Posts Tagged China

Fasten your (Road and) belts. China to follow example of DIFC and ICC.

Update 9 April 2019 see Matthew Erie’s paper on ‘new legal hubs’ or NLHs discussing these and other issues here.

Susan Finder has an absolutely indispensable post on two recent initiatives over at the Chinese Supreme Court.

Firstly, the Supreme People’s Court is working on a judicial interpretation of the rules on recognition and enforcement of civil and commercial judgments. This follows the first such recognition from a judgment originating in the United States, Liu Li v. Tao Li and Tong Wu (2015) Yue Wuhan Zhong Min Shang Wai Chu Zi No.00026 – see professor Clarke’s review here. The recent conference at Wuhan which I reported on at my Twitter feed, shows the intensity of engagement of China with the Hague Judgments project.

Next, the SPC is engaging with a multitude of stakeholders to consider setting-up specialist mediation centres, with the examples of Dubai’s DIFC and Singapore’s ICC in mind, to smoothen the participation of foreign governments and companies in China’s Belt and Road initiative. Susan has great review of the implications of same.

Don’t forget to look to the East: Exciting stuff happening there.

Geert.

 

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South East China Sea award puts wind in the sails of UNCLOS environmental provisions.

Most of the political attention to the panel’s award on the South East China Sea issue has gone to the implications for Chinese sovereignty in the area. That is in itself neither surprising nor problematic. It is worth highlighting however that 2 out of 6 of the Panel’s conclusions, as listed by Herbert Smith Freehills, relate to environmental protection:

  1. failed to protect and preserve the marine environment by tolerating and actively supporting Chinese fishermen in the harvesting of endangered species and the use of harmful fishing methods that damaged the fragile coral reef ecosystem in the South China Sea;
  2. inflicted severe harm on the marine environment by constructing artificial islands and engaging in extensive land reclamation at seven reefs in the Spratly Islands;

If one includes a third one, ‘interfered with the traditional fishing activities of Philippine fishermen at Scarborough Shoal;’ as being part of the principle of sustainable development, then half of the Chinese infringements relate to environmental protection in the wide sense. These findings highlight how closely linked environmental protection is to natural resources and to territory generally, and how environmental protection has come of age and is now part of core debates in public international law. Sadly also, of course, how in their search for scarce resources plenty of nations continue to trample freely on values which the 1992 Rio Declaration already found to essentially be part of customary international law.

A Monash student of mine is writing on the Panel report from the environmental angle and I shall share as and when that analysis is available.

Geert.

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Chinachem: Forum non conveniens, non-exclusive choice of court and concurrent proceedings in Hong Kong and Mainland China.

I reported earlier on the waiver of privilege issues in Chinachem. The Hong Kong High Court has now also ruled on the issue of application of forum non conveniens in the event of concurrent proceedings in Hong Kong and mainland China. In a lengthy judgment (particularly resulting from extensive summary of counsel arguments but also of relevant precedent), Ng J recalls English precedent on forum non conveniens (Spiliada evidently being featured) and the way in which said precedent has been applied in Hong Kong. (Carrie Tai has excellent overview here).

Contract between the parties included choice of court and choice of law as follows: ‘This Agreement shall be governed by the laws of Hong Kong and it shall be construed by the laws of Hong Kong. Both parties agree to submit to the non-exclusive jurisdiction of the courts of Hong Kong.’

Ng J in the end rejects all arguments suggesting a stay in favour of the mainland proceedings. In doing so, she confirmed the tendency of Hong Kong courts (like indeed their English common law counterparts) to only brush aside choice of court in exceptional circumstance. Even if that choice of court is, such as here, non-exclusive. The concurrent proceedings stand.

Geert.

 

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Conflicts, conflicts everywhere? The Hong Kong High Court in Chinachem.

It must be those late nights spent marking exam papers. (Thank goodness there is the World Cup to take the edge off that exercise this year). Either that or generally the twisted mind of a conflicts lawyer. I can see one or two conflicts issues in Chinachem which the Hong Kong High Court did not pick up on: probably because parties did not raise them and /or because the dispute was not ‘international’. In which case, let’s call this blog posting Fantasy Conflicts.

