II. Chinese Courts’ Efforts in Law Harmonization

First, the courts ascertain and apply foreign laws in specific cases. The courts have applied foreign laws in many cases involving foreign interests, in accordance with the Law of the People's Republic of China on the Law-Application to Foreign-related Civil Relations. Though China has no tribunal for international commercial cases, the departments and judges in certain courts have been specially designated for such cases. To apply foreign laws, the judges research into commercial laws abroad. This help them to make rulings up to international practice and good for world trade. In free trade zones in Shanghai and Shenzhen foreign investors hope to base their contracts on foreign laws. But this goes against the Chinese provision that foreign-invested enterprises in China are Chinese enterprises that shall not base their contracts on foreign laws except the disputes are foreign-related in certain ways. This is an issue that Chinese authorities are trying to solve. They are exploring the possibility of expanding the application of foreign laws in special areas like these pilot free trade zones. In recent years, the Supreme People’s Court has been working with scholars and experts in civil society, especially legal institutions, to ascertain foreign laws. We have not yet collaborated with our counterparts abroad for the reference of some specific foreign laws, but I think we should definitely do it, as Singapore and Dubai and some other courts have done.

Second, our judicial interpretation draws on international experience. The legislators in China are the National People’s Congress and its standing committee. The Supreme People’s Court makes binding judicial interpretations on the laws that courts apply.

When making judicial interpretations, we pay particular attention to learning foreign laws and rulings, and suiting the proven approaches to China’s reality. Judicial interpretations are more flexible and timely than law amendments and so they fit the needs of economic and social development and reflect the advanced concepts and ideas in the international legal community.

In 2005, we released the judicial interpretation Provisions on Trials of Letter of Credit Disputes. It was modeled on international conventions, such as the Uniform Customs and Practice for Documentary Credits by the International Chamber of Commerce. The interpretation represented the essence of successful rulings by our courts, and has filled a gap in our legal system. It was recognized by some international commentators and scholars as pioneering. The interpretations on the laws of contracts, corporations, insurance, and guarantees, made in recent years, all drew on the principles and ideas of the legislations and practice in advanced countries and from international conventions. Now we are developing a judicial interpretation of independent guarantees, and we are also learning from the ICC’s Uniform Rules for Demand Guarantees, the United Nations Convention on Independent Guarantees and Stand-by Letters of Credit, and, of course, also the relevant provisions in other countries. Through judicial interpretations, the Supreme Court finds a proper way to apply the laws and thus align courts’ judgment with international practice, and more importantly, feed fresh concepts and ideas to our legislation.

Third, the Guiding Cases Project brings in the essence of foreign laws and regulations. China is a civil law country. Courts and judges do not make law and there is no rule of stare decisis. However, as China’s judicial reform advances, the Guiding Cases System was put in place in 2010, which provided that Supreme People’s Court issues guiding cases and courts at all levels take it as reference in adjudicating similar cases. So far, the Supreme People’s court has issued 11 groups of guiding cases, 56 in total. It is a small portion of all judicial cases, but carefully selected and highly representative, which serves as interpretation of laws and principles guiding trials and judgments.

Under the principle of law, the people’s courts also absorb fine ideas from foreign legal systems in terms of interpretation and application of law in handling individual cases. If an idea proves to bring about good result, well-received by litigants, and stands to the test of history and practice, it can then be listed as a guiding case. Such ideas and cases will provide guidance to judicial practice in the way of thinking and in dealing with specific cases. Apart from the Guiding Cases Project, China courts are now engaged in the transparent project through which the texts of judgments by all levels of courts are now released on the Internet. The Supreme People’s court is also planning to start up the Judicial Case Research Center, which will be responsible for conducting joint research on cases with other countries and regions, in hope to achieve deeper integration with advanced legal cultures and rules.

Fourth, draw on the national policy of “one country, two systems” and formulate special Chinese experience. After the return of Hong Kong and Macao, according to the policy of “one country, two systems” and basic laws, the original laws of two regions were retained, except for those contradicted with basic laws. Taking Taiwan into account, there are four jurisdictions coexisting in Chinese territory. The four sides made relentless efforts in promoting the exchange and cooperation between different legal traditions and systems. Mainland China and Taiwan built up an all-around legal mechanism for mutual assistance covering civil law, criminal law and administrative litigation. Mainland China, Hong Kong, and Macao also have a legal assistance framework on the service of legal instruments, judgment recognition and enforcement in some cases of civil and commercial affairs.

In July 2015, under the proposal of Judges' Association of China and other institutions, the Chinese Judicial Studies Institute was established. It aimed at facilitating legal exchange and cooperation between Hong Kong, Macao, Taiwan and mainland China to promote the rule of law in China. At the frontline of this cooperation, the basic courts in the free trade zones of Guangdong and Fujian provinces invited people’s assessors, mediators from Hong Kong, Macao, and Taiwan to participate in court proceedings, put in place a legal material exchange mechanism and are discussing the introduction of commercial rules in Hong Kong, Macao, and Taiwan laws to form the model contract text for trade participants. Though under different laws and legal systems, and guided by different traditions and cultures, Hong Kong, Macao, Taiwan, and mainland China are, on the basis of mutual assistance, taking the free trade zone as an experimental field, striving to get beyond the barriers of different legal systems and achieve the connectivity of laws and regulations. We hope such attempts will provide empirical experience for the convergence of law on a larger scale.