Resolution of Economic Disputes: litigation
(I) First instance procedure
The ordinary procedure of first instance is the most fundamental procedure in the trial of economic cases, and is the most complete and widely applicable among all procedures. A case tried applying this procedure should be closed within 6 months.
1. Filing and acceptance
Filing a case refers to the act of an individual, legal entity, or other organization filing a lawsuit with a people's court to sustain their claims for infringement upon, or settle a dispute over, their economic rights and interests. In order to be accepted, a case filed must meet the following conditions: the plaintiff is an individual, a legal entity, or other organization that has a direct interest in the case, there is a specific defendant, the complaint contains a specific claim based on facts and grounds, and the case involves a civil dispute and falls under the jurisdiction of the people's court.
Acceptance is a litigation act of a people's court reviewing a case filed and accepting it for hearing if it deems that the legal requirements have been satisfied. The plaintiff shall submit a complaint to the people's court and provide its copies based on the number of defendants when filing a case. Upon receipt of a complaint, the people's court shall review the complaint and decide to admit it within 7 days if it deems that the conditions for filing a case are satisfied, and notify the plaintiff of the acceptance, or make an order to reject it within 7 days if it deems that the conditions for filing a case are not satisfied, and notify the plaintiff of the rejection. Where the plaintiff challenges the order of rejection, an appeal may be filed.
2. Preparation before trial
This is a necessary stage before the trial in the ordinary procedure of first instance. The people's court shall send a copy of the complaint to the defendant within 5 days from the date of admission of the case, a and the defendant shall submit a defense within 15 days from the date of receipt. Within 5 days from the date of receipt of the defendant's defense, the people's court shall send a copy of the defense to the plaintiff. The defendant's failure to submit a defense shall be without prejudice to the admission of the case. The people's court shall inform the parties of their relevant rights and obligations in the notice of acceptance and the notice of response if it decides to accept the case. After the composition of the collegial panel is determined, the parties shall be notified within 3 days. Judges must carefully review the case files and collect necessary evidence through investigations, and the people's court may entrust a people's court in other jurisdiction to conduct investigations where necessary. If a party whose attendance is necessary does not attend the court trial, the people's court shall notify such party to attend.
3. Court trial
Court trial refers to the litigation activities of hearing cases in court with the participation of judges, parties, and other participants. It is the central stage of the trial procedure of an economic case, divided into the following stages:
(1) Preparation before trial. For any case that has been decided to be heard in court, the parties and other participants must be notified 3 days in advance of the court trial. Where the plaintiff, having been served with a summons, fails to appear in court absent good cause shown, or leaves the courtroom without permission, the complaint shall be deemed withdrawn. Where the defendant files a counterclaim, a decree may be mad in absentia. Where the defendant, having been served with a summons, fails to appear in court absent good cause shown, or leaves the courtroom without permission, a decree may be mad in absentia. Before a court session is called to order, the court clerk shall ascertain whether the parties and other participants in the proceedings are present and announce the rules of order of the court.
(2) Start of a court session. At the beginning of a court session, the presiding judge shall check the parties present, announce the cause of action and the names of the judges and clerks, inform the parties of their relevant litigation rights and obligations, and inquire whether the parties wish to apply for recusal.
(3) Court investigation and cross-examination. Court investigation shall be conducted in the following order: ① Statements of the parties; ② Informing the witnesses of their rights and obligations, giving testimony by the witnesses, and reading of the written statements of absentee witnesses; ③ Presenting documentary evidence, real evidence, and audio-visual materials; ④ Reading expert conclusions; and ⑤ Reading records of inspection. The parties may present new evidence in court and, with the permission of the court, question witnesses, appraisers, and inspectors. Where a party requests a new investigation, appraisal, or inspection, the people's court shall decide whether to grant approval. The evidence provided by both parties to the court shall be cross-examined in court.
(4) Court debate. Court debate should be conducted based on court investigation and cross-examination. Court debate shall be conducted in the following order: ① Oral statements by the plaintiffs and their agents ad litem; ② Oral statement by the defendants and their agents ad litem; ③ Oral statements or defenses by third parties and their agents ad litem; ④ Mutual defense. After the court debate is concluded, the presiding judge shall solicit the final opinions of all parties in the order of the plaintiffs, defendants, and third parties.
(5) Judgment. Mediation may be conducted before the judgment if possible, and mediation should run through the entire court proceedings and can be conducted in court.
Practising lawyers
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Robert Zhang
An international lawyer registered in Shanghai, China. Master's degreePublish…
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Steve Li
An international lawyer registered in Shanghai, China. Master's degreePublish…
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