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The Latest Development on Anti-suit Injunction Wielded by Chinese Courts to Restrain Foreign Parallel Proceedings
(This post is provided by Zeyu Huang, who is an associate attorney of Hui Zhong Law Firm based in Shenzhen. Mr. Huang obtained his LLB degree from the Remin University of China Law School. He is also a PhD candidate & LLM at the Faculty of Law in University of Macau. The author may be contacted at the e-mail address: huangzeyu@huizhonglaw.com)
When confronted with international parallel proceedings due to the existence of a competent foreign court having adjudicative jurisdiction, the seized foreign court located in common law jurisdictions seems to see it as no offence to Chinese courts by granting anti-suit injunctions to restrain Chinese proceedings. This is because the common law court believes that “An order of this kind [anti-suit injunction] is made in personam against a party subject to the court’s jurisdiction by way of requiring compliance with agreed terms. It does not purport to have direct effect on the proceedings in the PRC. This court respects such proceedings as a matter of judicial comity”. [1] However, the fact that the anti-suit injunction is not directly targeted at people’s courts in the PRC does not prevent Chinese judges from believing that it is inappropriate for foreign courts to issue an anti-suit injunction restraining Chinese proceedings. Instead, they would likely view such interim order as something that purports to indirectly deprive the party of the right of having access to Chinese court and would unavoidably impact Chinese proceedings.
The attitude of Chinese courts towards the anti-suit injunction – a fine-tuning tool to curb parallel proceedings – has changed in recent years. In fact, they have progressively become open-minded to resorting to anti-suit injunctions or other similar orders that are issued to prevent parties from continuing foreign proceedings in parallel. Following that, the real question is whether and how anti-suit injunction is compatible with Chinese law. Some argued that Article 100 of the PRC CPL provides a legal basis for granting injunctions having similar effects with anti-suit injunction at common law. [2] It provides that:
“The people’s court may upon the request of one party to issue a ruling to preserve the other party’s assets or compel the other party to perform certain act or refrain from doing certain act, in cases where the execution of the judgment would face difficulties, or the party would suffer other damages due to the acts of the other party or for other reasons. If necessary, the people’s court also could make a ruling of such preservative measures without one party’s application.” [3]
Accordingly, Chinese people’s court may make a ruling to limit one party from pursuing parallel foreign proceedings if such action may render the enforcement of Chinese judgment difficult or cause other possible damages to the other party.
In maritime disputes, Chinese maritime courts are also empowered by special legislation to issue maritime injunctions having anti-suit or anti-anti-suit effects. Article 51 of the PRC Maritime Special Procedure Law provides that the maritime court may upon the application of a maritime claimant issue a maritime injunction to compel the respondent to do or not to do certain acts in order to protect the claimant’s lawful rights and interests from being infringed. [4] The maritime injunction is not constrained by the jurisdiction agreement or arbitration agreement as agreed upon between the parties in relation to the maritime claim. [5] In order to obtain a maritime injunction, three requirements shall be satisfied – firstly, the applicant has a specific maritime claim; secondly, there is a need to rectify the respondent’s act which violates the law or breaches the contract; thirdly, a situation of emergency exists in which the damages would be caused or increased if the maritime injunction is not issued immediately. [6] Like the provision of the PRC CPL, the maritime injunction issued by the Chinese maritime court is mainly directed to mitigate the damages caused by the party’s behaviour to the other parties’ relevant rights and interests.
