Conflict Rules under Chinese Law
2.1 Introduction
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,there are four articles that deal with torts.In Chapter VI,Article 44 lays down the main rules on the law applicable to a tort claim,Articles 45 and 46 provide the choice-of-law rules for two particular torts respectively,i.e.,product liability and internet defamation; In Chapter VII,Article 50 specifies the choice-of-law rules for infringement of intellectual property.Moreover,it is worth emphasizing that Article 51 in Chapter VIII states ambiguously that Article 146 of the General Principles of the Civil Law of the People’s Republic of China (“GPCL”) shall be replaced by the relevant articles of the Conflicts Act.
As carefully scrutinizing the above articles,one can observe that Chinese private international law in respect of tort is undergoing a fundamental transformation: First,the double actionability rule embodied in Article 146 of the GPCL was abolished.Second,and more strikingly,the Conflicts Act introduces party autonomy to the field of tort.Third,the Act switches to establish habitual residence,rather than nationality or domicile,as the connecting factor to determine the lex personalis.Last,but not least,particular rules for product liability,internet defamation,and infringement of intellectual property are laid down by the Conflicts Act.Furthermore,Article 51 of the Conflicts Act indicates that among the tort choice-of-law rules that have existed in various separate laws prior to the date of commencement of the Conflicts Act,only Article 146 of the GPCL was abolished.It therefore follows that the tort choice-of-law rules included in the Maritime Act and the Civil Aviation Act,remain unaffected by the new statutory code.
As such,the purpose of this section is two-fold.First,it provides an examination of the statutory reform of private international law regarding tort conflicts that has happened in China.Second,after summarizing problems concerning the tort choice-of-law rules have surfaced in this process,it puts forward suggestions for improvement.
2.2 Conflict Rules prior to the Conflicts Act
2.2.1 The Main Rule on Torts
Before China drafted the Conflicts Act in 2010,the conflict rules were scattered among various separate statutes and regulations.Among these statutes and regulations,the most significant provision was Article 146 of the GPCL7 which provides that:
With regard to compensation for damages resulting from a tortious act,the lex loci delicti shall be applied.If both parties are nationals of the same country or domiciled in the same country,the law of their own country or of their place of domicile may also be applied.
An act committed outside the People’s Republic of China shall not be treated as a tortious act if under the law of the People’s Republic of China it is not a tortious act.
Additionally,in order to implement the rules contained in the GPCL,the Supreme People’s Court,in its capacity as interpreter of the application of law as prescribed by the Organic Law of the People’s Court,8 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 referred to as the “Opinions on GPCL”) in 1988.9 Given the definition of the lex loci delicti is somewhat ambiguous,the Supreme People’s Court set forth in Article 187 of the Opinions on GPCL that:
The lex loci delicti may refer either to the law of the place where the tortious act was committed or to that of the place where the harm of the act occurred and that People’s Courts may select either in case where these two laws are different.
The above articles indicated that Chinese conflicts law in tort before the Conflicts Act established a single general rule,containing two limbs,and a single exception thereto.Thus,the combined effect of Article 146 (1) of the GPCL and Article 187 of the Opinions on GPCL was to establish a general rule whose operation depended on the existence or otherwise of a domicile or a nationality common to the parties.If both parties were of the same citizenship or domicile,the lex partriae or the lex domicilii may apply.If no such common citizenship or domicile existed,the tort was governed by the lex loci delicti which included either the law of the place of occurrence of the tort or that of the place of the occurrence of the results of the tort.Then,Article 146 (2) of the GPCL provided an exception which meant that,in order for an act committed outside the PRC to be actionable in the PRC,it must necessarily be regarded as a tort in accordance with the domestic Chinese law.This exception was regarded by Chinese scholars as a Chinese version of double actionability.
(1) Lex Loci Delicti
The lex loci delicti theory (the application of the system of law of the place where the tort was committed) is the orthodox doctrine in classic private international law which was prevailing in both civil law countries and some common law countries,such as the United States and Australia,until the first part of the 20th century.
The theory,dating back to the fourteenth century,is originally derived from the ancient Latin axiom “locus regit actum” which means the law of the locality regulates the thing to be done.10 In the first half of the twentieth century,it is further endorsed by the vested rights theory.11 Adherents suggest that the lex loci delicti reflects and protects the legitimate and reasonable expectations of the respective parties.Furthermore,it is contended that the jurisdiction in which the tort was committed is the place that has the greatest interest in striking a reasonable balance among safety,cost,and other factors pertinent to the design and administration of a system of tort law.12
Chinese legislators enacting the GPCL accepted the lex loci delicti theory for the similar reasons who believed that the adherence to this theory in general avoided egregious forum shopping and led to certain,predicable and uniform result.However,judicial practice suggested it was not infrequent that the tortious act and the harm of which the plaintiff complained occurred in different jurisdictions.Accordingly,the Supreme People’s Court empowered the courts to choose a law of either place at discretion should this situation occur.
