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April 25, 2014

China Amends its Civil Procedural Law 全国人大常委会发布修改《中华人民共和国民事诉讼法》的决定(08/31/2012)

The Standing Committee of the National People's Congress (NPCSC) released the Amendments to the Civil Procedure Law of the People’s Republic of China (“Amended CPL”) on August 31, 2012, which become effective on January 1, 2013. The amendments to the Civil Procedure Law aim to better reflect real-world business practices. Some key amendments thereto are summarized as follows:

I. Jurisdiction

The Amended CPL specifies that any and all lawsuits arising from or in connection with the incorporation of a company, confirmation of a shareholder’s qualifications, distribution of profits, or dissolution of a company shall be filed with the competent people’s court in the place where the company is registered.

II. Pro Bono Litigation

To deal with activities that damage the environment, infringe upon various consumers’ interests, or impair social and public interests, the Amended CPL establishes a system of Pro Bono litigation. The act authorizes relevant institutions and organizations, determined by law, to file lawsuits that protect the public welfare.

III. Preservation of Evidence

After instituting a lawsuit, the Amended CPL provides that the parties to the suit are entitled to file an application with the court to preserve evidence, provided that such evidence is likely to suffer irreparable damage or be difficult to obtain in the future. The court may also preserve evidence at its own discretion. Additionally, the Amended CPL specifies that prior to instituting a lawsuit or applying for arbitration, interested parties are entitled to seek preservation of evidence in cases of emergencies with the court in the place where the evidence is located, the respondents reside or the competent people’s court with jurisdiction over the matter.

IV. Service of Judicial Documents

According to the Amended CPL, in the event that a rejected judicial document is left in the addressee’s place of abode, service shall be deemed effective if videos or photos have been taken of the service process.

Moreover, upon consent of the parties, a court may now serve judicial documents by fax, email or other means that guarantee receipt of documents by the addressee.  However, the court cannot serve judgments, rulings or meditation agreements in this manner

V. Other Significant Amendments

The Amended CPL provides summary procedures for the more efficient handling of small claims for debts or damage. County-level courts may now make final judgments for first instance trials concerning simple civil claims for an amount of money equivalent to 30 percent of the average annual salary in the province,autonomous region or municipality where the case takes place.

With respect to implementation of the judgments, the Amended CPL has significantly increased the amount of fines imposed on enforcees who hide or transfer frozen property or refuse to implement judgments or rulings. Particularly, fines imposed on an individual shall not exceed RMB 100,000, an amount 10 times that provided in the previous Civil Procedure Law. Furthermore, fines imposed on an entity shall be no less than RMB 50,000 and no more than RMB 1,000,000, which is much higher than the previous limit of RMB 300,000.

  • Decision of the People's Republic of China by Standing Committee of the National People’s Congress on Amendments to the Civil Procedure Law
  • 修改《中华人民共和国民事诉讼法》的决定
  • Issuing Authority: the Standing Committee of the National People’s Congress
  • Date of Issuance: August 31, 2012 / Effective date: January 1, 2013
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About the Author

Shareholder

George Qi is a shareholder in Greenberg Traurig's Shanghai office. He focuses his practice primarily on China-related cross-border mergers and acquisitions, capital market, corporate finance and general corporate matters. He has wide-ranging experience advising multinational companies in acquisitions and otherwise doing business in China, and in advising Chinese private companies in raising capital in overseas capital markets.

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About the Author

Shareholder

Dawn Zhang is a shareholder in Greenberg Traurig's Shanghai office. She has broad experience advising clients on venture capital, China-related cross-border mergers and acquisitions, restructuring, joint ventures, and general corporate matters. Before joining Greenberg Traurig, Dawn practiced in other international law firms for many years and served as the PRC legal counsel for a multinational corporation, where she handled a wide variety of corporate matters for public and emerging growth companies. Dawn passed the national PRC judicial qualification examination in 1998 and was...

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