In Huatai P&C Insurance Corp Ltd Shenzhen Branch v Clipper Chartering SA, the Maritime Court of Wuhan City granted the maritime injunction upon the claimant’s application to oblige the respondent to immediately withdraw the anti-suit injunction granted by the High Court of the Hong Kong SAR to restrain the Mainland proceedings. [7] The Hong Kong anti-suit injunction was successfully sought by the respondent on the grounds of the existence of a valid arbitration agreement. [8] However, the respondent did not challenge the jurisdiction of the Mainland maritime court over the dispute arising from the contract of carriage of goods by sea. Therefore, the Maritime Court of Wuhan City held that the respondent had submitted to its jurisdiction. As a result, the application launched by the respondent to the High Court of the Hong Kong SAR for the anti-suit injunction to restrain the Mainland Chinese proceedings had infringed the legitimate rights and interests of the claimant. In accordance with Article 51 of the PRC Maritime Special Procedure Law, a Chinese maritime injunction was granted to order the respondent domiciled in Greece to withdraw the Hong Kong anti-suit injunction (HCCT28/2017). [9] As the maritime injunction in the Huatai Property case was a Mainland Chinese ruling issued directly against the anti-suit injunction granted by a Hong Kong court, it is fair to say that if necessary Chinese people’s court does not hesitate to issue a compulsory injunction “which orders a party not to seek injunction relief in another forum in relation to proceedings in the issuing forum”. [10] This kind of compulsory injunction is also called ‘anti-anti-suit injunction’ or ‘defensive anti-suit injunction’. [11]
When it comes to civil and commercial matters, including preserving intellectual property rights, the people’s court in Mainland China is also prepared to issue procedural orders or rulings to prevent the parties from pursuing foreign proceedings, similar to anti-suit injunctions or anti-anti-suit injunction in common law world. In Guangdong OPPO Mobile Telecommunications Corp Ltd and its Shenzhen Branch v Sharp Corporation and ScienBiziP Japan Corporation, the plaintiff OPPO made an application to the seized Chinese court for a ruling to preserve actions or inactions.[12] Before and after the application, the defendant Sharp had brought tort claims arising from SEP (standard essential patent) licensing against OPPO by commencing several parallel proceedings before German courts, a Japanese court and a Taiwanese court. [13] In the face of foreign parallel proceedings, the Intermediate People’s Court of Shenzhen City of Guangdong Province rendered a ruling to restrain the defendant Sharp from pursing any new action or applying for any judicial injunction before a Chinese final judgment was made for the patent dispute. [14] The breach of the ruling would entail a fine of RMB 1 million per day. [15] Almost 7 hours after the Chinese ‘anti-suit injunction’ was issued, a German ‘anti-anti-suit injunction’ was issued against the OPPO. [16] Then, the Shenzhen court conducted a court investigation to the Sharp’s breach of its ruling and clarified the severe legal consequences of the breach. [17] Eventually, Sharp choose to defer to the Chinese ‘anti-suit injunction’ through voluntarily and unconditionally withdrawing the anti-anti-suit injunction granted by the German court. [18] Interestingly enough, Germany, a typical civil law country, and other EU countries have also seemingly taken a U-turn by starting to issue anti-anti-suit injunctions in international litigation in response to anti-suit injunctions made by other foreign courts, especially the US court. [19]
In some other IP cases involving Chinese tech giants, Chinese courts appear to feel more and more comfortable with granting compulsory rulings having the same legal effects of anti-suit injunction and anti-anti-suit injunction. For example, in another seminal case publicized by the SPC in 2020, Huawei Technologies Corp Ltd (“Huawei”) applied to the Court for a ruling to prevent the respondent Conversant Wireless Licensing S.A.R.L. (“Conversant”) from further seeking enforcement of the judgment rendered by the Dusseldorf Regional Court in Germany. [20] Before the application, a pair of parallel proceedings existed, concurrently pending before the SPC as the second-instance court and the Dusseldorf Regional Court. On the same date of application, the German regional court delivered a judgement in favour of Conversant. Within 48 hours after receiving the Huawei’s application for an anti-suit injunction, the SPC granted the injunction to prohibit Conversant from applying for enforcement of the German judgment; if Conversant failed to comply with the injunction, a fine (RMB 1 million per day) would be imposed, accumulating day by day since the date of breach. [21] Conversant applied for a reconsideration of the anti-suit injunction, and it was however rejected by the SPC eventually. [22] The SPC’s anti-suit injunction against the German regional court’s decision compelled both parties to go back to the negotiating table, and the dispute between the two parties striving for global parallel proceedings was finally resolved by reaching a settlement agreement. [23]
The SPC’s injunction in Huawei v. Conversant is commended as the very first action preservation ruling having the “anti-suit injunction” nature in the field of intellectual property rights litigation in China, which has prematurely established the Chinese approach to anti-suit injunction in judicial practice. [24] It is believed by the Court to be an effective tool to curb parallel proceedings concurrent in various jurisdictions across the globe. [25] We still wait to see Chinese court’s future approach in other civil and commercial matters to anti-suit injunction or anti-anti-suit injunction issued by itself as well as those granted by foreign courts.
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1. See Impala Warehousing and Logistics (Shanghai) Co Ltd v Wanxiang Resources (Singapore) Pte Ltd [2015] EWHC 811, para.144.
2. See Liang Zhao, ‘Party Autonomy in Choice of Court and Jurisdiction Over Foreign-Related Commercial and Maritime Disputes in China’ (2019) 15 Journal of Private International Law 541, at 565.
3. See Article 100, para.1 of the PRC CPL (2017).
4. See Article 51 of the PRC Special Maritime Procedure Law (1999).
5. See Article 53 of the PRC Special Maritime Procedure Law (1999).
6. See Article 56 of the PRC Special Maritime Procedure Law (1999).
7. See Huatai Property & Casualty Insurance Co Ltd Shenzhen Branch v Clipper Chartering SA (2017) E 72 Xing Bao No.3 of the Maritime Court of Wuhan City.
