Every year, the Supreme People's Court (SPC) of China makes several responses to guide local courts in making decisions for the recognition and enforcement of foreign arbitral awards in specific cases. Are these responses binding on for a court when deciding subsequent cases?
The answer is that these responses are not universally binding as judicial interpretations, but you cannot ignore the views expressed by the SPC in these responses.
1. These responses are not judicial interpretations with universally binding force
The judicial interpretation is a rule promulgated by the SPC, explaining how the court should apply the law during case trials.[1]
The judicial interpretation, as a rule formulated by the SPC, is generally binding on all courts throughout the country. Therefore, the court can use it as the legal basis in decision making and directly cite the relevant judicial interpretation in the judgment.
It is worth noting that there is still a controversy in China about whether arbitral institutions should apply the SPC's judicial interpretation. We'll write articles and discuss it later.
However, the SPC's response is not a judicial interpretation. When the column "President's Mailbox" (院长邮箱) in the SPC website responded to the public consultation, it made such statement:
The legally binding force of the SPC's response to the local court's request for a specific case “is limited to the case concerned and does not have a universal legal effect. In other cases, the judge in question cannot directly use the above response as the basis for the judgment; while for documents with universal effectiveness for guiding courts at all levels, the SPC will generally publish it in the form of judicial interpretations, which can be inquired in newspapers and on the Internet.”[2]
Thus, the SPC's response to a specific case is not universally binding.
2. The SPC's views in the response should not be ignored
Although responses are not universally binding, the views in these responses are usually taken into account by local courts.
Moreover, in cases regarding the recognition and enforcement of foreign arbitral awards, local courts usually give more serious consideration to the SPC's relevant responses. The reason behind this lies in the internal report/review mechanism of recognition and enforcement of foreign arbitral awards established by the SPC in 1995.[3]
According to this mechanism, if the local court (an intermediate people’s court) accepting the application for recognition and enforcement of foreign arbitral awards intends to make a ruling against recognition and enforcement, it must first report its findings to the high people’s court (its higher court) for approval, and if the latter court agrees with the findings of the lower court, the matter shall be reported to the SPC. Only with the approval of the SPC can the local court decide to refuse recognition and enforcement.
In November 2017, the SPC issued the Provisions of the Supreme People's Court on Issues Concerning the Reporting and Approval in the Judicial Review of Arbitration Cases, which reconfirmed the aforementioned internal report and review mechanism.
Therefore, if local courts and relevant high courts hold views that conflict with the SPC's response and are prepared to refuse to recognize and enforce foreign arbitral awards based on such views, then such views will be reported to the SPC level by level. Generally speaking, unless there are some new changes to the situation, the SPC will not easily change its own view. Consequently, the SPC is likely to reject those views that conflict with its response, as well as to disagree with the local courts and the relevant high courts for refusing recognition and enforcement of foreign arbitral awards on such basis.
In fact, the SPC attaches great importance to its published responses. For example, Judge Gao Xiaoli (高晓力), Director of the SPC’s 4th Civil Division, in her latest article on recognition and enforcement of foreign arbitral awards, reviews in detail dozens of relevant responses issued by the SPC.
Thus, even if the SPC's responses are not universally effective, you can still rely on them to a large extent.
3. How to distinguish between the response and the reply
There are four kinds of judicial interpretations promulgated by the SPC, one of which is called reply (批复), which is similar in literal meaning to response (答复). Even in China, many people are often confused by these two.
A reply means that a lower court asks the SPC for opinions on a case or a legal issue, and the SPC replies to and provides its opinions to the courts throughout the country.
A response means that a lower court asks the SPC for instructions on a specific case or a legal issue, and the SPC responses to the said lower court.
Therefore, the reply is a rule promulgated by the SPC, so it is universally binding, while the response is only the SPC's view on specific cases, so it is not universally binding.
Then, how could we distinguish between the response and the reply?
At the beginning of the reply, it is generally stated that the reply is approved by the SPC Adjudication Committee (审判委员会), while such statement would not appear in the response, as it was made by the Trial Division (审判业务庭).
The replies shall be issued by the president or standing vice-president in the form of a bulletin of the SPC and filed with the Standing Committee of the National People's Congress. The responses are usually collected by the Trial Division which made such responses and then published regularly in the form of books.
However, since responses are usually only published through books, unless you pay attention to buying these books in time, you may not find all SPC responses easily through other channels.
Notes:
[1]《关于司法解释工作的规定》，http://www.npc.gov.cn/npc/xinwen/fztd/sfgz/2007-03/23/content_362927.htm
[2]《关于“最高人民法院公开各类司法依据文件”的答复》，http://www.court.gov.cn/zixun-xiangqing-18262.html
[3]《最高人民法院关于人民法院处理与涉外仲裁及外国仲裁事项有关问题的通知》，http://www.people.com.cn/zixun/flfgk/item/dwjjf/falv/9/9-2-1-05.html
Contributors: Guodong Du 杜国栋 , Meng Yu 余萌