Nonetheless,it should be noted that unlike the laws of many other civil law countries,[1]Chinese law at this stage failed to provide any guideline for judges to follow when they have to choose one law between the law of the place of occurrence of the tort and that of the place of the occurrence of the results of the tort; arbitrary selections and inconsistent decisions were,therefore,almost inevitable.Indeed,judicial practice in China suggested that the People’s Courts under this circumstance tended to choose the law which would be more favorable to the Chinese parties.The following two decisions may serve as illustrative examples.
In Tokizaki v.Beijing Hongyun Tianwaitian Restaurant Co.Ltd.,13 a case decided in 2001,the plaintiff,a Japanese national,was injured in an assault by the employees of the defendant,a Chinese company,located in Beijing.The plaintiff brought an action in Beijing and sought compensation in the amount of 4,096,333.55 yuan (RMB) pursuant to Japanese tort law.The trial judge acknowledged that: (1) the alleged wrongful act was committed in China,and the damage was suffered primarily in Japan and continued to occur there,(2) Chinese tort law differed from Japanese tort law in assessing damages resulting from a wrongful act,and the latter provided a higher level of compensation.The judge went on to reason that as he was entitled to choose either Chinese law or Japanese law in such legal scenario under Article 187 of the Opinions on the GPCL,he thus chose Chinese law,i.e.,the law where the wrongful act was committed,as the governing law at his discretion.Regrettably,no detailed reasoning or further explanation in support of the choice was provided in the judgment.As a result,the judgment was rendered pursuant to the relevant Chinese law,under which the award of damages to the plaintiff was reduced to 229,612.85 yuan (RMB),a sum which was much less than he had expected.
In Gansu Highway Administration v.Yokohama Rubber Co.Ltd.,14 the plaintiff alleged that a defective tire manufactured by the defendant,Japan’s third-largest tire maker,caused the death of its four employees.The plaintiff specified that four of its employees,including a driver,left Lanzhou on business in an automobile owned by the plaintiff.When the car was driven along a highway in Shaanxi Province,one of the car tires exploded which led to the accident,claiming the lives of the four.Gansu Highway Administration thus brought the action against Yokohama Rubber Co.Ltd.in Xi’an Intermediate People’s Court,seeking compensation in the amount of 557,000 yuan (RMB) under Japanese Product Liability Law on the ground that it was the law of the place where the defective tire was manufactured.Nonetheless,the defendant argued that Chinese law,as the law of place where the accident happened,should apply.The judge of Xi’an Intermediate People’s Court reasoned that under Article 146 of the GPCL,the dispute in question should be governed by lex loci delicti.Moreover,pursuant to Article 187 of the Opinions on the GPCL,either Chinese law or Japanese law may be selected as the applicable law,insofar as the injury occurred in China while the alleged defective tire was manufactured in Japan.The judge emphasized that due weight should be given to the argument of the plaintiff in the present case,as its employees,the victims of the alleged defective products,was the weaker party whose legitimate interests should be protected.In this light,the judge chose Japanese Product Liability Law as the applicable law.
In both cases,the tortious act and the harm of which the plaintiff complained occurred in different jurisdictions; however,different People’s Courts chose different laws under the same conflicts rule,depending on which law would benefit the Chinese litigants.Such decisions demonstrated that the lack of guideline for selecting law in case that the place where tort was committed differed from that of the occurrence of the results of the tort has led to too much elasticity and flexibility in the application of the lex loci delicti,which undermined uniformity,predictability and certainty that private international law purports to safeguard.
