Proof of Foreign Law
Establishing the contents of foreign law may be an essential part of any litigation that involves transnational parties or transactions.In the absence of a choice-of-law clause,courts must determine what law to apply.As part of the selection of what law to apply,courts generally must ascertain the contents of the various substantive laws,especially when the choice of law doctrine requires using the law with “the most significant relationship.” 1 Even when the parties have preselected an applicable law,proof of the content of the foreign law is still required.Many courts,as discussed below,will apply the forum’s law by default when there is insufficient proof of the contents of foreign law.
Proof of foreign law is essential not only for determining underlying substantive issues but also for resolving many procedural matters.For example,a crucial element in the analysis of a motion to dismiss for forum non conveniences in Anglo-American countries is to ascertain whether the alternative forum would provide a just remedy.Proof of foreign law is even important in connection with international civil judicial assistance.For instance,when a court is requested to recognize and enforce a foreign judgment,the determination of the law of the foreign forum is usually required.
It is undoubted that proof of foreign law is essential in adjudicating private international law cases; however,it is by no means an easy task for a judge to fulfill,as Holmes J.noted that:
“This is especially true in dealing with the decisions of a Court inheriting and brought up in a different system from that which prevails here.When we contemplate such a system from the outside it seems like a wall of stone,every part even with all the others,except so far as our own local education may lead us to see subordinations to which we are accustomed.But to one brought up within it,varying emphasis,tacit assumptions,unwritten practices,a thousand influences gained only from life,may give to the different parts wholly new values that logic and grammar never could have gotten from the books.”2
1.1 Foreign Law: Fact or Law?
What is the nature of foreign law in Chinese People’s Courts,fact or law? In many foreign states this is a fundamental question which has a direct bearing on the specific methods and procedures for the proof of foreign law; however,Chinese law fails to provide an answer.Some Chinese scholars even argue that it is meaningless to address this question in the light of Chinese legislation,insofar as Civil Procedure Law provides that “[I]n trying civil cases,the People’s Courts must base themselves on facts and take the law as the criterion.”3 These scholars note that under the wording of this provision,there is no difference between fact and law; therefore,the classification of foreign law as fact or law is pointless in practice.4
Nevertheless,this is not an unimportant issue from the perspective of academic analysis,and in light of the civil law tradition that China inherited and the relevant provisions in the Civil Procedure Law and the Conflicts Act,the author tends to argue that foreign law is law instead of mere fact before Chinese courts.
First,modern Chinese law adopts a largely western-style legal code in the civil law tradition (specifically German-influenced); therefore,it is logical that Chinese law follows the civilian approach.Second,unlike common law jurisdictions,Chinese courts do not depend on pleadings and proof by the parties concerned,because the Chinese civil procedure adopts an inquisitorial system rather than adversarial system,in which the judge is not just the passive servant of the parties but a ‘truth-seeker’ whose duty is to take active initiative and select appropriate means to ascertain the objective truth underlying a legal dispute.Therefore,it is a general principle that where a People’s Court applies foreign law as the applicable law,it has to ascertain the law ex officio,5 which has been confirmed by the Conflicts Act,as discussed in detail later in this section.
1.2 Methods of Proof
In China,the earliest rules concerning proof of foreign law can be dated back as far as the year 1988,when the SPC issued the “Opinions of the Supreme People’s Court on Implementing the General Principles of Civil Law of the People’s Republic of China” (hereinafter,Opinions on the GPCL).Pursuant to Article 193 of Opinions on the GPCL,the applicable foreign laws may be found out in the following ways: (1) provided by the litigants; (2) provided by the central authority of the foreign country having entered into the judicial assistance treaty with China; (3) provided by the Chinese embassy or consulate in this foreign country; (4) provided by the embassy of this foreign country in China; (5) provided by the legal experts at home and abroad.6
The above article enumerates five methods to ascertain the content of foreign law which provides much needed help to Chinese judges when foreign law is referred to as the applicable law.However,there are several points which are worthy of discussion.
