DOI 10.1007/s11463-005-0008-8

RESEARCH ARTICLE

ZHU Jingwen

Legal Transplantation in the Judicature: Employing Foreign Laws

in China’s Judicial Practice

# Higher Education Press and Springer-Verlag 2006

Abstract: For wholly domestic cases, when there are no suitable domestic provisions andsimilar precedents, the courts in some countries will directly incite relevant foreignlegislations or precedents. While in China, never before had its judicature ever used foreignlaws or comparative law to handle non-foreign cases. However, in recent years, with thegradual opening of China’s judicial area, its judicature also begin to use precedents of foreignand comparative laws.

Keywords: Comparative law, precedents, Foreign judicature, Chinese judicature, Citation

The transplantation of foreign laws is generally thought of in terms of legislation. We shallexplore it from a different perspective here—the judicature. There are two reasons for this.First, while further theoretical and practical probing is needed, there is an abundance of studyand writing about legal transplantation as reflected in legislation. Second, legislativetransplantation is confined to the letter of the law; whether the transplanted law functionsproperly and effectively in a new land is another consideration. If it fails to work, judgespresiding in courts of law will shun it as book law, not practicable law. The case is quitedifferent in the judicial area, as there is no opposition between a law in book and in action. Alaw applied in jurisdiction is virtually the law in action, whether or not it is a law developed inanother country.

Foreign laws tend to be applied in two different judicial situations: cases involvingforeigners and those involving foreign matters. It has been formulated in both GeneralPrinciples of the Civil Law of the People’s Republic of China and Law of the People’sRepublic of China on Economic Contracts Involving Foreign Interest that the parties to acontract involving foreign interests may choose the law applicable to settlement of their

Translated from Legal Science Monthly, Vol. 1. 2004

ZHU Jingwen ())Renmin University of China School of Law, Beijing, China

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contractual disputes, except as otherwise stipulated by law. If the parties to a contractinvolving foreign interests have not made a choice, the law of the country to which thecontract is most closely connected shall be applied.

In a sense, applying foreign law or comparisons among legal systems in foreign-relatedcases relating to private international law or the conflict of laws is clearly beyond the scope ofthis study. The second situation could be described as follows: as a law court processes somecases having the least connection with foreign elements, there are no proper internal legalrules available for its reference and decision making. As we know, in some countries, courtsconfronted with this problem turn to relevant foreign legislation or cases for solution. Casesare on record in Chinese judicial practice of citing foreign law in the absence of domestic law.One reason for this, we believe, is that the diversity of the cases to be heard and determined bycourts is much greater than legislative anticipation; and law courts cannot refuse to handlethose cases on the excuse that no domestic laws are yet available. Another reason might besome remarkable changes in China’s judiciary body in recent years: many ambitious youngjudges are keen on creating a Chinese-style Marbury v. Madison.

This study consists of three parts, which will present analyses of some foreign and Chinesecases, respectivelly.

I. Application of foreign laws in judicial practice of countries outside China

1. The United States

(a) Muller v. State of OregonThe case was finally processed and decided by the Supreme Court in 1908, inwhich the plaintiff Muller filed a charge claiming the legal provisions about theworking hours of women to be unconstitutional, while Mr. Brandeis, counsel forthe State of Oregon, argued for regulating the hours of employment of women,making many references to foreign legislation. The Supreme Court intimated in itsdecision that a statute that has counterparts in most countries in the civilized worldcannot be struck down as unreasonable, arbitrary, and capricious.1

(b) Pelka v. State of ConnecticutThe case was decided by the Supreme Court in 1937. The appellant Pelkachallenged a statute of Connecticut permitting appeals in criminal cases to be takenby the state as an infringement of the “double jeopardy” clause of the FourteenthAmendment of the Constitution of the United States (which severely limitsprosecutorial appeals in federal and state criminal prosecutions). Justice Cardozo ofthe Supreme Court upheld the constitutionality of Connecticut’s approval ofappeals. The decision made by the Supreme Court observed that the practices in thecivil law countries demonstrate that the prosecutor has the fight to appeal against anacquittal as well as against any punishment that he considers light.2

