The Shanghai Financial Court: Provision of the Supreme People’s Court
The Supreme People’s Court of China recently adopted a resolution regarding the newly established financial court in Shanghai (Provisions of the Supreme People’s Court on Jurisdiction of the Shanghai Financial Court (Fa Shi [ 2008], No. 14) (最高人民法院关于上海金融法院案件管辖的规定). These provisions were executed following the decision of the Standing Committee of the National People’s Congress earlier in April 2018 to establish China’s first financial court in Shanghai.
The establishment of the financial court is a big step in the development of the Chinese judicial system and is a part of China’s efforts improve the overall professional level of its judicial system. The selection of Shanghai, further exemplifies Shanghai’s role as the “commercial capital” of China.
The provisions provide that the Shanghai Financial Court shall have jurisdiction over cases which previously were subject to the jurisdiction of the Intermediate People’s Court in Shanghai. The Financial court shall be responsible to adjudicate among other, disputes involving securities, futures trading, trust, insurance, bills, letter of credit, financial loan contracts.
Also the dispute involving independent guarantee, private equity funds, online payment services, P2P lending, or online equity based crowd funding shall be subject to the jurisdiction of the finance court.
The financial court shall also be responsible to provide judicial based review of arbitration cases involving civil and commercial disputes, and shall hear cases of application for recognition of enforcement of judgment on civil and commercial financial disputes rendered by foreign courts.
Although this is positive step moving forward, it is good time to review your China related contracts and to double check that your dispute resolution clauses fit the Chinese legal environment. In many international cases, foreign parties will highly benefit from having an international arbitration clause in their contracts, which will assist to effectively enforce their contracts.
Attorney Amit Ben-Yehoshua is a foreign expert in Chinese law and resided in China for nine years. Amit completed his Master of Law degree in Chinese Law at Tsinghua University of Beijing and is also licensed to practice law in Israel & California. Amit served as the Vice Chair of the China Committee of the American Bar Association, and is a member of the foreign panel of arbitrators of China’s largest arbitration commission (CIETAC).