Introduction
On September 1, 2023, the Decision of the Standing Committee of the National People’s Congress to Amend the Civil Procedure Law of the People’s Republic of China was examined and approved which shall come into effect on January 1, 2024 (hereinafter referred to as the “2023 Civil Procedure Law”). Among them, the foreign-related litigation procedures have been substantially revised and improved, mainly including expanding the jurisdiction of Chinese courts over foreign-related civil cases, adding the parallel litigation system and the principle of inconvenient jurisdiction, solving the problem of difficulties in service of process in foreign-related cases, and improving the recognition and enforcement of foreign court judgements and rulings, and other aspects. This article briefly introduces the six changes in the rules on foreign-related service of process for the reference of foreign subjects participating in litigation in Chinese courts.
New Rules to Address Foreign Service
According to the new rule, the People’s Court may adopt the following methods for service of litigation documents on litigants without domicile in the People’s Republic of China:
(1) service by the methods stipulated in an international treaty concluded or jointly acceded to by the country of the party being served and the People’s Republic of China;
(2) service through diplomatic channels;
(3) service upon the party being served with the Chinese nationality by the entrusted embassy or consulate of the People’s Republic of China based in the country where the party being served resides;
(4) service on the agent ad litem entrusted by the party being served in the lawsuit;
(5) service on a wholly-owned enterprise, representative office or branch established in the People’s Republic of China by the party being served or a business agent who has the right to receive service of process;
(6) service on the legal person or other organization where the party being served is a foreigner or a Stateless person, who acts as the legal representative or key person-in-charge of a legal person or any other organization established in the People’s Republic of China, and is the co-defendant with the said legal person or other organization;
(7) service on the legal representative or key person-in-charge where the party being served is a foreign legal person or any other organization, and its legal representative or key person-in-charge is in the People’s Republic of China;
(8) where the laws of the country where the party being served resides, permit service of documents by mail, the documents may be served by mail; upon expiry of a three-month period from the date of mailing and the acknowledgement of service is not being returned, but the documents may be deemed served based on the circumstances, the service shall be deemed successful on the date of expiry of the period;
(9) service by electronic methods for which receipt by the party being served can be confirmed, except prohibited by the laws of the country where the party being served resides; and
(10) service by any other methods agreed by the party being served, except prohibited by the laws of the country where the party being served resides.
Where the documents cannot be served via the aforesaid methods, the documents shall be served by way of a public announcement and deemed served 60 days after the date of issuance of the public announcement.
1. The litigation representative shall accept service of process on behalf of the person.
Since the current Civil Procedure Law only stipulates the situation that the litigation representative is only “authorized to accept service on behalf of the person.” In practice, there are cases where the authority of the litigation attorney excludes the acceptance of service or does not specify the acceptance of service in order to avoid service. This amendment expands the subject of service to the litigation attorney entrusted in this case, thus avoiding the phenomenon of litigation representatives circumventing service of process through the narrowing of the power of the attorney.
2. Permission to serve on a wholly-owned enterprise established by the person to be served in China.
According to the current laws and regulations, the representative office or branch office does not include subsidiaries, therefore, if the foreign organization only establishes subsidiaries within China without representative office or branch office, or the branch office is not explicitly authorized, there will be great difficulties in service.
The 2023 Civil Procedure Law expanded the subjects who may be served by adding wholly owned enterprises and deleting the circumstance that a branch office is “entitled to be served” when accepting service.
3. When a foreign natural person is a co-defendant with a domestic enterprise of which he or she is the legal representative or principal person, the domestic enterprise may be served.
When natural persons from abroad are involved in domestic litigation, there are often cases where natural persons respond negatively to lawsuits, affecting trial of cases. In recent years, judicial practice has made meaningful attempts, the 2023 Civil Procedure Law included the experience of practice and reserved some eligible subjects that can be served, but cautiously limited the application of the circumstance. According to this provision, the requirements for domestic service on a foreign natural person include: 1. the natural person is the legal representative or principal person in charge of the domestic enterprise; and 2. the domestic enterprise is a co-defendant in the case.
4. Service may be made on the representative, principal person in charge (directors, supervisors and senior management personnels) of the foreign enterprise in China
For service on foreign enterprises, the 2023 Civil Procedure Law adds “representative and principal person in China” as the person to be served.
According to the current interpretation of the Civil procedure Law, principal person includes the directors, supervisors and senior management personnel of the enterprise or organization.
5. Addition of the electronic service and other means of service agreed to by the person to be served
The 2023 Civil Procedure Law added electronic service and other methods agreed to by the person to be served, but in order to respect the sovereignty of foreign jurisdictions, it expressly excludes methods of service that violate the national laws of the person to be served.
6. Reduction of the period for service by public notice: from 3 months to 60 days
The 2023 Civil Procedure Law reduces the period of service by public notice to 60 days. Appropriately shortening the period of service by public notice is conducive to accelerating the progress of litigation and improving efficiency.
Conclusion
Overall, the 2023 Civil Procedure Law has enriched the methods of service and helped to improve the success rate of service in foreign-related litigation in China.
Due to the increase in the number of subjects to be served and the scope of application, the relevant foreign subjects should pay more attention to the strategies and methods in litigation, adopt a positive attitude to participate in the dispute resolution and pay attention to the deadline of the relevant litigation procedures, so as to avoid the loss of the subsequent procedural rights after the service of the lawsuit.
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Disclaimer
The above content is provided for informational purposes only. The provision of this article does not create an attorney-client relationship between DP Group and the reader and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel.
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