An outbreak of pneumonia began in Wuhan, China, at the end of December 2019. Named the novel coronavirus 2019-n-Cov, the virus has rapidly spread and has infected tens of thousands of people in China, and in thousands of instances, causing death. The outbreak has a significant impact on all aspects of society in China, including parties involved in pending litigation. Many local governments have devised "hardcore" measures to respond to the outbreak, including prevention and isolation, often causing parties to delay their civil litigation activities unwillingly. Parties are unsure how to comply with the laws and regulations given these "force majeure" circumstances. This article examines what and how parties in litigation, must do, under these "force majeure" circumstances, to comply with the laws and regulations.
I. A Force Majeure Event- Understanding the Nature and Impact of the Coronavirus and its Unforeseen Consequences on Parties in Litigation
The delays in litigation are not the result of the voluntary actions of the litigating parties. The delays are caused by, and the effect of, the sudden and unforeseen outbreak of the devastating coronavirus outbreak. Also, to some extent, the corresponding government-imposed regulations have caused a delay. Under ordinary circumstances, litigation participants must comply with laws and regulations. Is this a force majeure event? Do litigation parties have options they can exercise? What are their options? The following examines what and how to respond to this problem.
The second paragraph of Article 180 of the General Part of the Civil Code, People's Republic of China defines force majeure, "objective conditions that cannot be foreseen, avoided and overcome." Unforeseen conditions are those in which parties cannot predict the occurrence by natural social cognitive ability. Parties cannot avoid these conditions, prevent their happening, and overcome these by still using their best efforts. The coronavirus outbreak began without warning, and happened suddenly, and spread in such proportions that it has afflicted tens of thousands and has claimed the lives of thousands in China and now globally. This outbreak has caused corresponding government intervention of drastic proportions, and government and man cannot overcome this. and with no cure or drug soon at hand, this outbreak is an epidemic, a nationwide emergency and now, globally, the World Health Organization has listed as a "Public Health Emergency of International Concern (PHEIC)" on January 31, 2020. Medical and scientific communities globally cannot find an exact and effective cure or treatment method. The natural emergence of the coronavirus and its sudden spreading, and now its affliction of drastic proportions on the general population, fits the legal definition of a force majeure.
Is this a force majeure when the delays are partly due to the local governments mandating isolation and treatment of suspected and infected persons? The burden is on the party claiming that the coronavirus outbreak is a force majeure. This burden requires proof that the attending circumstances - governmental action - is not a detachable part of the virus outbreak. The government action is so intertwined with the coronavirus - that there is no natural separation from the originating events. If the government action is, to some extent, independent and due to fear of the epidemic situation, then the burden may be complicated to overcome. Government necessity, though, requires government, human-made intervention, and is a natural consequence that flows from the origin of the coronavirus. Government necessity requires measures to protect the public from the natural effects of the virus - particularly sickness and death- in massive proportions. It is also unforeseen and unavoidable in the sense that this would not have occurred absent the virus outbreak. Government necessity is more similar to the urgent call globally for the development of a medical vaccine, a natural flowing consequence of, and emanating from the virus outbreak. There is a sound, logical reasoning that the government's measures are a necessity, which makes it part of the force majeure event of the coronavirus origin.
There is non-binding legal precedence, sufficiently persuasive to establish that government necessity falls within force majeure. During the "SARS" period, the Supreme People's Court issued the "Notice of the Supreme People's Court on Doing Well in Relevant Trials and Enforcement Work of the People's Court consistent with the Law during the Prevention and Treatment of SARS" promulgated on June 11, 2003. The Notice provided that force majeure clauses shall apply if the interested parties to the litigation are SARS patients or persons quarantined under the law, and delays arose concerning the limitations of action and other legal periods.
2. Article 194, General Provisions concerning Limitation of Action, Provides A Legal Basis for Suspension and Tolling of the Limitation Period of Action due to Force Majeure
2.1 Limitation of Action-Article 194, General Provisions
The limitation period of action refers to the time set by the law, during which a party must apply for relief to the people's court to seek legal protection or remedy for allegedly infringed upon civil rights. The limitation period of action belongs to a variable period and can be suspended, interrupted tor extended if there are legal reasons. Article 194 provides a suspension and an extension of the expiration date of the limitation period. This statute provides if, in the last six months of the limitation period of action, a party cannot exercise his or her right to bring a claim due to obstacles caused by force majeure, you can seek to extend the expiration time of the limitation period. The time expires after the expiration of six months from the date of elimination of the force majeure. The delay, caused by the force majeure event, the coronavirus epidemic (including government necessity for intervention), results in the suspension of the limitation of action. Therefore, the limitation of action period, the period in which an affected party must bring a lawsuit, is in the last six months, from the date of the elimination of the force majeure.
