CHINA: An Introduction to Dispute Resolution: Litigation (PRC Firms)

Overview of Chinese Dispute Resolution Market in 2023

2023年中国争议解决市场概述 

In 2023, the turbulent international environment, together with various uncertainties in the domestic and foreign markets, constituted a hotbed of new controversy at the end of the post-pandemic era in China. In this era of frequent disputes, China's dispute resolution market requires lawyers to provide their services from a higher dimension. A broad vision and a more active strategy will be the most important prerequisites for the sustainable development of Chinese dispute resolution lawyers.

2023年，随着后疫情时代的逐渐结束，动荡的国际环境和国内外市场的种种不确定性构成了新的争议的温床。在这个争议多发的时代，中国的争议解决市场需要律师从更高的维度规划自身的工作，开阔的视野和更为积极的策略将成为中国争议解决律师在当下持续发展的首要前提。

I. Continuous Support for Cross-Border Dispute Resolution

跨境争议解决业务持续得到支持 

The uncertainty of the geopolitical and international environment, to some extent, has contributed to the emergence of cross-border disputes at the current stage. Currently, due to certain setbacks for globalisation, the antagonism between certain countries or regions and subsequent policies of economic sanctions, all related entities are exposed to the unpredictable risk of cross-border disputes because of their roles in international investment and supply chains.

我们理解，地缘政治和国际环境的不确定性一定程度上催生了跨境争议的发生几率。在当下，由于全球化一定程度上的受挫，以及部分国家或地区之间的对立，相关的经济制裁政策可能会导致任何一个主体皆有可能因其在国际投资或供应链的某个角色而卷入跨境争议。

China's cross-border dispute resolution mechanism has been improving. The latest Amendment to the Civil Procedure Law of the People's Republic of China will come into force on 1st January 2024. As the first revision to the chapter on foreign-related trials since the law was promulgated in 1991, the amendment highlights the updating and sorting out of relevant procedural issues, including some preliminary matters (such as parallel proceedings) which need to be addressed at the first instance during cross-border disputes. Meanwhile, on 22nd November 2023, the Standing Committee of the Shanghai Municipal People's Congress passed the Regulations on Promoting the Development of the Shanghai International Commercial Arbitration Centre, which comprehensively support the establishment of the Asia Pacific International Arbitration Centre in Shanghai. It is anticipated that more cross-border disputes will be arbitrated in Shanghai in the future.

而中国的跨境争议解决机制目前仍然在不断得到完善，比如最新一版的《中华人民共和国民事诉讼法》修正案将于2024年1月1日颁布施行。作为自1991年该法出台以来首次就涉外审判章节所进行的修订，突出了对于涉外争议解决程序性问题进行了更新及梳理，涉及 “平行管辖” 等跨境争议解决业务开展所必须厘清的 “前置问题” 。同时，2023年11月22日，上海市人民代表大会常务委员通过《上海市推进国际商事仲裁中心建设条例》，全方位支持上海成立亚太国际仲裁中心，相信未来会有越来越多的的境外纠纷选择上海仲裁。

II. Financial Trials and Financial Supervision Continue to be Connected and Unified

金融审判与金融监管继续衔接与统一 

On 10th January 2023, the PRC National Court Finance Adjudication Work Conference was held, which makes it clear that PRC financial regulatory policies shall be given more emphasis and followed in judicial practice. At the same time, as regulators intensify financial supervision, it is foreseeable that judicial practice will pay more attention to the binding force of financial order and regulatory norms in individual cases. Compliance of financial transactions with domestic financial rules and regulations will be an important factor for judges to consider in their cases. We have been particularly impressed by this trend in similar cases in the past year. The compliance review of transactions has even been extended to the compliance of foreign investment transactions under local laws. In HKEX related investment disputes that we represented in China, the compliance of transactions under local laws became one of the bases for the arbitration tribunal to support the position of the client. How to find a balance between commercial order and financial security will become a new test for local judges and lawyers in their cases.