In Chinachem Financial Services v Century Ventures Holdings Ltd, the Hong Kong High Court held on the issue of implied waiver of privilege. Gareth Thomas and Dominic Geiser have a summary of the case here, including a review of its implications in Hong Kong dispute resolution. It is the discussion on waiver of privilege which is of interest to this blog. Both parties to the dispute are PRC (Mainland) based. They entered into an agreement whereby defendant would assist with the appeals stage of a dispute between plaintiff and third party. After a short while, disagreement ensued on the scope of the advice and plaintiff took legal advice from a Hong Kong based law firm but with international roots. This legal advice was later handed over to defendant by Plaintiff’s former CEO, in an alleged breach of his fiduciary duties. Did the hand-over and alleged partial use of the advice in the proceedings amount to waiver of privilege?

Ramanathan SC (at 130 ff) reviewed US, Australian, and English precedent (in particular Paragon v Freshfields and subsequent case-law) and in the end opted for the English approach. In doing so he presumably applied lex fori to the waiver issue, it being procedural? (And without consideration of the intervening nature of the lex causae of the contract between the law firm and plaintiff, or third party effect thereof. Lex contractus of this contract may well have been English given the roots of the firm involved. Lex contractus for the agreement between the parties presumably was ‘Chinese’ or ‘Mainland Chinese’). In this case, the open-minded comparative law approach is commendable (and of particular note, the fact that the judge opted for the English approach citing inter alia human rights impact and related relevance to Hong Kong (at 135)).

Finally, the Hong Kong proceedings were started 7 March 2013. Proceedings by defendant on the mainland, seeking essentially the reverse of plaintiff’s action in Hong Kong, had been initiated ‘early 2013’ (at 21). Yet any form of lis alibi pendens does not seem to have been entertained – presumably because mainland China generally has no structured approach to lis alibi pendens and Hong Kong is not willing to employ one unilaterally.

Fantasy over. Back to marking exams. Geert.

 

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Rolex v Blomqvist. ECJ confirms irrelevance of ‘focus and target’ or ‘direction’ in intellectual property cases.

After its withholding of mere accessibility of a site as a jurisdictional trigger for copyright infringement in Pinckney, the ECJ has now accepted that the mere acquisition of a good by a person domiciled in an EU Member State, suffices to trigger the application of the EU Customs Regulation’s provisions on counterfeit and pirated goods. It is not necessary, in addition, for the goods at issue to have been the subject, prior to the sale, of an offer for sale or advertising targeting consumers of that State.

In Case C-98/13 Martin Blomqvist v Rolex Mr Blomqvist, a resident of Denmark, ordered a watch described as a Rolex from a Chinese on-line shop. The order was placed and paid for through the English website of the seller. The seller sent the watch from Hong Kong by post. The parcel was inspected by the customs authorities on arrival in Denmark. They suspended the customs clearance of the watch, suspecting that it was a counterfeit version of the original Rolex watch and that there had been a breach of copyright over the model concerned. In accordance with the procedure laid down by the customs regulation, Rolex then requested the continued suspension of customs clearance, having established that the watch was in fact counterfeit, and asked Mr Blomqvist to consent to the destruction of the watch by the customs authorities. Mr Blomqvist refused to consent to the destruction of the watch, contending that he had purchased it legally. Is there in the present case any distribution to the public, within the meaning of the copyright directive, and any use in the course of trade, within the meaning of the trade mark directive and the trade mark regulation?

The ECJ re-iterated earlier case-law (in particular L’Oreal /E-bay) that the mere fact that a website is accessible from the territory covered by the trade mark is not a sufficient basis for concluding that the offers for sale displayed there are targeted at consumers in the EU. However proof that the goods are intended to be put on sale in the European Union, is being provided, inter alia, where it turns out that the goods have been sold to a customer in the European Union, such as clearly in the case at issue.

That sales to the EU have taken place is enough. Proof that EU consumers were actually targeted is not required – at least not with a view to triggering intellectual property protection (cf consumer protection under i.a. the jurisdiction Regulation).

In the view of the EU of course this is not an ‘extraterritorial’ application of EU law: the territorial link is firmly established through the customer’s domicile.

Geert.

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