2.2 Defense Period
Article 125, Civil Procedure Law of the People's Republic of China ("Article 125") stipulates that the defendant must file a statement of defense within 15 days after the statement of claim is delivered to the defendant ("defense period"). Article 268, Civil Procedure Law of the People's Republic of China stipulates that if the defendant does not have a residence in China, the defense period is 30 days. Since Article 125 also specifies that the failure of the defendant to submit a defense does not affect the hearing of people's court, many defendants do not offer a defense during the defense period. However, under Article 127 of the Civil Procedure Law, objections to jurisdiction must be raised within the defense period; otherwise, the defendant will have waived jurisdiction. Therefore, the defense period mainly affects the period during which the parties must raise objections to jurisdiction.
The defense period, the time during which the defendant must raise a defense, and which follows the court's service of the statement of claim, remains unchanged. The provisions on suspension, interruption, or extension of the limitation of action, does not apply to the defense period. But, Article 83 of the Civil Procedure Law, provides a defendant relief to seek an extension of time following the removal of the force majeure event. Article 83 states, "if a party exceeds a time limit due to an event of force majeure or other legitimate reasons, the party may apply for an extension of the period within ten days after the removal of the obstacles." The people's court shall decide whether to approve the application. Article 83 provides for relief to a party affected by epidemic or force majeure event -- it can apply to the court for an extension of the period if it fails to reply or raise an objection to jurisdiction within the defense period. However, the application to extend the time to file an extension is within ten days after the completion of measures such as isolation and traffic control. It should be noted that the force majeure at this time does not necessarily lead to the extension of the period, and the people's court has the discretion to extend the period.
2.3 Evidence- Production of Evidence and Time Limits
The people's court sets the time limit for the parties to provide their evidence. See, Article 65 of the Civil Procedure Law and Article 100 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China. A party can apply for an extension of time where it has difficulty meeting the court-imposed deadline. If a party cannot apply for an extension of time before the expiration of the court deadline due to government epidemic isolation measures, then the parties must apply for an extension within ten days after the obstacle is removed based on Article 83 of the Civil Procedure Law.
2.4 Suspension of an Action
Under Article 150 of the Civil Procedure Law, if one party is unable to participate in the litigation due to an event of force majeure, the lawsuit shall be suspended. However, the action can resume after the cause of the suspension is eliminated. If a party is unable to participate in the litigation due to the epidemic situation or traffic control measures, the action shall be suspended but resumed once the isolation measures terminate.
2.5. Appeal Period
Article 164 of the Civil Procedure Law governs appeals. A party appealing a first-instance judgment of the people's court must file within fifteen days from date of service while appealing a first instance ruling is ten days. (This period is unchanged period and does not apply the provisions on suspension, interruption or extension in the limitation of action.???) If a party is unable to file an appeal within these periods timely, it can apply to the people's court for an extension of time per the provisions of Article 83 of the Civil Procedure Law. The people's court shall decide whether to agree or not.
2.6. Period for Application for Enforcement on a Judgment
Article 239 of the Civil Procedure Law establishes that the period for execution on a judgment is two years. Also, the provisions on the suspension or discontinuance of the litigation limitation period similarly apply to applications to execute judgment. Therefore, a party, unable to apply timely for enforcement of the judgment due to the epidemic event, must apply within six months from the date when the epidemic situation or obstacle is removed.
2.7. Retrial and Other Period
Article 127 of the Interpretation of the Civil Procedure Law stipulates:
"The six months stipulated by the Paragraph 3 of Article 56 (the third party revokes the judgment, ruling and lawsuit of mediation agreement), Article 205 (retrial) and Article 374 of this interpretation (the interested party applies for retrial of the ruling confirming the mediation agreement, etc.), Article 384 (the third party applies for retrial of mediation agreement), Article 401 (the retrial applied again after the retrial is withdrawn), Article 422 (The retrial must be applied by the parties that jointly conduct litigation), Article 423 (An outsider who refuses to accept an enforcement ruling applies for a retrial of the original case) of the Civil Procedure Law, and the one year stipulated by the Article 223 of the Civil Procedure Law are the unchanged period, and shall not apply the provisions on suspension, interruption and extension of the limitation of action."