(c) Greenspan v. SlateThis was a lawsuit decided by the New Jersey Supreme Court in 1953. The plaintiffGreenspan charged that the defendant Slate did not pay the medical remedy that shehad to for her minor daughter’s twisted foot. Slate argued that the treatment of

1 See 208 U. S. 412, 28S. Ct. 324 (1908).2 See 302U. S. 3 19, 58S. Ct. 149 (1937).

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Greenspan’s daughter had not acquired the explicit or acquiesced empowermentfrom the defendant. The New Jersey Supreme Court sensed that the problem waswhether a parent should be liable for the necessaries of her minor child in troublewithout the explicit or acquiesced contract. There is, however, an inconsistency inAmerican law between provisions of the common law and those of equity. It is heldin common law as an ethical, not a legal duty, that a parent should providenecessities for his minor child; these tend to be compulsorily imposed under the lawof equity. In view of the precedent, the court seemed to be free to decide whether thecommon law or equity was to be applied. By quoting the civil codes of Austria,France, Germany, Italy, and Switzerland, the New Jersey Supreme Court stated thatin these modern civil-law countries, parents have immediate duties towards theirminor children, and decided that the plaintiff won the case.3

2. Germany

(a) Ruling of compensation for intangible damage. The German Civil Code does nothave specific provisions defending the fight of personality, though, underparagraph 1, Section 823 of the German Civil Code, any illegal invasion of aperson’s physical body, health, life, or freedom will incur a claim of damage. Whilethe Civil Code offers individual’s physical protection, it remains blind to their gloryor privacy. In practice, the personality right cases handled by the German FederalSupreme Court (Bundesgerichtshof) are usually limited to those specific onesconcerning rights of name and portrayal or right to literary and artistic works, withthe exception of the fight of personality in its general sense. The German FederalSupreme Court remarked in a decision in 1958 as follows: In almost all legalsystems which, like ours, put a prime value on the individual, damages for pain andsuffering are regarded as the proper private law sanction for invasions of thepersonality. The availability of such damages does not adversely affect freedom ofthe press, which those systems also treat as of fundamental importance. So theobjection that the award of such damages in cases of invasions of personalityimproperly invades or unduly imperils the constitutionally guaranteed freedom ofthe press is clearly without substance.4

(b)Deciding on the limits of compensation for intangible damage. TheBundesgerichtshof specified in a judgment in 1985 that the claim for such damageswas limited to cases where invasion of the right of personality was particularlyserious. Such a limitation “is also to be found in Swiss law, which is moreconcerned with legal protection of the personality than the German Civil Code (seeArt. 49. 1 OR)”.5

3 See 12 N. J. 426. 97A. 2d390.4 See Decisions of the West German Federal Supreme Court (Bundesgerichtshof) in civil matters 35, 363, 369,cited in Zweigert and Kotz, Introduction to comparative law, vol. 1, P. 19, Oxford, Clarendon, 1987.5 SeeDecisions of the West German Federal Supreme Court (Bundesgerichtshof)in civil matters 39, 1 24, 1 32,cited in Zweigert and Kotz, Introduction to comparative law, vol. 1, Oxford: Clarendon, 1987, pp. 18–19.

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3. SwitzerlandGerman comparative law scholars, K. Zweigert and H. Kotz, observed that the SwissFederal Court (Bundesgericht) seems more ready to accept arguments fromcomparative law.6 In fact, Swiss law has specific provisions for such arguments,which is most impressive among Western countries.

Article 7 of the Swiss Law of Vessels provides that “judges, in the absence ofreadymade relevant Swiss law or regulations, are to adhere to the commonly acceptedprinciples of maritime law; otherwise, they make a decision as legislators, in whichcase they are to examine statute laws, customs, theories, and precedents from othermaritime-law countries.” The rule for source of law applied in the civil-law countries isthat the judge must apply the laws if they can be found, failing which he must turn tocustom; or else he must draw upon precedents; or else he must follow legal principles.Laws, customs, precedents, and legal principles here can all be categorized undernational law. Under this provision from the Swiss law, a reasonable conclusion couldbe reached that domestic law should be referred to when it is available; otherwise,foreign laws can be borrowed.

