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FAQ: Chinese Civil Procedure Law Revision – Property Preservation & Case Acceptance

Q1. What are the provisions of Property Preservation in the Chinese Civil Procedure Law Revision?

A1. The provisions are prescribed in Chapter IX of the Civil Procedure Law (2012). Article 100 stipulates:

If it becomes impossible or difficult to execute a judgment because of the acts of one of the parties or for other reasons, the people's court may, at the request of the other party, order to adopt property preservation, instruct the party to do or not to do some performances. In the absence of such request, the people's court may, when necessary, also order to adopt property preservation measures.

When a people's court has decided to adopt property preservation, it may instruct the applicant to provide a security; if the applicant fails to do so, his or her application shall be rejected.

After receiving a party's application, if the case is urgent, the people's court must make an order within 48 hours concerning property preservation; if property preservation is granted by an order, implementation thereof shall begin immediately.

Meanwhile, Article 101 states:

Any interested party whose lawful rights and interests, due to urgent circumstances, would suffer un-remediable harms without immediately applying for property preservation, may, before filing the lawsuit or applying for arbitration, apply to the people's court, where the property is located, the party being applied or has the jurisdiction over the case, for the adoption of property preservation measures. The applicant shall provide a security; if the applicant fails to do so, his or her application shall be rejected.

After receiving a party's application, the people's court must make an order within 48 hours concerning property preservation; if property preservation is granted by an order, the implementation thereof shall begin immediately.

If the applicant fails to bring an action or file an application for arbitration within 30 days after the people's court has adopted the preservation measures, the people's court shall cancel the property preservation.

Article 102 prescribed:

Property preservation shall be limited to the scope of the claim or to the property relevant to the case.

 

Q2. What are the related provisions in the Chinese IP laws pertaining to the property preservation?

A2. Article 57 of the Trademark Law stipulates:

If the registrant of a trademark or an interested person has the evidence to prove that another person is conducting or is going to conduct the acts infringing upon its right to the exclusive use of a registered trademark, and if the acts are not stopped promptly, irreparable damages will occur to its legal rights and interests, it may apply to a people's court for a order of measures for stopping relevant acts and for attachment.

The provisions of Article 93 to Article 96 and of Article 99 of the Civil Procedure Law of the People's Republic of China shall be applicable to the handling of the applications mentioned in the preceding paragraph by a people's court.

Article 50 of the Copyright Law (2010) states:

A copyright owner or copyright-related right owner who has evidence to establish that another person is committing or will commit an act of infringing his right, which could cause a remediless loss to his legitimate rights and interests if the act is not prevented immediately, may apply to a people's court for adopting such measures as order to stop the relevant act and property preservation before he initiates an action.

Articles 93-96 and Article 99 of the Civil Procedure Law of the People's Republic of China shall be applied to the application mentioned above.

Article 66 of the Patent Law prescribes:

Where any patentee or interested party has evidence to prove that another person is infringing or will soon infringe its or his patent right and that if such infringing act is not checked or prevented from occurring in time, it is likely to cause irreparable harm to it or him, it or he may, before any legal proceedings are instituted, request the people's court to adopt measures for ordering the suspension of relevant acts and the preservation of property.

The applicant shall provide security while applying for the preservation. When the applicant fails to do so, the application shall be rejected.

After the acceptance of the application, the people’s court shall render the order within 48 hours. If special circumstances occur, the render of the order may be postponed for another 48 hours. If the order is to stop performances, it shall be immediately enforced. If the applicant is not satisfied with the order on property preservation, it may apply for reconsideration which could be granted only once. Implementation of the order shall not be suspended during the time of reconsideration.

If the applicant fails to file a lawsuit within 15 days after the order of stopping performances has been rendered, the people’s court shall cancel the preservation.

If the application is wrongfully made, the applicant shall compensate the person against whom the application is made for any loss incurred from property preservation.

 

Q3. What are the differences between the property preservations which are applied before the filing of the lawsuit and those applied during the litigation?

A3: The differences are listed as follows:

 

 

Property Preservation applied before the filing of the lawsuit

Property Preservation applied during the litigation

Reason of Application

The interested party confronts the urgent circumstances

Impossibility or difficulty of enforcement of judgment could occur due to one party’s action or other reasons

Applicant

The interested party

Party involved in the litigation or the court

Security Requirement

Security is required

The court may instruct the party to provide security

Time for rendering orders

Shall within 48 hours

Depends on the court; in case of urgent matters shall be rendered within 48 hours.

 

 

Q4. What are the impacts of the Civil Procedure Law Revisions on case acceptance practice?

A4. First of all, the number of the filing of lawsuit in the local courts may be increased due to the revised provision pertaining to the jurisdiction. For example, Article 34 of the revision states:

The parties to a contract may choose through agreement stipulated in the written contract the people's court in the place where the defendant has his or her domicile, where the contract is performed, where the contract is signed, where the plaintiff has his or her domicile, where the subject matter is located to have jurisdiction over the case or which has the real connection with the case, however, such an agreement may not violate the provisions of this Law regarding jurisdiction by level and exclusive jurisdiction.

Secondly, the acceptance of the cases which shall be heard by the courts at higher levels is ensured by adding the limitation to the power of the court at higher levels to transfer their cases to the courts at lower levels according to Article 38:

People's courts at higher levels shall have the authority to try civil cases over which people's courts at lower levels have jurisdiction as courts of first instance; if it is really necessary, the court at higher levels may also transfer civil cases over which they themselves have jurisdiction as courts of first instance to people's courts at lower levels for trial, and the case transfer shall be applied to the court at its higher levels for approval.

Thirdly, the jurisdiction and the acceptance of the case are specified. For example, Article 26 is added to deal with the jurisdiction and acceptance of the dispute of establishment of the company, the qualification of the shareholders, the distribution of the profits and the dissolution.

Besides, the provision in the Article 199 is enriched to handle the acceptance of the retrial issue.

Furthermore, it becomes possible for the filing and the acceptance of the public interest litigation by adding the Article 55:

The organs prescribed by law or related organizations may file the lawsuit to the people’s court for environment pollution, infringement of the right of large members of consumers and other cases in relation to the public interests.

 

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