Consequently, if the party concerned delays the above-mentioned period due to the epidemic situation, the party concerned can only apply to the people's court for an extension in accordance with Article 83 of the Civil Procedure Law.
The impact of the epidemic on other legal period
(Note: The first sentence-- do not understand, too long, too wordy... What is the message here???) I cannot understand what author is trying to accomplish. I recommend author not just string cite a bunch of laws – without explaining first the message. )
3.1 Administrative Proceeding Limitation and Administrative Reconsideration Limitation
Force majeure principles are embodied in both administrative proceedings and administrative reconsideration proceedings.
Article 48 of the Administrative Procedure Law of the PRC governs procedures applied in administrative proceedings. This article expressly provides,
"In case that a citizen, a legal person or any other organization misses the time limit for initiating legal proceedings due to force majeureor other impersonal reasons, the missed time will not be counted in the time limit for initiating legal proceedings."
Upon reconsideration of an administrative decision, delay in filing beyond the 60 days or other statutory deadline resumes after the date the force majeure obstacle is removed. Article 9 of Law of the People's Republic of China on Administrative Reconsideration stipulates:
"Citizens, legal persons and other organizations that consider that certain specific administrative acts infringe upon their lawful rights or interests may apply for administrative reconsideration within 60 days from the date when they come to know such administrative acts, except where the time limit for application is more than 60 days as prescribed by law. In case of delay in applying within the statutory time limit occasioned by force majeure or for other justifiable reasons, the counting of the days shall be resumed from the date when the obstacle is removed."
The coronavirus epidemic is considered as a force majeure event applicable to the limitations period in administrative proceedings and administrative reconsideration. As applied, these statutes suspend the limitations period, that is, the statute of limitations ceases to run when the epidemic obstacle arises and continues for counting after the obstacle is removed.
3.2 Limitation in Patents, Trademarks, Layout-Designs of Integrated Circuits
On January 28, 2020, the State Intellectual Property Office ("SIPO") promulgated the Announcement  No.350–Announcement on Issues concerning the period related to the Impact of Epidemic on Patents, Trademarks and Integrated Circuit Layout Designs ("Announcement"). The Announcement provides certain rights to parties who are affected by a force majeure event. where a party has lost rights arising from the delay of the limitations period caused by an epidemic, the party can apply to restore their rights. The injured party may request to have its rights restored within two months after the obstacle is removed, at the latest within two years after the expiration of the period.
In cases involving trademarks, delays in handling the trademark within the prescribed limits set by the Trademark Law and implementing regulations shall be suspended if the epidemic outbreak causes such delays. Article 2 of the Announcement provides that the relevant limitation period is suspended until the time when the obstacle is eliminated unless provided otherwise by law.
The various laws and regulations provide some relief to parties in litigation proceedings when a force majeure event occurs. The coronavirus epidemic forces parties to deal with circumstances beyond their control, for example, delays in filing or participating in litigation proceedings. The law provides, in some cases, a suspension of the action with resumption when the force majeure event ceases, and such obstacles are eliminated. A thorough understanding of the relevant laws and how it applies in the case of a force majeure event is required. Otherwise, valuable rights can be lost.
If you have questions or concerns about this article or possible litigation matter, please feel free to contact the authors, Li Qi and Jia Kun, as both attorneys are experienced at handling litigation matters involving civil and commercial disputes. Please also feel free to consult with any other of our experienced counsel at King & Capital.
Li Qi, a lawyer of King & Capital, graduated from the Law School of China University of Political Science and Law, handles a large number of civil and commercial disputes, with rich experience in civil and commercial litigation and arbitration.
Jia Kun, an intern lawyer in civil and commercial department of King & Capital, graduated from China University of Political Science and Law earning both a Bachelor of Law and Bachelor of Science (psychology) degree. At the postgraduate level, Jia Kun studied comparative law between China and the United States at the Institute of Comparative Law of China University of Political Science and Law, earning a Master's degree in law, and also earning a LLM degree from Fordham University in the United States.