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Zhong Lun Wins Two Retrial Cases relating to Jurisdictional Challenges before the Supreme People’s Court
Zhong Lun Wins Two Retrial Cases relating to Jurisdictional Challenges before the Supreme People’s Court
Zhong Lun Law Firm recently represented two clients, Haeahn Architecture, Inc. (a Korean company, “Haeahn") and Zhengzhou Yutong Bus Co., Ltd. (a PRC company, “Yutong Bus"), in two retrial cases before the SPC for correction of jurisdictional rulings issued by lower-level courts and won both cases. The limited number of retrial cases accepted and corrected by the Supreme People’s Court (the “SPC") seldom deal with procedural matters, such as jurisdictional challenges.
In the Haeahn retrial case, the SPC fully adopted Zhong Lun’s legal arguments on the nature of the dispute and the “doctrine of forum non conveniens". Specifically, Zhong Lun argued the dispute should be a transnational guarantee dispute, rather than a letter of credit dispute as originally held, and the Wuxi Intermediate Court should have the jurisdiction over the dispute as the “doctrine of forum non conveniens" did not apply. The SPC overruled and revoked the first and second-instance jurisdictional rulings issued by the Wuxi Intermediate Court and the Jiangsu High Court, and directed the Wuxi Intermediate Court to hear the dispute. The SPC’s holding in this retrial case could provide important guidance to PRC courts in the future with respect to the proper interpretation and application of the “doctrine of forum non conveniens" in foreign-related disputes.
In the Yutong Bus retrial case, the key issue was whether the opposing party intentionally avoided the jurisdiction of a higher level court. The opposing party filed the case before a lower-level court with a small claim amount and later substantially increased its claim amount during the litigation proceedings. Zhong Lun argued this was a tactic of the opposing party to circumvent the statutory provisions on forum level and avoid jurisdiction of the higher level court. The SPC adopted Zhong Lun’s legal reasoning and revoked the first and second-instance jurisdictional rulings of the Lanzhou Intermediate Court and the Gansu High Court. The SPC held that the opposing party had intentionally avoided the jurisdiction of the higher level court and directed the Gansu High Court to hear the case as the court of first instance. This case could provide helpful guidelines to prevent and reduce the local protectionism that has been growing in local judicial practices around China.
Haeahn is a famous Korean company that provides design services for construction and infrastructure projects and urban planning services. Yutong is a listed company on the Shanghai Stock Exchange and the largest bus manufacturer in China. These two retrial cases were handled by a team led by Decai Zhang, a partner of Zhong Lun’s Dispute Resolution Group. Huimin Xia (partner) and other associates including Bing Wang, Zoe Li Zhang and Jie Zhou participated in these cases.
