The Multi-angle Perspective on the Doctrine of the Most Significant Relationship in the Practice of the Private International Law in China

Transcription

1 From the SelectedWorks of Jiayi Geng June 25, 2015 The Multi-angle Perspective on the Doctrine of the Most Significant Relationship in the Practice of the Private International Law in China Hong Yun Tian, Jilin University Jia Yi Geng, Jilin University Available at:

2 The Multi-angle Perspective on the Doctrine of the Most Significant Relationship in the Practice of the Private International Law in China Introduction With the increasing number of the civil and commercial cases with foreign elements as well as the promulgation of the Law of the People s Republic of China on Application of Laws to Foreign-related Civil Relations 1 (hereinafter referred to as Application of Laws) and the Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the Law of the People's Republic of China on the Application of Laws to Foreign-Related Civil Relations (I) 2 (hereinafter referred to as Law Interpretation I), the scholastic focus in China starts to turn from legislative study to judicial study. Professor Huang Jin for example has been studying the judicial practice of private international law (PIL) in China since 2004, so the same with other scholars as Professor Guo Yujun the author of the Application and Retrospection on the Law of the People s Republic of China on the Application of Laws to Foreign-Related Relations, Professor Song Lianbin the author of the Discussion of the Current Problems of the Foreign-Related Civil and Commercial Judgment Documents and so forth. However, most of the aforementioned studies pay more attention to macro respects, but not to the specific fields and institutions. The doctrine of the most significant relationship, one of the two cornerstones of the modern private international law, is embodied in lots of laws in China, and furthermore in 2010 the promulgation of the Application of Laws made it a principle. During the judicial practice, the doctrine of the most significant relationship is highly welcomed by its relative flexibility and malleability, and at the same time pretty controversial for its irregularity in application, ambiguity, consequences-orientations and discordances of adjudications, etc.. In order to have a better knowledge of the values of the doctrine of the most significant relationship, regulate the judicial application of the doctrine of the most significant relationship and play the due role of the doctrine of the most significant 1 Zhonghua Renmin Gonghe Guo Shewai Minshi Guanxi Falü Shiyong Fa( 中华人民共和国涉外民事关系法律适用法 )[Law of the People s Republic of China on Application of Laws to Foreign-related Civil Relations] (promulgated by the Standing Comm. Nat l People s Cong, Oct. 28, 2010, effective Apr. 1, 2011) (China). 2 Zuigao Renmin Fayuan Guanyu Shiyong Zhonghua Renmin Gonghe Guo Shewai Minshi Guanxi Falü Shiyong Fa Ruogan Wenti de Jieshi(I) 最高人民法院关于适用 中华人民共和国涉外民事关系法律适用法 若干问题的解释 ( 一 )[Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the Law of the People's Republic of China on the Application of Laws to Foreign-Related Civil Relations (I)](promulgated by the Sup. People s Ct., Dec. 28, 2012, effective Jan. 7, 2013) (China). 1

3 relationship, the writer has collected 258 typical cases adopting the doctrine of the most significant relationship from April 1 st 2011 (validation of the Application of Laws) to April 1 st 2014, and based on category analysis, takes multi-angle perspective on the problems in the practice of the doctrine of the most significant relationship attempting to make the appropriate application of the doctrine of the most significant relationship come true in the present legislative background of China. Moreover, perfect the legislative system of the doctrine of the most significant relationship with the pushing power from judicial practice and realize the positive interactions between legislation and judicial practice. Part I of the Article will show the cases accumulated in different categories and use these statistics to show the current situation of the application of the doctrine of the most significant relationship in judicial practice. Part II will talk about the problems existed in judicial practice in China in detail and try to find out solutions for China by analyzing those problems. The Article ends with a brief conclusion. I. Statistical Analysis A. The Ratio of the Cases Adopting the Doctrine of Most Significant Relationship among the Civil and Commercial Cases with Foreign Elements The basic situations, such as status and effects, of the application of the doctrine of the most significant relationship in judicial practice can be estimated by analyzing the ratio of the foreign-related civil and commercial cases adopting the doctrine of the most significant relationship. According to the collected information of the cases following the doctrine of the most significant relationship after the promulgation of the Application of Laws, it is easy to find out that the doctrine of the most significant relationship has become one the most popular methods and principles in the practice of private international law in China. Table 1: The Ratio of the Cases Following the Doctrine of the Most Significant Relationship 3 Civil and commercial cases with foreign elements 1088 (April 1 st 2011-April 1 st 2014) Cases following the doctrine of the most significant 258 relationship (April 1 st 2011-April 1 st 2014) Ratio of the cases following the doctrine of the most 23.7% significant relationship 3 All the statistics analyzed in this paper came from the website of judgment documents in China, (last visited April 1, 2014 ). 2