(2) Common Personal Law
As indicated earlier,Article 146 of the GPCL stated that where the persons who inflicted the injury and the victim were nationals or domiciliaries of the same state,the law of that State may displace the lex loci delicti.The rationale for applying common personal law is based on the likelihood that where such a law exists,it will be more closely connected with the parties than the lex loci delicti,or its application better reflects the expectations of the parties.Indeed,recent private international law codifications and international conventions have adopted the notion that the common personal law of the parties normally prevails over the lex loci delicti.This notion is implemented either through a common domicile rule,or through an exception from the lex loci rule.The exception is phrased either in common-domicile or common habitual residence language,15 or in common-nationality language.16 Thus,preference for the common personal law over the lex loci delicti by the GPCL seems to reflect similar developments in contemporary conflicts law around the world.17
However,it should be noted that unlike the laws of many countries which provide a systematic and automatic preference of the common personal law over the lex loci delicti,Article 146 of the GPCL stated clearly that the application of the common personal law was discretionary rather than mandatory; differently expressed,judges were entitled to apply either the lex loci delicti or the common personal law of the parties.The reason for employing an alternative reference rule is that though the common personal law is likely to be more closely connected with the tort or better reflected the legitimate expectations of both parties,it is by no means the case that common personal law must in fact be so.In certain cases,the automatic displacement of the lex loci delicti in favor of the common personal law has been proved to be unjustified.What is more,in contrast to the laws of many other countries which provide an exception in favor of the law of another country which has a manifestly closer connection with the tort,the GPCL did not include such exception.Therefore,it was submitted that the alternative reference rule adopted by Article 146 of the GPCL was a necessary arrangement to avoid the injustice that automatic displacement of the lex loci delicti by the common personal law may produce.18
(3) The Double Actionability Rule
Under Article 146(2) of the GPCL,in order for an act committed outside People’s Republic of China to be recognized as a tort in the PRC,it must necessarily be regarded as a tort under the domestic Chinese law.Apparently,this was the reflection of the double actionability rule.According to some Chinese scholars,Article 146(2) of the GPCL was based on the consideration that implementing open door policy often involved laws of many capitalist countries which often had strict liability principles in dealing with tort and which allowed the definition of tort to include a very broad range of acts; the double actionability rule would limit the adverse impact of the absolute liability doctrine in tort or of the broad coverage of tort being developed in the Western legal system.19
Though such consideration was not irrational,the reflection of the double actionability rule in the GPCL had invited a lot of criticisms especially since the late 1990s.Many Chinese scholars have questioned the merits and rationality of the incorporation of this common law rule and rejected it as an outmoded remnant of the past.20 The debate on the double actionability rule among Chinese scholars will be introduced in more detail later.
2.2.2 Some Particular Torts
Though the GPCL contained only one article on the choice-of-law rules for tort in general,some other Chinese laws prior to the enactment of the Conflicts Act lay down particular rules for certain torts.The Maritime Act of the People’s Republic of China,effective as of July 1,1993,makes the following conflicts rules for maritime torts in Article 273:
The law of the place where the infringing act is committed shall apply to claims for damages resulting from collision of ships.
The law of the place where the court hearing the case is located shall apply to compensation for damages resulting from collision of ships on the high seas.
If the colliding ships belong to the same country,the law of the flag state shall apply to claims for damages resulting from collision between them,irrespective of the place where the collision occurs.
Adopted on October 30,1995,the Civil Aviation Act of the People’s Republic of China contains conflicts rules for aerial torts,providing in Article 189 as follows:
The law of the place where the infringing act is committed shall apply to claims for damages to the third party on the ground by civil aircraft.
The law of the place where the court hearing the case is located shall apply to claims for damages to a third party on the high seas surface by civil aircraft from the air.
Echoing Article 146 (1) of the GPCL,Article 273 of the Maritime Act,and Article 189 of the Civil Aviation Act confirm the status of lex loci delicti as the general rule; additionally,given the particularities of maritime and aerial torts,the two articles provide special conflicts rules respectively in case application of the lex loci delicti is not possible or appropriate.
Under Article 273 of the Maritime Act,the lex loci delicti is supplemented with one substitute and one exception.Pursuant to Article 273(2),where the collision occurs on the high seas,the lex fori shall be applicable.This substitute is self-explanatory: as the high seas are subject to no State’s jurisdiction,the lex loci delicti is of no availability,the lex fori,the law of the place of jurisdiction chosen by the victim would,therefore,be the governing law.However,both Article 273(1) and (2) shall be displaced if the ships wear the same flag in which case the law of the flag shall be applied.The exception is based on the presumption that the law of flag in this case usually has a closer connection with such collision than the lex loci delicti,and that the rule in favor of the law of the flag States reflects and protects the legitimate expectations of both parties.
Pursuant to Article 189 of the Civil Aviation Act,claims for damages to the third party by civil aircraft is governed by: (1) the lex loci delicti if tort occurs on the ground; or (2) by the lex fori if tort occurs on the high seas,as it is impossible to determine the lex loci delicti in this case.However,a careful perusal of Article 189 of the Civil Aviation Act will reveal two problems: first,the article fails to provide the governing law in case where two aircrafts collide with each other; second,if literally interpreted,the article does not cover the situation where damages to the third party by civil aircraft occurs on the surface of the territorial waters.
It should be noted that Article 51 of the Conflicts Act indicates that among the tort choice-of-law rules that have existed in various separate laws prior to the date of commencement of the Conflicts Act,only Article 146 of the GPCL was abolished.Then,Article 273 of the Maritime Act and Article 189 of the Civil Aviation Act will continue to apply to the issues that fall within their respective scope.
