Litigation in Mainland China under New Evidence Rules: Your 50 questions – Part 5

The Supreme Court of People’s Republic of China (SPC) formally promulgated the amended version of Several Provisions of the SPC on Evidence for Civil Litigation (New Evidence Rules) on 25 December 2019, which came into effect on 1 May 2020.

There are many highlights in the New Evidence Rules. To provide readers with some guidance from a practitioner’s perspective, we prepared 50 questions divided into five sections: (i) overall picture, (ii) routes for evidence production, (iii) witness testimony, (iv) judicial expert opinion and (v) electronic evidence and others. Section one was published on 1 May and can be found here. Section two was published on 8 May and can be found here.  Section three was published on 15 May and can be found here. Section four was published on 22 May and can be found here. This blog post focuses on the fifth and last section, i.e., electronic evidence and others. Continue reading

Litigation in Mainland China under New Evidence Rules: Your 50 questions – Part 4

The Supreme Court of People’s Republic of China (SPC) formally promulgated the amended version of Several Provisions of the SPC on Evidence for Civil Litigation (New Evidence Rules) on 25 December 2019, which came into effect on 1 May 2020.

There are many highlights in the New Evidence Rules. To provide readers with some guidance from a practitioner’s perspective, we have prepared 50 questions which are divided into five sections: overall picture, routes for evidence production, witness testimony, judicial expert opinion and electronic evidence and others. Section one was published on 1 May and can be found here. Section two was published on 8 May and can be found here.  Section three was published on 15 May and can be found here. This blog post focuses on the fourth section, i.e., judicial expert opinion. Continue reading

Litigation in Mainland China under New Evidence Rules: Your 50 questions – Part 3

The Supreme Court of People’s Republic of China (SPC) formally promulgated the amended version of Several Provisions of the SPC on Evidence for Civil Litigation (New Evidence Rules) on 25 December 2019, which came into effect on 1 May 2020.

There are many highlights in the New Evidence Rules. To provide readers with some guidance from a practitioner’s perspective, we have prepared 50 questions which are divided into five sections: overall picture, routes for evidence production, witness testimony, judicial expert opinion and electronic evidence and others. Over the course of the next few weeks, we will be publishing a series of blog posts targeting one section at a time. Section one was published on 1 May and can be found here. Section two was published on 8 May and can be found here. This blog post focuses on the third section, i.e., witness testimony. Continue reading

Litigation in Mainland China under New Evidence Rules: Your 50 questions – Part 2

The Supreme Court of People’s Republic of China (SPC) formally promulgated the amended version of Several Provisions of the SPC on Evidence for Civil Litigation (New Evidence Rules) on 25 December 2019, which came into effect on 1 May 2020.

There are many highlights in the New Evidence Rules. To provide readers with some guidance from a practitioner’s perspective, we have prepared 50 questions which are divided into five sections: overall picture, routes for evidence production, witness testimony, judicial expert opinion and electronic evidence and others. Over the course of the next few weeks, we will be publishing a series of blog posts targeting one section at a time. Section one was published on 1 May and can be found here. This blog post focuses on the second section, i.e., routes for evidence production.

Section 2: Routes for Evidence Production

  1. Can I apply for the court to investigate and collect evidence for me?
  2. Can the court investigate and collect evidence ex officio?
  3. What are the procedures for the court to investigate and collect evidence?
  4. Can I request my counterparty or a third party to disclose evidence under his/her control?
  5. What are the conditions to apply for an Order for Disclosure?
  6. What are the legal consequences if my counterparty refuses to obey an Order for Disclosure?
  7. Can I apply for evidence preservation to court?
  8. What are the requirements for application for evidence preservation?
  9. What measures may the court take to preserve evidence?
  10. What are the legal consequences if I make a wrongful application for evidence preservation?

 

  1. Can I apply for the court to investigate and collect evidence for me?

Yes, if in circumstances where the parties and their attorneys are unable to produce evidence for objective reasons. These include circumstances where (i) the evidence is kept by relevant State authorities, and the parties and their attorneys have no right to inspect or have access to it; (ii) the evidence involves State secrets, business secrets or personal privacy; or (iii) any other evidence for which the parties and their attorneys could not produce for objective reasons.