4 As we can see in Table 1, cases following the doctrine of the most significant relationship nearly take up one forth of the total amount of China s civil and commercial cases involving foreign elements, which is basically same as the previous empirical data recorded by Professor Huang Jin and Professor Guo Yujun of the foreign-related civil and commercial cases. Table 2. Other Pertinent Research Data of China Relevant data from Professor Huang Jin Relevant data from Professor Guo Yujun Relevant data from Professor Xu Jintang 36.1% 27.4% 34.9% The above data comes from the Review on Our Practice of Private International Law released by Professor Huang Jin annually, Application and Retrospection on the Law of the People s Republic of China on the Application of Laws to Foreign-Related Relations released by Professor Guo Yujun and the Empirical Study on Choosing Laws by Parties Consents Centering around the Trail Practice with Foreign Elements by Professor Xu Jintang. No matter on which perspective are those cases extracted 4, the doctrine of the most significant relationship has become one of the most popular methods and principles in the practice of private international law. B. Types of Disputes of the Cases Following the Doctrine of the Most Significant Relationship We can apprehend the field, the situation of distributing and the frequency of applying the doctrine of the most significant relationship by analyzing what kind of disputes those cases following the doctrine of the most significant relationship are concerning. Table 3: Types of Disputes of the Cases Following the Doctrine of the Most Significant Relationship General Table Types of disputes Amount of cases Ratio Contractual disputes % Non-contractual disputes 51 20% Real property disputes 5 3 1% Table 4: Types of Disputes of the Cases Following the Doctrine of the Most Significant Relationship Classification Table 4 Professor Huang Jin( 黄进 ) took a sample survey in which the selected cases cover people s courts at all levels nationwide; Professor Guo focused on the cases after the Application of Laws to Foreign-related Civil Relations came into effect; moreover that Professor Xu, in order to study party autonomy, collected a thousand cases (from 1986 to 2007) indirectly confirmed that the doctrine of the most significant relationship took the percentage of 34.9%. 5 Real estate disputes representing house dealing disputes and house renting disputes have been contained in contract disputes. 3

5 Types of disputes Amount of cases Ratio Sale contract disputes 44 17% Folk loan disputes 38 15% Company loan contract 20 7% disputes Share & shareholder 16 6% qualification disputes Lease contracts 15 6% Transportation contract 11 4% disputes Employment contract 10 4% disputes Financial loan contract 10 4% disputes Work contracts 10 4% Commission contract 9 4% disputes Debt cession contract 7 3% disputes Guarantee& warranty 7 3% contracts Agency contract disputes 4 1% Intellectual property 3 1% disputes Intermediary contracts 3 1% House dealing and renting 3 1% Right of recovering 4 1% Right of subrogation 2 1% Stock disputes 2 1% 4

6 Other innominate contract 16 6% disputes Other creditors right 24 10% disputes Several conflict rules concerning the most significant relationship has been stipulated in the Application of Laws, the General Principles of the Civil Law 1986, the Contract Law 1999, the Maritime Code 1992, the Civil Aviation Law 1995 and other law interpretations 6, referring to the resolutions of contracts, maintenance, bonds, positive conflicts of nationalities, positive conflicts of domiciles, interregional conflicts of law, etc.. However in judicial practice, cases concerning property occupy the overwhelming portion, whereas the proportion of personal and moral respects such as cases about maintenance, nationalities is pretty low 7. Amongst the cases concerning property, contractual cases take the majority 80%; other types of the property-related cases are up to 20%. Among these contractual cases, sale contracts, loan contracts, lease contracts, etc. are at a larger ratio; non-contractual obligations are more connected with the qualification of shares and shareholders, security disputes, etc.. C. Citations of Legal Norms In all the collected cases, the study of whether or not the judges have cited legal norms and what kind of norms they cite when deciding the applicable laws by following the doctrine of the most significant relationship will help us understand how and how good the Chinese judges know about the legal norms of private international law in practice. Table 5: Status of Citing Provisions of the Most Connected Cases Citation of provisions 8 Amount of the cases Ratio 6 The years mentioned after the laws are promulgation years. 7 On one hand the amount of personal and moral cases is truly less than that of property cases; on the other hand, because of the request of trails and the protection of privacy, cases of such kind are difficult to be collected. 8 Article 2, 9 and 41 is referred to the provisions in the Application of Laws to Foreign-related Civil Relations; Article 145 is referred to the provision of the General Principles of the Civil Law; Article 126 is referred to the provision of the Contract Law; Article 269 is referred to the Maritime Code; provisions of 2007 are referred to Provisions of the Supreme People s Court on Certain Issues Concerning the Application of Law in the Trial of Cases Involving Disputes over Foreign-related Civil or Commercial Contracts; Interpretation I is referred to the Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the Law of the People's Republic of China on the Application of Laws to Foreign-Related Civil Relations (I). 5

7 Non-citation % of provisions Citation of single provisions Article % Article % Article % Provisions of % Article % Article % Article % Citation of Article 145 & % compound provisions Article 41 & provisions of 2007 Article 145 & Interpretation I Article 41 & Interpretation I 3 1.1% 2 0.8% 2 0.8% Article 126 & % Article 126, 14 & 1 0.4% Interpretation I Article 145, 126 & % Article 145 of the General Principle of the Civil Law, Article 126 of the Contract Law, Article 269 of the Maritime Code and Article 41 of the Application of Laws are all regulations about the application of contractual laws. Although different provisions have different expressions, they all refer to two respects: first, parties are allowed to choose the applicable law in the area of contracts; second, where the parties have not chosen the applicable law for contracts, the law relating most closely to the case should be applied. To carry out the General Principles of the Civil Law and the Contract Law, the Supreme People s Court promulgated the Provisions of 2007, helping judicial departments determine the most related place in the absence of choice made by the parties. However, with the publication of the Law Interpretation I, the Supreme Court cleans out some law interpretations including the Provisions of 2007, and the Law Interpretation I also adjusts the sequence of the application of the laws that are released before or after the Application of Laws. Till now, we have theoretically formed a basic framework of applying the doctrine of the most 6