II. Application of foreign laws in China’s judicial practiceBefore reform and opening-up, there is no record of a foreign law being applied in adomestic case without involving any foreign elements in China’s jurisprudential history.However, as the reforms—not least the vigorous ones at work in the legal system—haveprogressed, some cases where foreign law is invoked as domestic law have been spotted inthe national judicial practice.

1. “Uniform Simultaneous Death Act” applied in settling an insurance claimThe case, which was finally determined by Taicang People’s Court, Jiangsu Province,on April 7, 2003, was as follows. Lu Jing and Zhang Liang both lived in Taicang,Jiangsu, and had been in love with each other for three years. In February 2002, theyoung couple bought “Health and Peace Life Insurance,” an insurance product offeringmajor medical cover. It was marketed by China Life Insurance Company, one of themajor insurance firms in the country. While Lu Jing was the insurer and insured, ZhangLiang was the beneficiary. Unfortunately, ten months later, they were both killed in atraffic accident. A sticky problem arose: whether the insurance premium should bepaid to the parents of Lu Jing, the insured, or to the parents of Zhang Liang, thebeneficiary?

Disagreement led the four parents into a lawsuit. Xu Jianfeng, Zhang’s mother, filedsuit against Jiangsu Branch and Taicang Subbranch of China Life. The plaintiff heldthat the insurance company should pay the amount of money to the heir of thebeneficiary, Zhang Liang, not to the heir of the insured Lu Jing, charging thatdefendants by their actions violated the policy. Responding, the Subbranch argued thatit had done nothing wrong in paying the money to the parents of the insured, because,under the provisions “if the insured is still alive after an accident occurs, then theinsurance premiumwill be paid to the insured; if the insured is dead and the beneficiaryis alive, then the premium shall go to the beneficiary.” In this case, Zhang’s parentsconsidered that they were entitled to the sum of money because their dead son was the

6 See Zweigert and Kots 1987, p.34.

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beneficiary. But the premium could be given to Zhang only if he was still living whenhis lover Lu Jing died. Hence, the dispute between the two families began to focus onthe order of the young couple’s deaths, but neither side could cite convincing evidence.Finally, the insurance company presumed that Zhang and Lu died simultaneously,under a judicial interpretation by the China’s Supreme Court included in “Some Ideason the Issue of Implementing ‘Law of Succession of the People’s Republic of China’”:If two or more persons die in a common disaster and there is no sufficient evidence ofthe order of death, and if they are of the same generation, then it shall be presumed thatthey died simultaneously and no succession of each person’s property or devolutionshall take place. The persons’ property or devolution thus disposed of shall bedistributed, respectively, among the designated successors.

According to the above presumption, if Lu and Zhang died at the same time, therewould be no beneficial owner of the insurance, i.e., no beneficial fight to the premiumwould go to Zhang, let alone his designated successors. The agent for the plaintiffrefuted the presumption as untenable by arguing that the two persons actually died in acommon event, not at the same time, and that the fight of the beneficiary to theinsurance could not be annulled. Besides, the plaintiff repeatedly stressed that where itwas a kind of business contract involved, it would be improper and erroneous to drawupon the provisions from the Law of Succession.

The insurance company tried to uphold their standpoint by citing the insuranceclaim settlement in the international practice. It is provided in American UniformSimultaneous Death Act that where the insured and the beneficiary in a policy of life oraccident insurance have died and there is not sufficient evidence that they have diedotherwise than simultaneously, the proceeds of the policy shall be distributed as if theinsured had survived the beneficiary.

The agent for the defendant, the insurance company, concluded then that althoughspecifically formulated legal rules or regulations for the issue could not be found inChina’s legislation, some relevant foreign law could be referred to because it squaredwith one of the Chinese principles for handling civil legal relations and its ability tosimplify such relations. The agent for the plaintiff, however, challenged the idea bysaying that since China had already effected the Insurance Law as well as many otherrelevant laws, thoughmerely short of specific provisions in some cases, presumption inaccordance with international practice was totally groundless and unacceptable. Hethen demanded that the case be settled in the light of factum juridicumwhen the currentlaw or regulations had not been amended. On this point the defendant persisted thatunless strong evidence could be obtained to confirm the order of the deaths, the casehad to be determined under the provisions of the Insurance Law of China that identifywhose interest should be protected, as well as with reference to international practice.The plaintiff countered that the right of the beneficiary was also protected by law, andany presumption should be based on genuine facts.

