time will be determined on the situation of NCP.

During the suspension, firstly, parties may file application materials for retrial, complaint letters or apply for other litigation services online (SPC litigation service website http://ssfw.count.gov.cn/ssfww ) or by mail.1

The second is to standardize online filing, requiring courts to examine and verify online filing applications within seven days after receiving them. If the case complies with the provisions of the law, the case shall be registered in time.2

On February 13, 2020, SPC ordered courts at all levels to guide litigants to file cases or mediate disputes online.3 Actually, before the order of SPC, courts located in many cities and provinces have set online litigation service platforms for litigants to file litigation materials and suspended on-site litigation services and reception of visitors. For example:

table01

II. Online court sessions

SPC encouraged judges of courts at all levels to increase functions of online platforms, such as “trial in the cloud,” video system, and hear cases online during NCP.10 Online cases handling by courts run as a regular mechanism.

Upon our telephone consultation,11 the judges have to consider factors such as technological realities, case conditions and the wishes of the parties to determine:
• Postponing the case;
• Promptly hear on-site with precautionary measures; or
• Promptly hear online
To be specific, complicated disputes and those that demand litigants to offer abundant evidence still need to be postponed during the epidemic. Courts located in areas with high-risk tend to use online system.

For example, on February 4, a judge with Beijing No. 1 Intermediate People’s Court heard a private loan dispute through the platform with a video communication system. In this case, the lawyer for one of the litigants was in the Ningxia Hui autonomous region, if he was back in Beijing to attend the trial, he would have first had to be quarantined for at least 14 days, which means our hearing might not have begun on time. Therefore, the judge decided to adopt online system to handle this case. The judge first got the litigants’ approval to use the platform and taught them to install software on a laptop or download a smartphone application. The online session went smoothly, litigants and the judge talk with each other quickly and the case was properly decided.

A statistic released by the high court on Wednesday also showed that courts across the city have used the online platform to hear cases 78 times since Feb 3, helping reduce visits and gatherings in courts.12

III. The PRC laws as concern remedies for litigation participants during NCP

1. Adjourning or suspending trials during NCP

Where the courts do not decide to postpone the trial (neither adopt online system to carry out the hearing), and parties cannot attend the on-site trials scheduled because they are under quarantine due to infection of NCP or suspect infection, or because of transportation control during NCP, etc., they have two solutions as following:

table02

Parties’ choice between two solutions rely on whether they can expect the date of rescheduled trial.
• If they can make sure when they are available for court hearing, they may apply to adjourn trials and select the rescheduled date with judges (or clerks) and the opposite parties.
• If they cannot make sure when circumstances are available for court session, they may apply to suspend trials and apply to restore the court session when the circumstances allow it.

2. Suspending statute of Limitation

During NCP, enterprises and persons that are involved in the epidemic control and prevention may not be able to take legal action before the expiry of the statute of limitation. Specially for the disputes subject to statute of limitation expiry, some parties may not be able to complete the case-filing (most courts require filing online or by mail) before the expiry of statute of limitation. Under the PRC laws, the statute of limitation of action shall be suspended during the last six months of the limitation if the right of claim cannot be exercised because of force majeure. The statute of limitation shall expire after six months from the date when the obstacles causing the suspension are eliminated.16 Although there is no official announcement that NCP epidemic is identified as force majeure event that can hinder the parties from exercising their rights; nevertheless, the PRC laws have clarified that the suspension on the statute of limitation shall be applied where the litigation or arbitration is unable to continue due to the adoption of any emergency response measure.17

IV. Arbitration adjustments

Currently, many arbitration commissions have rolled out policies to adjust the arrangements for arbitration. We hereby summarized some adjustments in the below table.18

table03

Foreign enterprises are advised to contact the local courts and arbitration commissions for a better understanding on the adjustments. Should you need to have more details of the rules in your case, please feel free to contact us at asiallians@asiallians.com.

NCP Outbreak: Exemptions for Beijing 14-day Self-Quarantine Rule

As introduced in our last legal update, on February 14, 2020, Beijing implemented the mandatory 14-day self-quarantine rule to be applied to all of returnees to Beijing25. Within a week, the Beijing Municipal Government announced at a press conference on February 21, 2020 that seven categories of people returning to Beijing would be exempted from self-quarantine for 14 days, but applied different measures, which are:

table04

Recently, the officially released number of confirmed NCP infectious patients rose to 893 in South Korea (with 8 deaths), 850 in Japan (with 3 deaths) and 229 in Italy (with 7 deaths) respectively. Due to the ever-changing situation, the Beijing government’s exemption policy may change from time to time, and we will keep a close eye on it. Should you need to have more details, please feel free to contact us at asiallians@asiallians.com.

 

1. See:  http://www.court.gov.cn/zixun-xiangqing-218771.html

2. See: http://www.court.gov.cn/fabu-xiangqing-220071.html

3. See: http://english.court.gov.cn/2020-02/13/content_37533572.htm

4. All levels” include district, intermediate, and high PRC courts.
Litigation service platform: http://www.bjcourt.gov.cn

5. See: https://www.thepaper.cn/newsDetail_forward_5701647
Litigation service platform: http://www.zjsfgkw.cn

6. See: http://www.hbfy.gov.cn/DocManage/ViewDoc?docId
=d0663910-4613-4525-9c90-46005195695e

Litigation service platform: http://www.hbfy.org/

7. See: https://news.sina.com.cn/c/2020-02-01/
doc-iimxxste8058035.shtml

Litigation service platform: http://www.tjcourt.gov.cn/tjfyss/

8. See: http://hlj.sina.com.cn/news/ljyw/2020-02-02/
detail-iimxxste8170774.shtml

Litigation service platform: www.hljcourt.gov.cn/ssfw/

9. See: http://www.xmhsfy.gov.cn/ShowList.aspx?id=4177&nid=13
Litigation service platform: http://ssfw.fjcourt.gov.cn

10. See: http://english.court.gov.cn/2020-02/19/content_37533789.htm

11.We consulted with district courts in Beijing, Shanghai, Suzhou, Tianjin, and Hangzhou by telephone.

12. See: http://english.court.gov.cn/2020-02/13/content_37533572.htm

13. Article 146 of PRC Civil Procedure Law

14. Article 25 of Provisions on Safeguarding the Right of Lawyers to Practice in Accordance with the Law

15. Article 150 of PRC Civil Procedure Law

16. Article 194 of PRC General Rules of the Civil Law

17. Article 13 of Emergency Response Law of the People’s Republic of China

18. Please be noted that the policies are subject to update since the NCP situation is evolving. For the upcoming update, please pay attention to our following legal updates.

19. See: https://www.thepaper.cn/newsDetail_forward_5722105

20. See: http://www.shiac.org/SHIAC/news_detail.aspx?id=873

21. See: http://www.bjac.org.cn/news/view?id=3660

22. See: http://www.moj.gov.cn/Department/content/
2020-02/04/612_3240856.html

23. See: http://www.sccietac.org/web/news/detail/1920.html

24. See: https://www.gzac.org/WEB_CN/NewsInfo.aspx?
KeyID=87454719-c4ea-47bf-934d-b82e7af5bb3d

25. See: http://asiallians.com/china-legal-update-ncp-outbreak
-know-preferential-policies-support-enterprises
-china-quarantine-requirements/

 


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