Note that such an application shall be filed during the litigation proceeding and not prior to commencement of litigation.

  1. Can the court investigate and collect evidence ex officio?

If the court deems it necessary, the court may investigate and collect evidence ex officio. However, the court’s discretionary power is limited to prescribed circumstances, which include where (i) the evidence may harm State interests and/or public interest; (ii) evidence relating to identity relationship; (iii) evidence in disputes involving environmental pollution, infringement on vast consumers’ rights and damage to ecological environment and resource protection; (iv) there is a possibility that the parties maliciously conspire to harm the legitimate interests of others; or (v) evidence related to procedural matters like the joining of a third party, suspension, termination or abstention.

  1. What are the procedures for the court to investigate and collect evidence?

The court may direct at least two staff members (judge or court clerk) to jointly carry out the investigation and collection. The court shall make an investigation record detailing (i) the sources of the evidence collected, (ii) the process of investigation, and (iii) the investigators involved. The person and/or entity under investigation and the recorder shall then sign on the investigation record.

In respect of investigating and collecting evidence for conducting judicial appraisal, the New Evidence Rules specifically requires the court to further comply with technical requirements to ensure that the evidence would not be contaminated.

  1. Can I request my counterparty or a third party to disclose evidence under his/her control?

Yes. The regime of Order for Disclosing Evidence under Control of Counter Party (Order for Disclosure) is for the first time detailed with operational rules in the New Evidence Rules.

Though the Order for Disclosure is established for documentary evidence, it is worthy to note that Article 99 of the New Evidence Rules provides that these shall also apply to audio-visual materials and electronic data.

However, the Order for Disclosure only applies to parties in the proceeding and not any third party. That is because the New Evidence Rules are subject to and may be limited by the provisions in the CPL.

  1. What are the conditions to apply for an Order for Disclosure?

The applicant shall describe the name or contents of evidence, elaborate the importance of the facts to be proved, the basis of its belief of the Counter Party’s direct or indirect control and also reasons for requiring the disclosure of such evidence. The applicant shall submit a written application before the expiry of the time limit for evidence production as set by the court.

Note that the scope of evidence which an evidence controller shall disclose is limited. Such evidence includes (i) evidence which has been cited by the evidence controller; (ii) evidence prepared for the interests of the other party (applicant); (iii) evidence to which the other party (applicant) has a legal right to obtain; (iv) account books and original vouchers for book-keeping; or (v) other circumstances where the court finds such evidence shall be disclosed.

It is particularly noted that for evidence within the prescribed scope above which involve State secrets, commercial secrets, personal privacy of parties, or under circumstances where the law stipulates, the evidence controller may also be required to disclose the same but admissibility test shall not be conducted openly.

  1. What are the legal consequences if my counterparty refuses to obey an Order for Disclosure?

If the evidence controller refuses to disclose evidence as ordered without justified reasons, the court may deem the fact to be proved as true. If the evidence controller for the purpose of obstructing the applicant from using or relying on evidence, destroys that evidence or causes that evidence to become unusable, the court may penalise the evidence controller with either a fine or detention or both, and most importantly the court may deem the fact to be proved as true. This is to deal with the difficulty in practice where a party would rather be penalised than give out key evidence.

  1. Can I apply for evidence preservation to court?

Yes. There are two different types of evidence preservation at law – evidence preservation by court and by a notary public. A notary public’s function is to witness the process of a party’s own attempt to collect or preserve evidence to increase the credibility of the evidence collected. A court may preserve evidence which is in the possession of the applicant’s counterparty or third parties.

  1. What are the requirements for application for evidence preservation?

The applicant may apply for evidence preservation prior to the commencement of litigation or during litigation. The CPL provides grounds for such application where evidence may be destroyed or become difficult to obtain. For evidence preservation at the pre-action stage, urgency should be further proved.

Do note that during litigation the party shall file the application before the expiry of the time limit for evidence production. The court may request for security from the applicant should preservation cause any loss to the evidence holder.

