China: Country’s Second Specialized Financial Court to Be Established in Beijing

(Feb. 10, 2021) On January 22, 2021, China’s National People’s Congress Standing Committee (NPCSC) issued a decision approving the establishment of a new specialized financial court, the Beijing Financial Court. The establishment of China’s first financial court, the Shanghai Financial Court, was approved by the NPCSC on April 27, 2018. The Supreme People’s Court (SPC, China’s highest court) subsequently issued rules to define the jurisdiction of the Shanghai Financial Court in August 2018.

Similar to the Shanghai Financial Court, the newly created Beijing Financial Court will have the status of an intermediate court. The court will handle civil, commercial, and administrative financial cases that were previously under the jurisdiction of the intermediate courts in Beijing. (NPCSC Decision art. 2.) According to the explanation of the proposal to establish the court made by the SPC president to the NPCSC, the court will have jurisdiction over cases involving securities, futures, trusts, insurance, negotiable instruments, letters of credit, financial loan contracts, etc., as well as new types of financial disputes, such as those involving independent guarantees, factoring, and privately offered funds.

The new court will also hear appeals against the judgments of those financial cases issued by the primary people’s courts in Beijing. Appeals against its own judgments will be heard by the Beijing Higher People’s Court. The Beijing Financial Court will also handle other financial cases as determined by the SPC. (NPCSC Decision art. 2.)

According to the SPC president, in 2019, Beijing’s intermediate courts handled 1,269 first-instance and 5,519 second-instance financial cases. Courts in Beijing handled an additional 209 administrative cases in 2019, in which a financial regulator such as the People’s Bank of China, China Securities Regulator Commission, China Banking and Insurance Regulatory Commission, and State Administration of Foreign Exchange was the single defendant.

The Chinese court system comprises the SPC, local people’s courts, and specialized people’s courts. There are three levels of local people’s courts: the primary people’s courts, the intermediate people’s courts, and the higher people’s courts. Specialized people’s courts include, but are not limited to military courts, maritime courts, intellectual property courts, and financial courts. The courts’ organic law requires that the setup, structure, powers, and appointment and removal of the judges of specialized courts be stipulated by the NPCSC. (Organic Law of the People’s Courts arts. 12, 13, 15.)

Three specialized intellectual property courts were established in 2014 in Beijing, Shanghai, and Guangzhou. (NPCSC, Decision on the Establishment of Intellectual Property Courts in Beijing Municipality, Shanghai Municipality and Guangzhou City (Aug. 31, 2014).) On December 26, 2020, the NPCSC approved the establishment of a new specialized IP court in Hainan, the Hainan Free Trade Port Intellectual Property Court. (NPCSC, Decision on the Establishment of the Hainan Free Trade Port Intellectual Property Court (Dec. 26, 2020).)

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