First of all,it fails to spell out who bears the burden of proof in general and in each specific situation.Second,the wording of “may”,instead of “shall” implies that it is unnecessary to exhaust the above-said ways before the conclusion that the applicable foreign law cannot be ascertained.Moreover,it indicates that these five ways are illustrative rather than exhaustive.For example,judicial practice shows that Intermediate People’s Court of Wuxin City of Juangsu Province ascertained the content of German civil law according to the published Chinese translation of the German Civil Code in 2005,7 and the First Intermediate People’s Court of Shanghai identified the law of State of Delaware via LexisNexis,an online legal database,in 2006.8 Third,it makes it clear that in the event that foreign law cannot be ascertained,rather than applying the most closely ascertainable law,Chinese courts will apply Chinese law instead.
The Conflicts Act of 2010 contains 52 articles arranged under eight chapters,with headings that are indicative of their respective scope.Among those 52 articles,the article that deals with proof of foreign law is located in Chapter One “General Provision”,as Article 10 provided that:
The foreign law applicable to a foreign-related relationship shall be ascertained by the relevant People’s Court,arbitration institution,or administrative agency; Where the parties choose to apply a foreign law,the parties concerned shall ascertain such foreign law; In case the foreign law cannot be ascertained or there is no pertinent rule of law after ascertainment,the law of the PRC shall apply.
A careful reading of the above article indicates that some interesting changes have been made compared with Article 193 of Opinions on the GPCL.
First,reflecting the civil law tradition,Article 10 of the Conflicts Act states expressly that,as a general principle,courts or other quasi-judicial institutions,shall ascertain the content of foreign law ex officio.This confirms the author’s opinion that foreign law is law instead of mere fact,as mentioned above.
Second,it distinguishes a specific situation (i.e.,the parties choose a foreign law as the governing law) where the parties concerned shall bear the burden to ascertain the content of the chosen law.The rationale behind this provision is that since the parties have reached agreement on the applicable law,it is reasonable to presume that they are familiar with the law in question and possess sufficient materials to ascertain its content; therefore,it is logical to ask the parties to bear the burden of proof in this case.
Third,given the development of modern science and technology and the close exchange between countries across the globe,it does not enumerate the specific methods to ascertain foreign law.The lack of listing the specific methods increases the flexibility of the Article,which will,in turn,facilitate the task of ascertaining foreign law.
Moreover,having acknowledged that proof of foreign law is one of the major obstacles for the People’s Courts to improve judicial efficiency in foreign-related cases,the SPC considers it necessary to provide more detailed provisions.Therefore,the Interpretation (I) on the Conflicts Act implemented in 2013 provides more detailed rules,as Article 17 of this judicial interpretation states that:
If a foreign law cannot be established pursuant to the methods provided by the international conventions to which China is a party,by the parties’ submission,by expert witness,or other appropriate methods,the People’s Court may hold that the foreign law cannot be proved.
Where the parties bear the burden of proving a foreign law chosen by them,the People’s Court may hold that the foreign law cannot be proved if they fail to fulfill this duty without due reasons in the reasonable period designated by the Court.
It merits particularly strong emphasis that judges are left with much more discretion under the above article compared with the judicial interpretation issued previously,which is reflected in the following two aspects:
First,when the People’s Court ascertain the content of foreign law ex officio,it shall fulfill its duty pursuant to Article 17 of the Interpretation (I),with no need to exhaust the five methods enumerated by the Interpretation on the GPCL.
Second,when the parties bear the burden of proving the foreign law,they shall fulfill the duty within a reasonable period specified by the People’s Court; otherwise,they have to face the consequence that the law chosen by them is unable to be ascertained.
Obviously,the SPC attempts to improve judicial efficiency by vesting judges with such wide discretion.Nevertheless,given the failure to prove foreign law would lead to the application of the lex fori,the author submits that Article of the Interpretation (I) would encourage the “homeward trend”.Indeed,as many Chinese judges are still reluctant to recognise the effect of foreign law in civil cases involving foreign elements,it is highly possible that this article would be manipulated by Chinese judges to expand the application of lex fori,and if this were the case,the underlying purpose of Private International Law Act would be defeated.
