Definition: A Chinese Approach
Given the lack of consensus on the subject’s title,scope and nature,it is not surprising that there exists no universally accepted definition for private international law,and scholars of different countries formulate different definitions.This section introduces the definition of private international law from the perspective of Chinese law.
In Chinese textbooks,the classic definition is that “private international law is the branch of law that regulates international civil and commercial relations,” or “the branch of law that deals with civil and commercial relations that involve foreign elements”.23 In this context,it is vital to define the term “international” or “foreign”.
As a matter of fact,Chinese private international law scholars have different opinions on the criterion for the classification between domestic and foreign (or international) cases.[4]Some authors advocate that if a civil case involves the interests of more than one country,it should be qualified as a civil case involving foreign elements; otherwise,it should be as a purely domestic case.24 Nonetheless,others prefer a more objective approach which is called “three-element-test”.Pursuant to this approach,if one of the following elements,i.e,the parties,the subject matter and the juristic fact,has contact with foreign jurisdiction,the case in question will be classified as the one involving foreign elements.25 To be more specific,cases involving foreign elements may arise in three situations: (1) one party or both parties involved is/are foreigners [or foreign enterprises or organizations]; (2) the property in dispute is located in a foreign country; (3) the creation,variation or termination of civil legal relationship occurred in a foreign country.
Between the two approaches,the latter,apparently,is easier to be employed by judges out of its objectivity; therefore,it is endorsed by the Supreme People’s Court of the PRC (SPC) which declared in a judicial interpretation in 1988 that “international or foreign civil relations are the civil relations in which one or both parties are foreign,a stateless person or a foreign corporate body,the subject matter underlying such relations is located outside the territory of China,or the juristic facts that cause the relation to be established,changed or extinguished occurred outside the territory of China.”26
The “three-element-test”,objective though it is,turns out to be too rigid in judicial practice which may produce unjust results.For instance,two Chinese citizens who habitually reside in Beijing signed a contract to exchange goods located in Beijing when they happened to be in New York during a short tour.Later,if a dispute arose in the performance of the contract after they both returned home,it would be unnecessary to classify the contract into a foreign related one,as the place where the contract was made is entirely fortuitous while all other elements are domestic.Another example,two companies,solely invested by two Hong Kong residents respectively,incorporated and registered in Shenzhen.[5]If these two companies concluded a house rental contract in Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone which selected Hong Kong law as the applicable law,it seems to be wise for a People’s Court in Shenzhen to classify the contract as Hong Kong related and to confirm the validity of the choice-of-law clause,although all elements are domestic superficially.
Therefore,the SPC came to realise that it is necessary to improve the test to make it adaptable to the judicial practice.On December 28,2012,the SPC promulgated “Interpretation (I) on the Conflicts Act” which has developed the “three-element-test.”27 Article One of this judicial interpretation provides that:
“If a civil relationship meets one of the following circumstances,the People’s Court may classify it as one involving foreign element(s):
(1) one party or both parties involved is/are foreigners or stateless persons,or foreign enterprises or organizations;
(2) the habitual residence of one party or both parties is located without the territory of the PRC;
(3) the property in dispute is located without the territory of the PRC;(https://www.daowen.com)
(4) the creation,variation or termination of civil relationship occurred without the territory of the PRC;
(5) other circumstances that can classify it as a civil relationship involving foreign element(s)”.
The above article is based on,and simultaneously improves,the “three-element-test”.The improvement made by Article 1 of the Interpretation (I) is reflected in the following aspects: First,the habitual residence of one party or both parties is included as a new connecting factor to determine whether the party to a dispute is foreign-related.Since habitual residence has been elevated to a fundamental status by the Private International Law Act,[6]this development,needless to say,is a necessary step to make the “three-element-test” conformable to the Act.Second,given a rigid adherence of the “three-element-test” has sometimes led to unreasonable consequences,the SPC deems it necessary to add a catch-all clause (i.e.,para.5 of Article 1) to increase the flexibility of the test.Hence,the approach employed by Article 1 of the Interpretation (I) may be defined as the “liberal three-element-test”.Apparently,the main purpose of para.5 of Article 1 is to expand the application of the Act by treating a civil relationship as foreign-related which,though not prima facie satisfying the “three-element- test”,has substantive contact with a foreign jurisdiction.In this respect,the “liberal three-element-test” reflects a remarkable progress.
