By Susan Ning, Yin Ranran
On 25 April 2011, the Supreme People’s Court issued for public comments draft rules which govern civil action in relation to Anti-Monopoly Law (AML) disputes. These rules are entitled "Provisions on Issues Concerning the Application of Law in the Trial of Monopoly Civil Dispute Cases"("Draft Rules"). Prior to the release of these Draft Rules, there haven’t been any detailed rules in relation to AML civil action. The court will consult on this Draft Rules till 1 June 2011.
The Draft Rules contain 20 articles covering jurisdiction, standing of plaintiffs, burden of proof, evidentiary rules, relationship of antitrust administrative investigations and the judicial process, form of civil liabilities and the statute of limitations. The objective of these Draft Rules is to ensure proper adjudication of civil monopoly disputes cases, prevent monopolistic conduct, protect fair competition in the market and safeguard the interests of consumers and public interest.
As set out in its preamble, the Draft Rules are promulgated in accordance with the AML 1, the General Principles of Civil Law, the Tortuous Liability Law, the Contract Law, and the Civil Procedure Law. In fact, even before the AML formally came into force on August 1, 2008, the Supreme Court showed its efforts in paving the way for upcoming AML private actions by recognizing monopoly dispute as a cause of action under the section of intellectual property disputes2. In late July 2008, the Supreme Court explicitly provided in a notice that anti-monopoly cases shall be handled by the intellectual property division of the courts.
The current Draft Rules addressed some of the most important unresolved issues. It confirms that civil antitrust cases of first instance shall be heard by specified intermediate people’s courts 3. It recognizes the standing of indirect customers to bring an action. The Draft Rules also make some break-through in respect of the rules for allocation of the burden of proof. Noticeably, the current Draft Rules do not contain provisions on representative actions and punitive damages, which had existed in previous drafts.
We understand that the Supreme Court commenced the drafting of these Draft Rules sometime in 2009 (i.e. a year after the enactment of the AML). We also understand that the Supreme Court has held several rounds of consultations and workshops to discuss preliminary drafts.
It is the first time the Supreme Court officially published the Draft Rules for public comments. It suggests that the Supreme Court sees the Draft Rules as a rather mature product and it is reasonable to expect that the finalized provisions will come out in the foreseeable future. According to a press interview with the Supreme Court judge, from the period August 1, 2008 to the end of 2010, the local courts in China have accepted 43 private actions under the AML and have closed 29 of them. We anticipate that more private actions will come up when the Draft Rules come into force.
1 Article 50 of the AML provides the source power for private actions. Article 50 states that business operators who engage in monopolistic conduct and cause damage to other shall bear civil liabilities.
2See the 2008 Provisions on the Cause of Action of Civil Cases. The 2010 Provisions on the Cause of Action of Civil Cases sets out further three categories of monopoly disputes, i.e., monopoly agreement disputes, abuse of dominance disputes, and concentration of undertakings disputes.
3Intermediate courts having jurisdiction over antitrust cases are those in capital cities of the provinces and autonomous regions, municipalities directly under the State Council or cities separately listed on the State plan, or those specifically designated by the Supreme Court.