On 25 December 2019, the Supreme People's Court issued updates in relation to The Provisions of the Supreme People's Court on Evidence in Civil Procedures (Provisions).
This is the most substantive update since the Provisions were first promulgated in 2001 (the Old Provisions) and it is noteworthy that the amendments are quite substantive – 47 provisions were added, 41 amended and only 11 provisions remained untouched.
We set out below a snapshot of the important updates on the Provisions.
In disputes involving foreign parties, it is common that some documents originate from / are executed outside of China. Under Article 11 of the Old Provisions, such documents will need to be notarised before a Notary Public of the country where they originated. Following this, the notarised documents will then need to go through a legalisation process by the Chinese Embassy / Consulate General of that country. In the event that there is a bilateral treaty between China and that country in relation to such matters, the requirements in such treaty will need to be adhered to accordingly. Such processes are in place to ensure the authenticity of such documents.
Based on our experience, it is not unusual for foreign clients to encounter practical and on-the-ground difficulties in having documents originating from outside of China notarised and legalised. To name but a few, substantial time and costs are typically spent during these processes and such costs are not recoverable from the adverse party even if a favourable judgment was obtained following Court litigation in China.
In this regard, the Provisions have been updated insofar as the requirement for notarisation and legalisation is now simplified to that of notarisation only and if there is a bilateral treaty in place, the requirements therein shall apply. This amendment will no doubt expedite the process of ensuring the authenticity of documents originating from outside of China and lessen quite substantially the relevant party's burden in respect of time and costs to be incurred.
Having said that, it is important that there are some documents (assuming they originate from outside of China) which still need to undergo both procedures of notarisation and legalisation – these are documents dealing with the identity of the party involved, for example, the Certificate of Incorporation, Certificate of Identity of Legal Representative and Power of Attorney.
In practice, we will, at times, encounter the scenario where some favourable documents / evidence to a particular party are in the possession of the adverse party. Under Article 112 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, in the event that documentary evidence is in the possession of the adverse party, the party who bears the burden of proof may, before the deadline to adduce evidence, apply to the Court for an order that the adverse party disclose such documentary evidence accordingly... Should the adverse party refuse to do so, the Court may determine that the contents of the documentary evidence alleged by the requesting party are true.
However, it is at the Court's sole discretion whether (or not) to approve the requesting party's application. From our experience, rarely would the Court reach a decision against the party who is in the possession of the evidence on the basis of the above provision. The rules for disclosure of documentary evidence have been amended in the updated Provisions as follows:
i. If a party refuses to submit some evidence in its possession, which is alleged by the other party (who has the burden of proof to show that such evidence is against that party taking control of the evidence), the Court may support such allegation accordingly. In other words, if the party in possession of such evidence refuses to disclose the same, it will be deemed as the party have admitted to the allegation in relation to the fact to be ascertained made by the other party;
ii. Rules on documentary evidence have been expanded to now cover electronic data – for example, website materials, blog, weibo, sms, email, instant message, group chat, user's registration details, identity verification details, e-commerce transaction details; log in details; electronic file, picture, voice and recording etc.; and
iii. In addition, the Court can no longer ascertain the facts on the mere basis of a party's statement (in itself).
In litigation practice, more and more cases now revolve around technical issues instead of pure legal arguments, particularly if the disputes arise from intellectual property, medical treatment, construction and so on. It is common for courts to retain experts with professional knowledge in that particular field to conduct appraisals and issue expert opinions, which will in turn be relied upon by the Courts for purposes of arriving at a decision. The Provisions have been amended in this aspect as follows:
i. The expert has to sign a letter of commitment when he / she is engaged to perform the appraisal or issue the expert opinion. The letter of commitment includes the commitment to perform objective, fair and honest appraisals. At the same time, such letter sets out the legal consequences for failure to comply with such commitments;
ii. The expert has to attend the hearing if any party objects to the expert opinion issued or if the court deems it necessary;
iii. A party's application for a re-evaluation shall be accepted on the following occasions:
a. The expert is unqualified;
b. The appraisal or expert opinion was conducted in an illegal manner;
c. The expert opinion is devoid of any basis;
d. Other reasons which render the expert opinion not usable as valid evidence.
The Provisions will come into force on 1 May 2020. We will be keeping a close eye on the application of the Provisions in practice and shall provide updates from time to time.