FOREIGN COMPANIES CHINA

Foreign-Commercial Litigations adopting digital technologies

Phd Candidate at Chinese University of Political Science and Law 中国政法大学 Carolina Fabara

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Table of Contents

1. Brief introduction to Internet Courts
2. Internet Court in China
3. Chinese Judicial Reform
4. Online Case-filing Services for Foreign Litigants
5. Laws and regulations
6. Evidence of e-commerce disputes
7. Conclusion
8. Questions or comments

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Brief introduction to Internet Courts

The rapid development of the digital economy, most commercial activities have moved from the physical world to the Internet and the legal perspective is not the exception.

Question: How Internet Courts are accessible for foreign companies in China.

Law and regulations and cultural barriers

Legal Challenges

Internet Courts

Online shopping is linked with almost everyone because most people are getting used to purchasing goods and achieving services through the Internet.

Brief introduction to Internet Courts

In China, in the case of electronic commerce most people use Taobao and Tmall, these two belong to the well-known Alibaba Group. For instance, Alibaba’s Single’s Day Sales on November 11, 2020 totaled a record $ 74.1 billion (¥ 498.2 billion).

The problem

• In e-commerce buyers and sellers are often located far apart, even located in different countries.
• When a dispute arises from e-commerce, the sufferer is often the consumer with weak negotiation power.
• If a consumer wants to claim damages from the seller, they must file a lawsuit in the court where the seller’s headquarters or where the main business office is located, by the current global legal system.

THE PROBLEM

The transaction amount of e-commerce is usually small, but the litigation cost under the traditional litigation system may be close to or even higher than the amount of compensation that can be sought.

People have made deposits of large amounts of money and do not know how to access justice, or how to start their trial abroad, this is one of the reasons why many cases remain unpunished.

To bring a lawsuit, consumers often must pay high litigation costs

Most Chinese suppliers are located in China's economically developed regions, and the courts in these regions have most of the cases. This has led to the extension of the time limit for you to obtain the sentence

The problem

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All commercial litigation is governed by the Civil Procedure Law of the People's Republic of China.

• Arbitration takes much less time in hearing cases than in litigation.
• The main reason is that most Chinese courts are plagued by litigation explosions.

time limit in months for you to obtain the sentence from the usual

Online court hearings have proliferated in jurisdictions that include the US, the UK, Canada and Australia, partly in response to the challenges raised in the justice system by the COVID-19 pandemic .

In many countries, AI-based solutions are already applied in the legal systems, especially to optimize databases and make them more accessible .

The Chinese government is actively supporting these industries and investing in AI.

Technology has been quietly adopted and widely used by judiciaries in many countries

2019

2017

1990'S

2015

• Chinese courts started to consider online proceedings by introducing provisions that addressed case registration and filing. The Civil Procedural Law Interpretation allowing parties to agree on the hearing format, including the option for virtual hearings using audio and visual transmission technology.

• China’s State Council published the Artificial Intelligence Development Plan (AIDP), a national strategy white paper that charts China’s AI development aspirations up to 2030

• China announced that millions of legal cases are now being decided by “Internet courts” that do not require citizens to appear in court.

The Netherlands judiciary set up its first platform to discuss information technology for its courts .

The COVID-19 pandemic has increased the importance of the Internet, prompting the People's Republic of China to establish a "smart court" and modernize its court system using technology

China adopted an ambitious plan to build a ‘smart court’ (智慧法源 ‘Zhi Hui Fa Yuan ’ in Chinese) and to modernize its entire court system across the nation by utilizing various technological innovations.

In China, citizens can use smartphones to file a complaint, follow the progress of the case or communicate with the judge. AI-based machines offer, among other things, legal consultations, register cases and generate legal documents 24 hours a day .

As of 31 October 2019, the three e-courts served 96,857 documents via phone, email, WeChat, SMS, and official online accounts .

• A data to have in mind is that China’s “techno-authoritarian toolkit” has already been exported to at least 18 countries, including Ecuador, Ethiopia, and Malaysia. As China sells its tools for domestic control, its digitized justice system may be its next offering to allies and trading partners.

Help to reduce the litigation and court costs paid by the parties, as well as the transportation expenses and time costs. It does not matter where the person or enterprise is located because the official website of Internet Court also provides 24/7 access and services as an online litigation platform.

Internet Court proceedings are conducted online:

The parties can initiate case applications at any time because they are restricted by the working hours of traditional courts.

Parties are free to file a lawsuit at any time of their choice and to pay the court’s litigation fee online. Parties can check the progress of the case and upload information and electronic evidence on the webpage of the litigation platform

Different forms of access interface, including mobile apps, have been developed for parties to select and use, making the platform more convenient for the parties. The parties can conduct online negotiation and mediation through the litigation platform in the form of web video and voice conversation.