  1. What measures may the court take to preserve evidence?

The court is authorised to preserve evidence through a range of measures. It can seal, seize, photograph, audio or video record, photocopy or inspect the object, or take witness statements, per the application and other specific circumstances as may be considered as necessary by the court. If there are several measures which could fulfil the purpose of evidence preservation, the court shall select a measure which has the least impact on the interests of the evidence holder.

  1. What are the legal consequences if I make a wrongful application for evidence preservation?

The New Evidence Rules added a new Article 28 to clarify its position on compensation for wrongful preservation. If an applicant is deliberately or grossly negligent in making the application for which the evidence holder suffers property damage, the applicant shall compensate the evidence holder.

Stay tuned for next week’s blog post which will focus on the third section, witness testimony.

If you have any questions or would like to discuss any aspect of this post, please contact:

Cathy Liu
Cathy Liu
Partner, Kewei, Shanghai
+86 21 2322 2158
Helen Tang
Helen Tang
Partner, HSF Shanghai
+86 21 2322 2160
Jean Zhu
Jean Zhu
Counsel, Kewei, Beijing
+86 10 6535 5041
Stella Hu
Stella Hu
Senior Consultant, HSF Beijing
+86 10 6535 5017

Litigation in Mainland China under New Evidence Rules: Your 50 questions

The Supreme Court of People’s Republic of China (SPC) formally promulgated the amended version of Several Provisions of the SPC on Evidence for Civil Litigation (New Evidence Rules) on 25 December 2019, which comes into effect today, 1 May 2020. The New Evidence Rules together with Chapter VI of the Civil Procedure Law of the People’s Republic of China (amended in 2017) (CPL) and Chapter IV of the Interpretations of the SPC on Application of the CPL (issued in 2015) (2015 Judicial Interpretation) have now covered most evidential rules which constitute a major part of litigation practice.

The New Evidence Rules with 100 articles maintain the structure of the old Evidence Rules covering six aspects including “parties’ statements”, “court’s investigation, collection and preservation of evidence”, “time limit for producing evidence and evidence exchange”, “examination and cross-examination”, “evidence verification” and “miscellaneous”. However, the New Evidence Rules also reflects the development of litigation practice in past years and addresses the resolution of disputes arising out of the use of modern technology.

There are many highlights in the New Evidence Rules. To provide readers with some guidance from a practitioner’s perspective, we have prepared 50 questions which are divided into five sections: overall picture, routes for evidence production, witness testimony, judicial expert opinion and electronic evidence and others.

Over the course of the next few weeks, we will be publishing a series of blog posts targeting one section at a time.  This blog post focuses on the first section, i.e., the overall picture.

Section I Overall Picture

  1. What forms of evidence would a Chinese court accept?
  2. Are there any formality requirements for evidence produced outside Mainland China?
  3. What are the routes available for me to produce evidence?
  4. How is the burden of proof allocated between parties?
  5. What standards am I to satisfy when bearing the burden of proof?
  6. Are there any facts that I am relieved of proving?
  7. When shall I submit evidence to court?
  8. When will parties present evidence and determine its admissibility before court?
  9. What is the process of assessing evidence?
  10. How does a Chinese court give weight to each evidence?

 

  1. What forms of evidence would a Chinese court accept?

The CPL sets out eight types of evidence, namely parties’ statements, documentary evidence, physical evidence, audio-visual materials, electronic data/evidence, witness testimony, judicial expert opinion and inspection record.

  1. Are there any formality requirements for evidence produced outside Mainland China?

The New Evidence Rules have relaxed formality requirements that were mandatory in the past. For evidence produced abroad, if it is documentary evidence by officials or authorities, such evidence shall be notarised by a local notary public or shall comply with the certification requirements in bilateral treaties if applicable. However, if it is evidence related to identity, such evidence shall be notarised by a local notary public and legalised by the Chinese embassy in that country, or shall comply with the certification requirements in bilateral treaties if applicable. If it is evidence to prove contractual relationship or other facts between parties, there are no longer strict formality requirements and the veracity of such evidence could be examined the same way as evidence produced within mainland China through examination and cross-examination.

The position on formality requirements for evidence produced in Hong Kong, Macau and Taiwan remains the same whereby such evidence is to be attested before an attestation officer (Hong Kong and Macau) or notarised before a local notary public (Taiwan).

  1. What are the routes available for me to produce evidence?

In general, a party may collect and produce evidence on its own. The court may provide support upon application on certain conditions, which include ordering the other party to disclose evidence under that party’s control; exercising its power to investigate and collect evidence, or ordering for evidence preservation. Moreover, the court may also investigate and collect evidence ex officio in prescribed circumstances.

  1. How is the burden of proof allocated between parties?

A party shall submit evidence to prove facts that it relies on to establish claims and rebuts the counterparty’s counterclaims or defence. By default, a party who contends the existence of a legal relationship shall have the onus to prove. If the other party contends any variation, termination or hinderance, it shall prove basic facts of that contention. However, some special laws may reverse the default allocation of burden of proof. For example, in a tortious case for environmental pollution, the polluter shall assume the burden to prove that it should not be liable for the victim’s damages, its liability could be mitigated, or there is no causal link between its conduct and the victim’s damages.

The New Evidence Rules deleted the old rules about granting a court with the power to allocate the burden of proof between parties based on principles of fairness and good faith in consideration of parties’ capability to produce evidence. This provides certainty in the allocation of burden of proof.

  1. What standards am I to satisfy when bearing the burden of proof?

The general rule is that the party bearing the burden of proof has to prove the existence of facts on a balance of probabilities (more likely than not). The New Evidence Rules added new rules to enhance and lower this general standard in exceptional scenarios. For facts regarding fraud, coercion and malicious collusion or oral wills and gifts, the party has to prove beyond a reasonable doubt that such facts exist. For facts supporting procedural applications like preservations (interim measures) and recusal, the court may deem such facts exist if the party proves them as more probable than not.

  1. Are there any facts that I am relieved of proving?

Natural or universal rules stand without proof.

Parties do not need to prove facts that are widely known to all, induced by law, induced by a known fact based on daily-life experience and ascertained in a binding arbitral award, unless sufficiently rebutted by evidence to the contrary. Further, parties are relieved from proving basic facts ascertained in a binding court judgment and notarised by a notary public, unless the same has been sufficiently overturned by contrary evidence. It is interesting to note that the old rules give facts ascertained in a binding arbitral award the same probative value as ascertained in a binding judgment yet the New Evidence Rules lowers the value of facts ascertained in a binding arbitral award.

  1. When shall I submit evidence to court?

The claimant and the defendant shall submit evidential materials to meet the necessary conditions for filing either a claim or counterclaim. At the pre-hearing stage, the court may set a time period for producing evidence, which shall not be less than 15 days for the first instance and 10 days for the second instance. Alternatively, the parties themselves may agree on a time period to produce evidence which may be subject to the court’s approval. Parties are allowed to apply for a time extension for evidence production if there exists objective obstacle. However, whether to grant such extension is at the court’s discretion. The court may also give further time to submit rebuttal evidence if it deems necessary.

Note if a party submits evidence beyond the time limit, the court may require that party to provide reasons for the delay. If that party fails to do so or the court considers those reasons unjustified, the court may refuse to accept evidence, or accept evidence but reprimand that party or impose fines on that party or both.

  1. When will parties present evidence and determine its admissibility before court?

Normally, the court may convene a pre-hearing meeting called “evidence exchange meeting” for parties to present evidence and submit examination opinion on the veracity, legality and relevance of evidence. For complicated cases with significant amounts of evidence, there may be two or three “evidence exchange meetings” before the hearing. By contrast, for straightforward cases with limited evidence, parties may test the admissibility of that evidence directly during the hearing.

  1. What is the process of assessing evidence?

The typical process would be for one party, usually the claimant, to present its evidence and test the veracity, legality and relevance of the evidence of the opposing party. If there was evidence investigated and collected by the court, the assessment of such evidence would follow after the completion of the same for the parties’ evidence. The court may first need to explain the process of investigation and collection and status of these evidence to parties.

  1. How does a Chinese court give weight to each evidence?

The court assesses all the evidence and the evidential chain comprehensively, and examines the relevance of each piece of evidence. As for each individual piece of evidence, the court considers various factors in giving evidential weight like veracity, relevance, source, form and whether there exists any conflicting interest between the evidential holder or provider or witness and any of the parties involved.

