Chinese Legislation and Practice
Prior to the enactment of the Conflicts Act,Chinese conflict rules on succession were clarified by the Succession Act,15 the General Principles of Civil Law (GPCL)16 and its judicial interpretation.17 As discussed above,the choice-of-law rules relating to succession,generally,are distinct depending on succession testate or intestate.It is also necessary to examine the rules relating to the succession of vacant estate.However,in the existing Chinese legislation before 2010,there were choice-of-law rules relating to intestate and vacant succession only,and among those rules,different rules contained in different laws are not consistent; therefore,establishing a comprehensive,coherent and consistent framework of succession is an important task for China’s first Conflicts Act to accomplish.Entitled “succession,” Chapter Four of the Act covers not only the conflict rules in intestate and testate succession but also in the succession of vacant estate and the administration of estate.
5.1 Legal Succession
In the past,Chinese conflict rules on succession law followed the Eastern European approach of treating all property (movables and immovables) alike.18 However,in contrast to other socialist countries,which tend to apply the personal law of the testator at the time of death,Chinese law governed all property situated in China for succession purposes.19
The traditional Chinese approach is reflected in Article 20 of the 1959 China-Soviet Consular Convention,which states: “[T] he movable and immovable estate in the territory of one of the contracting parties of a deceased citizen of the other party shall be subject to the law of the country in which such an estate is situated.”20
However,with the promulgation of the Succession Act in 1984 and the GPCL in 1986,China has abandoned the nationalist approach of treating movables and immovables alike,and adopted instead conflict rules reflecting the scission system where the lex situs governs immovables and the lex domicilii governs movables.Promulgated on April 10,1985,the Succession Act provides,in its Article 36,as follows:21
For inheritance by a Chinese citizen of an estate outside the People’s Republic of China or of an estate of a foreigner within the People’s Republic of China,the law of the place of domicile of the decedent shall apply in the case of movable property; in the case of immovable property,the law of the place where the property is located shall apply.
For inheritance by a foreigner of an estate within the People’s Republic of China or of an estate of a Chinese citizen outside the People’s Republic of China,the law of the place of domicile of the decedent shall apply in the case of movable property; in the case of immovable property,the law of the place where the property is located shall apply.
Where treaties or agreements exist between the People’s Republic of China and foreign countries,matters of inheritance shall be handled in accordance with such treaties or agreements.[1]
In addition,Article 149 of the GPCL in a brief sentence stipulates that:
In the legal succession of an estate,movable property shall be bound by the law of the decedent’s place of last domicile,and immovable property shall be bound by the law of the place where the property is situated.
Apparently,the above provisions either in Succession Act or GPCL demonstrate that China has switched to the scission system since the 1980s.Nevertheless,a careful comparison between the earlier and later pieces of legislation will reveal some differences.First,Article 36 of the Succession Act does not make a distinction between legal succession and testamentary succession,while Article 149 of the GPCL states unambiguously that it applies but to legal succession.Second,Article 149 of the GPCL specifies that decedent’s place of last domicile governs the legal succession of movable property,thus settling the possible conflict of domiciles if the decedent has more than one domicile.
The following is a case in point concerning succession issues.Wu,a Chinese national,was a professor at a university in Shanghai.In 1988,Wu went to Japan for study.In 1990,just before his return to China,Wu died from an unexpected car accident who was struck down when riding a bicycle.Zhou,Wu’s wife,in company with Wu’ brother,went to Japan to deal with the legal issues arising from the accident.The outcome was a compensation agreement with the Japanese driver.The compensation consisted of three parts: (1) “the expected interest” which represented the estimated income that Wu would obtain during the remainder of his life; (2) compensation for mental injury of the victim’s relatives; (3) the damages for the bicycle.In addition,Zhou received insurance compensation paid by a Japanese insurer under a life insurance contract with Wu as the insured.Therefore,the total sum that Zhou receives amounted to more than 700,000 yuan (RMB).
After Zhou came back to Shanghai with Wu’s brother,disputes arose between Zhou on one part and Wu’s parents and siblings on the other as to the distribution of the compensation.The latter then filed a petition in a court in Shanghai against Zhou.
The plaintiffs argued the following: First,insurance compensation was the estate of Wu instead of the common property shared by Wu and Zhou which,therefore,should be inherited by Zhou,Wu’s child,and his parents.[2]Second,the expected interest and compensation for mental injury should also be classified as the estate of Wu instead of the matrimonial property,which accordingly should be distributed likewise.Third,the maintenance fee for Wu’s daughter should be reserved in advance totaling 10,000 yuan.
