PhD defense on Commercial Dispute Resolutions in China

On Friday 29 September, mr. Bo Yuan LL.M. will defend his PhD thesis 'Foreign-Related Commercial Dispute Resolution in China: A focus on litigation and arbitration' at Erasmus School of Law.

Foreign businessmen often feel uneasy when their Chinese partners insist on litigating or arbitrating their disputes in China, since they are normally worried about the quality of dispute resolution service provided by Chinese courts and arbitration institutions. However, this reluctance may delay or even break possible business cooperation between the parties.

Yuan’s research shows that, although several deficiencies remain in the systems, China’s foreign-related litigation and arbitration systems, which are specially designed for disputes between foreign and Chinese parties, can basically fulfill the requirements of modern commercial litigation and arbitration. In other words: the worries of foreign businessmen can to some extent be eased if they need to or have to resolve their dispute in China.

Yuan notices that China adopts a particular dual legal system in which domestic and foreign-related commercial disputes (disputes involving foreign parties, foreign domiciles, foreign subject matters, etc.) are separated. Special legal settings, such as allocating foreign-related commercial cases to higher level courts, are being introduced into China’s litigation and arbitration systems.

Core principles
To find suitable criteria for evaluating the current status of the two systems, Yuan studied authoritative international legal documents and literature, and summarized a set of core principles which should be followed in litigation and arbitration, including accessibility, competence of adjudicators, fairness of proceedings, efficiency and enforcement. He then examined the two systems to find out whether the core principles are fulfilled in the law and practice of foreign-related commercial litigation and arbitration in China.

Quality Assessment
The research results indicates that foreign businessmen generally receive better dispute resolution service in Chinese courts and arbitration institutions in comparison with domestic ones. Although the current situation is still distant from a sound status, foreign businessmen can be at least less worried than before when their Chinese partners urge them to resolve their disputes in China.

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