The Supreme People's court for retrial ruling to clarify the common infringement litigation and arbitration of disputes

Author:Liu Haitao Qiu Yue Kindu law firmsDispute resolutionGroupShanghaiOffice

Arbitration is a kind of non litigation dispute resolution, are increasingly being commercial contract the parties choose to contract dispute resolution. Arbitration a party may take the other party arbitration clause and non parties to an arbitration clause as a joint defendant to joint tort sue. In this case, the court of common tort disputes with the question of jurisdiction in the judicial practice has no definite answer, the Supreme People's Court of this problem is also wavering attitude. The Supreme People's court has recently made by the judicial committee for discussion and the adjudication of the problem to give clear reply, demonstration, with reference to the judicial practice in the future.

A previous case, review

In the process of fulfilling the contract fraud, a party or other breach may also constitute infringement, the other party may sue to the court directly to the infringement on the grounds, not according to the arbitration clause in the contract arbitration. Jurisdiction in disputes of this type, the Supreme People's court has given a clear answer in "the second national foreign-related commercial and maritime trial work conference summary", the parties to the contract signed between the international commercial arbitration agreement agreed in the contract or in connection with the contract shall be settled through arbitration all disputes, the parties concerned in signing and performing contract disputes in the process to the people's court in infringement, the people's court shall not have jurisdiction.

But the regulation does not have if the plaintiff is a party in the signing and performing contract disputes in the process to the people's court in the relationship between parties and non parties to the contract the common violations, whether a people's court has jurisdiction to be clear. Because of the concurrence of tort liability and liability for breach of contract often happen, the parties to the joint tort case to challenge the jurisdiction of the case is not in the minority. The people's courts often have two opposite positions in handling this kind of objection to the jurisdiction of the case. A court of arbitration clause is the position between the parties to the dispute have no jurisdiction, but between the plaintiff and the defendant disputed by other jurisdiction of the court. Another position is not under the jurisdiction of arbitration the parties due to non arbitration agreement, namely common infringement behavior person, therefore the arbitration can not be completely, properly solve disputes. The practice of people's court in the trial practice has not reached a unified, the Supreme People's court also has the question made different cognizance.

In 1998 Jiangsu Province Light Industry and textile materials Group Corporation (hereinafter referred to as the "textile company") v. (Hongkong) Yu billion Group Company Limited (hereinafter referred to as "Yu billion company"), (Canada) Prince Development Ltd (hereinafter referred to as the "Prince") infringement damage compensation disputes of appeals, the Supreme People's court has taken the first kind of standpoint, that even if the case involved third people, third people in the arbitration tribunal shall not the responsibility of the case, the plaintiff may take third as the respondent to the people's court shall bring a lawsuit, the legitimate rights of the parties can still be maintained. In this case, the textile company with Yu billion company, Prince ordinary old motor company signed a sales contract, the contract shall contain an arbitration clause. Textile company to Yu billion company, Prince Edward, use contract fraud to sue the loss. The Supreme People's court finds that the parties expressly agreed in the contract dispute settlement by arbitration, the contract without the approval of relevant authority to confirm the invalid situation, the parties shall be bound by the terms of the contract. In the case of all parties to an arbitration clause in a contract constraint, the disputes shall be settled by arbitration, the people's court has no jurisdiction.

In May 10, 2005 concluded American WP International Development Company (hereinafter referred to as "WP") v. Jilin City Song Beautiful acetic acid Co. Ltd. (hereinafter referred to as "Song Mei company"), the Jilin Formosan Union Chemical Corporation (hereinafter referred to as "the company") damages for infringement disputes jurisdiction objection appeal (hereinafter referred to as the "WP company") in the Supreme People's court, the second position, between the arbitration clause can not bind directly to three parties necessary joint tort disputes rejected the appellant Corporation jurisdiction objection. In this case, WP company signed a "cooperative contract" and Jilin chemical company, agreed to jointly funded the establishment of Sino foreign cooperative enterprise song company. WP said Song beauty company in the production process and the companies collude with each other, to raise the price of raw materials, for other enterprises to take unreasonable costs, virtual loss to fact, depreciation charges, cheat WP. WP company won Corporation and song company as co defendants sued to the court, asked two companies jointly assume the tort liability for damages. The Supreme People's court in ruling that tort litigation WP filed of Jilin Chemical Industrial Company and song beauty of the company is the common infringement necessary, between the arbitration clause cannot be bound between WP company and the company in the case of the three parties in necessary joint tort litigation, the people's court has jurisdiction over the case.