2.3 Conflict Rules under the Conflicts Act
Abolishing Article 146 of the GPCL,the Conflicts Act prescribes relatively elaborate conflict rules for torts which contain both rules for torts in general and particular rules for certain torts.Generally speaking,the incorporation of various new choice-of-law rules in tort by the Conflicts Act is a response to the fact that more and more foreign-related tort cases are adjudicated by the Chinese People’s courts,and the existing conflict rules were unable to provide proper solutions.
2.3.1 Torts in General
The main choice-of-law rules on torts are provided by Article 44 of the Conflicts Act which applies to most torts.It specifies:
The laws applicable to tort liability shall be the law of the country in which the tortious act is committed.However,where the parties concerned have their habitual residence in the same country,the tort liability shall be governed by the law of that country.If the parties choose the applicable law by agreement after the tort occurred,their agreement shall prevail.
Under Article 44 (1) of the Conflicts Act,tort liability,as a general rule,is governed by the lex loci delicti.However,this rule is subject to two exceptions: (1) if both parties are habitually resident in the same country,the tort shall be governed by the law of that country; (2) if the parties reach an agreement on the applicable law after the tort occurred,the tort is governed by the law chosen by them.Such triple structure manifests that the Chinese legislators take pains to maintain equilibrium between the orthodox doctrine and modern ones: on the one hand,the general rule of Article 44 is nothing but a restatement of the traditional lex loci delicti; on the other hand,the Conflicts Act attempts to substantively reform Article 146 of the GPCL by abolishing the double actionability rule,introducing party autonomy and choosing habitual residence to replace domicile and nationality as the connecting factor to determine the lex personalis.
As the lex loci delicti remains to be the general rule,a question naturally arises: where a tortious act and the ensuing damage occur in different places,which one shall be determinant? Though Article 44 per se fails to provide any guiding principle,one can find the solution by virtue of Article 2(2) of the Conflicts Act.Included in Chapter I (General Provisions),Article 2 provides in the second paragraph that a foreign-related civil relationship is governed by the law most connected to it,where neither this Act nor any other law designates the applicable law.Thus,the law keeping the closer connection with tort,between the law of the place of conduct and that of injury,shall be applied under such a circumstance.Compared with the GPCL which did not provide any guideline for courts to choose between the two laws,the Conflicts Act,obviously,represents an improvement.
Another issue which should be mentioned is that the reference made by Article 44 is always the substantive law of the relevant country.Renvoi is excluded by Article 9,which stipulates that the foreign law applicable to a foreign-related civil relationship does not include the conflicts law of that foreign country.
As regards the reform made by the Conflicts Act,there are several points worth drawing attention to.First,the double actionability rule reflected in the GPCL has been abolished.As mentioned above,Chinese scholars have questioned the merits and rationality of the incorporation of the double actionability rule since the late 1990s.They argued that the rule operated in favor of the defendant and to the disadvantage of the plaintiff,and could lead to absurd and anomalous results; therefore,even in the United Kingdom,the double actionability rule in Phillips v.Eyre had been abolished in respect of all torts except defamation committed after May 1,1996;[2]furthermore,they contended that with the development and improvement of Chinese economy and legal system,the differences between Chinese tort law and the Western tort law were no longer substantive.In fact,the Tort Liability Act of the PRC enacted in 2009 has incorporated many doctrines in torts developed in the Western legal system.Accordingly,there was neither theoretic justification nor practical necessity for the Chinese law to retain this outdated rule.For these reasons,they advocated that Chinese law should abolish the rule as soon as possible.In response to their suggestions,the Conflicts Act does not include the outdated rule.(https://www.daowen.com)
Second,Article 44 (2) of the Conflicts Act ensures that the law of the country where the parties are habitually resident will prevail over the lex loci delicti.What merits particularly strong emphasis is that habitual residence has been elevated to a fundamental status by the Conflicts Act; or to be more specific,habitual residence,rather than nationality,has been established as the principal connecting factor to determine lex personalis,family law and succession law.As habitual residence enjoys such a fundamental status in the Conflicts Act,it is not surprising that the law of the country where the parties are habitually resident replaces both the lex partriae and the lex domicilii.21
Third,and more strikingly,Article 44 (3) of the Conflicts Act gives preference to the law chosen by the parties after the tort has occurred notwithstanding paragraphs 1 and 2.The introduction of party autonomy to tort represents a paradigm shift: in tort,achieving the public interests of justice had traditionally been considered to be paramount but adjusting the private interests of the parties is increasingly considered to be also important.22 The new rule imposes no restriction on the range of legal systems to choose from.Nonetheless,it does not permit a choice before a tort takes place,as the parties usually do not contemplate a future tort,and allowing pre-tort agreements may lead to the consequence that the socially stronger party imposes its unilateral choice on the weaker party.
