Corporate Counsel Team: Huaicheng lawyers
Edit | July
Author | Huaicheng lawyer Yu Kejie
Yu Kejie
Liaoning Huaicheng Law Firm
Corporate Counsel in Civil Litigation
Corporate restructuring and mergers and acquisitions
In addition to the rights, obligations, performance methods, price, time limit, and liability for breach of contract, the jurisdiction clause is also a "battleground" for both parties in the signing of the contract.
The jurisdiction clause determines which court or arbitration institution to go to to deal with the dispute when a dispute arises in the contract, which directly affects the cost of resolving the dispute by the company.
In practice, lawyers have encountered strange cases in which two Dalian companies filed lawsuits in Beijing after a dispute arose due to the blind application of the online contract model, which greatly increased the company's litigation costs and caused a waste of manpower and material resources.
In practice, there is also a situation where although the jurisdiction clause is clear, but the other party has moved several times later, which court should be sued in case of disputes?
Today I will bring you a case to talk about this situation in jurisdictional practice.
1
The defendant's domicile at the time the contract was signed
Determine the jurisdiction of the case
Mr. Liu signed the Grape Purchase Agreement with Company A, and the contract stipulated that the court where Company A was domiciled would have jurisdiction in the event of a dispute.
Later, Company A owed Liu 33,260 yuan for the goods.
Company B and Company A signed the Asset Acquisition Agreement, and the balance sheet of the agreement stated the fact that it owed Liu 33,260 yuan.
On the same day, Company C, Company D and Company B signed the Guarantee Agreement, under which Company C and Company D, as guarantors, were jointly and severally liable for the debts owed by Company A.
In accordance with the contract, Liu Moumou sued the four companies to the Zhongning County People's Court of Zhongwei City, Ningxia Hui Autonomous Region.
However, Company A raised a jurisdictional objection on the ground that its main office was located in Jinfeng District, Yinchuan City.
On October 24, 2023, the High People's Court of Ningxia Hui Autonomous Region issued the (2023) Ning Min Zhi No. 35 Civil Ruling, and the case was heard by the People's Court of Zhongning County, Zhongwei City, Ningxia Hui Autonomous Region.
Article 32 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China stipulates that "the jurisdiction agreement stipulates that the people's court at the place where one party is domiciled shall have jurisdiction, and if the domicile of one party is changed after the agreement is signed, the people's court at the place of domicile at the time of signing the jurisdiction agreement shall have jurisdiction, unless otherwise agreed by the parties." ”
In this case, the Grape Purchase Agreement signed between the plaintiff Liu and the defendant Company A stipulates that in the event of a dispute, "the court where Party A is located shall adjudicate in accordance with the law".
The date of the signing of the Jurisdiction Agreement between the parties is September 27, 2017.
Company A moved to a certain floor of the third phase of IBI Yucai Center, Jinfeng District, Yinchuan City in December 2019, so when the two parties signed the jurisdiction agreement on September 27, 2017, the domicile of Ningxia Goji Products Co., Ltd. was still in Xinbao Street, Zhongning County.
Therefore, this case should be under the jurisdiction of the Zhongning County People's Court of Zhongwei City, Ningxia Hui Autonomous Region.
2
There were two views on the jurisdiction of the courts
The first type has been identified
(Click on the image to ask a lawyer)
Previously, there were two views in court trial practice.
One view is that although the domicile of the parties has changed, it should still be subject to the jurisdiction of the court of domicile at the time of the conclusion of the agreement.
This is because the original intention of the agreement jurisdiction system is to respect the parties' expressions of intent.
When agreeing to choose a court of jurisdiction, the parties are well aware of the jurisdiction of the court they have chosen, and if the court of jurisdiction changes with the change of domicile, it will not only leave room for the parties to circumvent the law, but also cause chaos in the jurisdiction to a certain extent.
Another view is that the law defines the domicile of the parties as the place of jurisdiction so that the court of the place of domicile can more easily ascertain the facts of the case and the parties can more easily participate in the litigation.
Therefore, in the event of a change in the domicile of the parties at the time of the jurisdiction agreement, the competent court shall be determined by the domicile at the time of the actual dispute, so as to facilitate the rapid and effective resolution of the dispute.
The first view is now widely adopted.
Because the competent court is determined when the parties sign the agreement, choosing the competent court at the time of the agreement between the parties not only stabilizes the expectations of the parties, but also prevents the parties from choosing a competent court that is beneficial to them by changing their domicile, or deliberately causing trouble for the other party's right to sue.
3
Huaicheng lawyer suggested
Based on the practical experience in handling litigation jurisdiction disputes, Huaicheng lawyers provide the following suggestions for your reference:
1. Actively negotiate the jurisdiction clause before signing the contract, and try to determine the jurisdiction of the court where the party is located.
2. It is best to indicate the place of residence in the contract, even if the other party moves out, you can also claim to sue the court where the address is located at the time of signing the contract.
3. If you are not sure about the agreement on the core elements of the contract such as the jurisdiction clause, you can first take the contract to a professional lawyer for a look at it and check it, so as to avoid the trouble mentioned at the beginning of the article.
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Case Source:
Liu XX v. Ningxia XX Goji Products Co., Ltd., Ningxia XX Investment Co., Ltd., Ningxia XX Sales Co., Ltd., and Ningxia XX Co., Ltd., a case of dispute over a sales contract Ningxia Hui Autonomous Region High People's Court (2023) Ning Min Zhi No. 35
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