Stay tuned for next week’s blog post which will focus on the second section, the routes for evidence production.

If you have any questions or would like to discuss any aspect of this post, please contact:

Cathy Liu
Cathy Liu
Partner, Kewei, Shanghai
+86 21 2322 2158
Helen Tang
Helen Tang
Partner, HSF Shanghai
+86 21 2322 2160
Jean Zhu
Jean Zhu
Counsel, Kewei, Beijing
+86 10 6535 5041
Stella Hu
Stella Hu
Senior Consultant, HSF Beijing
+86 10 6535 5017

One step closer – English Court of Appeal aligns itself with other common law jurisdictions to find legal advice privilege subject to a “dominant purpose” test

Clients and legal practitioners often come across a fairly common question during the course of discovery/disclosure in litigation or arbitration: is the document privileged? Legal professional privilege is a fundamental and constitutionally guaranteed right in Hong Kong and, generally speaking, can be split into two branches: litigation privilege and legal advice privilege.  Legal advice privilege (LAP) offers broad protection to documents prepared by a client or its lawyers for the purpose of obtaining legal advice. In practice, however, clients and practitioners need to carefully consider what documents specifically, amongst all those prepared for seeking legal advice, would attract LAP. A related and important question is, who qualifies as the “client”.

The Hong Kong Court of Appeal (HKCA) in Citic Pacific Limited v Secretary for Justice and Commissioner of Police (unrep, 29/06/2015, CACV 7/2012) adopted the “dominant purpose” test for LAP, a broader one than had been previously applied. LAP now covers an internal confidential document of a client organisation which is produced or brought into existence with the dominant purpose that the document or its contents be used to obtain legal advice. In essence, this can include background documents or communications prepared by the client for use in instructions to the lawyers. The HKCA also took a liberal approach in interpreting the “client”. In a corporate context, the HKCA held that the client is the corporation itself and the question is to ascertain which employees are authorised to act for it to obtain legal advice. With that, Hong Kong courts moved away from the English Court of Appeal’s (English CA) narrow definition of “client” in Three Rivers No 5 [2003] QB 1556 (i.e. documents did not attract LAP unless the employee was tasked with seeking and receiving such advice on behalf of the company).  Similarly, other common law jurisdictions such as Australia and Singapore, too, chose to depart from English case law in this area.

The latest English CA decision on the scope and test of LAP aligns with Citic Pacific and has expressly taken Hong Kong authorities into consideration. We welcome this development. In The Civil Aviation Authority v The Queen on the application of Jet2.com Ltd [2020] EWCA Civ 35, the English CA found that LAP was subject to a “dominant purpose” test. The English CA held that in order to benefit from LAP, it is necessary to show that the dominant purpose of a communication was to give or obtain legal advice. The finding was based on two grounds. First, both litigation privilege and LAP are limbs of legal professional privilege and there is no compelling rationale for differentiating between limbs of the same privilege in this context. Second, in addition to Hong Kong, the English CA considered the position in other common law jurisdictions such as Singapore and Australia, and recognised that not only is the “dominant purpose” test able to work in practice but also that there is an advantage in the common law adopting similar principles.  As to the meaning of “client”, the English law position remains unchanged and is out of step with other common law jurisdictions. Any change to the law on that point will have to await a Supreme Court decision.  We hope to see in the future that the Supreme Court will steer the law on this point to align with Hong Kong and other common law jurisdictions.

For more details, please see our blog posts on the latest EWCA judgment here and the HKCA judgment reported in June and August 2015.

