CHINA Law and Practice Contributed by: Peibing Qi, Na Gao and Shanshan Heng, Fangda Partners
such time limits may be extended upon special appli- cation by the presiding judge. In practice, depend- ing on the complexity and circumstances of the case, court proceedings typically last from several months to several years. For foreign-related civil and commercial cases, courts are not subject to statutory time limits. In practice, such cases may take several months longer than domestic cases. 2.5 Confidentiality PRC courts adjudicate civil and commercial disputes on the principle of open trials. Non-public trials may be conducted only upon court determination in cases involving special circumstanc- es such as state secrets, trade secrets or personal privacy. For instance, cases involving family status relationships such as divorce are generally not open to the public. In practice, parties frequently submit applications for non-public trials on broadly construed grounds based on special strategic considerations. PRC courts typi- cally do not conduct substantive review of whether a case genuinely involves trade secrets or other except- ed circumstances, resulting in a substantial number of cases that do not actually fall within the statutory exceptions ultimately being adjudicated in non-public proceedings. 2.6 Interim Relief Under PRC law, the interim relief that parties may apply for either before the court accepts a case or during the litigation proceedings includes three cat- egories: property preservation, conduct preservation and evidence preservation, specifically as follows. • Property preservation – refers to temporary con- trol measures imposed by the People’s Court on property to prevent a party from transferring assets and to ensure effective enforcement of the prevail- ing party’s rights. • Conduct preservation – designed to prevent other damages to a party; during litigation proceedings, the court may order the opposing party to take or refrain from taking certain actions.
• Evidence preservation – where evidence may be destroyed or become difficult to obtain in the future, a party may apply to the People’s Court for preservation of evidence during the litigation process; the People’s Court may also take preser- vation measures on its own initiative. Overall, property preservation is widely used in Chi- nese litigation practice and is not limited to any spe- cific type of case. Conduct preservation is typically supported by courts only in specific types of cases, such as intellectual property disputes and defama- tion claims. Evidence preservation is relatively less frequently applied for and utilised. 2.7 Final Relief Under PRC law, there are three categories of claims for final relief: performance claims, declaratory claims and constitutive claims, specifically as follows. • Performance claims – represent the most com- mon form of relief in commercial litigation, whereby the court orders the defendant to perform specific obligations, which may be enforced through court enforcement procedures. • Declaratory claims – the court confirms the exist- ence or non-existence of a legal relationship between the parties. While such judgments are not directly enforceable, they serve to confirm the par- ties’ rights. • Constitutive claims – through a court judgment, an existing legal relationship is altered or extin- guished, typically involving the exercise of specific legal rights by the litigants. For example, a plaintiff may file an action seeking to rescind the contract. 2.8 Damages Compensatory Damages Under PRC law, the principle of compensatory dam- ages governs loss recovery, whereby the amount of damages is premised on indemnifying actual losses. Courts typically ascertain the amount of actual losses by evaluating the factual evidence presented by both parties. Liquidated Damages Where the parties have stipulated a liquidated dam- ages clause, courts may also reference the agreed
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