8 significant relationship, where the Application of Laws with its law interpretations and other commercial special laws each perform its own functions, making effects in their own areas. Where the Application of Laws overlaps other laws, the Application of Laws has the priority, but obviously those judicial departments do not have a comprehensive and profound knowledge of the relations among the provisions of the aforementioned laws. From the perspective of the application of laws of these collected cases, the situation when judges do not cite any provision takes the majority; then comes their reflections of the newly released Article 41 of the Application of Laws; the last one is their ambiguously understanding the relationship of different provisions of laws, such as the relations between the Application of Laws and the afore-published laws, the relations among Article 41 of the Application of Laws, Article 126 of Contract Law and provisions of 2007, whether or not Article 2 can be cited directly as the determination of a case, whether or not the provisions of 2007 can still be cited after its abolishment, etc.. D. Results of the Application By analyzing the situation of the application of laws with cases following the doctrine of the most significant relationship, we can understand judges attitudes, their predilections as well as how important and valuable they think the doctrine of the most significant relationship is when applying laws. Table 6: Results of the Application of Laws Application of law Amount of cases Ratio China(mainland) law % Law of the Hong Kong 2 0.8% SAR International conventions 1 0.4% & laws of the PRC Korean law 1 0.4% From the data above we can know that whether or not judges adopt provisions, which provision they choose and whether the process of reasoning exists or not, when it comes to the most related cases the results are almost identical, nearly 98.4% of the cases following the internal laws, only in some extremely typical situations following extra-territorial laws. This result is really thought-provoking: whether the value of the doctrine of the most significant relationship to soften conflict rules has become the instrument of the judges to implement territorialism. E. Reasoning and the Considerations The most significant relationship works as a flexible linking point or principle, of 7

9 which the advantage is that it can strengthen the flexibility of choosing laws, but it lacks certainty and specification. When judges adopt the doctrine of the most significant relationship to deal with civil and commercial cases with foreign elements, an arguing process is about synthetically analyzing, reasoning and finally connecting the doctrine of the most significant relationship with a certain law through provisions of laws and various factors of the case, where all the considered factors are arguments. Table 7: Statistic of the Reasoning Process General Table With or without reasoning Amount Ratio No % Yes % Amongst the 153 cases with reasoning, their reasoning bases are different, more specifically as follows: Table 8: Statistic of the Reasoning Process Classification Table Factors considered Amount Ratio Single factor Domicilii 40(32 of which 26.2% were decided by the characteristic performance in the Provisions of 2007) Loci solutionis % Nationalis voluntatis 7 4.5% Loci actus 7 4.5% Loci rei sitae(including 3 1.9% immobilia) Loci delicti(loci delicti 3 1.9% commissi, loci damni) Loci contractus 2 1.3% Loci dissertare 2 1.3% Double factors Loci contractus & loci solutionis % Domicilii & loci % 8

10 solutionis Subject matter & loci 8 5.3% solutionis Domicilii & loci 3 1.9% contractus Domicilii & loci 3 1.9% Multiple proprium Considering more than % factors three elements From Table 8 we can figure out that nearly half of the cases lack reasoning; within the cases with reasoning, domicile, place of contract-signature and place of performance are the most often considered reasoning factors, but they are applying in different ways. Among them, domicile usually comes as the result of following the Provisions of 2007 which expressly regulate that the most related place of different contracts is based on characteristic performance. 9 Such provision is cited with frequency even after its abolishment in Additionally, in judicial practice a most closely related place is often determined by some objective symbols such as places of contract-signature, places of performance, etc. On occasion that all the above factors are not sufficient to demonstrate that China is the most closely related place, other relevant factors will be listed out for synthetic consideration. Such reasoning process shows that there still exist some problems in the judicial departments when it comes to the control and mastery of the doctrine of the most significant relationship, that judges generally lack familiarity with the application of the doctrine of the most significant relationship. With the abolishment of the operable provisions as those of 2007, as well as lacking express directions from legislation, judges, driven by their inner predilection for territorialism, are always searching for the factors that will lead to their applying the lex loci. Therefore, the choice of factors throughout the whole reasoning process is arbitrary, disorderly and purpose-driven. F. Errors and Types The ratio of right-or-wrong application of the law is as follows: Table 9: Status of the Right-or-Wrong Application of Laws Wrong application of laws Right application of laws Amount of the cases It is under the affection of Convention on the Law Applicable to Contractual Obligations; see Convention on the Law Applicable to Contractual Obligations, art. 4 (available at XrhkfEMBzupQ5VtTqRq2wsYrrtnR-4qR7-y7bRB7yzEYd7IZvOYGz6m8U9JiEEi). 9