On April 7, 2003, the People’s Court of Taicang, Jiangsu Province, made the trialcourt judgment, dismissing the appeal for action by the plaintiff, Zhang’s mother. TheCourt asserted that simultaneous death of the beneficiary and the insured concernedactually invalidated the interest that the insurer endorsed for the beneficiary in theinsurance contract, and that the intention of the insurer who insured his own interestwould be in contradiction to the spirit of the Insurance Law if the premiumwas given tothe beneficiary’s successors, to whom the insurer had not designated the insurance.

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Zhang’s mother refused to accept the decision and appealed soon to the IntermediatePeople’s Court of Suzhou, which turned down her appeal and affirmed the originaljudgment.

Mr. Qian Jiangguo, Deputy Director-General of the second civil adjudicationdivision of the Intermediate people’s court of Suzhou, commented on the decision asfollows: “as there are no specific relevant laws or regulations at present, we have tostick to one of the judgments made by litigants, which is largely theoretical oremotional. So we need to seek out some legal basis. In this case the legal basis that thecourt could find and on which they based their trial court verdict, was specificprovisions from foreign laws. Under those provisions, the court presumed that if thebeneficiary died first, then the premium should go to the insured.”7

2. Foreign law applied in the bona fide acquisition caseLi’s parents planned to buy a house in a certain city, but they were so busy with theirwork that they could not spare any time to look for the estate. Li decided to collect andstudy the housing developers who sell newly-built apartment buildings.

Having weighed all the choices, Li decided that the flat he preferred would surelymeet his parents’ wishes. But he was afraid that the chosen flats would be sold outbefore his parents, who were then on a business trip abroad, would come back. So hesigned the purchase contract without his parents’ warrant. According to the existinglaw that provides that contracting parties should be at least 18 years of age, Li, the then17 year old, was obviously not qualified to sign the contract. Despite this, Li managedto find a forger of documents and papers to counterfeit an identification card that couldbe used to prove that he had already reached the legal age. Finally, he prepaid a depositof 60,000 yuan to the housing developer and signed “the Contract for Sales of RealEstate (Presale).”

Later, Li’s parents came back and felt totally dissatisfied with the new flat. Theyconsulted their lawyer and claimed that Li was underage. With limited capacity forcivil acts, when Li concluded the contract with the housing company, under theprovisions of Section 1, Article 47 of the Contract Law, the contract was called invalid.As legal agents, they refused to ratify it, but the housing developer seemed insistent onhaving the contract enforced. The two parties got engaged in a dispute. Finally, thedeveloper filed a lawsuit with the court, asking for the awarding of an order forperformance of the contract.

The trial court tried the case and decided that “The provision of the statute on whichthe defendants solely based their argumentation shall be applicable to the generalsituation where legal acts conducted by a person with limited capacity for civil acts willnot be valid unless the acts are ratified by the legal agent for this person. But theunusual nature of this case lies in the fact that Li forged the identification card andtricked the housing developer into the conviction that he had full capacity for civil acts,which cannot be categorized under the ‘general situation’ referred to in the statute.Therefore, Section 1, Article 47 of the Contract Law shall not be applied to this case.Although there are no relevant rules from the statute in force for this case, protection ofthe good faith of the other trading party is upheld by the compulsory and effective rulesfor civil subjects adopted by foreign (or regional) legislation, i.e. ‘If a person with

7 For a detailed story, see http://www.cctv.com, “An Insurance Case Involving a Couple of Dead Lovers(Shengsi lianren de baoxian jiuge)” (August 8, 2003).

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limited capacity for civil acts cheats others into believing that he has full capacity forcivil acts, then the legal acts that the person has conducted shall be regarded as valid’(see Art. 1307 of the Civil Code of France, Art. 20 of the Civil Code of Japan, Art. 51of the Civil Code of Thailand, and Art. 83 of the Civil Code of Taiwan). Universaladoption of legislative rules in foreign (regional) legislative practice is sufficient todemonstrate the legal principles of the civil code. For this reason, the IntermediatePeople’s Court decided to back up the plaintiff’s claim.” In other words, the rulingmade by the trial court rested on the compulsory and effective rules on the civil subjectin foreign (regional) legislation. It was the universality of the rule that led to the court’simmediate belief that the plaintiff’s claim “demonstrates the legal principles of the civilcode.”

