A review of litigation, arbitration and mediation

1. What have been the key legislative updates or changes affecting litigation and arbitration over the past 12 months

There have been many significant and comprehensive legislative developments this year that affect litigation and arbitration in China:

• PRC Environmental Protection Law (Revised) (promulgated on April 24 2014)
• PRC Company Law (2013 Revision) (promulgated on December 28 2013)
• PRC Law on the Protection of the Rights and Interests of Consumers (2nd Revision) (promulgated on October 25 2013)
• PRC Trademark Law (3rd Revision) (promulgated on August 30 2013)
• PRC Tourism Law (promulgated on April 25 2013)
• Implementing Regulations for the PRC Trademark Law (Revised) (promulgated on April 29 2014)
• State Council, Decision on Abolishing and Revising Certain Administrative Regulations (promulgated on February 19 2014)
• Supreme People's Court, Several Provisions on the Trial of Relevant Civil Cases Involving Notarial Activities (promulgated on May 16 2014)
• Supreme People's Court, Interpretations on Issues of Jurisdiction over and Application of the Law in Trademark Cases after Implementation of the Decision to Amend Trademark Law (promulgated March 25 2014)
• Supreme People's Court, Interpretations on Issues Relevant to the Application of the Law in the Trial of Disputes over Lease Financing Contract (promulgated on February 24 2014)
• Supreme People's Court, Decision on Amending the Provisions on Several Issues Concerning the Application of the «PRC Company Law» (promulgated on February 20 2014)
• Supreme People's Court, Guiding Opinions on Tariffs for Sentencing for Common Crimes (promulgated on December 23 2013)
• Supreme People's Court, Provisions on Several Issues Concerning the Application of the Law in the Trial of Food and Drug Disputes (promulgated on December 23 2013)
• Supreme People's Court, Official Reply on Issues Relevant to the Application of Article 64 of the Criminal Law (promulgated on October 21 2013)
• Supreme People's Court, Provisions on Several Issues Concerning the Application of the «PRC Enterprise Bankruptcy Law» (2) (promulgated on September 5 2013)
• Supreme People's Court, Circular on Issues Relevant to Correctly Trying Cases of Judicial Review of Arbitration (promulgated on September 4 2013)
• Supreme People's Court, Several Provisions for Publication of Lists of, and Information on, Untrustworthy Persons Subjected to Enforcement (promulgated on July 16 2013)
• Supreme People's Court, Interpretations on Several Issues Concerning the Application of the «PRC Insurance Law» (2) (promulgated on May 31 2013)
• Supreme People's Court, Circular on the Issuance of the Implementing Rules for the Provisions for the Handling of Requests for Judicial Assistance in Civil and Commercial Cases in the Service of Judicial Documents and Investigation and Taking of Evidence Pursuant to International Conventions and Bilateral Treaties on Judicial Assistance (Trial Implementation) (promulgated on April 7 2013)
• Supreme People's Court, Provisions for the Handling of Requests for Judicial Assistance in Civil and Commercial Cases in the Service of Judicial Documents and Investigation and Taking of Evidence Pursuant to International Conventions and Bilateral Treaties on Judicial Assistance (promulgated on April 7 2013)
• Rules for the Monitoring of Civil Procedures by People's Procuratorates (Trial Implementation) (promulgated on November 18 2013)

2. From your experience, what types of disputes have been most common in the past year Are there specific reasons for the growing emergence of these types of disputes

During the past year, the flaws in the regulation of banking industry loans gradually came to light, prominently displayed in the still-fermenting steel trade cases and in the recently exposed Qingdao Port financing fraudulent loan case.

Firstly, the creation of multiple pledges over the same assets is an important means used by the traders in these cases to fraudulently secure loans. The traders and warehousing companies conspire to create repeated pledges over the same batch of goods to secure loans from multiple banks. In this cooperation, the trader leverages a small quantity of goods to obtain a large amount in loans, and the warehousing company earns significant custodial charges. The number of cases in which the person in charge of the warehousing company has been able to squeeze out kickbacks is also not insignificant.

Secondly, banks lack the means to effectively oversee such multiple pledges. Since banks do not share pledge information among themselves, they cannot effectively communicate or promptly discover instances of fraudulent warehouse receipts or multiple pledges. Furthermore, banks' gatekeeping at the risk control stage is insufficiently stringent, they blindly trust state-owned warehousing companies and they are negligent in the verification of goods, presenting certain warehousing companies an opportunity that they can take advantage of.

Lastly, an economic downturn is often the detonator that triggers such types of cases. A break in the funding chain makes it impossible for the trader to repay a loan and interest that has fallen due, natu­rally exposing the fraudulently secured loans.