Zhou,the defendant,however,submitted the following arguments:
First,since the insurance compensation was paid by the Japanese insurer in Japan,conflict-of-law rules of the forum,therefore,should be invoked.Under Article 36 of the Succession Act and Article 149 of GPCL,Zhou submitted that Japanese law should govern the distribution of the insurance compensation,and pursuant to Japanese law,decedent’s spouse and children are the successor (s) in first order,22 therefore,Zhou and her daughter should inherit this part of estate equally.Second,since Chinese law had no provisions about compensation for mental injury the distribution of which should,therefore,take the following elements into consideration: (1) the interests of the person whom the decedent supported should be given priority,insofar as he (she) generally lack the ability to support himself (herself); (2) the interests of a closer relative should be given priority to a more distant relative.Taken the above elements into consideration,Zhou submitted that Wu’s daughter was entitled to inherit the majority of the compensation for mental injury.Moreover,Zhou argued that “the expected interest” should be classified as matrimonial property rather than the estate of Wu,since it represented the estimated income that Wu would obtain if he had not been dead.Therefore,she was entitled to half of the “the expected interest.”
The present case triggers a series of conflicts issues among which we argue that the classification of the sum of 700,000 yuan in terms of its different sources is the first one.Generally,there can be little doubt that,in practice,classification in a private international law case is effected on the basis of the law of the forum.23 There is,however,one type of case in which the judge probably will not make the classification on the basis of the lex fori.This is where the relevant foreign institutions are unknown to the lex fori.Under the latter circumstance,it is established the foreign law to which the institution belongs should govern the classification.
In this vein,“the expected interest” in the present case should be classified under the Japanese law for which Chinese law made no provision at that time; while the classification of the rest of the 700,000 yuan should be governed by the Chinese law.Pursuant to Japanese law,“the expected interest” is the expected income of Wu on the assumption of his survival,which actually is not the income within the duration of the marriage.Hence it should be qualified as the estate of Wu rather than matrimonial property.As to the classification of the insurance compensation,under Chinese law,it depends on whether the insurance contract designated a beneficiary.If there is a specific beneficiary other than Wu himself,the insurance compensation should be excluded from the estate; otherwise,it constitutes a part of the estate instead of inter-spousal property.As the compensation for mental injury acts as a comfort for Wu’s relatives to decrease their mental suffering,it should not be distributed as estate.The damages for the bicycle,needless to say,should be included as a part of the estate.
Second,since the case in hand concerns the legal succession of movable property involving foreign elements,the law of the decedent’s place of last domicile shall govern the distribution of the estate which is invoked by Article 36 of Succession Act and Article 149 of the GPCL.Under such a circumstance,the Chinese Court should determine whether Wu has obtained a domicile in Japan under Japanese law.If the answer is affirmative,Japanese law should,accordingly,govern the distribution of the estate; otherwise Chinese substantive law should prevail.
Furthermore,it should be noted that the doctrine of renvoi may manifest itself in this case.In order to elucidate this issue,it is necessary to survey the Chinese law on the doctrine of renovi at the outset.
Basically speaking,this is a special problem in private international law to which no nation has found a totally satisfactory solution.To date,there have been few reported cases in China in which the doctrine of renvoi has been used,nor are there statutes which expressly direct the courts to consider the conflict rules of a foreign jurisdiction.Despite the absence of express references,an argument may be made that renvoi has been partly accepted by the Chinese conflicts law.Evidence of this can be found in “Provisions of Registration of Marriage between a Chinese and a Foreigner.”24 Pursuant to Articles 3(B)(c) and 3(C)(c),foreigners wishing to marry a Chinese national in China must prove their martial status by producing a certificate of martial status notarized and authenticated in the applicant’s own country,or a similar certificate issued by the embassy or consulate of the applicant’s own country stationed in China.By means of this provision,China is recognizing the foreign certificate or decree of marriage,divorce,or nullity as valid and conclusive under all the laws of lex patriae.In other words,when referring to the lex patriae,in order to determine the martial status of a foreigner,the reference includes the conflict rules of the foreigner’s national law.Thus these two provisions may be regarded as incorporating the doctrine of renvoi into the Chinese-Alien Marriage Regulations.(https://www.daowen.com)
While evidence of renvoi does not appear to exist in other situations,the majority of Chinese scholars advocate adopting partial renvoi in certain cases (including succession cases) which result in remission where the foreign conflict rules refers back to the application of Chinese law,but not transmission where the foreign conflict rules direct the application of a third country.[3]
In this light,if the judge in this case intends to apply Chinese law,he may succeed by referring to the conflict rule of the Japanese Conflicts Code,insofar as Article 25 of the Code provides that the succession of an estate shall be bound by the lex patriae of the decedents.
It should be emphasized that with the enactment of the Conflicts Act in 2010,Chinese private international law has got significant amendment in the field of succession.This,basically,is reflected in the following two aspects: first,Article 36 of the Succession Act of the PRC is abolished by the Conflicts Act,as Article 51 of the Act provides that “[W] here Article 146,Article 147 of the General Principles of Civil Law of the PRC and Article 36 of the Succession Act of the PRC are inconsistent with the provisions of this Act,this Act shall prevail”;25 second,the Conflicts Act introduces new conflict rules not only in intestate and testate succession but also in the succession of vacant estate and the administration of estate.
With regard to intestate succession,the Conflicts Act follows the scission principle which has been traditionally adopted by Chinese law,as Article 31 of the Act provides that “the movables shall be governed by the law of the habitual residence of the deceased at the time of his death,while the immovables shall be governed by the law of the place where the immovables are situated.”
5.2 Testamentary Succession
Testamentary succession has been recognized by the People’s Republic of China since its establishment,and has been reaffirmed by the Succession Act.26 However,the conflict rules in the Succession Act deal with but the essential validity of a will,without regard to its formal validity,or the capacity of the testator.The GPCL is completely silent with respect to testamentary succession.Fortunately,the legal gap has been filled by the Conflicts Act of 2010 to a considerable degree.
5.2.1 Testamentary Capacity
The Succession Act specifies that a will must be made by a person with full civil conduct capacity,acting free from coercion and fraud.Wills made by persons with no capacity or with limited capacity shall be void.27 As to what constitutes full civil conduct capacity,the GPCL requires that a person who is 18 years of age or over,and is of sound mind,has the full civil conduct capacity to engage in civil activities independently.28 The Succession Act fails to provide a conflict rule on the testamentary capacity.Most Chinese scholars advocate that the conflict rules on the civil conduct capacity contained in the Conflicts Act and its judicial interpretation should apply.29
5.2.2 Formal Validity
Prior to the promulgation of the Succession Act,the formality of all wills was governed by Chinese practice,which required a will to be in writing and to be notarized prior to their administration in order to be enforceable.The Succession Act loosens the formal requirements for wills by recognizing other forms of wills.30 However,this Act is silent,perhaps inadvertently,on the conflict rules concerning the formal validity of wills.Therefore,some writers speculate that the lex fori governs.31 However,it does not seem reasonable to insist that foreign wills made by testators of other nationalities or domiciles to be made to follow the Chinese formality requirements.Given that the recent legislation in China indicates a shift away from the traditional nationalist territorial principle,it should be logical to assume that China would loosen the requirement for the formal validity of the wills and enact specific conflict rules on this issue in future.
The assumption has been fulfilled by the Conflicts Act,as it distinguishes formalities from essential validity for testate succession.[4]As regarding the form of a will,the Conflicts Act,apparently,adopts the principle of favor testamenti; to be more specific,the form of a will is valid only if it conforms with any law among the following: the law of the testator’s habitual residence either at the time of his death or at the time the will was made,the testator’s national law either at the time of his death or at the time the will was made,or the law of the place where the testator made the will.32
5.2.3 Essential Validity
With regard to the essential validity of a will,both the Succession Act and the GPCL failed to contain any conflict rules.In this respect,the conflict rules for the essential validity of a will contained in the conflicts Act is of particular importance.
Under Article 33 of the Conflicts Act,the essential validity of a will shall be governed by the law of the testator’s habitual residence either at the time of his death or at the time the will was made,or the testator’s national law either at the time of his death or at the time the will was made.Pursuant to Article 34,the law where the estate is situated at the time of decedent’s death shall govern the administration of the estate.33
5.3 Vacant Succession
Under Chinese law,the vacant estate of a deceased Chinese escheats to the state or the organization of which he was a member,as Article 32 of the Succession Act stipulates as follows:34
An estate which is left without successor or legatee shall belong to the state or,where the decedent was a member of an organization under collective ownership before his or her death,to such an organization.
With respect to estate without heirs or beneficiaries that involves a foreign national,Chinese formal legislation before 2010,including the Succession Act,and the GPCL did not provide any regulations.What we can find is an explanatory rule in the judicial interpretation of the GPCL issued by the Supreme People’s Court,as Article 191 of this document provides as follows:35
The property inside this territory left by the foreigner passing away in this territory shall be disposed of by the law of this country in case there is no heir to succeed the property and no one has accepted the bequeath except for those otherwise stipulated by the international treaty entered into by two countries or participated by two countries.
It follows that in case of a vacant succession involving a foreign national,the Chinese court will first determine the existence of an applicable international convention,and if there is such a convention,it prevails over the Chinese domestic law; otherwise,the estate will escheat to the state under the Succession Act.
In comparison,the Conflicts Act provides a more embracive article concerning vacant succession under which the disposition of vacant estate shall be governed by the law where the estate is situated at the time of decedent’s death.