China Choice Of Law Agreement

It should be noted that, although China did not ratify the 2005 Hague Convention, the PPU found it positive that under Article 3.b) of the 2005 Hague Convention, “a jurisdictional agreement that designates the courts of a contracting state or one or more specific courts of a contracting state is considered exclusive , unless the parties expressly intended otherwise.” Therefore, the choice of judicial agreement in the guarantee contract should be considered exclusive. (For a more detailed discussion on the role and impact of the 2005 Hague Convention in China, see the post “When will China ratify the Hague Convention on the Election of Judicial Conventions?”) To the extent that, and only if the for agreement is clearly not “exclusive”, the Chinese courts of the agreed jurisdiction are not exclusive. Under Article 531 of the CPL interpretation, the autonomy of the parties over the jurisdiction of a foreign contract or other property rights dispute is permitted and respected as long as 1) the agreement is concluded in writing, 2) that the elected court has a substantial connection to the litigation and 3) that the case is not subject exclusively to the exclusive jurisdiction of the Chinese courts. In ABAXLOTUSLTD. v. Zhang Zhengyu, [1] the applicant ABAXLOTUS Ltd. was registered in the Cayman Islands, entered into an investor rights agreement with the defendant, Zhang Zhengyu (`Zhang`). The parties agreed that “[t]he group company and controlling shareholders agree to file against them all shares that arise from or are based on this agreement, or that transactions considered in that agreement or legal proceedings may be filed with any State court in New York City and New York County or the U.S. Federal Court of Justice. , and irrevocably accept the non-exclusive jurisdiction of such courts in all disputes and irrevocably accept the non-exclusive jurisdiction of such courts in all disputes.

, actions or legal proceedings.” Following a challenge, ABAXLOTUSLTD brought an action against Zhang at the Changping District People`s Court, where the defendant was domiciled. Zhang did not challenge the Tribunal`s jurisdiction. [See Changping Court Judgment, (2015) Chang Min (Shang) Chu Nr. 09248 ((2015)商)初 -09248)] Zhang appealed to the Beijing Court of First Intermediate Persons (`intermediate court`). However, it was rejected and the original judgment was upheld. The Intermediate Court found that the jurisdiction of the New York court in the for election clause is clearly indicated as non-exclusive, which means that the parties have more jurisdictional options and can bring an action before a court at the choice of the court of justice or a jurisdiction with legal jurisdiction. Zhang was domiciled under the jurisdiction of the trial court, so the Changping Court of Justice has jurisdiction over law and law. In the absence of agreement on a dispute resolution forum and applicable law, a Chinese court will review PRC law to determine the appropriate jurisdiction and law for foreign litigation. Section 531 of the Judicial Interpretation of the PRC Civil Procedures Act (hereafter the interpretation of the CPL) clearly provides that parties to foreign contracts or other property rights disputes may choose a foreign court with substantial connection to the litigation through a written agreement.

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