Guiding Cases Analytics TM 指导性案例分析
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1 Guiding Cases Analytics TM TM 指导性案例分析 Issue No. 3 (January 2015) Dr. Mei Gechlik * Founder and Director, China Guiding Cases Project * * * Guiding Cases Analytics TM analyzes trends in the Guiding Cases selected and released by China s Supreme People s Court and identifies important issues for further study. Expected to be an essential supplement to the qualitative analysis of cases, Guiding Cases Analytics TM will help deepen our understanding of China s court system and case law. * * * Table of Contents I. Background and Significance of Guiding Cases... 2 II. Number of Guiding Cases... 3 III. Areas of Law Covered by Guiding Cases... 4 IV. Sources of Guiding Cases... 6 V. Facts and Reasons in Guiding Cases VI. Time Elapsed * The author thanks Dimitri Phillips and Jordan Corrente Beck for editing different versions of this piece.
2 2 I. Background and Significance of Guiding Cases On November 26, 2010, the Supreme People s Court of China ( SPC ) issued the Provisions of the Supreme People s Court on Case Guidance (the Provisions ) 1 to establish a system for the selection and re-issuance of certain Chinese court judgments as Guiding Cases ( GCs ). 2 Article 1 of the Provisions provides: The Supreme People s Court shall determine and uniformly release as Guiding Cases those cases that have the effect of guiding adjudication and enforcement work in courts throughout the country. Article 2 lists the following requirements: The Guiding Cases referred to in this set of Provisions mean the rulings and judgments that have taken legal effect and which are cases that meet the following conditions: (i) are of widespread concern in society; (ii) legal provisions are of relatively general nature; (iii) are of a typical nature; (iv) are difficult, complicated, or of new types; [or] (v) other cases having a guiding effect. Though not explicitly binding, GCs are meant to guide the adjudication of subsequent similar cases. Article 7 of the Provisions states: People s courts at all levels should refer to the Guiding Cases released by the Supreme People s Court when adjudicating similar cases. These measures are, according to the Preamble of the Provisions, carried out to summarize adjudication experiences, unify application of law, enhance adjudication quality, and safeguard judicial justice. 1 最高人民法院关于案例指导工作的规定 (Provisions of the Supreme People s Court on Case Guidance), issued by the Supreme People s Court on November 26, 2010, available at 2 This system has been officially named 案例指导制度 (literally translated as case guidance system ). The choice of the term 案例指导制度 could lead to confusion, as it has been used for many years to refer to any case system that has guiding significance. See 王立峰 (WANG Lifeng), 中国案例指导制度的必要性和功能 (The Necessity and Function of China s Guiding Cases System), 中国指导性案例项目 (CHINA GUIDING CASES PROJECT), Oct. 15, 2013, available at While the author refrains from calling the system by name in this issue of Guiding Cases Analytics TM, it is worth noting that a growing body of official documents have used the term to refer to the specific system created under the Provisions.
3 3 The system for the selection of GCs is being developed at a critical time. The SPC has pledged in The Fourth Five-Year Reform Plan of the People s Court ( ) to, among other objectives, deepen reform of court personnel management, strengthen judicial protection of human rights, and further increase judicial transparency. These specific judicial reforms are intended to achieve two goals laid out in the Decision on Major Issues Concerning Comprehensively Deepening Reforms, adopted at the Third Plenary Session of the 18th Central Committee of the Communist Party of China on November 12, 2013, namely to: ensure independent and impartial exercise, in accordance with law, of adjudication power and promote open trial. Dubbed the Third Plenum Decision, this document has historical significance, calling to mind the late 1978 Third Plenum Decision, which announced China s open door policy and marked the beginning of the country s remarkable economic development. Further, in October 2014, President Xi Jinping and other leaders of China took an unprecedented step toward greater focus on the rule of law in China during the fourth plenary session of the Chinese Communist Party s 18th Central Committee. In the Decision on Several Major Issues Concerning Comprehensively Moving Forward Governing the Country According to Law (the Fourth Plenum Decision ), the Central Committee noted some of its primary goals, including to: accelerate the construction of a rule of law government, guarantee judicial fairness [and] raise judicial credibility, and strengthen and standardize [the systems of] judicial interpretations and case guidance to unify the applicable standards in law. The explicit reference to case guidance shows the importance of GCs as perceived by China s top leaders. II. Number of Guiding Cases Since 2011, the SPC has issued nine batches of GCs, the last two of which were released in December The ninth batch has seven GCs, while the fifth and eighth batches have six GCs each. The seventh batch has five. Each of the other batches has four GCs. In 2012, the SPC released eight GCs in total, followed by ten in 2013 and 22 in 2014 (see Chart 1). The growing trend shows the SPC s efforts to achieve the goal of strengthening the case guidance system, as stated in the Fourth Plenum Decision. Chart 1: Number of GCs Issued per Quarter
