Authored by Dr. Zhan Hao (email@example.com)
1. Overview of the Jurisdiction System of Private Antitrust Litigation
Private Antitrust Litigation belongs to the civil proceeding in nature and its relationship with the civil proceeding can be summarized as the special and general. Despite that there are differential rules and slight variances in private antitrust litigation; they are still designed rooting from general theories, principles and systems of civil proceeding.
The jurisdiction in the civil proceeding refers to division of work and authorities among People’s Courts of all levels or courts of the same level when civil cases of first instance were handled. Jurisdiction system serves as prerequisite and foundation of litigations. Appropriate division of the jurisdiction not only determines proper exercise of judicial power, but also prevents litigants from nowhere-to-go when filing lawsuits due to buck-passing or competing for jurisdiction between different courts. In addition, it helps protect our national jurisdiction and safeguard the interests of private subjects in foreign-related disputes. To ensure a reasonable jurisdiction, the following systems are specified in Civil Procedure Law of PRC: jurisdiction by level; territorial jurisdiction, exclusive jurisdiction, designated jurisdiction and transfer of jurisdiction. Likewise, the jurisdiction system of private antitrust litigation is framed with the aforesaid systems.
2. Jurisdiction by Level in Private Antitrust Litigation
The Judicial Interpretation of Private Antitrust Litigation (hereinafter referred to as the “Judicial Interpretation”) provided the jurisdiction by level in a relatively simply way: antitrust civil disputes of first instance are under the jurisdiction of intermediate people’s courts of municipalities, municipalities directly under the jurisdiction of the Central Government (MUCG) or municipalities-on-list, where provincial governments, MUCG governments or governments of autonomous regions are located, and of intermediate people’s courts designated by the Supreme People’s Court. Local people’s courts, if authorized by the Supreme People’s Court, are also entitled to handle antitrust civil disputes.
Three implications of the above Judicial Interpretation are summed up by the author as follows:
First, the intermediate people’s court, as the major court of jurisdiction, accepted a majority of antitrust civil disputes of first instance regardless what the subject amount is.
Currently, it is universally provided in the Judicial Interpretation that the first instance court of antitrust civil disputes are mainly under the jurisdiction of intermediate courts and few under that of local people’s courts. However, Article 39 of the Civil Procedure Law implies it is also occasionally possible for the Supreme People’s Court to handle the first instance of antitrust civil cases. Moreover, in view of uniqueness and complexity of private antitrust litigation, the author is in the view that intermediate people’s courts should not transfer self–jurisdictional cases of first instance to other local people’s courts except for those authorized local people’ courts by the Supreme Court. Meanwhile, Article 10 of the Supreme’s People’s Court‘s Regulations on Trials of Jurisdictionally Dissident Private Cases points outthe party can raise objections to the jurisdiction of the court where relevant provisions on the jurisdiction by level are not complied with.
Second, a few local people’s courts, if authorized, also have jurisdictions on the first instance of antitrust civil cases.
The Judicial Interpretation’s stipulations on jurisdiction of local courts are similar to its stipulations on jurisdiction over intellectual property (IP) cases. Dissenters hold the view that antitrust civil disputes should not fall into the jurisdiction of local courts on account of its specialty, broad perceptivity and complexity. However，there are considerable amount of high-tech enterprises and large transnational companies in some developed regions in China, such as, some areas in Guangdong, Shanghai where produces large caseload of monopoly disputes; Besides, the local courts in those areas have relatively high-quality judicature and mature judicial technology. For above reasons, the Judicial Interpretation provided: local people’s court, upon authorization by the Supreme Court, could also exercise jurisdiction over of the first instance of antitrust civil disputes.
Third, not all intermediate people’s courts have jurisdictions over antitrust civil cases.
According to the Judicial Interpretation, two types of intermediate people’s courts have jurisdictions over antitrust civil cases. The first type includes intermediate people’s courts of municipalities, municipalities directly under the jurisdiction of the Central Government (MUCG) or municipalities-on-list, where provincial governments, MUCG governments or governments or autonomous regions are located, and the second type are intermediate people’s courts designated by the Supreme People’s Court. It should be recognized that the scope of the courts of former type is relatively fixed, while the courts of the latter type remain to be designated.
This provision of the Judicial Interpretation differs from that for IP cases, thus, it reflects the cautious attitude of the Supreme People’s Court to some extent.
3. Territorial Jurisdiction in Private Antitrust Litigation
According to the Judicial Interpretation, theterritorial jurisdiction in antitrust civil disputes is determined on a case-by-case basis and in line with relevant provisions related to infringement disputes and contractual disputes in the Civil Procedure Law and its relevant Judicial Interpretations.
3.1 Territorial Jurisdiction of Antitrust Private Litigation
(1) Defining of venues for conducting antitrust infringements.
Venues for conducting antitrust infringement should be classified on the basis of antitrust conducts.
First, disputes concerning antitrust agreements (horizontal disputes concerning antitrust agreements and vertical disputes concerning antitrust agreements): In the event that the plaintiff believes the defendant infringes him by signing and implementing monopoly agreement, he can lodge a complaint to the people’s court where the infringement is conducted. Under such circumstances, monopoly agreement practice constitutes a means for infringement, so the places for signing and implementing the agreement are deemed as venues for conducting antitrust infringement.
