When operating a business in China, it is important to understand the civil procedure system. Proper knowledge helps you navigate legal matters effectively.
You can face potential challenges and risks when you do not know the laws. Ignorance of the rules can lead to unintended legal consequences.
New civil procedure law
China’s new civil procedure law (2023 Amendment) took effect on January 1, 2024. This revision is the first substantive one in 30 years. It introduces significant reforms to enhance judicial efficiency and protect parties’ rights in civil cases. The updated law streamlines procedures, encourages alternative dispute-resolution mechanisms and emphasizes the role of mediation in resolving conflicts.
Impact
The new law affects multinationals doing business in China and Chinese enterprises operating internationally. The majority of the revisions concern foreign-related matters.
The amendment broadens the jurisdiction of Chinese courts over foreign-related civil and commercial litigation. Chinese enterprises can now file lawsuits regarding disputes with “appropriate connections” with China. Cases may be under Chinese jurisdiction based on the subject matter of the litigation, the place of residence of the defendant’s representative office, the location of contract execution or formation or where the tort happens.
Key points
Some important factors to note about the new law include:
- Contains provisions enabling the accelerated service of process on foreign parties
- Allows for the collection of evidence from overseas
- Provides for enhancements to the rules governing the enforcement and recognition of arbitral awards and foreign judgments
Staying informed about the rules and steps of China’s civil procedure is important. It can help you navigate the legal complexities of conducting business in China.