4 4 III. Areas of Law Covered by Guiding Cases Nine GCs cover criminal law, while six GCs cover civil procedure law. Administrative litigation law and company law are each covered by four GCs. Other areas of law listed in Chart 2 are covered by three or fewer GCs. Given that even Zhou Qiang, President of the SPC, admitted in his report to the National People s Congress that some courts had delivered verdicts out of accordance with law and that the credibility of the court system had been undermined, 3 the SPC s release of more GCs to provide lower level courts with better guidance on the application of criminal rules is welcome. Chart 2: Number of GCs by Laws and Regulations Covered Related Legal Rules GC No(s). Total # of GCs Administrative Licensing Law 5 1 Administrative Litigation Law 5, 22, 38, 41 4 Administrative Penalties Law 5, 6 2 Anti-Unfair Competition Law 29, 30 2 Auction Law 35 1 Civil Air Defense Law 21 1 Civil Procedure Law 2, 7, 25, 34, 36, 37 6 Company Law 8, 9, 10, 15 4 Contract Law 1, 33 2 Criminal Law 3, 4, 11-14, 27, 28, 32 9 Education Law 38 1 Food Safety Law 23 1 General Principles of the Civil Law 15, 29, 35 3 Insurance Law 25 1 Interim Implementing Measures of the Regulation on Academic Degrees 39 1 Labor Contract Law 18 1 Law on Protection of Consumer Rights and Interests 17 1 Legislation Law 5 1 Maritime Law 16, 31 2 Patent Law 20 1 Regulation on Academic Degrees 38, See, e.g., China s Chief Justice Warns of Weakness in Court System, CHINA DAILY, available at
5 5 Regulation on Open Government Information 26 1 Regulation on Work-Related Injury Insurances 39 1 Road Traffic Safety Law 19, 24 2 Special Procedure Law on Maritime Litigation 16 1 State Compensation Law 42, 43, 44 3 Tort Liability Law 19, 24 2 In addition, the SPC seems to have become more interested in releasing the following kinds of cases: GCs covering areas that are of interest to foreign businesses The first GC on intellectual property (specifically patent law) was not released until 2013 Q4 (Guiding Case No. 20) and the first two GCs on anti-unfair competition law were not released until 2014 Q2 (Guiding Case Nos. 29 and 30) (see Chart 2). Will a GC covering antimonopoly law be issued soon? There are certainly good candidates. For example, Renren v. Baidu (2009), the first private lawsuit under China s Anti-Monopoly Law, and Rainbow Medical Equipment & Supplies v. Johnson & Johnson (2013), in which the Higher People s Court of Shanghai Municipality had to have three hearings, an exceptional number, in their handling of the case on appeal. What is interesting is that the two anti-unfair competition GCs Guiding Case Nos. 29 and 30 were released on June 26, 2014, three days after the release of the other three cases in the seventh batch. In all other batches, GCs were released on the same day. Does this unusual arrangement reflect that the two anti-unfair competition GCs presented unique challenges to the SPC s Adjudication Committee and that it took the SPC a few more days to resolve them? It is worth noting that Guiding Case No. 30 is the longest GC released so far (see below). Included in these two GCs are the following Main Points of the Adjudication, which are general principles summarized by the SPC to help subsequent courts understand the GCs: Guiding Case No. 29: Tianjin China Youth Travel Service v. Tianjin Guoqing International Travel Agency, A Dispute over an Unauthorized Use of Another Enterprise s Name 1. An abbreviated enterprise name that has been widely used externally by an enterprise for a long period of time, that has a certain degree of market visibility and is known to the relevant public, and that actually already functions as a trade name, may be regarded as an enterprise name and [thus] be protected [under law]. 2. Where, without authorization, [a business operator] uses another s abbreviated
