The Judicial practice of forum non conveniens

Authors: Zhang Guanglei / Cai Xiaoxia

(This article was first published on China Business Law Journal column "Cross-border dispute resolution", authorised reprint)

The doctrine of forum non conveniens (an inconvenient forum) means a court that has accepted a foreign-related case believes that a court in another jurisdiction is more convenient to adjudicate the case, and thus waives its jurisdiction over the case.

The doctrine of forum non conveniens was provided in article 11 of the Notice of the Supreme People’s Court on Issuing the Minutes of the Second National Working Conference on Foreign-Related Commercial and Maritime Trials, issued in 2005, and article 532 of theInterpretation of the Supreme People’s Court on Application of the Civil Procedure Law of the People’s Republic of China, implemented in 2015. According to the above-mentioned provisions and judicial practice, to apply the doctrine of forum non conveniens, all of the following conditions should be met:

The defendant raises a jurisdiction, or forum non conveniens, challenge

This condition comes as the procedural premise for applying the doctrine of forum non conveniens. If the defendant does not raise an objection to jurisdiction, or a defence of forum non conveniens in his or her response, the court generally will not take the initiative in applying the doctrine to decline jurisdiction.

The court accepting the case has jurisdiction over it

Unlike provisions in the above-mentioned minutes, the judicial interpretation does not take “the court accepting the case has jurisdiction over it” as a precondition for applying the doctrine of forum non conveniens. Nevertheless, after the judicial interpretation was implemented, the judicial practice still follows that the doctrine rests on the premise that the court accepting the case has jurisdiction over it. Otherwise, the court may directly reject or dismiss the case without further examining whether there are any inconvenient forum factors.

No consensual or exclusive jurisdiction rests with the PRC court

There is no dispute in practice about understanding the following two conditions on application of the doctrine, namely, “there is no agreement between the parties that chooses a PRC court as the court of jurisdiction”, and “the case is not subject to exclusive jurisdiction of a PRC court”. The absence of an agreement choosing a PRC court as the court of jurisdiction includes the circumstance in which a PRC court is chosen as the court of jurisdiction under an agreement, but the agreement is determined to invalid.

No interests of the Chinese state, citizens, legal persons or other organisations are involved

In practice, courts frequently refuse to apply the doctrine of forum non conveniens on the ground that this requirement is not met. Moreover, the court often decides on whether the case involves the interests of the PRC, and any Chinese party, according to nationality or habitual residence. For example, in Case [2016] Lu Min Xia Zhong No. 245, since the defendant was a domestically incorporated legal person, the court decided that the defendant had a direct stake in the result of the case and thus the doctrine of forum non conveniens should not apply. In Case [2016] Su Min Xia Zhong No. 180, the court held that although the party concerned resided in the Philippines for a long time, he was still a Chinese citizen, so the case certainly involved Chinese citizen’s interests, and dismissed the forum non conveniens defence.

The PRC court faces major difficulties in adjudicating the case

As for ascertainment of this requirement, the judicial interpretation requires satisfaction of two conditions, namely, the main facts in dispute did not occur in the PRC, and the PRC laws do not apply to the case. In practice, the court has great discretion as to whether this requirement is met, especially whether the main facts in dispute occurred in the PRC.

In addition, even if the main facts in dispute occurred overseas, and the case is governed by foreign laws, the court does not necessarily determine that it faces major difficulties in adjudicating the case. Nowadays, the ease of transportation and information transmission has greatly reduced inconveniences caused by geography and language, and there are no major difficulties in fact finding or law application.

A foreign court has jurisdiction over, and is more convenient to adjudicate, the case

The existing foreign parallel proceedings do not constitute an inconvenience for the domestic court to adjudicate the case. For example, in Case [2018] Zui Gao Fa Min Xia Zhong No. 261, the court held that whether the Hong Kong court already accepted the case did not affect the mainland court’s jurisdiction over it, and whether the mainland court should accept the case should be decided according to the specific circumstances of the case.

In practice, in addition to the above-mentioned fact finding and law application, the court will consider many factors such as the defendant’s response, service of documents, collection of evidence, witness testimony, etc., to determine whether it is more convenient for foreign courts to adjudicate the case, and make a final decision from the perspective of protecting the rights and interests of the parties concerned. “Whether the court judgment can be enforced” is an important consideration.

For example, in Case [2015] Hu Gao Min Er (Shang) Zhong Zi No. S7, the defendant’s property available for enforcement was subjected to attachment measures in the PRC. The court held that because the mutual legal assistance treaty between the PRC and Singapore did not include the recognition and enforcement of court judgments, even if the claimant won the case at the Singapore court, it would be difficult to effectively enforce the defendant’s property in the PRC, so the Singapore court was not a more convenient court to adjudicate the case.

The Supreme People’s Court, in the dispute over agency contract between a law firm and Xiamen Huayang Color Printing Company, also held that the domestic court was the more convenient forum on the ground that the subject matter of enforcement was located in the Chinese mainland.

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作者介绍张光磊

合伙人

010-5809 1515

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张光磊律师毕业于中国政法大学，获法学学士、民法学硕士和商法学博士学位。此外，获美国乔治华盛顿大学法学硕士学位，为哥伦比亚大学法学院访问学者。张律师拥有中国及美国纽约州律师资格，为香港国际仲裁中心在册仲裁员，中国政法大学法律硕士学院和对外经济贸易大学法学院兼职导师。

张律师的主要业务领域为争议解决，在民商事诉讼、仲裁、调解等领域拥有丰富的经验和良好的声誉，于2018年被CLECSS评选为中国十大杰出青年律师，并于2020年被《商法》评选为“A-list法律精英100强”。在香港国际仲裁中心主办的2019国际仲裁中文赛中，张律师带领竞天公诚律师事务所获得北京赛区冠军和全国亚军，其个人在所有场次比赛中均被评为最佳律师。

张律师曾代表境内外客户处理过中国国际经济贸易仲裁委员会及其分会、北京仲裁委员会、上海国际仲裁中心、深圳国际仲裁院、珠海国际仲裁院、香港国际仲裁中心等仲裁机构及中国不同层级法院的数百宗民商事案件。张律师擅长在跨境交易纠纷中为客户制定整体解决方案，曾在美国、新加坡、香港等地的诉讼和仲裁程序中多次担任中国法顾问及专家证人。

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蔡晓霞

律师

010-5809 1243

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蔡晓霞律师毕业于中国政法大学和美国北卡罗莱纳大学，分别获得法学学士和法学硕士学位，拥有中国律师执业资格。蔡律师的执业领域为争议解决，曾代表境内外客户处理过数十宗民商事诉讼仲裁案件，并曾为多家知名企业提供常年和专项法律服务。

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