2023年1月10日，全国法院金融审判工作会议召开，金融监管政策在案件审理过程中的位阶 “升格” 属正在进行时。在监管层加大金融监管力度的同时，司法实践中可预见到金融秩序和监管规范的约束力将在裁判中得到强化，金融交易是否合规将成为裁判者在有关案件中的重要考虑因素，这一趋势笔者在过去一年的类似案件中感受尤为深刻，对交易合规性的审查甚至已扩展至涉境外投资交易在当地法律下的合规性。在内地涉及港交所的投资纠纷中，交易是否符合当地法律成为仲裁庭支持委托人立场的依据之一。如何在商业秩序和金融安全中寻找平衡点将成为考验裁判者和双方代理律师的新课题。

III. Dispute Risks in the Investment and Financing Fields Continue to be Exposed

投融资领域争议风险持续暴露 

Over the past year, our experience suggests the number of disputes related to investment and financing has continued to grow in terms of the number, claim amount and intensity of disputes. While both domestic and foreign enterprises were accustomed to cross-border financing and the establishment of cross-border corporate governance structures, they were not well prepared for the risks of economic downturns. As the domestic backflow of US dollar funds, changes in the international environment and other factors continuously challenge the capital chains of enterprises, the risk control mechanism embedded in the original transaction frameworks encounter difficulties, which results in risk exposure and disputes.

过去一年，笔者所经历的投融资领域争议在数量、金额和争议强度上依然保持持续增长的态势。过往，境内外企业虽已惯于跨境融资和搭建跨境企业治理结构，但是并没有很好的为经济下行时代做风险准备。随着美元资金本土回流、国际环境变化等因素不断考验企业的资金链，埋藏在原交易框架中的风控机制遭遇考验，导致风险暴露，纠纷产生。

Facts have proved that, in the past period of time, a considerable proportion of the enterprises participating in domestic and overseas investment and financing transactions have ultimately given up control of risk due to short-term interests without necessarily carefully considering the agreement framework and mechanism during these transactions. Therefore, in the face of greater pressure from the external environment, the links in the transaction structure which are not compatible with the macroeconomics are fully exposed. It also becomes weak points that affect the interests of enterprises. At this time, for legal professionals, the key to the success of this kind of dispute is to abandon the traditional approach, identify the risk in advance, give early warning and intervene decisively and take more active measures.

事实证明，在过去的一段时期里，参与境内外投融资交易的企业，有相当比例对于这些交易过程中的协议框架和机制未必都经过非常审慎的考虑，最终出于短期利益导向放弃了风控的把关。因此在面临外部环境的较大压力时，交易结构中与现实脱节的环节充分暴露，成为影响企业利益的薄弱点。此时，对于法律专业人士来说，能否抛弃因循守成的固有路径，提前识别风险、给出预警和果断介入，采取更为积极的措施，都将成为雇主在此类纠纷中成功脱身的核心关键。

IV. Conclusion 

尾声 

There were considerable uncertainties within the Chinese dispute resolution market in 2023, such as a turbulent external environment, fierce competition and clients' decreasing ability to pay. But for outstanding dispute resolution lawyers, the current market is at the best stage for them to demonstrate their talents. The value of good expertise will be highlighted when turbulent circumstances prevent low-value solutions from succeeding by the skin of their teeth. The market makes demands of its participants in its own way.

2023年中国争议解决市场，固然存在着外部环境动荡、竞争趋于激烈、客户支付能力下降等不确定性因素，但对优秀的争议解决律师来说，也是发挥自身长材的最佳舞台。在动荡的环境阻却了低价值的方案侥幸获得成功的可能后，优秀的专业能力的价值将得到彰显，当动荡的环境阻碍低价值解决方案取得成功时，良好专业知识的价值就会凸显出来。市场用自己的方式对参与者提出了他的要求。