3. What are the latest CIETAC updates What changes are the most important and practical for both domestic and foreign parties

In our look back over the year 2013, we advised readers to pay attention to a ruling rendered by the Suzhou City Intermediate People's Court to deny enforcement of an award of the former Shanghai Sub-commission of the China International Economic and Trade Arbitration Commission (Shanghai CIETAC). After the ruling was rendered, Shanghai CIETAC reported the relevant matters to the Jiangsu Provincial Higher People's Court stating that the ruling infringed its lawful rights and interests. On September 27 2013, the Jiangsu Provincial Higher People's Court issued Circular (2013) Su Zhi Jian Zi No.0071 informing Shanghai CIETAC that it had requested the Suzhou City Intermediate People's Court to quash the ruling in accordance with the law and conduct a new examination and render a new ruling. To date, we have been unsuccessful in obtaining through public channels the most recent information on the rendering of a new ruling by the Suzhou City Intermediate People's Court, but one can be sure that the dispute over the status of Shanghai CIETAC in the case will never again serve as the basis on which the Suzhou City Intermediate People's Court renders a ruling.

Likewise, a similar enforcement supervision case arose in the Ningbo City Intermediate People's Court in 2013. In a case of an application for enforcement of an award rendered by Shanghai CIETAC, the person subjected to the enforcement applied for denial of enforcement on the grounds that Shanghai CIETAC's authority to arbitrate had been cancelled by the China International Economic and Trade Arbitration Commission. On May 22 2013, the Ningbo City Intermediate People's Court rendered a ruling denying enforce­ment. On July 17 2013, the Zhejiang Provincial Higher People's Court issued an instruction requesting that the Ningbo City Interme­diate People's Court rectify the matter, whereupon the Ningbo City Intermediate People's Court rendered Ruling (2013) Zhe Yong Zhi Jian Du No.1 on July 25 quashing the original ruling and continuing to enforce the award of Shanghai CIETAC.

In another commercial dispute also in Zhejiang, a party applied to the Taizhou City Intermediate People's Court for the enforcement of an award rendered by Shanghai CIETAC, and the person subjected to the enforcement applied for denial of enforcement on the grounds of the institutional nature, etc. of Shanghai CIETAC. On July 29 2013, the Taizhou City Intermediate People's Court rendered Ruling (2013) Zhe Tai Zhi Cai Zi No.2 holding that the parties to the case expressly selected in their arbitration clause Shanghai CIETAC as the arbitration institution for the resolution of contract disputes and the arbitration award was rendered in the name of Shanghai CIETAC. Furthermore, the defence grounds of the person subjected to the enforcement for denial of enforcement, namely that Shanghai CIETAC did not have jurisdiction in the arbitration case due to the change in its nature and, on this basis, the award was rendered by an arbitration institution that did not have the authority to arbitrate, were untenable, for which reason it rejected the person subjected to the enforcement's application for denial of enforcement.

As people's courts around the country successively accepted arbi­tration judicial review cases triggered by the dispute over the status of the above mentioned arbitration institution in 2013, on September 4 2013, the Supreme People's Court issued the Circular on Issues Relevant to Correctly Trying Cases of Judicial Review of Arbitration, expressly requesting that, with respect to cases where parties apply for recognition of the validity of arbitration agreements and ones in which parties apply for the vacation or denial of enforcement of awards rendered by CIETAC, Shanghai CIETAC or South China CIETAC arising in connection with the above mentioned disputes, people's courts report the same way up the hierarchy to the Supreme People's Court and wait until the Supreme People's Court replies before rendering a ruling. The first Suzhou case mentioned above arose after the issuance of the circular by the Supreme People's Court, and we have reason to believe that the stance taken by the Jiangsu Provincial Higher People's Court in the case reflects the leanings of the Supreme People's Court. Accordingly, the dust has essentially settled at the level of local courts in the dispute over the status of Shanghai CIETAC. Unless the Supreme People's Court takes an express negative stance, the long-term parallel existence of the three former major institutions of the China International Economic and Trade Arbitration Commission will continue to drag on.

4. What is the status of mediation as an effective method of solving disputes in China

Mediation, as the “oriental experience”, runs through the entire dispute resolution process in China, giving it an unusually important position. This feature is particularly reflected in litigation procedures. In a legal action, the parties participate in the mediation procedure presided over by the court from the moment the case is placed on the docket. Depending on practice in different regions, the pre-trial mediation procedure may endure for one to two months, only after which will the court accept the case. During the course of a trial, experienced judges will also often actively seek to reach a settlement between the plaintiff and defendant through skillful discourse.

