McDermott Will & Emery has a strategic alliance with MWE China Law Offices, a separate law firm based in Shanghai. This China Law Alert was authored by MWE China Law Offices lawyers Henry (Litong) Chen and Steven (Sicheng) Fei.The Supreme People’s Court of China is currently trying to clarify the civil procedures that must occur during lawsuits brought forth in accordance with the Anti-Monopoly Law of China.
The Supreme People’s Court of China is setting out to draft its judicial interpretations of civil procedures for civil lawsuits launched in accordance with the Anti-Monopoly Law of China, according to the statement of Mr. He Zhongling, the presiding judge of the Intellectual Property and Competition Tribunal of the Supreme People’s Court, on 29 August, 2010.
The Anti-Monopoly Law has broad provisions regarding civil lawsuits brought under it. Article 50 of the law stipulates “a business operator who implements a monopolistic conduct, and causes loss to others shall bear civil liability according to law.” Right before coming into effect on 1 August 2008, the Supreme People’s Court issued the Notice on the Study and Implementation of the Anti-Monopoly Law of China (the Notice). The Notice called for courts to make their best efforts to adjudicate anti-monopoly lawsuits. However, the Notice did not provide better guidance than the Anti-Monopoly Law about how to docket and adjudicate anti-monopoly civil lawsuits, it just mentioned that a court should docket an Anti-Monopoly Law of China lawsuit as long as the case met the four standards of Article 108 of the Civil Procedural Law, which are: the concerned claimant must have direct interest in the case filed with the competent court. The case shall carry with it a specific claim and a clear cause of action. In addition, the claim must be supported by facts. According to Mr. He, these provisions are not specific enough for lawsuits launched in accordance with the Anti-Monopoly Law, and the judicial interpretations will address this vagueness by answering the following questions:
- What subject matters are sue-able? The Supreme People’s Court will decide whether or not a concentrating party would be sue-able for the wrongdoing incurred in the concerned concentration.
- What courts are hierarchically and geographically jurisdictional? Generally speaking, the level of a court hearing a dispute depends on the value of the dispute. The bigger the value of a case, the higher hierarchy the court hearing the case will be in. Geographically, a plaintiff will have to bring a lawsuit with the court where the concerned defendant lives. However, these general jurisdictional principles are not applicable to cases related with patent disputes. The cases on patent disputes of a certain area are usually rounded to be heard by a specific intermediate court of the area. That said, basic district courts are usually not competent to hear patent disputes. It’s likely that some Anti-Monopoly Law disputes, if not all of them, will follow such practice and be heard in the designated patent tribunals of the concerned intermediate court.
- Who qualifies as a plaintiff? The Supreme People’s Court will have to decide whether or not a consumer or consumer association can be a plaintiff of an Anti-Monopoly Law lawsuit. If business operators can be plaintiffs for Anti-Monopoly Law lawsuits, what are the appropriate scopes and conditions to sufficiently narrow them down? According to Mr. He, the Supreme People’s Court is considering whether or not class action or public interest action would be allowed to resolve the disputes under the Anti-Monopoly Law .
In short, the Supreme People’s Court is hammering out the civil procedures for lawsuits initiated under the Anti-Monopoly Law of China. It is foreseeable these lawsuits will increase after the court paves the road for plaintiffs of anti-monopoly civil lawsuits. Undoubtedly, multi-national companies would be easier to fall prey on the lawsuits under the Anti-Monopoly Law than small- and medium-sized companies and it is recommended that they improve their compliance programmes and risk-management plans for possible lawsuits.