How Do Chinese Courts View the Preferential Application of International Treaties?

"The preferential application of international treaties" means that China, in accordance with the principle of "pacta sunt servanda", implements the international treaties and agreements it has concluded or acceded to and fulfills its international obligations. When there is a conflict between the specific provisions of domestic law and those of an international treaty, the international treaty shall be applied prior to domestic law, and international obligations shall be fulfilled first. However, this preferential application is subject to two preconditions. First, the provisions explicitly declared as reservations in the treaties and agreements concluded or acceded to by China are excluded. Second, the implementation of relevant international treaties and agreements that would harm China's sovereignty, security, and public interests is excluded.

How Do Chinese Courts View the Preferential Application of International Treaties?

As an institution authorized to apply international treaties on behalf of the country, the People's Courts of China will implement the legal principle of "the preferential application of international treaties" based on clear legal provisions (both procedural and substantive laws) when hearing civil and commercial dispute cases involving the application of international treaties.

In Terms of Procedural Law

The People's Courts of China will hear foreign-related civil and commercial cases in accordance with Article 271 of Chapter 23 "General Principles" of Part 4 "Special Provisions on Foreign-related Civil Litigation Procedures" of the "Civil Procedure Law of the People's Republic of China" (hereinafter referred to as the "Civil Procedure Law"). This article stipulates that "where there are different provisions in an international treaty concluded or acceded to by the People's Republic of China and this Law, the provisions of the international treaty shall apply, except for the provisions on which the People's Republic of China has declared reservations."

In Terms of Substantive Law

Before the implementation of the "Civil Code of the People's Republic of China", the People's Courts of China heard foreign-related civil and commercial cases in accordance with Paragraph 2, Article 142 of Chapter 8 "Application of Law in Foreign-related Civil Relations" of the former "General Principles of the Civil Law of the People's Republic of China". This article stipulated that "where there are different provisions in an international treaty concluded or acceded to by the People's Republic of China and the civil laws of the People's Republic of China, the provisions of the international treaty shall apply, except for the provisions on which the People's Republic of China has declared reservations." After the "Civil Code of the People's Republic of China" (hereinafter referred to as the "Civil Code") came into effect on January 1, 2021, the "General Principles of the Civil Law of the People's Republic of China" became invalid. As the basic law in the civil field, the "Civil Code" does not have a clear provision on "the preferential application of international treaties".

The "Foreign Relations Law of the People's Republic of China" that came into effect on July 1, 2023, although it mentions the application of international treaties in many places. For example, Paragraph 1, Article 30 stipulates that "the state concludes or accedes to treaties and agreements in accordance with the Constitution and laws, and sincerely fulfills the obligations stipulated in the relevant treaties and agreements." And Paragraph 1, Article 31 stipulates that "the state takes appropriate measures to implement and apply treaties and agreements." However, expressions like "sincerely fulfill" and "take appropriate measures" seem rather ambiguous and do not clearly stipulate the legal principle of "the preferential application of international treaties".

On January 1, 2024, the Supreme People's Court of China filled the gap in the substantive law of foreign-related civil and commercial matters regarding "the preferential application of international treaties" with the judicial interpretation "Interpretation of the Supreme People's Court of the People's Republic of China on Several Issues Concerning the Application of International Treaties and International Customs in the Trial of Foreign-related Civil and Commercial Cases" (Fa Shi [2023] No. 15) (hereinafter referred to as the "Interpretation of Fa Shi [2023] No. 15"). Paragraph 2, Article 1 of this judicial interpretation stipulates that "where there are different provisions between an international treaty and Chinese law, the provisions of the international treaty shall apply, except for the provisions on which China has declared reservations."

The Supreme People's Court of China promulgating a judicial interpretation to clearly stipulate the preferential application of international treaties can, on the one hand, actively enhance the international credibility and influence of China's judiciary, effectively unify the standards for the application of laws, regulate and guide the People's Courts of China to accurately grasp the application conditions and scope of international treaties, and provide a basis for the correct trial of foreign-related civil and commercial cases by the People's Courts of China. On the other hand, it can actively contribute to creating a first-class business environment in China that is market-oriented, law-based, and internationalized, helping parties in the foreign-related civil and commercial field, especially those from countries that are also parties to the international treaty, to actively abide by international treaties, "make good use of" international rules of the game, and safeguard their legitimate rights and interests.