8. See HCCT 28/2017 of the High Court of the Hong Kong SAR.
9. See (2017) E 72 Xing Bao No.3.
10. See Andrew S. Bell, Forum Shopping and Venue in Transnational Litigation (Oxford University Press 2003), at 196.
11. See ibid.
12. See (2020) Yue 03 Min Chu No.689-1.
13. See ibid.
14. See ibid.
15. See ibid.
16. See ibid.
17. See ibid.
18. See ibid.
19. See Greta Niehaus, ‘First Anti-Anti-Suit Injunction in Germany: The Costs for International Arbitration’ Kluwer Arbitration Blog, 28 February 2021.
20. See Huawei Technologies Corp Ltd and Others v Conversant Wireless Licensing S.A.R.L. (2019) Zui Gao Fa Zhi Min Zhong No.732, No.733, No.734-I.
21. See ibid.
22. See Conversant Wireless Licensing S.A.R.L. v Huawei Technologies Corp Ltd and Others, (2019) Zui Gao Fa Zhi Min Zhong No.732, No.733, No.734-II.
23. See Case No.2 of the “10 Seminal Intellectual Property Right Cases before Chinese Courts”, Fa Ban [2021] No.146, the General Office of the Supreme People’s Court.
24. See ibid.
25. See ibid.
A Conflict of Laws Companion – Adrian Briggs Retires from Oxford
By Tobias Lutzi, University of Cologne
There should be few readers of this blog, and few conflict-of-laws experts in general, to whom Adrian Briggs will not be a household name. In fact, it might be impossible to find anyone working in the field who has not either read some of his academic writings (or Lord Goff’s seminal speech in The Spiliada [1986] UKHL 10, which directly credits them) or had the privilege of attending one of his classes in Oxford or one of the other places he has visited over the years.
Adrian Briggs has taught Conflict of Laws in Oxford for more than 40 years, continuing the University’s great tradition in the field that started with Albert Venn Dicey at the end of the 19th century and had been upheld by Geoffrey Cheshire, John Morris, and Francis Reynolds* among others. His writings include four editions of The Conflict of Laws (one of the most read, and most readable, textbooks in the field), six editions of Civil Jurisdiction and Judgments and his magnus opus Private International Law in English Courts, a perfect snapshot of the law as it stood in 2014, shortly before the UK decided to turn back the clock. His scholarship has been cited by courts across the world. Still, Adrian Briggs has managed to maintain a busy barrister practice in London (including well-known cases such as Case C-68/93 Fiona Shevill, Rubin v Eurofinance [2012] UKSC 46, and The Alexandros T [2013] UKSC 70) while also remaining an active member of the academic community regularly contributing not only to parliamentary committees but also, on occasion, to the academic discussion on this blog.
To honour his impact on the field of Conflict of Laws, two of Adrian’s Oxford colleagues, Andrew Dickinson and Edwin Peel, have put together a book, aptly titled ‘A Conflict of Laws Companion’. It contains contributions from 19 scholars, including four members of the highest courts of their respective countries, virtually all of whom have been taught by (or together with) the honorand at Oxford. The book starts with a foreword by Lord Mance, followed by three short notes on Adrian Briggs as a Lecturer at Leeds University (where he only taught for about a year), as a scholar at Oxford, and as a fellow at St Edmund Hall. Afterwards, the authors of the longer academic contributions offer a number of particularly delightful ‘recollections’, describing Adrian Briggs, inter alia, as “the one time wunderkind and occasional enfant terrible of private international law” (Andrew Bell), “the perfect supervisor: unfailingly generous with his time and constructive with his criticism” (Andrew Scott), and “a tutor, colleague and friend” (Andrew Dickinson).
The academic essays that follow are conventionally organised into four categories: ‘Jurisdiction’, ‘Choice of Law’, ‘Recognition and Enforcement of Foreign Judgments’, and ‘Conflict of Laws within the Legal System’. They rise to the occasion on at least two accounts. First, they all use an aspect of Adrian Briggs’ academic oeuvre as their starting point. Second, they are of a quality and depths worthy of the honorand (possibly having profited from the prospect of needing to pass his critical eye). While they all are as insightful as inspiring, Ed Peel’s contribution on ‘How Private is Private International Law?’ can be recommended with particular enthusiasm as it picks up Adrian Briggs’ observation (made in several of his writings) that, so far as English law is concerned, “a very large amount of the law on jurisdiction, but also on choice of law, is dependent on the very private law notions of consent and obligation” and critically discusses it from the perspective of contract-law expert. Still, there is not one page of this book that does not make for a stimulating read. It is a great testament to one of the greatest minds in private international law, and a true Conflict of Laws companion to countless students, scholars, colleagues, and friends.