11 Ratio 62.4% 37.6% As statistically presented, so far, there are a great many different types of misuses in the judicial practice of the doctrine of the most significant relationship in China, more specifically as follows: Table 10: Types of the Misuses in Applying Laws Lacking Citing old Citing invalid Erroneous Citing principle provisions laws laws collocation of provisions laws %5 24.2% 11.8% 5.6% 3.1% The above statistics show the great number of misuses in judicial practice of the doctrine of the most significant relationship and the urgent awaiting improvements to the quality of trails. II. Multi-angle Perspective From the aforementioned cases, it is easy to know that the doctrine of the most significant relationship plays an important role in the judicial practice of private international law in China. However, from the analysis of types of disputes, application of laws, results of applying laws, reasoning process, factors considered, right-or-wrong ratio and erroneous types, we can find out that the doctrine of the most significant relationship has not been appropriately performed in the judicial practice; there still exist a lot of problems, for a lot of reasons. A. Disorder and Complexity of Legislative Basis The doctrine of the most significant relationship, in our legislation, is mainly embodied in the Law of People s Republic of China on Economic Contracts involving Foreign Interest 1985, the General Principles of the Civil Law of the People s Republic of China 1986, the Opinions of the Supreme People s Court on Certain Issues Concerning the Implementation of the General Principle of the Civil Law of People s Republic of China 1988, the Answers of the Supreme People s Court on Certain Issues Concerning the Implementation of the Law of People s Republic of China on Economic Contracts involving Foreign Interest 1987, the Maritime Code of the People s Republic of China 1992, the Civil Aviation Law of the People s Republic of China 1995,the Contract Law of People s Republic of China 1999,the Provisions of the Supreme People s Court on Certain Issues Concerning the Application of Law in the Trial of Cases Involving Disputes over Foreign-related Civil or Commercial Contracts 2007, the Law of the People s Republic of China on Application of Laws to Foreign-related Civil Relation 2010, among which provisions as the Law of Economic Contracts involving Foreign Interest and its interpretations, the provisions of

12 have been abolished. The doctrine of the most significant relationship is mainly applied in contracts, maintenance, nationalities, domicile, place of business, multi-jurisdiction conflicts, and Article 2 of the Application of Laws brings the doctrine of the most significant relationship up to the level as a principle 10. During the period after the publication of the Application of Laws, the provision conflicts among the Application of Laws and other laws are troublesome and thorny in the practical circle. Subsequently, Article 3 of the Interpretation I issued by the Supreme People s Court provides that, in case of discrepancy between the provisions of the Law on the Application of Laws to Foreign-Related Civil Relations and other laws on the application of laws to the same foreign-related civil relation, the provisions of the Law on the Application of Laws to Foreign-Related Civil Relations(Law) shall prevail, except for the special provisions of laws in the commercial area such as the Law of the People's Republic of China on Negotiable Instruments, the Maritime Code of the People's Republic of China and the Civil Aviation Law of the People's Republic of China and the special provisions of laws in the area of intellectual property rights. In the absence of any provisions on the application of laws to foreign-related civil relations in the Law on the Application of Laws to Foreign-Related Civil Relations and the presence of such provisions in other laws, the provisions of other laws shall prevail 11. Under such provisions, the Application of Laws dominates in civilian aspect, only when the Application of Laws lacks relevant provisions will other laws be adopted; whereas the Maritime Code of the People s Republic of China and the Civil Aviation Law of the People s Republic of China continue in force in the commercial field. In accordance with the above regulations, in the domain adjusted by the Application of Laws, laws such as the Contract law and the General Principle of the Civil Law shall no longer be applied. Therefore, those cases adopted Article 145 of the General Principle of the Civil Law and Article 126 of the Contract Law after the promulgation of the Application of Laws and its interpretations, presented in Table 5, are obviously inappropriate. Besides, as the General Principle of the Civil Law and the Contract Law should concede to the Application of Laws, the provisions of 2007 that are made to specialize the relevant provisions 12 in the General Principle of the 10 Scholars have different opinions on Article 2 of the Application of Laws. Some consider it as a floor principle; some think it is a supplementary principle and has different functions and effects. However, it is a new try and breakthrough on legislation. 11 Zuigao Renmin Fayuan Guanyu Shiyong Zhonghua Renmin Gonghe Guo Shewai Minshi Guanxi Falü Shiyong Fa Ruogan Wenti de Jieshi(I) 最高人民法院关于适用 中华人民共和国涉外民事关系法律适用法 若干问题的解释 ( 一 )[Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the Law of the People's Republic of China on the Application of Laws in Foreign-Related Civil Relations (I)](promulgated by the Sup. People s Ct., Dec. 28, 2012, effective Jan. 7, 2013), art. 3(China). 12 See,e.g., Zuigao Renmin Fayuan Guanyu Shenli Shewai Minshi huo Shangshi Hetong Jiufen Anjian Falu Shiyong Ruogan Wenti de Guiding( 最高人民法院关于审理涉外民事或商事合同纠纷案件法律适用若干问题的规定 ) [Rules of the Supreme People's Court on the Relevant Issues concerning the Application of Law in Hearing Foreign-Related Contractual Dispute Cases in Civil and Commercial Matters] (promulgated by the Sup. People s Ct. Jul , expired Apr. 8, 2013), art. 5(China) (English translation available at 11

13 Civil Law and the Contract Law have consequently become the targets needing the removal, which means those cases that directly adopted provisions of 2007 on 8 th April 2013 are erroneous. Another problem in practice is that the applying method of the doctrine of the most significant relationship in the General Principle of the Civil Law and the Contract Law is to decide the most related law on characteristic performance; correspondingly, Paragraph 1 of Article 5 in the provisions of 2007 basically determines applicable law on the domicile of the party of the characteristic performance. However, Article 41 of the Application of Laws provides that parties concerned may choose the laws applicable to a contract by agreement. Where the parties have made no such choice, laws of the habitual residence of the party whose performance of obligations best reflects the characteristics of the contract or other laws having the most significant relationship with the contract shall apply. So far we can see that characteristic performance itself can no longer be treated as one of the methods of determining the doctrine of the most significant relationship; meanwhile, as the specific provisions (i.e. the provisions of 2007) of determining the applicable law to contracts on characteristic performance have been abolished, it comes to us as a set of problems about how to judge characteristic performance, how to comb the relations between the doctrine of the most significant relationship and characteristic performance, how to confirm the most significant relation. Therefore, attempts to cite Article 41 of the Application of Laws and at the same time use the provisions of 2007 to specialize it are also wrong. In addition to the high frequent clauses in the contractual field, the judicial operation of Article 2 of the Application of Laws is also tough. Article 2 provides that in the absence of provisions on the application of laws to foreign-related civil relations as prescribed in this Law and other laws, laws having the most significant relationship with the foreign-related civil relation in question shall apply. This clause is supposed to be seen as a principle rather than a provision. Legal principles are different from legal provisions; the latter has relevantly positive conduct regulation rules and adjudication rules 13. At the time of choosing laws, legal provisions should be given the priority and only when there is no provisions at all can principles be applied, which means no evasion towards general provisions 14. Therefore, the doctrine of the most significant relationship provided by Article 2 in the general provisions of the Application of Laws should better not apply directly to make decisions, when there is any particular provision in specific provisions 15. However, if Article 2 of the Application of Laws 16 is not allowed to apply directly in judicial 13 See Xu XianMing( 徐显明 ), Fali Xüe( 法理学 )[Jurisprudence] 33(2007). 14 See Zhang WenXian( 张文显 ), Fali Xue( 法理学 ) [Jurisprudence] 76-77(2011). 15 See Guo YuJun( 郭玉军 ):Shewai Minshi Guanxi Falü Shiyong Fa de Shiyong jiqi Fansi(< 涉外 民事关系法律适用法 > 的适用及其反思 ), [Application and Retrospection on the Law of the People s Republic of China on the Application of Laws to Foreign-Related Relations ], Shehui Kexue Jikan ( 社会科学辑刊 ) [J. Social Science] 44 (2013). 16 Zhonghua Renmin Gonghe Guo Shewai Minshi Guanxi Falü Shiyong Fa( 中华人民共和国涉外民事关系法律适用法 )[Law of the People s Republic of China on Application of Laws to 12

14 practice, the intention to make the doctrine of the most significant relationship a residual clause will not be fulfilled, and fulfilling such function of the doctrine of the most significant relationship demands not only the probe in judicial practice but also the direction of legislation. Therefore, the specification of this provision is also a focus of the study in the future. It has been 30 years since the doctrine of the most significant relationship was transplanted in China. A lot of provisions in our country refer to this principle some are still valid and some not; some have been partly replaced by new provisions; some have been confined in certain domains. Such complex relations among the provisions have promoted chaos in judicial practice, which results in a relevant disordered situation to apply the doctrine of the most significant relationship. B. Lacking Systematic and Operative Design of the Doctrine of the Most Significant Relationship How to design the doctrine of the most significant relationship on the perspective of legislation is a matter of understanding the nature and position of the doctrine of the most significant relationship. Reese describes the nature of the doctrine of the most significant relationship as a transitional means, a process rather than a consequence. When it is the time, conflict rules should be formed by summarizing the application of the doctrine of the most significant relationship in specific fields or items in time 17. The purpose of Reese is to further specify and political-analyze the doctrine of the most significant relationship. According to the study of native Chinese scholars as Xiao Yongping and Xu Guangyao, the doctrine of the most significant relationship is merely a kind of softening method, and as a softening method, only combining with specific conflict rules can the doctrine of the most significant relationship overcome its inherent nature of uncertainty and unpredictability. Working as the main character to perform the doctrine of the most significant relationship, judicial departments are asked for the ability of trying and summarizing and only in this way will the doctrine of the most significant relationship become more and more specific 18. In conclusion, as the doctrine of the most significant relationship itself is merely a method to ease conflicts, it cannot independently exist without conflict rules. In the process of accumulating experience, legislative and judicial departments should Foreign-related Civil Relations] (promulgated by the Standing Comm. Nat l People s Cong, Oct. 28, 2010, effective Apr. 1, 2011) art.2(2) If there are no provisions in this Law or other laws on the application of any laws concerning foreign-related civil relations, the laws which have the closest relation with this foreign-related civil relation shall apply. (English translation is available at 17 See Willis L. M. Reese, Choice of Law: Rules or Approach 57 Cornell L. Rev. 319 ( ). 18 See Xiao Yongping( 肖永平 ), Zui Miqie Lianxi Yuanze dui Chuantong Chongtu Guifan de Tupo ji Yinghua Chuli( 最密切联系原则对传统冲突规范的突破及 硬化 处理 ) [The Breakthrough and Hardening Treatment the Doctrine of the Most Significant Relationship Have on Traditional Conflict Rules], Henan Sifa Jingguan Zhiye Xueyuan Xuebao( 河南司法警官职业学院学 报 )[ Acad. J. Henan Judicial Police Officer s Institute] 19 (2001). 13

15 solidify the mature operating method in a form of conflict rules to work as a means of clarifying the doctrine of the most significant relationship 19. Therefore, in judicial practice, it is the conflict rules manifesting the doctrine of the most significant relationship or other regulations which can help decide it that should be adopted. Around the world, the status of the doctrine of the most significant relationship is mainly divided as follows: 1. The doctrine of the most significant relationship performing as the legislative principle directs the legislation of the whole private international law field, and works as the foundation for erecting specific conflict rules in private international law codes. For example, Article 1 of the Regulation of Private International Law of Austrian Federal 1978 provides that a case with foreign factors adopts the law of the country that has the most significant relationship with this case. The special provisions about the applicable laws in this federal law shall be seen as embodying this principle. 2. The doctrine of the most significant relationship works as a supplementary provision, to supplement the blank space where no legal regulation exists for determining an applicable law. Such situations are more common. For example, Article 1186 Paragraph 2 of the Russian Civil Law says if the applicable law cannot be determined by the code or other Russian laws (including treaties), the law of the state with the most significant contacts should be adopted. Similar regulation can be traced in at least 10 different states, such as Belarus, Berkina-faso, China, Liechtenstein, Ukraine, etc The doctrine of the most significant relationship exists as exceptional provision including general exceptions and special exceptions. General exceptions indicate the legal exceptions of the regulations of the whole private international law. If a case is obviously more closely to other nations, the law of the certain nation should be applied but not the law directed by conflict rules. Article 15 of Sweden Private International Law is a typical example in such aspect; besides, Belgium, Korea, Lithuania, Quebec, Slovenia, Macedonia and Netherlands 21 also have similar regulations. Special exceptions indicate exceptions that only have effects on a few conflict rules of partly laws, mostly existing in particular fields, such as contracts, torts, etc.. The exceptional provisions based on this principle can be found in the 19 See Xu QingKun( 许庆坤 ), Meiguo Chongtufa Zhong de Zui Miqie Lianxi Yuanze Xintan ( 美 国冲突法中的最密切联系原则新探 ) [The New Exploration in the Doctrine of the Most Significant Relationship of the American Conflict Law], Huanqiu Falu Pinglun ( 环球法律评论 ) [Global L. Rev.] 79 (2009). 20 See Belarus codif. art. 1125(4); Burkina Faso codif. art. 1003;Chinese codif. art. 2; Liechtenstein codif. art. 1(2); Ukraine (art. 44). Also see Symeon C. Symeonides, Codification and Flexibility in Private International Law, General Reports of the XVIIIth Congress of the International Academy of Comparative Law, Karen B. Brown, David V. Snyder, Springer, 2011, p See, e.g., Belgian codif. art. 19(2); South Korean codif. art. 8.1; Lithuanian codif. art (3); Quebec codif. art. 3082; Slovenian codif. art. 2(1); FYROM codif. art. 3; Dutch codif. art

16 Rome Convention and the Rome I Regulation and Rome II Regulation The doctrine of the most significant relationship works as the linking points in a particular field, such as contracts, torts and so forth. In China, Article 41 of the Application of Laws can be sorted in this classification. Belgian law 23 adopts the doctrine of the most significant relationship in the certain conflicts of intellectual rights to ensure the rights of some particular interest groups. In the laws of Taiwan, the doctrine of the most significant relationship is adopted as a supplementary linking point in the aspects such as surrogates, bill of lading and negotiable securities. Among the legal regulations of Burkina Faso 24, the doctrine of the most significant relationship will result in the application of laws converting from decedents lex fori toward lex domicilii in the items of succession. 5. The doctrine of the most significant relationship performs as a decisive element. This is usually applied to solve the problems related to multi-nationalities, multi-habitual abodes, or the cases referring to the validity of marriages or divorces. Article 26 of the Law of Armenia, for example, says: lex personalis of an individual indicates that if an individual as a citizen of a nation yet has multiple civil rights, the nationality of that individual should be the country with which he/she has the most significant relationship. 6. The doctrine of the most significant relationship acts as a last means, which is mostly used in the situations where the conflict rules direct to the laws of federal or multi-jurisdictional nation. Usually, under such situation, the resolution should first follow the interregional private law, only when lacking relevant provisions or laws should the law of the jurisdiction having the most significant relation to the case be applied. Article 18 of Italy, for instance, says: when a case refers to the interpersonal conflicts or interregional conflicts of a nation, the applicable law will be determined by the private interregional or personal law; however, if such kind of law does not exist, the applicable law determined by the doctrine of the most significant relationship can be applied. Similar provisions are exhibited in a couple of Hague conventions 25 and the private international law of 20 states See Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 2008 on the Law Applicable to Contractual Obligations (Rome I), [2008] OJ L 177/6.Int l L.245 (2008); also see Regulation (EC) No. 864/2007 of the European Parliament and of the Council of 11 July 2007 on the Law Applicable to non-contractual Obligations (Rome II), [2007] OJ L 199/40. Moreover, the laws below have the similar regulations. Article 15 and 20 in the Law of the General Principle of the Application of Laws in Japan 2006; Article 25 and 28 in the Application of Laws to Foreign-Related Civil Relation in Taiwan 2010; Article 34 in the Private International Law and International Procedural Law of Turkey 2007; Article of Burkina Faso. 23 See Belgian codif. arts. 93 and 87(2). 24 See Burkina Faso codif. art See, e.g., the Hague Conventions on: Conflicts of Law Relating to the Form of Testamentary Dispositions, art. 1; Law Applicable to Succession to the Estates of Deceased Persons, arts. 19(3)(b), 20; Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility, arts. 47(4), 49(b); International Protection of Adults, arts. 45(d),(f), art. 15

17 A lot of nations have had a relevantly complete system of the doctrine of the most significant relationship; if the doctrine of the most significant relationship is treated as a principle (general, supplementary or general exceptional principle) in one nation, correspondingly, matched choice-of-law measures and regulations will be written in specific provisions to form a complete system together with general provisions. Take the Second Conflicts Restatement in America for instance in which the factors needing consideration to determine the applicable law are prescribed both in the general provisions and in the fields of contracts and torts. Even the doctrine of the most significant relationship only performs as a linking point in a particular field, specification is still necessary to make it operable. For example, in the long-term judicial practice, European countries have been using characteristic performance to decide the most related place, which strengthens the flexibility of application and meanwhile confines the use of the doctrine of the most significant relationship within a certain range. The Second Conflicts Restatement of America provides judges with express directions by separately listing the elements that need considering in the domains of contracts and torts. The American judicial practice has accumulated plenty of experience in the past 20 years after the promulgation of the Second Conflicts Restatement. The latest promulgated legislations of the states such as Louisiana and Oregon have solidified the experience accumulated in judicial practice of the doctrine of the most significant relationship. The aforementioned theories and examples demonstrate that the doctrine of the most significant relationship of a nation s legislation of private international law should not be respective, separate or incompact principles or provisions but to be a system where the doctrine of the most significant relationship can be a principle as well as a linking point in a specific provision, but in any event this system should be well-conceived and operable. From the perspective of China s legislation, although the Application of Laws 2012 has raised the doctrine of the most significant relationship up to a position of supplementary principle, such principle has not cooperated with the provisions of the most significant relationship in the Maritime Code, the Civil Aviation Law, the General Principle of the Civil Law and the Contract Law, which means an integral and well-conceived system is still not formed. Meanwhile, most of the aforementioned provisions are too macroscopic, lacking specified measures, guiding cases and authoritative referential factors and too casual about the legislation and abolishment of a law. That the practical departments do not have a good knowledge of the position and nature of the doctrine of the most significant relationship, confusing with principles and provisions, adding up with the loose system and the absence of 47(b); Hague Protocol on the Law Applicable to Maintenance Obligations, art. 16(d) and (e). 26 These countries are: Armenia (art. 1256), Austria (art. 5(3)), Belgium (art. 17), Bulgaria (art. 41(4)), Burkina Faso (art. 1007), China (art. 10), Croatia (art. 10), Esto nia ( 3), Germany (art. 4), Lithuania (Art.1.10(6), The Netherlands (art. 15(2)), Japan (art. 38(3)), South Korea (art. 3(3)), Macau (art. 19), Moldova (art. 1581), Quebec (art. 3077), Russia (art. 1188), Slovenia (art. 9), Taiwan (art. 5), Turkey (art. 2(5)), Ukraine (art. 9), Uruguay (Draft art. 2(2), and FYROM (art. 10). 16

18 operability results in the lack of expertise, pertinence and controllability in the judicial practice of the doctrine of the most significant relationship. C. Laws and Interpretations Lacking Authority Private international law is the production of the development of economy, especially export-oriented economy, which can be implied by the codification movement of the private international law. The first internationally vast legislation of private international laws took place in the early 19 th century which came with the emergence of the codification of civil codes, typically the Civil Code of France 1804, the Civil Code of Austria 1811, the Civil Code of Italy 1865, the Civil Code of Spain 1889 and the Civil Code of Germany Legislation of the private international laws, at this time, was unsystematically scattered in different civil codes and it was the flourishing period during the development of economy in Europe. The second vast legislation of private international laws happened in 1960s, which lasts till now, totally having over 60 nations or sub-nations taking part in coding private international laws. Legislation during this time is mostly about special laws and codes, such as the Private International Code of Switzerland 1987, Netherland 2001, Belgium 2004, Japan 2007, Turkey, etc. and nations like Argentina, Czech Republic, Israel, Mexico, Poland, etc. are ongoing, which also reflects the tendency of the economic globalization. Due to the long-standing feudal society in China and the absence of the controlling power of the state in the modern semi-feudal and semi-colonial society, although the Beiyang government promulgated the Regulations on the Application of Laws 27 (7 sections, 27 articles in total), regulating the aspects of property, personal rights, kin relations, successions, etc., such law is useless and impractical under the control of the imperialist power in a semi-colonial society. After the foundation of the New China, at that time the development of economy was not put in the major place, needless to say the development of private international law which depends on an export-oriented economy, and besides the legislature of China did not pay enough attention to the legislation of private international law. Therefore the domestic legislation about the private international law was still blank 28. Till the year 1979 and thereafter, because of the policies about opening-up 29 to the outside world, China s culture and economy exchanges with foreign counties were developing rapidly and consequently cases involving foreign elements appeared more frequently, which objectively promoted our legislation of private international law and then came out 27 The reason why the Beiyang Government promulgated the Regulations on the Application of Laws in 1918 was that under the appealing of the patriotic personage and the anti-imperialists the government had to do so to defuse the tension. The regulation is the first legislation relating to the private international law in the history of China and it is one of the most detailed one comparing with the legislation of the contemporary capitalist countries. 28 See Han DePei( 韩德培 ), Guoji Sifa ( 国际私法 ) [Private International Law], 56 (2003) (China). 29 This idea came into performance in 1978 which turned the key emphasis to economic construction. 17