Furthermore,as Chinese judges are generally unfamiliar with foreign law,especially with case law in Anglo-American jurisdictions,Article 18 of the Interpretation (I) states that the People’s Court should listen to the parties’ statement on the content of foreign law,should they reach agreement,the Court may confirm it; should they have different opinions,the Court shall examine and determine it.That is to say,if the parties reach an agreement on the content of a foreign law,the court may confirm it directly,even in the circumstance that the court shall ascertain the content of foreign law ex officio.The purpose of such an arrangement,apparently,is to alleviate the burden of Chinese judges,thus enhancing judicial efficiency in foreign-related cases.(https://www.daowen.com)
1.3 Failure to Prove Foreign Law
In the event that foreign law cannot be ascertained,rather than applying the most closely ascertainable law,Chinese courts will,for reasons of a pragmatic nature and as a result of the “homeward trend” as the prevalent lex fori bias is called,apply Chinese law instead.As the above section suggests,both Article 193 of Opinions on the GPCL and Article 10 of the Conflicts Act make it clear that in the event that foreign law cannot be ascertained,rather than applying the most closely ascertainable law,Chinese courts will apply Chinese law instead.
It should be noted that many Chinese scholars who argued that Chinese law should not apply automatically when foreign law cannot be ascertained or there is no pertinent rule of law after ascertainment.They hold such position because they worry that the application of the lex fori without exception would encourage the “homeward trend” which has prevailed in Chinese judicial practice over the years.
For example,in the case of the collision between MV Trade Quicker and MV Yanan,9 the Tianjin Maritime Court held that since both colliding ships were registered in Panama,Panamanian law should be applied.However,since the parties failed to prove Panamanian law and the Maritime Court was unable to identify it,the Maritime Court applied Chinese law instead.In the case of the collision between the ships Huayu and Coral Island,10 the Maritime Court concerned was unable to identify the foreign law designated by the conflict rule in the agreement between the parties,and applied Chinese law instead.
In 2017,the author made an empirical observation on the performace of Chinese courts with regard to the proof of foreign law since the implementation of the Conflicts Act.11 Among the twenty nine cases in which foreign law was needed to be proved before Chinese courts up to 30 June 2017,twenty eight should be governed by foreign law,one by an international convention to which China is a contracting party.Hence,for those 28 cases,it is necessary to prove the content of foreign law before Chinese courts.In this respect,how foreign law was proved and whether it was able to be proved in those cases provide a good opportunity to observe the actual attitude of Chinese courts towards foreign law in judicial practice .
However,research suggested that only 9 out of 28 were eventually governed by foreign law.The reason for the application of Chinese law in place of foreign law in the rest 19 cases is the same: the otherwise applicable foreign law could not be proved.Furthermore,among those 19 cases,there are 16 cases in which the conclusion that foreign law was unable to be approved was based on the fact that the parties failed to submit the relevant foreign law.In comparison,among the 9 cases in which foreign law was applied,there are 7 cases in which the parties proved the relevant foreign law.Differently expressed,among those 28 cases in which foreign law should be proved,there were but 2 cases in which the court ascertained the content of foreign law ex officio.
In light of the analysis of the above cases,the following conclusions can be drawn: First,proof of foreign law,in general,is a difficult issue before Chinese courts.The failure to prove foreign law is a major reason why Chinese law is applied though private international law rules refer to a foreign legal system.
Second,Chinese courts are reluctant to ascertain the content of foreign law ex officio even after the implementation of the Conflicts Act which states in Article 10 that,as a general principle,courts shall ascertain the content of foreign law ex officio.Therefore,on most occasions,it is the parties that bear the burden to prove foreign law.