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* corrected from an earlier version
Enforcement of Foreign Judgments about Forum Land
By Stephen G.A. Pitel, Western University
In common law Canada, it has long been established that a court will not recognize and enforce a foreign judgment concerning title to land in the forum. The key case in support is Duke v Andler, [1932] SCR 734.
The ongoing application of that decision has now been called into question by the British Columbia Court of Appeal in Lanfer v Eilers, 2021 BCCA 241 (available here). In the court below the judge relied on Duke and refused recognition and enforcement of a German decision that determined the ownership of land in British Columbia. The Court of Appeal reversed and gave effect to the German decision. This represents a significant change to Canadian law in this area.
The Court of Appeal, of course, cannot overturn a decision of the Supreme Court of Canada. It reached its result by deciding that a more recent decision of the Supreme Court of Canada, that in Pro Swing Inc v Elta Golf Inc, 2006 SCC 52, had overtaken the reasoning and result in Duke and left the Court of Appeal free to recognize and enforce the German decision (see paras 44-45 and 74). This is controversial. It has been questioned whether Pro Swing had the effect of superseding Duke but there are arguments on both sides. In part this is because Pro Swing was a decision about whether to recognize and enforce foreign non-monetary orders, but the orders in that case had nothing to do with specific performance mandating a transfer or title to land in the forum.
I find it hard to accept the decision as a matter of precedent. The title to land aspect of the foreign decision seems a significantly different element than what is at issue in most non-monetary judgment decisions, such that it is hard to simply subsume this within Pro Swing. What is really necessary is detailed analysis of whether the historic rule should or should not be changed at a normative level. How open should courts be to recognizing and enforcing foreign judgments concerning title to land in the forum? This raises related issues, most fundamentally whether the Mocambique rule itself should change. If other courts now know that British Columbia is prepared to enforce foreign orders about land in that province, why should foreign courts restrain their jurisdiction in cases concerning such land?
In this litigation, the defendant is a German resident and by all accounts is clearly in violation of the German court’s order requiring a transfer of the land in British Columbia (see para 1). Why the plaintiff could not or did not have the German courts directly enforce their own order against the defendant’s person or property is not clear in the decision. Indeed, it may be that the German courts only were prepared to make the order about foreign land precisely because they had the power to enforce the order in personam and that it thus did not require enforcement in British Columbia (analogous to the Penn v Baltimore exception to Mocambique).
Given the conflict with Duke, there is a reasonable likelihood that the Supreme Court of Canada would grant leave to appeal if it is sought. And if not, a denial of leave would be a relatively strong signal of support for the Court of Appeal’s decision. But the issue will be less clear if no appeal is sought, leaving debate about the extent to which the law has changed.
News
Virtual Workshop (in German) on November 9: Christine Budzikiewicz on “The Proposal for the Creation of a European Certificate of Parenthood”
On Tuesday, November 7, 2023, the Hamburg Max Planck Institute will host its 38th monthly virtual workshop Current Research in Private International Law at 11:00-12:30 (CET). Christine Budzikiewicz (Phillips-Universität Marburg) will speak, in German, about
The Proposal for the Creation of a European Certificate of Parenthood
The presentation will be followed by open discussion. All are welcome. More information and sign-up here.
If you want to be invited to these events in the future, please write to veranstaltungen@mpipriv.de.
Book by Lydia Lundstedt on trade secrets in PIL
Fresh from the print comes the book titled Cross-Border Trade Secret Disputes in the European Union: Jurisdiction and Applicable Law authored by Lydia Lundstedt, Senior Lecturer in Private International Law at the Stockholm University and Senior Lecturer in Intellectual Property Law at the Linköping University.
The book is offering an EU perspective on one of the important ways the companies are protecting their intellectual property and information in general. This book examines different approaches to trade secret protection in the EU Member States, and focuses on the jurisdiction and applicable law under Brussels I bis, Rome I and Rome II.
The book is available here, and code LUND35 will secure a 35% discount on the book price.
Revue Critique de droit international privé – issue 2023/2
The second issue of the Revue critique de droit International privé of 2023 was released in August. It contains four articles and several case notes.
The first part of the issue features the doctrinal work of two young authors, who confront PIL techniques with contemporary developments in social sciences.
The first article Pour une approche décoloniale du droit international privé (A Decolonial Approach to Private International Law) is authored by Dr Sandrine Brachotte (Université Saint-Louis & Université de Lille). Following her doctoral work on The Conflict of Laws and Non-secular Worldviews: A Proposal for Inclusion (see presentation over at EAPIL), Dr Brachotte discusses colonial studies’ implications for PIL scholarship. She examines how plural normativities challenge the traditional conception of conflict of laws and then outlines the potential form of a decolonial PIL. An English translation of the article is available on the website of the editor. Its abstract reads as follows: