Choice of Court Agreement with foreign elements in China: Shandong Jufeng V. South Korea Mgame

• Author: Choice of Court Agreement with foreign elements in China: Shandong Jufeng V. South Korea Mgame
• Pages: 241-259

FRONTIERS OF LAW IN CHINA

VOL. 13 JUNE 2018 NO. 2

DOI 10.3868/s050-007-018-0016-8

FOCUS

RECOGNITION AND ENFORCEMENT OF JUDGMENTS BETWEEN CHINA, JAPAN

AND SOUTH KOREA IN THE NEW ERA

CHOICE OF COURT AGREEMENT WITH FOREIGN ELEMENTS IN CHINA:

SHANDONG JUFENG V. SOUTH KOREA MGAME

DU Huanfang∗

Abstract Unlike statutory and discretionary jurisdiction, jurisdiction by choice of

court agreement concluded in foreign-related civil and commercial matters should be

decided by the parties. As a special contract, the choice of court agreement is so

independent that its validity is governed by the law chosen by the parties or by the law

of the country where the chosen court is situated in case that the choice of law is invalid.

Amendments to the Civil Procedure Law (hereinafter referred to as “CPL”) of People’s

Republic of China (2012) should not only include the jurisdiction by choice of court

agreement with foreign-related elements, but also stipulate it in a more standardized way,

rather than simply refer to provision of jurisdiction by choice of court agreement in

domestic cases. At the same time, the CPL should make the scope of application of

choice of court agreement more clear, and provide choice of law clause and its

confirmative elements when deciding its effectiveness.

Keywords choice of court agreement, choice of law clause, the Civil Procedure Law,

judicial practice

INTRODUCTION .................................................................................................................... 242

I. LEGISLATIVE INTERPRETATION ON CHOICE OF COURT AGREEMENT CLAUSE ......... 244

A. Theoretical Basis of Choice of Court Agreement .............................................. 244

B. Article 242 of the CPL....................................................................................... 245

II. COMPARATIVE OBSERVATION OF CHOICE OF COURT AGREEMENT ......................... 247

A. The Practices of Foreign Countries ..................................................................247

B. Other Chinese Law and Arrangement............................................................... 248

∗ (杜焕芳) Ph.D. in international law, School of Law, Wuhan University, Wuhan, China; Professor, School

of Law, Renmin University of China, Beijing 100872, China. Contact: duhuanfang@ruc.edu.cn

This article is supported by the Fundamental Research Funds for the Central Universities and the

Research Funds of Renmin University of China (Grant No. 12XNJ004). Many thanks to my students, FU

Xiaoshan, ZHU Min, HE Zhanran, QI Chonghao, XU Chuanlei and LI Xiansen for their many helpful

reviews.

242 FRONTIERS OF LAW IN CHINA [Vol. 13: 241

C. The Hague Convention on Choice of Court Agreements of 2005 ..................... 249

III. JUDICIAL REVIEW OF CHOICE OF COURT AGREEMENT CLAUSE ........................... 252

IV. SUGGESTIONS ON PERFECTION OF THE CHOICE OF COURT AGREEMENTS ............ 255

A. Focus on the Research of Foreign-Related Civil Procedure Amendments........ 255

B. Recovery and Perfection of the Clause of Choice of Court Agreement............. 256

CONCLUSION........................................................................................................................ 258

INTRODUCTION

In accordance with the Decision on Amending the Civil Procedure Law (hereinafter

referred to as “CPL”) of the People’s Republic of China (PRC) as adopted at the 28th

Session of the Standing Committee of the Eleventh National People’s Congress, the CPL

was amended, and it is known as the 2012 Amendment,1 which abolished choice of court

agreement clause in Part Four Special Provisions of Civil Procedures involving Foreign

Elements while retained choice of court agreement clause to domestic cases. The

rationale behind this jurisprudence of the legislation intent is to uniformly apply choice of

court agreement clause in domestic cases to foreign-related civil cases. However, the

differences between foreign-related civil proceedings and domestic ones have been totally

ignored. The 2012 Amendment also ignores that, as special agreements for dispute

resolution, the foreign-related jurisdiction agreement and the choice of court agreement

are particular, and the lex causae governing the validity of the agreement needs to be

confirmed. Shall the rule applied in the general contract law be followed to confirm the

lex causae? Shall the law of the place of court or law of the place of the chosen court be

applied?

Shandong Jufeng Network Company, Ltd. v. South Korea Mgame Company and the

Third Party, Tianjin Forugame Company,2 the case concerning online games agency and

license contract, was finally decided by the Supreme People’s Court of the PRC. Section

21 of the contract between the parties stipulates that the contract shall be governed by the

China’s law and shall be interpreted in accordance with such law, and all the disputes that

may arise or have arisen shall be under the jurisdiction of Singapore. When a dispute

stipulated in the contract occurred, the plaintiff, Shandong Jufeng Network Company, Ltd.

(hereinafter referred to as “Jufeng Company”) brought the case to the Shandong Higher

People’s Court. During the civil procedure, the defendant, South Korea Mgame Company

(hereinafter referred to as “Mgame Company”) raised objection to jurisdiction of

1 全国人民代表大会常务委员会《关于修改<中华人民共和国民事诉讼法>的决定》 (Decision on Amending the

Civil Procedure Law of the People’s Republic of China), available at http://www.npc.gov.cn/huiyi/cwh/1128/

2012-09/01/content_1736003.htm (last visited Apr. 1, 2018).

2 This case is to be found in the 50 representative cases of judicial protection for intellectual property

rights in China’s courts released by the Supreme People’s Court of the PRC on Apr. 22, 2010, available at

http://www.chinacourt.org/html/article/201004/22/405642.shtml (last visited Apr. 24, 2017). Detailed

description of the case is on the Report of the Supreme People’s Court of the People’s Republic of China,

2010(3).