 

Gareth Thomas
Gareth Thomas
Partner, Head of Commercial Litigation, Hong Kong
+852 2101 4025
Dominic Geiser
Dominic Geiser
Partner, Hong Kong
+852 2101 4629
Jojo Fan
Jojo Fan
Senior Consultant, Hong Kong
+852 2101 4254
Priya Aswani
Priya Aswani
Professional Support Lawyer
+65 6868 8077

PAPERLESS HONG KONG – BILL FACILITATING ELECTRONIC COURT FILING GAZETTED

 

As part of the Legislative Council’s Information Technology Strategy Plan, The Court Proceedings (Electronic Technology) Bill (Bill), which was gazetted on 27 December 2019 and passed through the First Reading stage on 8 January 2020, takes the Hong Kong courts a step closer to being paperless. The Bill facilitates the filing and sending of court related documents through electronic means (amongst other useful changes) on a voluntary basis. The Bill is part of a bid to increase judiciary efficiency and to reduce paper use.  Dates for the Second and Third reading of the Bill are yet to be announced.

Key proposals

The Bill outlines the following key proposals:

  1. Electronic filing and sending of court documents (including original and certified copy documents) to the court;
  2. Inter-party documents can be served electronically if both parties agree. Parties should also decide on the most appropriate platform to use for service of and accepting documents;
  3. Use of electronic signatures for court related documents, applicable to court documents that require signing or certification; and
  4. Providing legal status for printed court documents. This means when a document is electronically filed with the court, a printout of that document retains its proper legal status.

The new law is likely to be accompanied by detailed subsidiary legislation and practice directions specifying court and operational procedures that will apply to electronic service and related court filing. This will enable the Judiciary to make timely amendments to the procedures and practices to take account of rapid technological developments.

If enacted, the use of electronic filing will be on a voluntary basis to ensure administration of justice is not affected because of the introduction of an additional way of filing.

In addition, the rules and practice directions in relation to electronic filing will set out types of documents which cannot be electronically filed. Further, the court will retain discretion as to which documents are allowed to be filed electronically, in case a particular original document needs to be physically inspected.

Practical information

Parties will have to register with the Judiciary Administration to file documents electronically and the filing will be done through the court’s IT system – an integrated court case management system (iCMS). If the document is an originating document then the court will apply an electronic seal before it is served on the other party.

If the other party has not consented to be served electronically, the electronic court document may be printed and then physically served on the party.

Once enacted, the new law is expected to be implemented in two phases:

  1. Phase I will be divided into two stages.
    1. The first stage of implementation will cover the District Court and the Summons Courts of the Magistrates’ Courts (covering mainly proceedings initiated by summons and fixed penalty proceedings – the exact types of cases will be set out in the relevant subsidiary legislation). Development of the iCMS in these courts is at an advanced stage where all activities relating to the building and set-up of IT infrastructure foundation have been completed.
    2. The second stage of implementation under Phase I will extend iCMS to the Court of Final Appeal, the High Court, the remaining part of the Magistrates’ Courts and the Small Claims Tribunal.
  2. For all other remaining courts and tribunals, the iCMS will be implemented under Phase II.

Since electronic court document filing is voluntary, it remains to be seen how quickly this will be adopted by law firms and litigants across the board at least during the initial stages. However, the hope is that the new legislation and practice directions will help to bring Hong Kong in line with standards in other common law jurisdictions, encourage parties to eventually go paperless in the long term and ultimately improve access to justice and efficiency of litigation.

 

Gareth Thomas
Gareth Thomas
Partner, Head of Commercial Litigation, Hong Kong
+852 2101 4025
Dominic Geiser
Dominic Geiser
Partner, Hong Kong
+852 2101 4629
Jojo Fan
Jojo Fan
Senior Consultant, Hong Kong
+852 2101 4254
Priya Aswani
Priya Aswani
Professional Support Lawyer
+65 6868 8077

Launch of Asia Pacific Guide to Privilege 2019

Please click here to access a preview of the Guide.

We are pleased to launch the 2019 edition of our Asia Pacific Guide to Privilege.

Businesses are increasingly faced with multi-jurisdictional disputes where evidence rarely falls within the borders of a single country and complex legal privilege issues often surface when dealing with communications across multiple jurisdictions.

Compiled by our network of Herbert Smith Freehills lawyers and trusted local counsel, the updated Guide takes account of the latest developments across Asia Pacific and covers 21 jurisdictions.