Third,in cases where foreign law is chosen by the parties,the parties,in principle,should prove its content; otherwise,they have to accept the consequence that the law they chose cannot be proved.It is worth noting that if both parties reached the agreement on the content of the relevant foreign law,Chinese courts would simply confirmed it and then applied it; nonetheless,if one party submitted the content of foreign law while the other party challenged its authenticity,or if the two parties disagree on the content of foreign law that they chose,it is highly possible that Chinese courts conclude that foreign law cannot be proved.
1.4 Mistakes in the Application of Foreign Law
Mistakes in the application of foreign law by the lower court,as well as mistakes in the application of Chinese private international law,can be appealed to a higher court in China.In some common law systems,foreign law is considered as a “fact” to be proven,and not as “law”.In these jurisdictions,where access to appellate review is restricted to mistakes of law,mistakes in the application of foreign law are not adequate grounds for review.In contrast,all court decisions in China are appealable to a higher court,whether the mistake alleged is one of the fact or of the law,as Article 168 of the Civil Procedure Law provides: “[W]ith respect to an appealed case,the People’s Court of second instance shall review the relevant facts and the application of the law.”12 Consistent with the notion of judges as “truth seekers,” the distinction between law and fact is irrelevant and is given no practical significance in Chinese judicial practice.
1.5 Latest Efforts Made by Chinese Courts with Regard to Proof of Foreign Law
In September 2013,President Xi Jinping proposed a Silk Road Economic Belt and in October,a 21st-Century Maritime Silk Road,together now referred to as the Belt and Road Initiative (“B&R”).It integrates the historical symbolism of the ancient Silk Road with the new requirements of today.The Initiative is a Chinese program whose goal is to maintain an open world economic system,and achieve diversified,independent,balanced,and sustainable development,and also a Chinese proposal intended to advance regional cooperation,strengthen communications between civilizations,and safeguard world peace and stability.
The significant opportunities of the B&R also come with significant risks of legal disputes arising.This is particularly the case given that the B&R sees commercial contracts being concluded between parties from the countries with vastly different legal systems and traditions.
Under such a circumstance,the number of the Initiative-related disputes has been increasing by leaps and bounds,and the challenges posed by the B&R for Chinese courts are unprecedented,as He Rong,a Vice-President of the SPC,said in an exclusive interview with China Daily,“[T]he Initiative has brought a boom of foreign-related disputes,as well as challenges for us in case hearings.”13 Indeed,given the context of the B&R Initiative,the author believes that proof of foreign law in the Initiative-related disputes would be a more challenging task before Chinese courts.
Fortunately,the SPC of the PRC has realized the challenges that the B&R Initiative has posed for Chinese courts.On 16 June 2015,the SPC issued a policy document entitled “Several Opinions of the Supreme People’s Court on Providing Judicial Services and Safeguards for the Construction of the Belt and Road by Peoples” Courts’ (hereinafter,B&R Opinion).14 The B&R Opinion covers cross-border criminal,civil and commercial,and maritime as well as free trade zone-related judicial issues which also deals with the judicial review of arbitration.What merits particularly strong emphasis is Paragraph 7 of this document,[1]in which the SPC unambiguously requests the Peoples’ Courts to “fully respect the right of the parties to choose a governing law,actively identify and accurately apply foreign laws,and eliminate legal doubts of the parties of China and countries along the Belt and Road routes in international commercial affairs”.
Apparently,the above Paragraph indicates that the SPC clearly understands the importance of conflicts law issues,proof of foreign law,in particular,for the smooth implementation of the B&R Initiative.As a matter of fact,in the author’s opinion,the expression employed herein reveals the anxiety of SPC over the “homeward trend”.
Since the promulgation of the B&R Opinion,Chinese courts at various levels have taken measures to “actively identify and accurately apply foreign law”.So far,noticeable progress can be summarized as follows:
First,Chinese courts have established specialized academic platforms providing foreign law ascertainment service in collaboration with leading Chinese universities or social institutions,which,inter alia,include the followings: the Foreign Law Ascertainment Center at China University of Political Science and Law (CUPL) in Beijing co-established by the SPC and the CUPL 2015,the Foreign and Hong Kong & Macao Law Ascertainment Center in Shenzhen co-established by the SPC and Benchmark Chambers International in 2016,and the Foreign Law Ascertainment Center at East China University of Political Science and Law (ECUPL) in Shanghai co-established by the Higher People’s Court of Shanghai and the ECUPL in 2014.Judicial practice during the past years suggests that these academic platforms have played a positive role in helping judges and parties to ascertain or prove foreign law,especially law of the countries along the B&R routes.