6 6 enterprise name, which actually already functions as a trade name, as an Internet bid-for-ranking 4 keyword in business activities, causing the relevant public to be confused and to misidentify [the enterprise], [the unauthorized use of the abbreviated enterprise name] is an act of unfair competition. Guiding Case No. 30: LAN Jianjun and Hangzhou Suremoov Automotive Technology Company Limited v. Tianjin Xiaomuzhi Automobile Maintenance and Repair Services Co., Ltd. et al., A Trademark Infringement and Unfair Competition Dispute 1. Whether or not a business operator has [carried out] an act that exceeds [its] legal business scope and violates administrative licensing laws and regulations does not affect its exercise, in accordance with law, of [its] civil rights to stop trademark infringement and unfair competition. 2. The [coverage of] the anti-unfair competition law is not limited to business operators having direct competitive relationships [amongst themselves] nor requires them to engage in the same industry. Where the business operators have indirect competitive relationships and the party [carrying out] the act [in question] violates the provisions of the anti-unfair competition law and adversely affects the legal rights and interests of the other business operators, [the act] should also be determined to be an act of unfair competition. Foreign-related GCs The first GC with a foreign party was released in 2014 Q2 (Guiding Case No. 31). It was a ship collision damages dispute. The defendant was Miranda Rose Limited, a company registered in the United Kingdom. In 2014 Q4, the SPC released two GCs with foreign parties involved. The first, Guiding Case No. 33, was a dispute over the validity of two contracts. The plaintiff was Cargill International SA. The second, Guiding Case No. 37, was an enforcement reconsideration case on an arbitral award. The party that was subject to enforcement was Retech Aktiengesellschaft. Both Retech Aktiengesellschaft and Cargill International SA are registered in Switzerland. IV. Sources of Guiding Cases Pursuant to Article 3 of the Provisions, the SPC has established a Case Guidance Office to be in charge of the selection, examination, and submission for approval of GCs. With respect to the sources of GCs, Article 4 of the Provisions provides: Any adjudication unit of the Supreme People s Court may recommend to the Case 4 Translators note: Internet bid-for-ranking ( 竞价排名 ) is a means of bidding for a higher position on an online search results page. For more information on the topic, see
7 7 Guidance Office any ruling or judgment that is made by the Supreme People s Court or local people s courts at any level and that has taken legal effect, so long as such ruling or judgment is deemed by the said unit to meet the requirements set out in Article 2 of this set of Provisions. Any Higher People s Court or the Military Court of the People s Liberation Army may, following discussion and decision by the adjudication committee of the said court, recommend to the Case Guidance Office of the Supreme People s Court any ruling or judgment that is made by the said court or by a people s court in its jurisdiction and that has taken legal effect, so long as such ruling or judgment is deemed by the said court to meet the requirements set out in Article 2 of this set of Provisions. Any Intermediate People s Court or Basic People s Court may, following discussion and decision by the adjudication committee of the said court, report to the Higher People s court level by level and suggest that the Higher People s Court recommend to the Case Guidance Office of the Supreme People s Court any ruling or judgment that is made by the said court and that has taken legal effect, so long as such ruling or judgment is deemed by the said court to meet the requirements set out in Article 2 of this set of Provisions. Article 5 further provides: Representatives of people s congresses, members of committees of the Chinese people s political consultative conference, experts and scholars, lawyers, and other people from all circles of society who care about the adjudication and enforcement work of people s courts may recommend any ruling or judgment that has taken legal effect to the original trial people s court which rendered such ruling or judgment, so long as such ruling or judgment is deemed by the said individual to meet the requirements set out in Article 2 of this set of Provisions. Each GC is a summary prepared by the SPC to report the original ruling or judgment rendered by a court that can be from any level of China s four-tier system of regular courts or from China s special courts. The special courts have jurisdiction to handle military, railroad transportation, maritime cases, and, pursuant to the recent approval from the Standing Committee of the National People s Congress to establish intellectual property courts in Beijing, Shanghai, and Guangzhou, 5 certain intellectual property cases. Of the 44 GCs, 13 are based on rulings/judgments originally rendered by higher people s courts, eleven by intermediate people s 5 全国人大常委会关于在北京 上海 广州设立知识产权法院的决定 (Decision of the Standing Committee of the National People s Congress on the Establishment of Intellectual Property Courts in Beijing, Shanghai, and Guangzhou), promulgated and effective as of Aug. 31, 2014, available at