Second, infringement conducts in terms of abuse of dominant position can be analyzed as follows: venues for setting monopoly price (venue for signing high-priced or low-priced sales contract and venue for signing supply contract) and venues for striking monopoly price (venue for selling high-priced commodities and venue for purchasing low-priced raw materials) are both legally regarded as places for striking monopoly price. Venues for dominator’s predatory pricing include venue for dominantly tempting the counterparty to sign low-priced contract, venue for supplying or selling low-priced commodities, and venue for unreasonably raising price after outing the counterparty. Venues for deal refusal refer to infringer’s unreasonable refusal of dealing with the counterparty. Venues for limited trading or bundle trading and discrimination treatment are inclusive of venues for signing and implementing contracts involving the above infringement conducts.
Third, infringement disputes concerning merger concentration: The defendant may be or may not be participant of concentration, or may be competitor, counterparty or consumer influenced by the concentration. With regards to venues for conducting concentration, the author prefers to divide concentration practices into unimplemented or implemented ones. Provided that the concentration agreement has been signed but not implemented, or the agreement is under negotiation but not signed yet, the place for signature and negotiation is treated as infringement venue; in case the agreement has been made and is being implemented, place for implementing the agreement is infringement venue.
(2) Defining of venues for antitrust infringement outcoming
There is no clear definition to venues for antitrust infringement outcoming and market is usually confused with affected extent as well.
First, venues for antitrust infringement outcoming are wide-spreading and far-reaching. Take merger concentration for instance, all participants of the concentration, other transactors in the market, transactors-to-be in the market (potential competitors), counterparties, consumers (indirect buyers) are all affected in varying degrees. Meanwhile, the consequences also vary, so different experiences on different concentration infringements lead to different understandings to it.
Second, consequences of antitrust infringement conducts do not simply and simultaneously appear. There is no corresponding result following each act. Take merger concentration for instance, direct result may appear in the way of increase of participants’ assets and business and possession of market power. However, there is also a possibility that participants of the concentration, in need of adequate time for staffing, operation and governance arrangements, are anxiously excluding and imposing restrictions on competitions by taking advantage of market power, as such, it is worth considering whether venue for possession of market power or venue for the defendant’s suffering from damages, such as, rights for selection of commodities, should be concluded as venues for antitrust infringement outcoming.
Third, to avoid possible abuse of jurisdiction or competing for jurisdiction in antitrust private litigation, the author suggests clear division be made to venues for antitrust infringement outcoming. Outcomes should consist of only direct one but not indirect one. Apart from this, “outcoming venue” and “affected extent” differ from each other in connotations and it should not be confusingly equaled to prevent disorganized jurisdiction of antitrust private litigation.
3.2 Territorial Jurisdiction of Antitrust Contractual Disputes
From the author’s point of view, jurisdiction over antitrust contractual disputes should be interpreted as follows:
First, contractual parties may negotiate on jurisdiction in no violation of provisions on jurisdiction by forum level and designated jurisdiction, e.g. contractual parties shall not agree on local courts’ jurisdiction over antitrust contractual proceedings.
Second, contract-execution venue should be decided in consideration of differences of monopoly contracts and features of antitrust conducts, abiding by the Civil Procedure Law and its Judicial Interpretation.
Third, due to the broad involvement of antitrust agreement, some monopoly agreements, in practice, are found and disposed by enforcement authorities or forced to stop execution before being implemented, therefore, relevant ligations should be under jurisdiction of the People’s Court in the defendant’s domicile if the monopoly agreement has not been performed and the two parties domiciles are not same with the agreed venue for implementing monopoly agreements.
4. Transfer of Jurisdiction over Antitrust Private Litigation
Article 36 of the Civil Procedure Law rules a people’s court, upon finding a case out of its jurisdiction, should transfer it to the competent court which shall handle the case. In the event that the court accepting the transfer considers the case is not under its jurisdiction, it shall submit the case to the superior people’s court for the designation of jurisdiction, must not again transfer it. In addition, Rule 33-36 of the Supreme People’s Court’s Opinions on Application of "the Civil Procedure Law of PRC also regulate on transfer of jurisdiction.
The following issues stated in the above rules need attention:
First, on the condition that the case-accepting court did not place the plaintiff’s case on antitrust file, jurisdiction can be transferred, that is, neither the plaintiff files a suit against the defendant’s monopoly conducts nor this filing is based on Antitrust Law.
Second, the approaches for the defendant’s declaration that the plaintiff has conducted monopoly are the defendant’s counterclaim or defense against the plaintiff’s litigation. Whatever approaches are adopted by the defendant, the court should make preliminary review and find proof supporting the defendant’s counterclaim or defense, or the case cannot be transferred until the court thinks the adjudication applies to Antitrust Law. It should be noted here that the prior case-accepting court cannot decide whether the defendant has supporting proof or whether the hearing will apply to Antitrust Law before substantial hearing is made, thus, transfer of jurisdiction can only occur after substantial hearing.
Third, the court transferring a case shall not have jurisdiction over antitrust private litigation and the court accepting the transfer should, acting with Rule 1 and 3 of Judicial Interpretation of Antitrust Law, shall handle the case. Under such circumstances, there may be several courts having jurisdiction over the case, the original court may choose to transfer the case to one of them. In the event that the court accepting the transfer considers the case is not under its jurisdiction, it shall submit the case to the superior people’s court for the designation of jurisdiction, must not again transfer it.
For more information, please refer to The Hot Issues of China Anti-trust Private Litigation, China Law Press, 2012