Though Article 44 of the Conflicts Act represents some progress compared with Article 146 of the GPCL,it produces several problems simultaneously,which can be analyzed as follows:
First,despite the vital importance of habitual residence,neither the Conflicts Act nor other Chinese legislation provides a definition of this term.The application of the law of common habitual residence,therefore,depends on the arbitrary interpretation of this term by judges.In this respect,it is very fortunate that the SPC has provided the definition of habitual residence in the Judicial Interpretation (I) of the Conflicts Act.
Second,the merit of an automatic preference to the law of the common habitual residence over the lex loci delicti is open to doubt.Certainly,there are many situations in which it seems clear that the law of the common habitual residence should prevail,as it reflects both the most significant relationship and the legitimate expectations of the parties; nevertheless,preference of the common habitual residence is not justified in some other situations.As a matter of fact,this is the reason why Article 146 (2) of the GPCL provides that the displacement of the lex loci delicti in favor of the common personal law is in any case a matter of discretion,rather than mandatory,as noted earlier.Given Article 44 of the Conflicts Act,like Article 146 of the GPCL,does not include an escape from the common-residence rule,i.e.,a closer connection exception,the author submits that the automatic preference given by Article 44 (2) of the Conflicts Act to the common habitual residence is problematic.In this respect,Article 44 (2) of the Conflicts Act is regress,rather than progress vis-à-vis Article 146 (2) of the GPCL.
Last,but not least,the practicability of allowing the parties to choose the applicable law after the tort has happened may be challenged.The reason is almost self-evident; after the tort has occurred,the parties are in a position to know of their rights and obligations.As reasonable persons,they naturally desire to apply the law that would lead to the result more favorable to them.After the occurrence of the tort,each party knows the result of the application of the relevant laws,thus,“the veil of ignorance” is pierced,and it follows that it is very difficult for the parties to reach an agreement at this stage.23 Such situation is vividly represented by the following case.
On July 23,2011,two high-speed trains collided in the suburbs of Wenzhou,Zhejiang Province,China.Forty people were killed and more than two hundreds were injured,twelve of whom were fatal.[3]Among the dead,there were two U.S.citizens and one Italian citizen.After the accident,China’s Ministry of Railways announced that the families of each victim would be compensated 915,000 yuan (around USD145,000).As regards the compensation to the foreigners who were killed in the train collision,the Ministry of Railways reiterated on various occasions that the families of the foreign victims would be compensated pursuant to the same standard under the Act on the Application of Laws on Foreign-related Civil Relationships of the PRC and the Tort Liability Act of the PRC.Nevertheless,the families of the foreign victims refused to accept the solution offered by the Ministry of Railways who argued that the law of their home country,rather than Chinese law,should be applied.No agreement had been reported to be reached between the families of the foreign victims on the one hand,and the Ministry of Railways on the other.
This case graphically illuminates that after a tort happened,each party usually aspires to apply the law to favor its particular condition.It is by no means easy for the parties to reach an agreement on the applicable law.In this sense,the feasibility and necessity of introducing party autonomy to tort in this manner is highly arguable.
2.3.2 Particular Torts
With the increasing complexity of tortious liability,the legislators of many countries today share the view that there is a need to indicate particular conflict rules for particular types of torts apart from providing conflict rules for tort in general.This is the case for Switzerland,Belgium,Spain,Italy,Germany,Austria,Japan,and European Union’s Rome II Regulation,etc.The Conflicts Act,in response to such need and the international trend,incorporates special conflict rules for product liability,internet defamation and IPR torts.
In recent years,there have been many cases in China concerning the liability for the harm caused by defective products manufactured in foreign countries.However Chinese People’s Courts have not adopted a consistent approach to solving the choice-of-law issues in those cases due to the lack of clear guidance from law.Therefore,it is of considerable significance for the Conflicts Act to provide specific conflict rules for product liability.
Article 45 of the Conflicts Act provides that the claims for damages relating to product liability shall be governed by the law of the habitual residence of the victim.However,if the victim chooses the law of the principal place of business of the tort-feasor or that of the place where the damage occurred,or if the tort-feasor did not engage in any soliciting activities in the place in which the victim is habitually resident,the law of the principal business place of tort-feasor or that of the place where the damaged occurred,shall be applied.