8 8 courts, ten by basic people s courts, nine by the SPC itself (Guiding Case Nos. 7, 20, 33-36, 42-44), and one by a maritime court (Guiding Case No. 31) (see Chart 3). Chart 3: Number of Rulings/Judgments Rendered by Different Courts Released as GCs Seven of the nine GCs whose original rulings/judgments were rendered by the SPC were released in December 2014 (i.e. the eighth and ninth batches). Three of these seven GCs were enforcement reconsideration cases. The other three cases were related to state compensation. These cases show the SPC s keen interest in providing more guidance on these two topics that have not been clearly understood. But the significant increase in GCs originating from the SPC s rulings/judgments has deeper implications. In the Fourth Five-Year Reform Plan of the People s Court ( ), the SPC has also vowed to establish a mechanism to convert the rulings and judgments rendered by the Supreme People s Court into guiding precedents ( 指导性判例 ) (emphasis added). The use of the term guiding precedents, instead of guiding cases ( 指导性案例 ), is intriguing because the highest court has carefully avoided this word precedent that could raise expectations that China might embrace the principle of stare decisis. If the term guiding cases was meant to be used in the phrase quoted above, the SPC s selection of many more of its own rulings/judgments is obviously a step to realize their stated goal. If, however, the use of the term guiding precedents was not an oversight, one must wonder whether guiding cases might evolve into guiding precedents and whether guiding precedents would have more de facto or de jure binding effect than guiding cases do. Even if the SPC issues binding decisions, this would not be a deviation from the civil law tradition that China has followed. The highest courts in Taiwan and Japan, both of which are civil law jurisdictions, have already issued binding precedents to help ensure the consistency and certainty of their legal systems. 6 6 See 黄蕙芳 (HUANG Huifang), 台湾刑事案例制度与中华人民共和国指导性案例制度的发展方向 (Taiwan s Criminal Case System and the Development Direction of the Guiding Cases System in the People s Republic of China), 中国指导性案例项目 (CHINA GUIDING CASES PROJECT), Aug. 25, 2014, available at
9 9 Among those rulings/judgments that were not originally rendered by the SPC itself, the SPC has chosen relatively more from Shanghai (8 GCs) and Jiangsu (6 GCs) for release as GCs. Other cases are most predominantly from Zhejiang (5 GCs), Sichuan (3 GCs), Tianjin (3 GCs), and Beijing (3 GCs) (see Chart 4). Chart 4: Number of Rulings/Judgments Rendered by the Courts in the Following Provinces/Provincial-Level Municipalities Released as GCs Does this distribution show that courts in these places, especially Shanghai and Jiangsu, display a higher level of competence and thus their rulings/judgments are more likely to be selected? Chinese courts located in more developed areas can generally offer better recruitment packages to attract the best talent in the country and can provide current judges with better training. Five of the above-mentioned places have high GDP per capita in China (see Chart 5). Though economically lagging behind these five places, Sichuan is a prosperous province in Western China. The SPC may have purposefully chosen some cases from Sichuan to diversify its sources of GCs. Toshiaki Iimura, Ryu Takabayashi, and Christoph Rademacher, Binding Nature of Court Decisions in Japan s Civil Law System, CHINA GUIDING CASES PROJECT, Feb 4, 2015, available at (forthcoming).
10 10 Chart 5: GDP per capita and Number of GCs Provinces / Provincial-Level Municipalities GDP per capita (yuan)* Total # of GCs Tianjin 101,699 3 Beijing 94,253 3 Shanghai 90,765 8 Jiangsu 74,699 6 Zhejiang 68,594 5 Inner Mongolia 67,470 1 Liaoning 61,745 0 Guangdong 58,678 1 Fujian 58,058 0 Shandong 56,789 1 Jilin 47,207 0 Chongqing 42,978 0 Shaanxi 42,752 0 Hubei 42,686 1 Ningxia 40,185 0 Hebei 38,832 0 Heilongjiang 38,602 1 Xinjiang 38,110 0 Hunan 36,906 0 Qinghai 36,667 0 Hainan 35,468 0 Shanxi 34,899 0 Henan 34,187 1 Sichuan 32,517 3 Jiangxi 31,836 0 Anhui 31,795 1 Guangxi 30,218 0 Tibet 26,039 0 Yunnan 25,158 0 Gansu 24,438 0 Guizhou 22,982 0 * Source:
11 11 V. Facts and Reasons in Guiding Cases The SPC has consistently used the format of dividing each GC into six parts: (1) Keywords (to list keywords that indicate the nature of the dispute etc.); (2) Main Points of the Adjudication (to include general principles prepared by the SPC that it expects other courts to refer to); (3) Related Legal Rule(s) (to list the legal rule(s) considered in the GC); (4) Basic Facts of the Case (to summarize the most important facts of the GC); (5) Results of the Adjudication (to report the outcomes of legal proceedings); and (6) Reasons for the Adjudication (to summarize the reasons for the final ruling/judgment). Chart 6: Number of Chinese Characters per GC
