Selection of Arbitration and Jurisdiction of Courts in China

摘要

In practice, parties to a contract usually prefer to incorporate an arbitration clause into the contract in the event that any disputes arise out of the contract. Considering the Chinese arbitrational regulations, parties should be aware of the importance of specifying the details of the arbitration and choosing a specific arbitration centre in order to prevent the arbitration clause or agreement being declared invalid. When considering the jurisdiction of Chinese courts, parties should be aware that the rules of exclusive jurisdiction take priority. These are relevant to disputes concerning immovable property, harbour operations and inheritance. All other contractual disputes follow a separate process to determine the court(s) that have jurisdiction to hear the claim. The place of domicile of the defendant or the place where the contract is performed will determine the region(s) in which the claim may be heard. The level of court that is competent to hear the claim will depend on the value of the claim; opinions issued by the Provincial High Court should be used to determine the correct level. Once this is known, the plaintiff can choose from among a number of competent courts, and may base his/her decision on a number of factors such as convenience, attitude of the judges and the status of the courts in different regions. In addition, parties to a contract may enter into a written agreement regarding territorial jurisdiction. This may take the form of a jurisdiction clause in the contract or a separate agreement entered into prior to commencing litigation. Such clauses/agreements allow the parties to bring the claim in a court situated in any of the following places: the place of domicile of the defendant, the place where the contract was performed or signed, the place of domicile of the plaintiff, the place where the subject matter of the contract is located or any other place actually connected to the dispute. One thing to bear in mind when concluding such agreements is that the provisions of hierarchical jurisdiction and exclusive jurisdiction cannot be violated.