Hence,under Article 45,the applicable law shall be ascertained in the following order of priority.First,if the plaintiff chooses to apply the law of the principal place of the defendant or that of the place where the damage occurred,the choice of the plaintiff shall be respected.Second,if the plaintiff does not choose a law,or his choice is not valid,the applicable law shall be determined according to whether the defendant engaged in soliciting activities in the country where the plaintiff is habitually resident or not.If the defendant did not,then the law of his principal place or that of the place where the damage occurred shall be applied.Third,in case neither of the above situations occurred,the law of the habitual residence of the plaintiff shall be applied.
Thus,the combined effect of the three limbs of Article 45 is to establish a general rule plus two exceptions; or to be more specific,the law of the habitual residence of the plaintiff shall be applied is the general rule,which is subject to the following two exceptions: (1) if the customers choose to apply the law of the principal place of the defendant or that of the place where the damage occurred,their choice shall prevail; (2) if the defendant did not engage in any soliciting activities in the country where the plaintiff is habitually resident,the law of the principal place of the defendant or that of the place where the damage occurred shall be applied.
Basically speaking,the primary objective of Article 45 is to protect the interests of the consumers,as they are usually the weaker party compared with the manufacturers.Therefore,the claims for damages relating to product liability are generally governed by the law of the habitual residence of the customers,insomuch as they are usually familiar with this law and they will normally expect to be protected under it.If they find that the law of the principal place of the defendant or that of the place where the damage occurred,is more favorable to the protection of their interests,however,they can choose either law to replace the law of their habitual residence.
Additionally,certainty and reasonable balance of interests are also among the concerns of Article 45.Therefore,Article 45(3) ensures that if the defendant did not engaged in any soliciting activities in the country where the plaintiff is habitually resident,the law of the principal place of the defendant or that of the place where the damage occurred shall replace the law of the habitual residence of the customers.The reason underlying this exception is that in the context of Article 45(3),the consumer is referred to as an “active consumer”,rather than a “passive consumer.” Such a consumer is not eligible for the protection under the law of the country of his habitual residence; it would also be beyond the foreseeability of the manufacturer should the law of the habitual residence of the customers be applied in this case.Thus,it concludes that the general rule,together with two exceptions,is a balanced solution in regard to these objectives.
However,there is one question which needs to be answered,i.e.,which law,between the law of the principal place of the defendant and that of the place where the damage occurred,shall be applied,if the defendant did not engage in any soliciting activities in the country where the plaintiff is habitually resident and the plaintiff did not make a valid choice of law or did not make a choice at all? Regrettably,Article 45 does not contain an answer.The only solution seems to be offered by Article 2(2) of the Conflicts Act.As noted above,Article 2(2) provides that a foreign-related civil relationship is governed by the law most connected to it in case of a legal vacuum.
Special rule is also considered necessary for defamation via internet,as such torts do not happen in a “real place”.Under Article 46 of the Conflicts Act,infringements of right of personality,including the right of personal name,portraiture right,privacy,and reputation,via internet or other means,shall be governed by the law of the victim’s habitual residence.Therefore,a single law will apply even if the victim’s personal right is harmed in more than one jurisdiction.Taking the characteristics of internet defamation into consideration,this rule avoids the complexity of applying different laws to a single,and usually inseparable,tortious act.
The victim’s habitual residence is established as the connecting factor for the following reasons.First,as it is often in the place where the victim is habitually resident that his personal right is harmed most seriously,such provision is helpful to protect the interests of the victim.Second,it may also provide the alleged tortfeasor a certain degree of predictability.
However,there are two problems with Article 46.First,as emphasized earlier,in spite of the importance of habitual residence,the Conflicts Act fails to provide the definition of this term.The application of Article 46,therefore,depended on the arbitrary interpretation of the term by judges until the Supreme People’s Court interpreted it in the Interpretation (I) in 2013.Second,the wording of Article 46 indicates that it governs infringements of right of personality via the internet or “other means”.No guidance is,however,given as to the exact meaning of “other means” used herein.Given the quality of Chinese judges and the legal atmosphere in China is far from perfect,the author submits that the vagueness of Article 46 as to its core concepts would lead to uncertainty and unpredictability in judicial practice.
Intellectual property rights (“IPRs”) have been acknowledged and protected in the PRC since the late 1970s when the Party adopted a new policy of reform opening up to the world.Since joining the World Trade Organization (“WTO”),China has further amended the legal framework of the IPRs and its related laws and regulations to comply with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPs”).[4]In the existing Chinese law prior to the Conflicts Act,however,there were no conflicts rules for the IPRs which,to a considerable degree,led to the consequence that most Chinese judges and lawyers were not well aware that the disputes involving the IPRs pose conflict-of-law issues.