To understand why such great weight is placed on mediation in legal actions in China, it is necessary to not only understand the traditional culture of “harmony as golden” in Chinese society and the government's policy direction of “promoting harmony”, but also to understand the crushing burden borne by basic-level courts due to the “litigation explosion”. In many relatively economically developed regions, people's mentality of resolving disputes through litigation is relatively strong, with judges in basic-level courts originally working under full loads. In recent years, due to the economic downturn, certain industries and certain types of cases have flooded the courts in waves, overwhelming the judges. Based on the publicity materials that we have seen in certain basic-level courts, outstanding judges will often be hearing more than 300 cases a year, and if one subtracts holidays, they are concluding one case per day on average. Their work pressure can be imagined. That the time required for pre-trial mediation is not counted toward the time limit for concluding a trial makes it possible for judges to gain time. Since its formal recognition in the 2009 Supreme People's Court, Several Opinions on Establishing and Improving a Conflict and Dispute Resolution Mechanism That Dovetails Litigation and Non-Litigation, this practice has become an important measure for slowing down the flood of cases.

However, the widespread application of mediation has also given rise to new issues, such as cases mired in mediation without being placed on the docket, the mediation procedure taking on an air of being mandatory. With a view to resolving these issues, the Supreme People's Court issued the Circular on Extensively Rectifying the “Six Difficulties and Three Cases” Problem to Strengthen a Judiciary for the People and Judicial Fairness in June 2014 to rectify the deficiencies at the different stages (placing on the docket, trial and enforcement) of a litigation procedure.

1. 在过去12个月，诉讼及仲裁方面出台和修改了什么主要法规？

今年在法规方面有很多重大和全面的革新，对国内的诉讼和仲裁都带来影响。

• 中华人民共和国环境保护法 (修订)（2014年4月24日发布）
• 中华人民共和国公司法 (2013年修正)（2013年12月28日发布）
• 中华人民共和国消费者权益保护法 (第二次修正)（2013年10月25日发布）
• 中华人民共和国商标法 (第三次修正)（2013年8月30日发布）
• 中华人民共和国旅游法（2013年4月25日发布）
• 中华人民共和国商标法实施条例 (修订)（2014年4月29日发布）
• 国务院关于废止和修改部分行政法规的决定（2014年2月19日发布）
• 最高人民法院关于审理涉及公证活动相关民事案件的若干规定（2014年5月16 日发布）
• 最高人民法院关于商标法修改决定施行后商标案件管辖和法律适用问题的解释（2014年3月25日发布）
• 最高人民法院关于审理融资租赁合同纠纷案件适用法律问题的解释（2014年2 月24日发布）
• 最高人民法院关于修改关于适用《中华人民共和国公司法》若干问题的规定的决定（2014年2月20日发布）
• 最高人民法院关于常见犯罪的量刑指导意见（2013年12月23日发布）
• 最高人民法院关于审理食品药品纠纷案件适用法律若干问题的规定（2013年12月23日发布）
• 最高人民法院关于适用刑法第六十四条有关问题的批复（2013年10月21日发布）
• 最高人民法院关于适用《中华人民共和国企业破产法》若干问题的规定 （二）（2013年9月5日发布）
• 最高人民法院关于正确审理仲裁司法审查案件有关问题的通知（2013年9月4 日发布）
• 最高人民法院关于公布失信被执行人名单信息的若干规定（2013年7月16日发布）
• 最高人民法院关于适用《中华人民共和国保险法》若干问题的解释（二）（2013年5月31日发布）
• 最高人民法院印发《关于依据国际公约和双边司法协助条约办理民商事案件司法文书送达和调查取证司法协助请求的规定实施细则(试行)》的通知（2013 年4月7日发布）
• 最高人民法院关于依据国际公约和双边司法协助条约办理民商事案件司法文书送达和调查取证司法协助请求的规定（2013年4月7日发布）
• 人民检察院民事诉讼监督规则（试行）（2013年11月18日发布）

2. 根据您的经验，过去一年什么类型的争议最普遍？有没有什么特别原因导致这类争议的数目上升？

过去一年，银行业的贷款监管漏洞逐渐暴露，突出表现为仍在持续发酵的钢贸案件和最近曝光的青岛港融资骗贷案。

首先，重复质押是这些案件中贸易商骗取银行贷款的重要手段。贸易商与仓储公司合谋，对同一批货物进行反复质押，向多家银行重复贷款。在这样的合作中，贸易商以少量货物为杠杆获得巨额贷款，仓储公司则赚取不菲的监管费用，仓储公司负责人抽取回扣的情况也不在少数。

其次，银行对重复质押缺乏有效的监管手段。各家银行之间质押信息互不相通，无法有效交流，不能及时发现虚假仓单、重复质押等情况。此外，银行在风险控制环节把关不严，盲目相信国资仓储公司，对货物监管情况疏于查验，导致一些仓储公司有机可乘。