12 12 Chart 7: Relative Length of Each of the Six Parts of GCs On average, a GC has slightly more than 2,000 Chinese characters (see Chart 6), 40% of which are found in the Basic Facts of the Case part, with another 40% in the Reasons for the Adjudication part (see Chart 7). The SPC s efforts to provide more facts and reasons should be praised. Detailed facts allow judges to better distinguish cases. More reasons provided in GCs will encourage other courts to follow the SPC s practice. One of the areas in China s court system that most needs improvement is the explanations for rulings/judgments: courts have generally placed less emphasis on explaining the reasons for their decisions. While these improvements are noted, a recent decrease in the percentage of characters used in the Reasons part of GCs is worthy of attention. It is hoped that the SPC will reverse this trend and provide more reasons in future GCs. Guiding Case No. 30, a trademark infringement and unfair competition dispute, is the longest GC. The original judgment was rendered by the Higher People s Court of Tianjin Municipality. The GC has 6,888 Chinese characters. This is one of the first two unfair competition GCs and is the first GC on trademark infringement. In this case, the Reasons part accounts for 53% of the length of the entire piece, and the Basic Facts part accounts for 33%. Apparently, the significance of the two topics demands a more detailed report of the case and, in particular, the Reasons for the Adjudication. Guiding Case No. 33, a dispute over the validity of two contracts entered into with a foreign company, is the second longest GC and is one of the three foreign-related GCs that have been released so far. The GC has 4,349 Chinese characters and the original judgment was rendered by the SPC. The Reasons and the Basic Facts parts of this case account for 44% and 42% of the length of the entire piece, respectively. The involvement of a foreign party in a dispute over a frequently contested topic may have driven the SPC to provide more details.
13 13 Of all the GCs, Guiding Case Nos. 20, 23, and 37 provide the most detailed reasons. The Reasons for the Adjudication parts in these three GCs respectively account for approximately 64%, 75%, and 64% of the total number of characters found in the corresponding GCs. These three GCs are, respectively, China s first GC on patent law, food safety law, and enforcement reconsideration of arbitral awards. Is the provision of more detailed reasons in these particular cases related to China s focus on improving the patent system to promote the implementation of its innovation policy, on the population s concern about food safety, or on all investors interest in seeing that their arbitral awards are enforced effectively? VI. Time Elapsed Chart 8: Time Elapsed Between Original Rulings/Judgments and GCs Most cases selected for release as GCs are about two years old, but recently the SPC defied this norm in its selection of two cases that are about 16 years old (Guiding Case No. 38) and 11 years old (Guiding Case No. 41) (see Chart 8). Guiding Case No. 38 is a case of a refusal to issue a diploma and a degree certificate, while Guiding Case No. 41 concerns the revocation of the rights to use state-owned land. The two GCs do not seem to have anything in common, except that each of them covers a provision of the Administrative Litigation Law of the People s Republic of China that has been amended and will come into effect in May Given that this is the first amendment to the law since it was adopted in 1989, it is expected that numerous training programs and conferences will be held to prepare judges and officials for the implementation of the amended law. It is, therefore, timely for the SPC to release more GCs on administrative litigation, allowing interested parties to draw on these sources to illustrate the 7 全国人民代表大会常务委员会关于修改 中华人民共和国行政诉讼法 的决定 (Decision of the Standing Committee of the National People s Congress Concerning the Revision of the Administrative Litigation Law of the People s Republic of China), adopted on Nov. 1, 2014 and effective as of May 1, 2015, available at
14 14 application of the Administrative Litigation Law. The SPC defied the norm again when it chose to release a case that is only seven months old (Guiding Case No. 24). Was this case chosen because its Main Points of the Adjudication are of special importance (see below)? Guiding Case No. 24: RONG Baoying v. WANG Yang and Alltrust Insurance Co., Ltd. Jiangyin Branch, A Motor Vehicle Traffic Accident Liability Dispute [If] a victim of a traffic accident is not at fault, the effect of his [pre-existing] physical condition on the ramifications of the harm [he suffered] is not a type of legal circumstance that can mitigate a tortfeasor s liability. The answer is affirmative. Research conducted by Stanford Law School s China Guiding Cases Project ( CGCP ) team shows that Guiding Case No. 24 has been most cited in subsequent cases, compared with other GCs. As of the publication of this piece, nearly 30 subsequent cases have referred to this case. The release of this case as a GC shows the SPC s understanding of the need to provide guidance in this area. For detailed information about the development of Guiding Case No. 24 and its subsequent cases, please refer to the CGCP s Guiding Cases in Perspective TM, the next issue of which will be released in February 2015.
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