19 some provisions concerning the private international law, such as the General Principle of the Civil Law 1985, the Maritime Code 1992, the Company Law 1993, the Law of Negotiable Instruments 1995, the Contract Law 1999, etc.. However, the abovementioned laws are not only decentralized in legislation but also lacking unification among themselves. After years of efforts in the academy of private international law, the Application of Laws and Interpretation I were respectively promulgated in 2010 and Professor Huang Jin pinpointed five deficiencies that still exist in our legislation of private international law 30. The root of these problems is the fact that with the constraints from various respects, the legislation of private international law in our country has still not been taken seriously which leads to the arbitrariness and mindlessness in promulgating or abolishing laws. In judicial practice, such arbitrariness doubtlessly means lacking attention and preciseness in both studying and applying the legislation of private international law. The relevant legislative authority is relatively weak in the field of private international law 31. On one hand, the problems shown in our judicial practice can be partly ascribed to legislative factors; on the other hand, it is the lack of study and comprehension of the existed laws, regulations, interpretations and some critical cases of private international laws in judicature itself that accounts for the problem. Therefore, errors as the arbitrary application of laws, postponing updating provisions, paying no attention to the latest news about private international law and other problems manifested in the accumulated statistics, such as the application of the old law after the promulgation of a new one, listing the related provisions arbitrarily without considering their relations, the continuing application of the invalid interpretations, etc. have been shown in the judicial practice. Generally speaking, the application of the provisions of private international law in judicial departments is relatively simple, shallow and still has numerous problems. All these reflect the lack of authority in the relevant laws and interpretations of the private international law. D. Severe Territoriality-Orientation The conflicts between territorialism and universalism are always there in private international law. Scholars of universalism 32 hold the idea that the emergence of legal society is due to the needs from human beings and the international obligations from general social connections among different nations. Therefore, the application of laws shall be based on international obligations but not reciprocity or mutual accommodation, which means that no sovereignty is allowed to reject the application 30 These five aspects refer to un-systematic, un-comprehensive, un-specific, un-explicit and un-scientific. 31 See Huang Jin( 黄进 ), Mibu Shewai Minshi Guanxi Falu Shiyongfa de Wuda Quexian( 弥补涉 外民事关系法律适用法的五大缺陷 ) [Compensating for the Five Defects of the Application of Laws to Foreign-Related Civil Relations], 8 Zhongguo Shehui Kexue Xuebao ( 中国社会科学学 报 ) [Acad. J. of Chinese Social Sciences] (2009) (China). 32 Such as Savigny. 18

20 of all the foreign laws 33. The universalism generally claims that foreign laws have the equivalent position as domestic laws; they are equal. One of the differences territorialism has from the universalism is about the relation between domestic and foreign laws. Territorialism 34 usually considers from the angle of the domestic and in favor of the domestic laws; intentionally or unintentionally constrains the range of applying foreign laws, holding the idea that domestic laws surpass the foreign laws and treats them in unequal ways 35. From the perspective of the historical development of private international law, the conflicts between territorialism and universalism are not new, but in different phase of development, the relations between them turn to be different. According to the relevant discusses among scholars 36, private international law can be divided into three phases on the relations between territorialism and universalism. The first phase is the transitional period from jus gentium to statute theory, which is the change of private international law from universalism to territorialism; the second phase is the transformational period from theory of statutes to sitz des rechtsverhältnisses, which means more intense confrontations between territorialism and universalism; the third phase, from the early 20 th century to now, is the gradual reconciliation of universalism and territorialism, mainly represented in the emergence of uniform substantive laws and the unification movement of the regional international organizations 37. The tendency of territorialism in applying laws oriented from the Middle Age and prevailed in 18 th and 19 th centuries, but today the conception of territorialism has been weakened for the economy globalization and the continuous fusion of laws. Therefore, nations with higher level of economic growth and globalization will not advocate territorialism but have an open mind to apply laws. After the reform and opening-up, China keeps on speeding up in economy development, increasingly takes participation in international affairs, and plays an important role in the international society, which all call for an open, active, well-conceived and healthy system of applying laws to correspond to it. However, the reality is that on one hand, China s courts do not have enough experience to deal with civil and commercial cases involving foreign elements, which means the unfamiliarity and insecurity make the judges resort to national laws i.e. lex fori to solve problems; on the other hand, trails on foreign-related civil and commercial cases expect more from the judges, and if the applicable law were a foreign law, problems like the proof of foreign law and application of law would need considering, without doubt increasing their workload, which is relatively difficult for the judges who are familiar 33 See Li Haopei( 李浩培 ), Li Haopei Wenxuan ( 李浩培文选 ) [Li Haopei Anthology] 61 (2000) (China). 34 Such as Kahn, Nussbaum, Raape, Currie, Ehrenzweig and Cheshire. 35 See Id. at See Geng Yong( 耿勇 ), Guojia Zhuquan yu Guoji Sifa Hou Xiandai Zhuanxing( 国家主权与国际私法后现代 ) [State Sovereignty and the Pos-modern Transition of the Private International Law], (2007)(China). 37 See Geng Yong( 耿勇 ), Minzhu Zhuyi yu Guoji Zhuyi Guoji Sifa Sixiang de Duili yu Ronghe( 民主主义与国际主义国际私法思想的对立与融合 ) [The Confrontation and Integration of the Private International Law Thoughts between Democraticism and Internationalism], Zhengfa Luntan ( 政法论坛 ) [Political and Legal Forum] 128 (2008) (China). 19