On April 25th, the Supreme Court issued Provisions On a Number of Issues Applicable to the Trial of Monopoly Civil Dispute Cases (the “Exposure Draft”) for public comments.
Totalling 20 articles, this Exposure Draft are based on the Anti-Monopoly Law (“AML”), the Civil Law, the Civil Procedure, the Contract Law, the Torts and other related laws. Primarily, the basic construction and detailed rules of the anti-monopoly civil procedure are summarised in the 4 parts below：
(1) About the centralized jurisdiction and transfer rule
Anti-monopoly civil dispute cases have their own features, which can be summarized as professionalism, complication and significant effect. Such features may explain why we believe the standard and quality of judgment will improve and there will be greater degree of consistency with the judgments, if the hearing of the cases is centralized to the courts which are well known for their excellent and with numerous judges with rich experience in AML.
From a practical perspective, regulation of the cause of action of the civil cases, which was issued by the Supreme Court on April 1st,2008, has moved the monopoly disputes and various unfair competition disputes into the category of intellectual property right dispute and the intellectual property right courts are in charge of the hearing of the monopoly civil disputes cases. That is to say, monopoly civil disputes cases are the same as the intellectual property rights cases where centralized jurisdiction is to apply.
The Exposure Draft also establishes the rule of transfer. Regarding to the monopoly agreements, the disputes between the parties may arise out of their own monopoly agreements. The defense or counterclaim formed based on AML in contractual disputes may affect the validity of contracts directly. Under this circumstance, if the court does not consider the defense or counterclaim based on monopoly just because it has no jurisdiction over monopoly dispute case, the judgment from different courts on the validity of the same contract may be in conflict. Therefore, the Article 2 and Article 3 provide that when the defendants raise their defense or counterclaim based on AML, even if the court who has accepted the case does not have jurisdiction over the anti-monopoly civil dispute case, it shall not reject the cases or require the plaintiff to file another law suit due to its lack of jurisdiction. According to Article 3 of the Exposure Draft, under such circumstance, the court that has no jurisdictions over the anti-monopoly cases shall transfer the case to the court that has such jurisdiction.
(2) Natural persons, legal persons and other associations including the operators and consumers could be the plaintiffs, if they are infringed by the monopoly acts.
Article 4 of the Exposure Drafts states natural persons, legal persons and other association whose rights are infringed by the monopoly acts, including operators and consumers, may file a suit according to the Article 50 of the AML. That is the first time for relevant regulations to specify that consumers as indirect victims are entitled to make an anti-monopoly dispute case.
According to Article 50 of the AML, as long as a person’s rights are infringed by the monopoly acts, the operators shall assume civil liabilities. But this article does not specify the qualification of the plaintiff. Theoretically speaking, those operators and consumers who suffered losses directly or indirectly as a result of monopoly acts are qualified to be plaintiffs. The indirect victims, especially the indirectly injured consumers, are always the ultimate victims, who may be in better position to discover and expose monopoly acts. Therefore, as plaintiffs, the consumers may enhance the possibility of disclosing and preventing the monopoly acts. What is more, this will also ensure that the victims can get the compensation.
(3) Both direct litigation and litigation after administrative procedure are recognized by the Exposure Draft
There are two approaches to deal with breaches to the AML: (1) administrative law enforcement and civil procedure; (2) civil law enforcement system. In the monopoly civil dispute cases, the plaintiffs always have difficulties with collection of evidence, understanding the professional knowledge and so on. If the acts have been confirmed as the monopoly acts by the administrative departments, a plaintiff may file a suit after the decision made by the administrative department becomes effective. That will relieve the plaintiff from its heave burden of proof and benefit plaintiffs in the protection of their legal rights and ultimately obtain compensation.
However, the said procedure also has it disadvantage. For example, the administrative procedure may need more time. Therefore, Article 6 of the Exposed Draft clearly denies the administrative methods must be adopted first. In fact, civil procedure litigation and administrative law enforcement are two separate procedure, the courts shall make the judgment through reviewing the plaintiffs’ claim independently if the investigation by the administrative departments failed to confirm acts in dispute as monopoly acts.
(4) The burden of proof
After two years of experience with anti-monopoly civil litigation, the problems regarding the difficulties of the plaintiffs to collect evidence and prove anti-monopoly conducts are blocking the development of the anti-monopoly civil procedure. If we could not find a way to resolve this situation, the rights and interests of the victims may hardly be protected.
The Exposure Draft explains the issue about the distribution of burden of proof between plaintiffs and defendants in detailed and there are different distributions of the burden of proof for different types of monopoly acts.
For example, Article 8 states that if the monopoly agreements fall within Article 13(1) to (5) and Article 14 (1) and (2) of the AML, and if the operator cannot provide enough counter evidence to prove the monopoly agreements is not with the obvious purpose of restraining and excluding the competition, the victims would not be required to provide evidence relating to such issues. According to Article 9, the public enterprises and the operators with exclusive qualifications may be deduced to have market dominance position, except where they have evidence to prove that the contrary. The same article states that the disclosure information of public listed companies, recognition from the operations who are sued to engage in monopoly actions and market investigation, economic analysis, research and statistic can be employed as the preliminary evidence to prove the dominant position. Furthermore, Article 12 states about the condition for applying to the court ordering defendants to submit evidence and the consequences of failing to provide the evidence ordered by the court. Article 13 also allows the parties to seek assistance from and to call experts witnesses. All of these measures would alleviate the difficulties faced by the plaintiffs in proving their claims.
We believe this Exposure Draft, which is drafted with the experience from monopoly civil dispute cases and the related litigation would be the important legal basis for the anti-monopoly litigation in the future.