Many enforcement actions either emanate from or involve long-arm jurisdictions outside Asia and span across many jurisdictions in Asia. Given for example the English Bribery Act’s broad jurisdiction and extra-territorial reach coupled with aggressive enforcement agencies, clients around Asia ought to understand how the authorities in England will apply the law of privilege, in addition to how the law is applied across Asia. Moreover, although English case law is persuasive in most common law jurisdictions, legal advice privilege is an area in which a number of common law jurisdictions, such as Australia, Hong Kong and Singapore, have chosen to depart from English case law. Given the spotlight on these issues, we have added a new chapter on England & Wales and a related comparative question in each of the other 20 chapters across Asia-Pacific.

We hope that this comprehensive Guide will be useful particularly to multinational companies who operate numerous subsidiaries across borders.

Please email asia.publications@hsf.com to request a hard copy of the Guide.

 

Peter Godwin
Peter Godwin
Regional Head of Practice - Dispute Resolution, Asia, Managing Partner - Kuala Lumpur
+60 3 2777 5104
Gareth Thomas
Gareth Thomas
Partner, Head of Commercial Litigation, Hong Kong
+852 2101 4025
Alastair Henderson
Alastair Henderson
Managing Partner - Southeast Asia
+65 6868 8058
May Tai
May Tai
Managing Partner - Greater China
+852 2101 4031
Dominic Geiser
Dominic Geiser
Partner, Hong Kong
+852 2101 4629
Peter Butler
Peter Butler
Partner, Sydney
+61 2 9225 5686
Helen Tang
Helen Tang
Partner, Shanghai
+86 21 2322 2160
Julian Copeman
Julian Copeman
Partner, London
+44 20 7466 2168
Narendra Adiyasa
Narendra Adiyasa
Partner, Jakarta
+62 21 3973 6108
David Gilmore
David Gilmore
Partner, Tokyo
+81 3 5412 5415
Mike McClure
Mike McClure
Partner, Seoul
+82 2 6321 5701
Chinnawat Thongpakdee
Chinnawat Thongpakdee
Partner, Bangkok
+66 2 857 3829

 

 

Admissibility of foreign judicial documents as evidence in subsequent civil proceeding

The Hong Kong Court of First Instance recently in Capital Century Textile Co Ltd v Li Dianxiao [2018] HKEC 1429 considered the question in relation to the admission of a PRC criminal judgment as evidence in Hong Kong civil proceedings. This article discusses and compares the position in Hong Kong and in the Mainland China.

Hong Kong

It is a well-established rule of evidence in common law jurisdictions that judicial and factual findings in earlier proceedings are not admissible for use in subsequent ones. This is known as the Hollington principle, which has long been a source of controversy for its inflexibility. The principle has been modified by s62 of the Evidence Ordinance in Hong Kong to allow the admission of domestic criminal convictions as evidence in subsequent civil proceedings.

In Capital Century Textile Co Ltd v Li Dianxiao [2018] HKEC 1429, Capital Century sought to adduce and rely on a PRC judgment in criminal proceedings against Li in the 2nd Intermediate People’s Court in Beijing, as evidence to undermine the defence of Li in the Hong Kong civil proceedings. The Hong Kong Court of First Instance was required to determine the admissibility of the PRC judgment. In this case, the judge reaffirmed that the application of the Hollington principle and its importance to ensuring the right to a fair trial.

Essentially, the right to a fair trial requires an impartial and independent judge to formulate his own opinions based on the admissible evidence and the submissions made to him. He should not be influenced by the opinion of someone else. If findings of fact and inferences made by another judge were admitted in later proceedings, there is a risk that the subsequent decision-maker would be influenced by the opinion of the earlier adjudicator. This principle is only subject to limited exceptions of opinions of scientific and expert witnesses who might be better placed to evaluate a specialist area than the judge, and where the findings are binding on other courts by reason of “estoppel per rem judiciatam” (i.e. a doctrine which bars a party from litigating a specific issue that has been decided in prior separate proceedings).

At the same time, it is also important to note that the Hollington principle does not impose a blanket ban on admitting earlier judicial findings in subsequent proceedings. The admissibility question is a fact-sensitive one and should be examined with the purpose of the principle in mind. For example, if the judgment sought to be adduced only summarizes and report factual evidence presented in that court, without any element of judicial judgment and opinion, there is no risk of influencing the subsequent adjudicator with another’s opinion. In the circumstances, in Capital Century, the court delineated different sections in the PRC judgment in its analysis. In doing so, it held admissible the section which merely summarized the factual evidence presented in the 2nd Intermediate People’s Court in Beijing, and held inadmissible the evidence which engaged the opinion of the PRC court – hence triggering the operation of the Hollington principle.