In order to correct the lack of understanding and to establish a complete conflict of laws regime,the Conflicts Act has devoted an entire chapter,i.e.,Chapter VII,to regulating the IPRs which consists of three articles,covering the ownership and the content of the IPRs (Article 48),the assignment and the licensed use of the IPRs (Article 49),and the infringement of the IPRs (Article 50).To be more specific,Article 50 provides that:
The tort liability arising from an infringement of an intellectual property right shall be governed by the law of the country where protection is claimed; the parties concerned may also choose the lex fori as the governing law after the tort has happened by agreement.
Similar to the law of many other countries,24 the Conflicts Act establishes that the lex loci protectionis is the general rule to govern the infringement of an intellectual property right.This is because the law under which an alleged infringement occurs usually has a greater interest in governing the protection of intellectual property.Additionally,in the majority of cases,given the territorial character of intellectual property protection,other law can hardly govern the issue effectively.Therefore,Chinese scholars believe that Article 50 preserves the universally acknowledged principle in favor of the lex loci protectionis and territorial character of an intellectual property right granted or recognized in a given country.
Moreover,it is important to note that Article 50 permits the parties to an IPR tort case to choose the lex fori as the governing law after the tort has happened.This is not only the reflection of a limited party autonomy,but also the manifestation of the legislative intent to expand application of the lex fori.
Nevertheless,one special problem may arise in the following case: if the infringements occur in different countries,and the parties do not reach the agreement on applying the lex fori,should the court apply different laws to what is essentially a single wrong perpetrated by a single infringer? Suppose that a case concerns multiple infringements in different countries,and the claimant has brought proceedings in China,as the country of the infringer’s domicile.In principle,each infringement is a separate wrong,each subject to the law of the country where each infringement occurs—a conclusion required by the lex protectionis rule.Although this is unproblematic in concept,it has serious practical consequences: It may be both unfair and unrealistic to expect the claimant to sue upon each and every infringement,not least because of the cost and delay involved in seeking to apply the laws of several different countries.The burden involved in applying numerous different laws falls also upon the court.There is also a kind of absurdity in applying numerous different laws to what is essentially a single wrong perpetrated by a single infringer.Fairness and efficiency and to some degree common sense suggest that one law should govern in such a case.
2.4 Concluding Remarks
The enactment of the Conflicts Act has been observed by many Chinese scholars as a benchmark that China has modernized its conflict rules.In the field of tort,the improvement is reflected in the following two aspects.First,the Conflicts Act provides a more comprehensive choice-of-law system of tort which includes not only the main rules on torts,but also particular rules for certain specific torts.Second,strongly influenced and much inspired by modern foreign and international legislation,the Conflicts Act abolishes the out-dated rules and incorporates a number of advanced doctrines that have been developed in western legal system.
Nonetheless,Chinese private international law is still in a period of transition,as the progress represented by the enactment of the Conflicts Act is but “an imperfect improvement.”25 There is still a long way for China to go towards accomplishing the task of building a modern and mature private international law system.The current crossroads at which Chinese private international law finds is graphically illuminated by the legislative development of torts conflicts.Notwithstanding the significant improvement,the rules contained in the Conflicts Act are fraught with various defects.For this reason,the statutory reform of the tort conflicts in China may be compared to “two steps forward,one step back.”
After providing a thorough introduction and systematic review of the statutory reform of torts conflicts that has happened in China,the author now summarizes the problems that have surfaced in this process,and puts forward the corresponding suggestions.It is the author’s hope that these suggestions will be helpful to Chinese authorities in improving the legislation in the future,which both China and foreign countries would stand to benefit from.
2.4.1 The Main Rules on Torts
As analyzed in 2.3.1,the main rules on tort reflected in Article 44 of the Conflicts Act are problematic in three points.First,habitual residence lacks an objective definition.Second,the rationality of an automatic preference to the law of the common habitual residence over the lex loci delicti is open to doubt.Third,there is little,if any,practicability to introduce the notion that the parties to a tort may choose the applicable law after the tort has happened.In this light,the author puts forward the following suggestions.
First of all,the Supreme People’s Court should spell out the precise meaning of habitual residence to close the statutory loophole.Hence,it is very timely that the SPC provides the definition of habitual residence in the Judicial Interpretation (I) of the Conflicts Act in spite of the problems it contains as specified in Chapter One,Part Three.
Second,as the automatic preference to the law of the common habitual residence over the lex loci delicti is not always justified,it is submitted that Article 44 of the Conflicts Act should restore the alternative reference rule employed by Article 146 of the GPCL in this context.To be more specific,where the parties have their habitual residence in the same country,the tort liability may be governed by the law of that country [Emphasis added].As noted earlier,the principle of closest connection has been established as a supplementary rule to determine the applicable law by Article 2(2) of the Conflicts Act.Judges are,therefore,entitled to choose a law between the lex loci delicti and the law of common habitual residence depending on the judgment which one is more closely connected with the tort liability.