Internet Court in China

August 18, 2017

9, September 2018

On August 18, 2017, the first Internet court in China was launched in Hangzhou, Zhejiang Province. One month later, the Beijing Internet Court and the Guangzhou Internet Court were also established. China established three Internet Courts in Hangzhou, Beijing and Guangzhou on 18 August 2017, 9 September 2018 and 28 September 2018, respectively. These three Internet Courts constitute the current Chinese Internet Court system .

28 September 2018

The Chinese Internet courts handle various disputes, including those related to intellectual property, e-commerce, online financial conduct, loans obtained or executed online, domain name conflicts, civil rights cases involving the Internet, product liability resulting from online purchases and some administrative disputes. .

In Beijing, cases are resolved within an average of 40 days, with an average dispositive hearing lasting 37 minutes. The majority of the litigants are individuals, while 20% are corporate entities. The Internet courts in Beijing, Guangzhou, and Hangzhou have heard 66,148 cases in 2021, with most of them being copyright-related disputes

China`s judicial reform

Foreign individuals and organizations can file online litigation in China, along with Chinese citizens and entities. The Supreme Court of China introduced the Several Provisions on Providing Online Case-filing Services for Foreign Litigants in 2021, which simplified the case-filing procedures and established an Internet platform for foreign parties to file cases with Chinese courts.

It is generally expected that in online courts, all aspects of the litigation process, from case acceptance to judgment, should be completed through the Internet. The fundamental principle of an online court is that the entire process is conducted virtually.

Online Case-filing Services for Foreign Litigants

Foreign litigants in Hong Kong, Macau and Taiwan can use the online platform called "China Mobile MiniCourt", which is integrated with WeChat, to file lawsuits.

• To use this platform, foreign litigants need to download WeChat and then they can file their case through their cell phone. When filing a case online, Chinese courts must verify the identity of the parties involved. This can be done through the information kept on the identity verification platform of China's National Immigration Administration. If this verification is not possible, the courts may also conduct a manual verification of the identity documents provided by the parties online.

Although online verification does not require the parties to submit the original paper documents, notarization, authentication and other procedures are still required.

justice applications (‘apps’)

China's courts have developed mobile justice apps to provide public access to legal services. One such app, called "Ning Bo Mobile Micro Court," was launched by the Ning Bo Intermediate People's Court in January 2018. This app allows litigants to complete the entire litigation process online, including case filing, serving of legal documents, mediation, evidence exchange, court hearings, and enforcement. By August 2018, around 70,000 cases had been filed using this app, saving judicial costs and improving litigant satisfaction.

Laws and regulations

PIPL AND PRC

The three laws that have an impact on e-commerce litigation are the China Cybersecurity Law (CSL), the Personal Information Protection Law (PIPL), and the Data Security Law (DSL

1 JUNE 2017

Cybersecurity Law,

are the three pillars of data protection regime that provide for a legal framework for the personal information protection, cybersecurity and data security perspectives.

PRC

01 september 2021

Data security law

• In China, the Internet Court has admitted blockchain-authenticated evidence in a copyright case, using a third-party platform to securely obtain and store digital evidence on the court's blockchain. From March 2023, all electronically served documents can be verified online on the Judicial Blockchain Platform.

• Digital evidence is becoming more and more important in court, but it must be collected and preserved according to the law. In most instances, digital evidence needs to be authenticated to be used in court.

• Store digital evidence securely on a system with strong security measures such as authentication, access controls and logging. Blockchain technology can be used to securely store evidence and reduce paperwork, while also enabling transparent records of the judicial process.

• There is a great diversity of courts and judicial systems in China, which can lead to uncertainty and inconsistency in the application and interpretation of laws. The Ministry of Industry and Information Technology (MIIT) has jurisdiction to regulate internet services, while the Cyberspace Administration of China (CAC) has jurisdiction to supervise internet security and content. These authorities may impose different or conflicting requirements on foreign companies that operate through the Internet in China, which may generate uncertainty and legal risks.

Conclusions

• China presents online challenges for foreign companies in resolving disputes, including verification of identity, authenticity of documents and evidence, and the need to file claims and procedural acts in a combined manner. Despite the use of digital technologies in the courts, notarization and authentication procedures are still necessary.

• Foreign companies seeking to protect their interests in Chinese internet courts can take several steps, including hiring local lawyers with expertise in the matter, using contracts that contain specific clauses for resolving disputes in China or using new Apps. The Internet courts in China still have certain limitations and challenges in terms of effective law enforcement. The importance is how to balance the efficiency of litigation with the correctness of judgements because every foreign needs to access to justice.

Thanks for your attention

谢谢

abogadacfabara@gmail.com

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