SPC’s Guideline Ⅲ on Handling Epidemic-related Civil Cases

 

On June 16, 2020 the Supreme People’s Court (the “SPC”) issued the Guiding Opinions Ⅲ on Several Issues Concerning Properly Handling Civil Cases Related to COVID-19 Epidemic (the “Opinions Ⅲ”). 

 

Below we have outlined several key measures involved in the Opinions Ⅲ which aimed to facilitate the properly handling with foreign-related commercial disputes and maritime disputes.

 

Article 1 of the Opinions Ⅲ: Foreign parties can request for extension of submitting relevant identification documents and power of attorney.

In the even that a foreign party is unable to complete notarization, certification or other identification procedures in time because of epidemic or epidemic prevention and control measures, the foreign party can request for extension of submitting and the people’s court shall uphold such request. The aforementioned foreign party means a foreign enterprise, organization, foreigner who has no domicile in China or stateless person.

 

Article 2 of the Opinions Ⅲ: Parties can request for extension of time limit for submitting extraterritorial evidences.

In the event that a party is unable to submit extraterritorial evidences within the original time limit because of epidemic or epidemic prevention and control measures, the foreign party can request for extension of time limit. The people’s court should ask the party to provide the basic information of the evidence to be collected and submitted, such as the form, content and object of proof. Upon examination and deeming it reasonable, the people’s court shall uphold such request.

 

Article 4 of the Opinions Ⅲ: Parties who have no domicile in China can request for extension of time limit for answer or appeal.

In the event that a party who has no domicile in China is unable to answer or appeal within the statutory period because of epidemic or epidemic prevention and control measures, the party can request for extension of time limit for answer or appeal and the people’s court shall uphold such request.

Article 5 of the Opinions Ⅲ: The limitation of action can be suspended because of epidemic.

According to the Chinese Civil Procedure Law, the limitation of application for recognition and enforcement of judgements or orders by foreign courts or foreign arbitrations shall be two year. If a party is unable to apply for recognition and enforcement during the last six months of limitation because of epidemic or epidemic prevention and control measures, the party can request for suspension of limitation and the people’s court shall uphold such request.

 

Article 6 of the Opinions Ⅲ: The people’s court should ascertain and apply the applicable law in accordance with the Chinese Law on the Application of Laws for Foreign-related Civil Relations.

In the event that Chinese law shall be applied, the specific application of force majeure rules shall be in accordance with the Guiding Opinions Ⅰ on Several Issues Concerning Properly Handling Civil Cases Related to COVID-19 Epidemic issued by the SPC.

In the event that extraterritorial law shall be applied, the people’s court should accurately understand and apply the force majeure rules in extraterritorial law.

 

Article 8 of the Opinions Ⅲ: Principles to be followed when trying L/C dispute cases.

The people’s court should accurately distinguish between the malicious non-delivery of goods and the non-delivery of goods because of epidemic or epidemic prevention and control measures.

If a party claims that the bank business interruption is caused by epidemic or epidemic prevention and control measures, the people’s court should determine whether it constitutes force majeure or not according to law.

Article 9 of the Opinions Ⅲ: Principles to be followed when trying independent guarantee dispute cases.

The people’s court should strictly determine whether the situation constitutes fraud of the independent guarantee or not and review whether the party’s request for suspension of payment under independent guarantee shall be upheld or not.

If a party claims that the relevant business interruption is caused by epidemic or epidemic prevention and control measures, the people’s court should determine whether it constitutes force majeure or not according to law.

 

 6. Trial of carriage contract cases

Article 10 of the Opinions Ⅲ: Change of route and delay in delivery under carriage contract.

In the event that a shipper claims that the carrier breaches its obligation of transporting goods to the agreed place as agreed, but the carrier can submit evidences and prove that the route is changed because of the need of timely diagnosis or quarantine measures and the carrier has timely notified the shipper, the shipper’s claim shall not be upheld by the people’s court.

In the event that a carrier claims exemption from corresponding liabilities and it can submit evidences and prove that the delay in delivery is caused by the prohibitive or restrictive measures in origin and destination and it has timely notified the shipper, the people’s court shall uphold such claim.

 

Article 11 of the Opinions Ⅲ: Determination of seaworthy vessel.

In the event that a shipper claims that the vessel is not seaworthy on the ground that the vessel is not suitable for carrying specific cargos because of epidemic prevention and control measures such as disinfection or fumigation due to the carrier’s careless handling or the number of certified healthy crew members cannot meet seaworthiness requirements, the people’s court shall uphold such claim.

In the event that a shipper claims that the vessel is not seaworthy only on the ground that the vessel used to dock in areas affected by epidemic or some of the crew members were infected with COVID-19, it shall not be upheld by the people’s court. 

Article 12 of the Opinions Ⅲ: Circumstances under which the carriage contract can be terminated before sailing and no party should be liable for compensation

Under the following circumstances, the carriage contract can be terminated before sailing and no party should be liable for compensation:

 

 i.  The carrier is unable to provide necessary crew and materials within a reasonable period of time;

ii.  The vessel is unable to arrive at the port of loading or the port of destination.

iii.  The vessel is unable to sailing or dock normally once it enters the port of loading or the port of destination.

iv.  The cargos are prohibited from import or export temporarily by the country or region of the port of loading or the port of destination.

v.   The shipper is unable to deliver the cargos to the port of loading port within a reasonable period of time because the land transport obstructs.

vi.   Other circumstances under which the contract cannot be fulfilled for the reason not attributable to the carrier or shipper.

 

Article 19 of the Opinions Ⅲ: In cases related to Hong Kong, Macao and Taiwan, the Opinions Ⅲ can be implemented by reference.

The people’s court can implement the Opinions Ⅲ by reference when trying commercial and maritime dispute cases related to Hong Kong, Macao and Taiwan.