Mainland China

Courts in Mainland China take a similar approach to the admissibility of foreign judicial documents in the PRC court proceedings. “Foreign judicial documents” refer to judgments and arbitration awards rendered outside the territory of Mainland China. Judgments and awards rendered in Hong Kong are considered foreign judicial documents for this purpose.

There is no specific rule regarding whether Hong Kong judgments or awards can be directly admitted as evidence by the Mainland courts.

Under PRC law, a foreign judgment or foreign arbitral award could be recognised by the Mainland courts pursuant to a reciprocal judgement enforcement treaty or the New York Convention. According to the arrangement for mutual recognition and enforcement of civil and commercial judgments between Mainland China and Hong Kong,[1] subject to certain conditions, Hong Kong judgments can be recognised in the Intermediate People’s Court at the place of domicile or ordinary residence of the party against whom the recognition application is filed, or the place where the property of that party is situated.

Alternatively, a foreign judgement could be admitted as evidence in the same way as a normal documentary evidence created outside of China, by being notarised, authenticated, or certified through procedures stipulated in the relevant treaty concluded between the PRC and that foreign country.[2] Documentary evidence created in Hong Kong would need to be (i) attested by a China-Appointed Attesting Officer entrusted by the Mainland[3]; and then (ii) examined and transmitted by the China Legal Service (H.K.) Ltd, with its seal with specified usage and receiving court. In 2015, the Supreme People’s Court further clarified that notarisation, authentication or certification procedures are not necessarily the prerequisite of courts’ assessment of the factual findings unless such evidence concerns the parties’ identification.[4]

However, factual findings contained in foreign judicial documents are inadmissible in the Mainland courts. For all the evidence developed outside of Mainland China, the Mainland courts are required to form their own views on the admissibility after examining the factual evidence referred to in the factual findings of the foreign judicial documents, and taking into account the parties’ views on such factual evidence. Therefore, unless consented to by both parties, factual findings in foreign judicial documents would only be admitted after the Mainland courts conduct their independent examination and assessment of evidence.

Similarly, judicial findings, opinions and comments of foreign courts that are prepared by foreign judges based on their understanding of procedural and substantive laws of that country or region are also inadmissible in the Mainland court.

Conclusion

As cross-border commercial activities increase, there has been an increasing amount of disputes involving proceedings in both the Mainland and Hong Kong. The admissibility of Hong Kong judicial documents or judgments in support of Mainland proceedings (and vice versa) is clearly an important aspect in the overall strategy.

 


[1] Arrangement of the Supreme People’s Court between the Courts of the Mainland and the Hong Kong Special Administrative Region on Mutual Recognition and Enforcement of Judgments of Civil and Commercial Cases under the Jurisdiction as Agreed to by the Parties Concerned (Fa Shi [2008] No. 9)

[2] Article 11 of the Provisions of the Supreme People’s Court on Evidence in Civil Proceedings (Fa Shi [2001] No.33)

[3] Management Measures of China-Appointed Attesting Officer (Hong Kong) (2002) (Order No. 69, Ministry of Justice)

[4] Supreme People’s Court’s Minutes of the Second National Working Conference on the Trial of Foreign-Related Commercial and Maritime Cases (Fa Fa [2005]) No.26)

 

Dominic Geiser
Dominic Geiser
Partner, dispute resolution, Hong Kong
+852 2101 4629
Helen Tang
Helen Tang
Partner, dispute resolution, Shanghai
+86 21 2322 2160
Rachel Yu
Rachel Yu
Senior Associate, dispute resolution, Hong Kong
+852 2101 4220
Celine Wang
Celine Wang
Senior Associate, dispute resolution, Shanghai
+86 21 2322 2159
Weina Ye
Weina Ye
Senior Associate, dispute resolution, Shanghai
+86 21 2322 2132