Two, the Supreme People's court retrial ruling

(a) the case profiles

In this case, China a Shipping Company Limited (hereinafter referred to as "the shipyard") and a foreign shipping company (hereinafter referred to as the "owner") signed the "ship", by the shipyard ship owner. "Any ship built under the contract or in connection with this contract dispute" stipulated in the contract, the parties may apply for arbitration in the United Kingdom, the arbitration shall be conducted in london. The shipyard and a foreign ship equipment supply company (hereinafter referred to as "marine equipment company") signed the "contract", the ship equipment company to supply the shipyard ship equipment. "The contract" agreed all disputes in connection with this contract shall be made in France Paris in accordance with the rules of conciliation and arbitration of the International Chamber of commerce. The shipyard will ship after the installation of equipment, marine equipment company in Chinese Associate Company according to the ship equipment company instructions (hereinafter referred to as "Service Corporation") provides debugging.

After the ship owner, shipyard to equipment company, Service Corporation as a joint defendant to commercial fraud, filed related to marine equipment tort disputes. Shipowners, ship equipment company, Service Corporation, to the court of first instance to challenge the jurisdiction, that between the owner and the shipyard, the ship equipment company and shipyard were entered into an effective arbitration clause, the court for "produced by ship construction contract" and "contract" and all disputes relating to, including infringement disputes, does not have jurisdiction.

(two) the court of first instance and the second instance court cognizance

The court held that the arbitration clause between the owner and the shipyard, ship equipment company and shipyard were not enough to cover the dispute, the arbitration clause shall not be binding. The dispute of infringement, infringement in the court of first instance jurisdiction within, so the first instance court has jurisdiction over the case.

In view of the trial court that the tort is a tort results in the court of first instance jurisdiction, the court of first instance jurisdiction of the case. As for the defendant in the trial of first instance of the dispute should be based on the relevant arbitration agreement, arbitration claims between the parties, because of its infringement disputes not binding, so the appellant's appeal, does not support.

(three) the Supreme People's court adjudication

Due to the ship owner, equipment company, Service Corporation may initiate retrial instance ruling to the Supreme People's court, the Supreme People's court after examination decision questioned the case. Recently, the Supreme People's Court of second instance court retrial ruling, upheld the civil ruling.

The Supreme People's court that the shipyard to provide preliminary evidence that, shipowners and equipment company malicious collusion to sell second-hand ship equipment, Service Corporation knowingly ship equipment is defective and should be installed, the three party uses the "contract" illegal infringement of the legitimate interests of the shipyard, joint tort. The shipyard to commercial fraud to sue, requested the three defendants bear joint liability for tort. According to the above proposition and shipyard litigation request, can be identified, the shipyard filed by the ship owner, equipment company, Service Corporation is a joint action co defendant is necessary. Because the ship equipment company and shipyard "between the supply contract" can not restrain the owner, between the owner and the shipyard "shipbuilding contract" cannot be bound ship equipment company, and as a joint defendant of Service Corporation is not "contract" and "building contract of the ship" of the parties, the two arbitration agreement is not binding on the. Accordingly, all parties involved in the two arbitration agreement shall not be binding in the case of joint tort disputes. According to the judicial committee of the Supreme People's court ruled that the trial court debate, has jurisdiction over the case.

The effect of three, ruling

The Supreme People's court ruling reaffirmed its take WP company in the case of position, namely the arbitration agreement between the parties are not binding on the common infringement dispute parties and non parties to the arbitration agreement, the court may exercise jurisdiction over the dispute. Position the Supreme People's court retrial verdict show, embodies the maximum protection for the victim's interests, have important reference value for future similar jurisdictional disputes the right to dissent. Decided by the judicial committee for discussion, more shows that the Supreme Court will emphasize the jurisdiction of the court in this case right. On the other hand, the use of the ruling parties may wish to escape from the side of the arbitration agreement. The parties can bring an action in tort to circumvent the arbitration clause. As the court in deciding whether to accept the case, and the legitimacy, authenticity, relevance is not evidence of making the examination, the parties to make court's reason, only need to provide surface evidence of the existence of joint act of tort, the court can on between the plaintiff and defendant's infringement disputes all the exercise of jurisdiction, the existence of jurisdiction clauses both parties.