Third,insofar as the parties can hardly reach an agreement on the applicable law after the tort has happened,the introduction of party autonomy by Paragraph Three of Article 44 is highly debatable.In the author’s opinion,if the Chinese legislators do intend to introduce party autonomy into the field of tort in order to promote predictability and efficiency,they should permit the parties to choose the law governing not only their contract but also the tort liability which would not have occurred but for that contract.
Many arguments can be made in support of application of the law chosen by the parties under such a circumstance.First,it is convenient to have all issues which arise out of what is essentially a single relationship governed by one law.
Second,and more importantly,application of the law chosen by the parties is in conformity with the parties’ expectations or intentions.In the practice of international business,the parties often agree that the law chosen by them will govern all disputes between them which arise in connection with the contract.Indeed,it is unrealistic to assume that the non-lawyers understand the distinction between contract and tort.Even if this distinction were appreciated,it is also inconceivable that the parties would expect another law to apply to tort which arises out of the contract,and they may well have relied on the assumption that the same law covers both types of liabilities.
Third,application of the law chosen by the parties to the contract to tort liability can increase uniformity of decisions.As “the parties can choose the law governing their contract” is a universally accepted principle,the same law will be applied regardless of whether an issue which arises out of a contractual relationship is characterized as one of contract or tort.
Last,but not least,the worry that allowing pre-tort agreement would put the weaker party in danger is unnecessary,insofar as Article 58 (3) of the GPCL states unambiguously that civil acts performed by a person against his true intentions as a result of cheating,coercion or exploitation of his unfavorable position by the other party shall be null and void.Under the Chinese scholarship and judicial practice,this is a mandatory rule,which,therefore,should be applicable to foreign-related civil relationships directly irrespective of the applicable law.26
In the light of all above analysis,the author submits that the suggested choice-of-law rules for tort in general are:
The laws applicable to tort liability shall be the law of the country in which the tortious act is committed.However,where the parties concerned have their habitual residence in the same country,the tort liability may be governed by the law of that country.Where the tort occurred in the performance of a commercial contract between the parties,the law chosen by the parties to govern the contract shall also govern the tort liability between them which arise in connection with the contract.
2.4.2 Particular Torts
After the implementation of the Conflicts Act,particular choice-of-law rules for certain specific torts are scattered among the three different acts: the Maritime Act,the Civil Aviation Act and the Conflicts Act.Since the Maritime Act and the Civil Aviation Act have been existed for nearly two decades which are unaffected by the Conflicts Act,this section will focus on the new rules incorporated by the Conflicts Act.
As analyzed above,apart from providing conflict rules for torts in general,the Conflicts Act lays down special conflict rules for product liability,internet defamation,and the IPR torts.Considering that those three categories of torts have occurred in China in quantity in recent years,most Chinese scholars argue that the enactment of the rules represents a historic progress.27
Nevertheless,it should be noted that the progress made by the Conflicts Act in this field is rather limited.As examined above,there are a number of defects or problems with Article 45,Articles 46 and 50,which need to be solved in one way or another.Moreover,the Conflicts Act neglects some other important types of torts which call for special treatment,such as unfair competition,environmental pollution,nuclear damage and traffic accidents,despite the scholars’ calls.
Indeed,as early as in the late 1990s,when the Chinese Society of Private International Law drew up the “Model Law of Private International Law of the People’s Republic of China” (hereinafter the Model Law) which was expected to serve as a blueprint for the NPC’s Standing Committee to enact the Conflicts Act,the scholars have reached a consensus on the pressing need to enact particular rules for those specific categories of torts.Therefore,the Model Law contains specific choice-of-law rules for not only product liability,internet defamation,IPR torts but also unfair competition,environmental pollution,nuclear damage,and traffic accidents.The judicial practice during the past decade has shown that there is greater need to enact particular rules for those special torts.Hence,the scholars advocated that the Conflicts Act should include those rules to establish a systematic and elaborate regime of tort conflicts and to meet the demand of judicial practice.Unfortunately,such suggestion was rejected by the legislators for reasons unknown.
Because the Conflicts Act has been newly enacted,it is improbable for the Chinese legislature to revise it in near future.The author argues that the improvement of the Conflicts Act may take two steps.First,the Supreme People’s Court should interpret the Conflicts Act as soon as possible,so that minor defects of the rules contained in the Conflicts Act can be overcome.Second,in the long run,when the judicial interpretation cannot satisfy the judicial practice any longer,the National People’s Congress should revise the Conflicts Act substantively to build a modern,sophisticated system of private international law in a real sense.