Dispute Resolution in China

Litigation, Arbitration, Mediation and their Interactions

Weixia Gu

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781317584766
• Edition: 1
• Topic: Law
• Subtopic: Alternative Dispute Resolution
• Index: Law

China's ever-expanding commercial influence has attracted global attention on how its civil and commercial disputes are resolved.

This compelling new book, Dispute Resolution in China, offers a detailed examination of the elements in the Chinese legal system and the relevant reforms to the multiplicity of approaches to civil and commercial disputes in China today. This book reveals how civil litigation, commercial arbitration, mediation, and their hybrid dispute resolution have distinctly responded to, reformed, and developed in the context of China's transformational economic growth, societal development, and international interaction in the last two decades. It situates these developments and continued experimentation within a unique hybrid of empirical, contextual, and comparative analytical framework, while paving productive pathways towards the future.

This book argues that, rather than being a legal project, China's civil and commercial dispute resolution system is essentially a social development project, which distinguishes the Chinese approach to civil justice reform from contemporary civil justice movements elsewhere. Among the primary methods of dispute resolution, commercial arbitration in China today uniquely transcending the traditional socio-political constraints, its reform has developed in favor of market-oriented considerations and shaped by China's socio-economic dynamics and internationalization needs. By contrast, civil litigation and mediation being more instrumentalist in nature, their reform is socio-politically embedded and continues to prioritize social stability. This book also shines a fresh light on comparative assessments of top-down and bottom-up changes in China's dispute resolution discourse, as well as on how China speaks to international dispute resolution systems.

Original and rich in its analysis, this book will be essential reading and invaluable reference tool for scholars with a focus on Chinese law, comparative and international dispute resolution, and on broader legal, institutional, economic, social, political and cultural dimensions of dispute resolution development.

Part I Background of dispute resolution in China

1Introduction to dispute resolution in China

1Scope and subject

To date, most legal studies on contemporary China, particularly in the English-language literature, have focused on substantive Chinese laws (both public and private laws) and their reforms, particularly in the context of China’s booming economy and its development of rule of law. Less attention has been given to the burgeoning disputes brought about in China by the economic boom and societal changes. This includes how the regulatory and institutional landscape of dispute resolution has developed in China, how it responds to the country’s socio-economic, socio-political, and socio-legal transformation, as well as how reforms on procedural law would impact on the rule of law development.

There are multiple means of dispute resolution in China, ranging from formal court adjudication, alternative dispute resolution (“ADR”) methods of arbitration¹ and mediation, to the means with more Chinese characteristics such as petitions (or “letters and visits”), and in some extreme cases, protests in the streets.² In the rapidly expanding dispute resolution community in China, three major means have developed rapidly in the resolution of civil and commercial disputes. They are: (1) civil litigation (including commercial litigation), (2) commercial arbitration, and (3) civil mediation (both judicial and extra-judicial).

With respect to the division between civil and commercial disputes, in the past, China has never made a clear distinction between its various branches of civil laws. Albert Chen, a leading Chinese law expert from a comparative law perspective, commented that civil and commercial matters did not come into the forefront of discussion until only several decades ago.³ The relevant Chinese legislation, such as China’s Civil Code most recently passed in 2020,⁴ is equally applied to both civil or commercial matters in China.⁵ Commercial matters are not defined or discussed in the Civil Procedure Law either. China’s development of the market economy has contributed to the development of the concept of commercial law which closely relates to civil law practices in China, and there is a consensus among academics and practitioners that there is a fusion between civil and commercial law.⁶ It is for this reason that there is only one Civil Procedure Law in China, governing both civil litigation and commercial litigation in the Chinese courts, rather than a separate code of litigation for commercial lawsuits. Article 3 of the Civil Procedure Law discusses the scope of civil actions. It states that the Civil Procedure Law “[applies] to civil actions accepted by a people’s court regarding property or personal relationships between citizens, legal persons, and other organisations,”⁷ while actions with respect to governmental bodies are precluded. While mediation could be applied to both civil and commercial disputes, arbitration, as under the current version of the China Arbitration Law, applies only to commercial disputes and is largely considered a means of commercial dispute resolution.⁸

The Chinese dispute resolution landscape⁹ could be described as analogous to a dynamic ecology. It consists of three primary (and established) civil and commercial dispute resolution systems in China (the systems of civil litigation,¹⁰ arbitration,¹¹ and mediation),¹² each having its own set of institutions and procedural rules, and in the meantime interacting with one another. As such, there are many “interactions” arising out of this ecology—the interactions among different institutions, procedures, and individual systems—thus creating “hybrid” (and emerging) civil dispute resolution systems, such as the judicial mediation system,¹³ the system of judicial enforcement of arbitration,¹⁴ and med-arb where mediation is combined with arbitration.¹⁵ This book also examines these hybrid mechanisms and their growing importance, which has either been ignored or not sufficiently addressed in the existing literature.

In sum, this book studies the three primary civil and commercial dispute resolution systems and their associated hybrid dispute resolution systems, which are collectively referred to as “civil dispute resolution” in this book. For ease of reference, throughout the book, the term “dispute resolution in China” is intended to refer to “civil dispute resolution in China,” and the two terms are used interchangeably.

2Engagement of literature and empirical evidence

The civil dispute resolution landscape in China is concerned with the civil procedures and associated legal institutions that design and implement the civil procedures and hybrid civil procedures. Procedurally, it refers to the procedural laws that deal with specific areas of civil, commercial, or private rights (i.e., procedures of civil litigation, arbitration, and mediation). These laws include the Civil Procedure Law, the Arbitration Law, the People’s Mediation Law, and regulatory documents that govern judicial mediation, judicial enforcement of arbitration, and mediation combined with arbitration. Institutionally, civil dispute resolution landscape refers to the specific legal institutions where parties turn to for filing legal actions to enforce their civil, commercial, or private rights, including the institutional design of the people’s courts (in particular, their civil and commercial tribunals), arbitration commissions, and mediation committees.

In the past decade, many changes have taken place in the regimes for civil dispute resolution in China, such as their respective legal institutions, procedural laws and regulations. These include, for example, publication of the five Reform Outlines of the People’s Courts (1998–2023);¹⁶ amendments to the Civil Procedure Law in 2007, 2012, and 2017, respectively;¹⁷ internal split of China’s flagship arbitration institution, the China International Economic and Trade Arbitration Commission (“CIETAC”), in 2013;¹⁸ formation of the Chinese arbitration market¹⁹ and flourishing of several leading locally based Chinese arbitration commissions in the 2010s;²⁰ promulgation of the People’s Mediation Law and Labor Dispute Arbitration and Mediation Law in the first decade of this century;²¹ as well as the establishment of the China International Commercial Court and promotion of the “One-Stop” Multi-tiered (Hybrid) Dispute Resolution Platform in 2018.²²

A significant body of literature on the laws of civil dispute resolution regime in China is technical and promotional.²³ Many authors also practice as litigators, arbitrators, or mediators. Scholarship on civil dispute resolution frequently grows out of the legal practice. Updated analytical works in the field are still scarce. Even on the practical side, there is a lack of empirical work such as studies on to what extent the civil dispute resolution systems are actually utilized and how they are utilized. This book robustly seeks to improve upon this tradition of scholarship.

First, it will bring the literature on civil dispute resolution in China up to date. This book offers a most recent and comprehensive status quo analysis of the legal systems and developments in the field, particularly those of the late 2000s and throughout the 2010s, such as their respective regulatory design, legal and institution...