Jurisdiction

Abstract Determining the competent court is the first step to bring a lawsuit. For such purpose, two questions are to be answered: the court of which level has jurisdiction (i.e., the hierarchical jurisdiction) and the court of which place has jurisdiction (i.e., territorial jurisdiction). In terms of hierarchical jurisdiction, Chinese courts determine the hierarchy of the competent court mainly according to the case type and the disputed amount, and have formulate specific standards for this purpose. However, these standards may be revised from time to time, and it is necessary for the parties to verify pertinent standards before filing a case. Generally, the parties cannot change the level of the competent court by agreement, that is, to agree on the trial of a case by a court of another level different from that stipulated by the law, unless the agreement selects China International Commercial Court under the SPC. In some circumstances, a higher court will take the initiative to exercise jurisdiction over the cases that have been accepted by lower courts, or transfer the cases that have been accepted by it to lower courts. In terms of territorial jurisdiction, it should be analyzed according to the case type. In respect of most disputes over contracts and property rights, Chinese courts allow the parties to choose the competent court by agreement. If there is no relevant agreement, generally, the court of the place where the defendant is located will have jurisdiction over the case, and different types of cases will have other different jurisdictional connecting factors. Even if a court that accepts the case does not have jurisdiction, the party's response to actions and defense may confer jurisdiction upon the court that would have been otherwise incompetent, which is referred to as “prorogated jurisdiction” under Chinese law context. However, in respect of some specific types of cases, Chinese law does not allow the parties to choose the competent court by agreement, and the prorogated jurisdiction rules do not apply to such cases as well; such jurisdiction rules are referred to as “exclusive jurisdiction”. In addition, Chinese courts will also designate specific courts to exercise cross-region jurisdiction over highly professional cases or cases with other special factors; such jurisdiction rules are referred to as “cross-region centralized jurisdiction”. At last, in respect of the contract and property right litigation in which the defendant is a foreign party without domicile in China, even if the connecting factors under the general jurisdiction rules are not in China, the plaintiff may still have the right to bring a lawsuit with the court of China. If the defendant considers that the court accepting the case has no jurisdiction, it may raise an objection. If the court finds that the objection is tenable, the case will be transferred to the court with jurisdiction. If a court finds that it has no jurisdiction over an accepted case after self-examination, the court may transfer the case ex officio even though the defendant raises no objection. The court receiving the transferred case shall not re-transfer the case to another court.