May 2009

Article 1 of the New York Convention states:

“This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.”Continue Reading China International Arbitration: Standards of Territory and non-domestic

With foreign investors testing ingenious ways in which to circumvent the regulatory burdens and scrutiny associated with a foreign owned Chinese insurance company, an interesting question has come to light; is it possible for an insurance policy between a domestic insurer and a Chinese manufacture to have a foreign element. The foundation of this question is rooted in the uncertainty surrounding the enforcement and validity of an arbitration clause designating a foreign jurisdiction for a case which is purely domestic (China).

Continue Reading A Domestic Insurer, a Chinese Manufacture, a Foreign Element?

The question of whether a Chinese case with purely domestic elements is capable of being arbitrated in foreign forum has been pondered by many foreign and Chinese lawyers. The results have led to confusion. Recently a major International law firm posed the question before Dr. Zhan Hao, we have summarized Dr. Zhan Hao’s reply below.

In short, if parties opt to arbitrate in a foreign forum, for example, Hong Kong; and opt to use English Law or the law of another foreign jurisdiction; the likelihood of the award being enforced is strong. However, the position is unclear under Chinese law as there are no specific regulations addressing the adjudication of a purely domestic dispute by a foreign arbitral institution. We will now consider the question in further detail.
 Continue Reading A Purely Domestic Case (China) Arbitrated in Foreign Forums?

Travel agencies legitimately established in mainland should buy compulsory travel agency liability insurance. This is one article in draft of the Administrative Measures for Liability Insurance of Travel Agencies (Draft for Comment) promulgated by National Tourism Administration of PRC and China Insurance Regulatory Commission for public comments.

According to the draft regulation, the compulsory travel agency liability insurance should cover the compensation liability incurred by the travel agency during the trip because of the death and injury of the clients and their property damages. It should also cover travel agency’s liability to the people they employed when they are injured or their property is damaged. The insurance should cover liability caused by travel agency’s negligence or fault; by accidents and based on what the People’s Court or arbitration institution held on the judgment.

Continue Reading Development on Liability Insurance of Travel Agencies

According to relevant provisions under Chinese Law, a “foreign-invested insurance company” may take the following forms;

1) A joint venture insurance company in China established by a foreign insurance company and a Chinese company or enterprise;
2) A foreign insurance company solely owned and operated by a foreign insurance company;
3) A branch company of a foreign insurance company in China.
 Continue Reading Foreign-invested Insurance Companies in China

A representative office in China of a foreign insurance company is in fact not a true commercial presence in China because a representative office and its employees are only allowed to conduct non-business activities in Chinese insurance market such as liaison, market research and are prevented from conducting or engaging in any business activities and providing insurance services. On the other hand, if an insurance company has a commercial presence in China, this means it can provide insurance services in China. But establishing a commercial presence such as foreign invested insurance company by a foreign insurance in China shall be subject to have a representative office in China for over two years. Therefore, setting up a representative office in China is the first step for a foreign insurance company who want to establish a commercial presence in China.

Continue Reading Procedures for the Establishment of Foreign Insurance Companies’ Representative Offices in China

Last month, nearly all domestic airline companies in China raise their price simultaneously. However, they denied that their decision based upon agreement between them. On 04.27.2009, SAIC promulgated the Draft Regulation on Prohibition of Monopoly Agreements and the Draft Regulation on Prohibition of Abuse of Dominance. The two drafted regulations offer detailed instruction and important amendments on how to regulate monopoly agreements and abuse of dominance.

Continue Reading New Trend Regarding Price Fixing Agreements in Aviation Industry

Currently, there is an absence of legislation in China concerning gun jumping in the context of mergers and acquisitions. However, the Anti-monopoly Law (AML) could potentially be utilized as mode to curb and or prohibit gun jumping in the future. The following will attempt to analyze how the AML may be used in relation to gun jumping in the future.

Continue Reading CHINA: “Gun Jumping” and the Anti-monopoly Law (AML)

In China and according to the Organic Law of the People’s Courts, judicial powers are exercised by the courts at four levels:

(i) Basic People’s Court: Courts at the county or district level. Tribunals may also be established in accordance with local practice;

(ii) Intermediate People’s Court: Prefecture level courts;

(iii) Higher People’s Court: Provincial level courts.

(iv) The Supreme People’s Court: the highest court in the judicial system located in Beijing. The court is directly responsible to the NPC and its Standing Committee. The court supervises the administration of justice by the People’s Courts at various levels. Additionally, the court provides interpretations of law which play an important role in the application of law and which act as guidelines for trials in China.
 Continue Reading An Introduction to China’s Judicial System: the Courts

Last week, SAIC promulgated two draft regulations relating to China’s Anti-monopoly Law. The new regulations concern abuse of dominance and monopoly agreements.

A prohibition on anti-competitive monopoly agreements and a prohibition against the abuse of market dominance are two of AML’s main prongs; the third being a review of concentration. However, under the AML, the provisions of these two categories lack detail as they are only covered through the broad principles of China’s competition law. Hence, the new draft regulations are welcomed as a mode to increase the detail of and to further develop China’s competition law. Furthermore, substantial private litigation has emerged challenging the abuse of dominance and monopoly agreements. Therefore, SAIC’s promulgation of the two drafts is a welcomed response to this rising trend.
 Continue Reading New Draft SAIC Regulations: Positive Affects for the AML