Second,the SPC plans to establish an Initiative-related case guidance and reference system for the lower courts,including model cases,guiding cases,and selected cases (i.e.as selected by the SPC),to guide and limit judges’ discretion.For example,in order to provide more detailed guidance to Chinese judges when they hear the Initiative-related cases,the SPC has released “Model Cases heard by People’s Courts to Providing Judicial Services and Safeguards for the Belt and Road Initiative” regularly since 2015.Ascertaining the content of foreign law properly and accurately is a major issue that these model cases aim to illustrate.
More importantly,as mentioned in Chapter Two of Part Four,the SPC established two international commercial courts designed to hear international commercial disputes,in particular those arising in connection with B&R in 2018,and under the “Provisions of the Supreme People’s Court on Several Issues Regarding the Establishment of the International Commercial Court” (the “Judicial Interpretation on CICC”),CICC has made some innovations with regard to ascertaining foreign law.
According to Article 8 of the Judicial Interpretation on CICC,the content of foreign law may be ascertained in the following ways: (1) by the parties; (2) by Chinese and foreign legal experts; (3) by institutions offering foreign law ascertainment services; (4) by the experts of the Expert Committee; (5) by the central authority of the foreign country,which has entered into a judicial assistance treaty with China; (6) by the Chinese embassy or consulate in the foreign country; (7) by the embassy of the foreign country in China; or (8) by any other reasonable means.The materials and expert opinions on foreign law provided in one or more of these ways should be presented during the CICC hearing,and the parties are to be given an opportunity to be heard.
In this respect,Article 8 has expanded beyond the pre-CICC methods of ascertaining the content of foreign law in Chinese litigation: methods (3),(4) and (8) are new inclusions.The “other reasonable means” addition (method (8)) presumably includes ascertainment of foreign law through a BRI online law database that the SPC plans to establish in the future.While the augmentation of methods to ascertain foreign law is a helpful development,three issues concerning Article 8 require clarification.
First,it is unclear what kind of institutions providing foreign law ascertainment services may fall within the ambit of Article 8.Currently,the official CICC website lists four such institutions.There is,however,no further guidance on how an institution may obtain authorization to submit expert opinions on foreign law in CICC litigation; or what the authorization criteria are.
Secondly,it is unclear if there is a hierarchical order between the opinions by the different experts/institutions.In other words,does the opinion of some experts (for example,the experts of the Expert Committee) carry more weight as compared with the opinions of others? Parties may take the issue of weight into consideration in sourcing an opinion on the content of foreign law.As parties before the CICC are not entitled to a right of appeal,“getting it right” is important,because there is no second chance.Further,if a member of the Expert Committee—an institution formally organized by the CICC—has misstated the content of foreign law,do the parties have any recourse—for example,the chance of a hearing de novo?
Finally,it is important to note that Article 8 of the Judicial Interpretation on CICC operates within the existing Chinese legislative framework,which is underlined by a strong “homeward trend” in application.Under Article 10 of the Conflicts Act,Chinese law applies by default where foreign law cannot be ascertained or where there is no relevant rule of law after conducting the ascertainment process.In practice,Article 10 has been manipulated by Chinese judges to expand the application of the lex fori.This dangerous “homeward trend”,if it is allowed to continue,is likely to undermine the CICC’s credibility as a neutral and trustworthy forum.In addition,this problem cannot be remedied by Article 8 of the Judicial Interpretation on CICC,which merely augments the means of ascertaining foreign law.To reduce the risk of judicial manipulation,more concrete rules need to be enacted to guide the CICC judges’ application of Article 10 of the Conflicts Act.15