最后，经济形势恶化往往成为类型化案件爆发的导火索， 资金炼断裂令贸易商无法偿还到期贷款和利息，骗取贷款的情况自然败露。

3. 贸仲会有什么最新的动向？有什么改变对境内和境外企业都是最重要和最实用的呢？

在2013年的回顾中，我们曾提示读者留意苏州市中级人民法院对原中国国际经济贸易仲裁委员会上海分会（“上海贸仲”）的一项裁决作出不予执行的裁定。该裁定作出后，上海贸仲向江苏省高级人民法院反映了有关情况，表示该裁定侵害其合法权益。2013年9月27日，江苏省高级人民法院发出（2013）苏执监字第0071号通知书函告上海贸仲，称已要求苏州中院依法自行撤销该裁定并重新审查作出裁定。目前我们无法从公开渠道了解苏州中院重新作出裁定的最新情况，但可以肯定该案中关于上海贸仲的身份争议不会再成为苏州中院作出裁定的依据。

同样是2013年，在宁波市中级人民法院亦出现一起情况类似的执行监督案件。在一起申请执行上海贸仲作出的裁决的案件中，被执行人以上海贸仲被中国国际经济贸易仲裁委员会取消仲裁授权为由申请不予执行。宁波中院于2013年5月22日作出不予执行的裁定。2013年7月17日，浙江省高级人民法院作出指令要求宁波中院纠正，宁波中院于7月25日作出（2013）浙甬执监督第1号裁定书，撤销原裁定，继续执行上海贸仲的裁决。

在另一起同样发生在浙江的商事纠纷中，一方当事人向台州市中级人民法院申请执行上海贸仲作出的裁决，被执行人以上海贸仲的机构性质等理由申请不予执行。2013年7月29 日，台州中院作出（2013）浙台执裁字第2号裁定书，认为该案双方当事人在仲裁条款中明确选择中国国际经济贸易仲裁委员会上海分会作为解决合同争议的仲裁机构，仲裁裁决也是以中国国际经济贸易仲裁委员会上海分会的名义作出，被执行人提出中国国际经济贸易仲裁委员会上海分会因性质改变而对案涉仲裁案件没有管辖权，并据此认为仲裁裁决存在仲裁机构无权仲裁情形的不予执行抗辩理由不能成立，因此驳回了被执行人的不予执行申请。

由于2013年各地人民法院陆续受理了因上述仲裁机构身份争议而引发的仲裁司法审查案件，最高人民法院于2013年9月4日发布《关于正确审理仲裁司法审查案件有关问题的通知》，明确要求对于因上述争议产生的当事人申请确认仲裁协议效力的案件以及当事人申请撤销或者不予执行中国贸仲或者上海贸仲、华南贸仲作出的仲裁裁决的案件，人民法院须逐级上报至最高人民法院，待最高人民法院答复后，方可作出裁定。上文提及的第一起苏州案件即发生在最高人民法院通知发布之后，我们有理由相信江苏省高级人民法院在该案中的立场体现了最高人民法院的倾向。据此，关于上海贸仲的身份争议在地方法院层面已基本尘埃落定。除非最高人民法院作出否定性的明确表态，原中国国际经济贸易仲裁委员会三大机构长期并存的局面将持续下去。

4. 对作为中国一个解决争议的有效方法，调解处于什么的状况呢？

调解作为“东方经验”，在中国贯穿争议解决过程的始终，具有异常重要的地位。这一特点尤其体现在诉讼程序之中。诉讼中，当事人自立案开始就参与到法院主持的调解程序中。根据各地实践的不同，诉前调解程序可能持续一到二个月，然后法院才会受理案件。在案件审理过程中，有经验的法官往往也会通过技巧性的谈话积极促成原、被告双方和解。

要理解调解在中国诉讼中为何如此受到重视，除了了解中国社会“以和为贵”的传统文化以及政府“促进和谐”的政策导向外，还应当明白基层法院由于“诉讼爆炸”已不堪重负的现状。在很多经济较发达的地方，人们通过诉讼解决纠纷的意识较强，基层法院的法官本来就在满负荷工作。近年来，由于经济不振，特定行业、特定类型的案件成批次大量涌入法院，导致法官难以应对。根据我们在一些基层法院看到的宣传材料，优秀的法官一年审理的案件往往在300件以上，扣除节假日，平均每天审结一起案件，其工作压力可想而知。而诉前调解的时间不计入审限，能够为法官争取时间。这种做法在2009年经最高人民法院《关于建立健全诉讼与非诉讼相衔接的矛盾纠纷解决机制的若干意见》正式认可后，成为法院延缓案件涌入的重要措施。

但调解的普遍应用也带来了新的问题，例如案件久调不立、调解程序带有强制性等。为了解决这些问题，最高人民法院在2014年6月发布《关于深入整治“六难三案”问题加强司法为民公正司法的通知》，对诉讼程序各个环节（立案、审理、执行）中的不足之处予以改进。