It is generally believed that if the dispute contains no foreign element,private international law is irrelevant.For example,if a man and a woman who are both citizens of the People’s Republic of China (mainland),are domiciled and resident in Beijing,go through a ceremony of marriage in Beijing and later,when they are both still domiciled and resident here,the wife petitions the People’s Court of Haidian District for divorce,no foreign element is involved in this case.No problem of jurisdiction arises and,any questions about the validity of the marriage or the grounds upon which a divorce can be granted,as well as any procedural or evidential matters,are all governed by Chinese law alone.This,apparently,is a purely domestic case.The same is true if two Chinese citizens in Chinese mainland contract here in Beijing for the sale and purchase of goods from Shanghai to Beijing with payment in RMB in Beijing,and the seller later sues the buyer in the jurisdiction where the latter is domiciled.This is also a purely domestic case which has nothing to do with private international law.
But if we vary the fact and suppose that in the first example at the time the wife petitions for divorce the husband is domiciled and resident in Japan,and the husband argues that the marriage did not comply with the requirements of Japanese law so that there is no marriage to dissolve,under such a circumstance,the conflict of laws becomes relevant.The husband’s absence raises the question of the court’s jurisdiction,and his argument raises that of whether Chinese or Japanese law is to determine the validity of the marriage.
Or suppose that in the second situation,the seller is a Chinese citizen in Beijing who agrees to sell goods in Shanghai to an American buyer in the U.S.A.,to be delivered in the U.S.A.,and paid for in RMB into a Chinese bank in New York.The question arises as to whether the seller can invoke the jurisdiction of the Chinese court against the buyer,who is still in the U.S.A.,if he wishes to sue him for breach of contract or failure to pay the price.The further question may also arise as to which law,Chinese or American,is to be applied to determine the parties’ rights and obligations should the Chinese court possess jurisdiction.
Another relevant issue worth noticing is that the term “foreign” or “international” in the context of Chinese private international law is used to mean “jurisdiction-based sovereignty” rather than “territory-based sovereignty”; or to be more specific,though Hong Kong and Macao became part of China in 1997 and 1999 respectively,the two regions are deemed foreign in the context of private international law.This is because under Chinese constitution and the Basic Law of Hong Kong and that of Macao,the two territories possess the status of “Special Administrative Regions” (SAR) which exercise a high degree of autonomy and enjoy executive,legislative and independent judicial power,including that of final adjudication.As a result,there are actually three legal systems that now exist concurrently in China.Hong Kong still retains the common law system inherited as a former British colony,and Macao employs a legal system based on that of Portuguese civil law.This is part of the “One Country,Two Systems theory.” They have their own courts of final appeal and extradition policies.As such,respectively,they are not within the jurisdiction of the court system within the People’s Republic of China,which is only effective within Chinese mainland.To reflect this reality,Hong Kong and Macao are recognized as foreign jurisdictions in the context of private international law,and the disputes that have Hong Kong or Macao elements are consequently regarded as the disputes involving foreign elements.28
The situation of Taiwan is more special.Though both the Constitution of China and international law recognize that Taiwan is an integral part of China,the Island has its own governmental and legal system which is a de facto independent jurisdiction from the perspective of private international law.Therefore,it is logical that the disputes possessing Taiwan elements are also regarded as the disputes involving foreign elements.
In this light,for the purpose of private international law,the expression “foreign law” means a distinctive legal system prevailing in a jurisdiction other than in which the People’s Courts function.It therefore includes,not merely the law existing in a country under a foreign political sovereignty,but also the law prevailing in a subdivision of China as a sovereign country of which the mainland is part.Hence,the accurate definition of private international law in China can be expressed as the branch of law that deals with civil and commercial relations that involve foreign elements which are extended to include those having Hong Kong,Macao or Taiwan elements.