CHINA Law and Practice Contributed by: Peibing Qi, Na Gao and Shanshan Heng, Fangda Partners
2. Litigation 2.1 Limitation Periods
2.3 Pre-Action Conduct In China, courts typically require mediation prior to formal adjudication in divorce cases. Additionally, for certain types of disputes involving relatively minor controversies, such as private lending disputes, some courts mandate compulsory pre-filing media- tion before a case is formally accepted and docketed. In practice, given that parties often have substantial disagreements on factual and legal issues, such com- pulsory pre-filing mediation procedures are largely perfunctory. In arbitration practice, parties frequently stipulate in their arbitration clauses that negotiation or mediation shall serve as a condition precedent to arbitration. In such circumstances, if a party fails to comply with such pre-arbitration requirements prior to initiating arbitration, this may be considered by the adjudicative body when assessing the jurisdiction of the arbitral tribunal and the procedural validity of the arbitration. PRC courts operate under a two-instance system in terms of which the second instance is final. For civil and commercial disputes, court proceedings typically encompass various stages, including first-instance trial, appeal and, in some cases, retrial. In general, parties must pursue remedies sequentially through the court hierarchy; that is, they must file an appeal or apply for retrial with the next higher-level court. Additionally, where a party raises an objection to the jurisdiction of the court that accepted the case, jurisdictional challenges may arise at both the first and second instance levels. 2.4 Stages of Court Proceedings Main Stages of Court Proceedings In retrial proceedings, depending on whether the court proceeds to substantive adjudication, the process may be further divided into two procedural stages: a preliminary examination stage and a substantive retrial stage. Duration of Court Proceedings at Different Stages Under the Civil Procedure Law and related regulations, the statutory time limits for domestic civil cases are six months for first-instance proceedings and three months for second-instance proceedings; however,
For claims seeking performance, the statute of limita- tions applies. The general limitation period for civil and commercial disputes is three years, commencing from the date when the right-holder knew or should have known that its rights had been infringed, and may be interrupted and will recommence upon the occurrence of circumstances such as the assertion of rights by the right-holder. For claims involving the exercise of rights, such as the termination or rescission of a contract, a statutory time limit for the exercise of such rights applies. This is a fixed statutory period within which certain rights must be exercised, and its duration varies depend- ing on the nature of the right. For example, unless otherwise provided by law or agreed by the parties, a right-holder must exercise its right to rescind a con- tract within one year from the date on which it knew or should have known of the grounds for rescission; otherwise, such right shall be extinguished. For declaratory claims, the statute of limitations does not apply. Under PRC law, for claims such as those seeking confirmation of property ownership or the validity of legal relationships, the relevant limitation provisions do not apply, and a party may seek judicial confirmation of such rights at any time. 2.2 Court Structure The PRC court system is structured into four hierarchi- cal levels corresponding to administrative divisions. From the lowest to the highest, these are: Primary People’s Courts at the district/county level, Intermedi- ate People’s Courts at the municipal level, Higher Peo- ple’s Courts at the provincial level, and the Supreme People’s Court at the national level. With respect to specific types of disputes such as finance, maritime affairs and intellectual property, China has established specialised courts in certain administrative regions. Such courts are generally at the level of Intermediate People’s Courts and exercise specialised jurisdiction over specific types of disputes in accordance with the law.
103 CHAMBERS.COM
Powered by FlippingBook