Meaning
Statutory provisions within the civil litigation framework of the People’s Republic of China establish the rules for jurisdiction in foreign-related civil disputes. A foreign party contracting with a Chinese entity relies on civil procedure law article 206 to determine which court has the authority to hear a dispute when a written contract exists. This provision sets the baseline for forum selection agreements and prevents local courts from claiming jurisdiction when the parties have validly agreed on an alternative forum.
Contractual Limitation
Agreement in writing is mandatory under this provision to establish jurisdiction in a foreign-related contract. The parties are permitted to choose a court in a jurisdiction that has an actual connection to the dispute, which can include the place of contract performance, the place of contract signing, the domicile of either party, or the location of the subject matter. If the chosen court has no connection to the dispute, the agreement is frequently deemed invalid during administrative and judicial reviews.
This requirement restricts the choice of neutral third-country forums unless a connection can be legally demonstrated.
Judicial Practice
Enforcement of forum selection clauses by intermediate courts requires careful procedural filing by the foreign claimant. Chinese courts will scrutinize the agreement to ensure it does not violate exclusive jurisdiction rules, such as those governing domestic real estate disputes or joint venture operations in China. The statutory right to choose a forum on paper does not guarantee that a local court will automatically dismiss a parallel lawsuit filed by a Chinese counterparty.
Procedural Remedy
Challenging the jurisdiction of a local court must occur before filing a substantive defense on the merits of the case. A foreign defendant files a formal jurisdictional objection within thirty days.