The defendant refused to accept the decision and filed an appeal, holding that thetrial court had no right to apply a foreign rule to this case directly. The court of appealexamined the case and ordered that “The existing law does not underlie the trial court’sresort to foreign legislation and its direct belief that supporting the appellee’s claimwould be ‘sufficient to demonstrate the legal principles of the civil code’. Therefore,the trial court’s decision, which is right but rests on the wrong grounds, should berevised.” The court of appeal restated the grounds of the judgment, saying that“although no explicit provisions of the law in effect can be found applicable to thiscase, the same legal reasoning is represented in Article 49 and Article 50 of theContract Law about apparent agency and Acting beyond the scope of authority of thelegal representative, and Article 89 of the Judicial Interpretation of the GeneralPrinciples of the Civil Law, i.e. “the law shall protect the believer of apparent facts.”Applying the analogy of the civil law approach, the other trading party of the plaintiffin the case shall be regarded as the believer of apparent facts. The compulsory andeffective rule of civil subjects has already been incorporated in foreign legislation: ‘If aperson with limited capacity for civil acts deceives others into believing that he has fullcapacity for civil acts, then the legal act that the person has performed shall beconsidered valid’ (see Art. 1307 of the Civil Code of France, Art. 20 of the Civil Codeof Japan, Art. 51 of the Civil Code of Thailand, and Art. 83 of the Civil Code ofTaiwan). On account of the above, the claim made by the plaintiff shall be backed.” Inother words, the court of appeal combined the analogy approach and the legalprinciples represented in foreign law as the grounds of decision.8

III. Some considerations in applying foreign laws in the judicial process

1. Source of lawNational sovereignty is inevitably involved when a foreign law or a foreign case ofjudgment is cited as a reference in a domestic judicial process. Does this mean that aforeign law or foreign precedent case can take effect in domestic situations, or thatwhen no relevant national laws or precedents are available, foreign laws can be directlyinvoked? Does it follow that foreign laws will be the source of law for the trial ofdomestic cases? The author’s answer is no. This is because it is in reality legal

8 Quoted from Ding Nan, “Jurisprudential Study of the Principle of Appearance in Civil Law (Minfa waiguanzhuyi defalixue yanjiu),” doctorate dissertation of Jilin University, Changchun, Jilin Province (November2003), pp. 10–19.

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principles, or the approach to legal revision as a common resource for differentsocieties, that will be employed. This can only be a source of domestic law if it isapproved by a sovereign state. This is the same as the way that domestic legislationdraws upon foreign laws, which do not become domestic laws or sources of law untilthey are processed and approved by the national legislature. The only differencebetween the two phenomena is that one takes place in the judicial process and the otherin the legislative process. While substantive incorporation of foreign or comparativelaw into domestic law seldom evokes controversies over the probability of violation ofnational legislative sovereignty or domestic enactment of foreign laws, a judicialprocess seems more likely to be the target of criticism when it draws upon foreign orcomparative law. Why is this so? One reason might be that there is some difference inauthoritativeness between the legislature and the judiciary. A common assumptionprevails that the legislature, vested with the responsibility and power to make laws forthe nation, tends to be prudent and cautious in consulting foreign law when drawing updomestic laws. To adopt a foreign law cannot be decided by one or two legislators. Aforeign law will not be included in the national source of law before it goes through aseries of official legislative procedures: proposal, discussion, enactment, andpromulgation. But a judicial process is different. When no domestic law or domesticprecedents are available for reference, a judicial officer, by acting as a legislator, mayinvoke foreign laws or precedent cases as the interpretative means and the legaldoctrine. The chief judge or the collegial bench can decide on what kind of law isapplicable. That is to say they can set down a new law. It is clear here that the judgerepresents sovereign authority; he (or a couple of judges) has the power to decidewhether a foreign law or precedent is used as the legal doctrine and interpretativemeans and drawn upon as the source of law for trial of a domestic case.

2. Caution needed in resorting to foreign lawGenerally speaking, resorting to foreign laws in the judicial process is unusual in Chinaand other countries. Employing comparative law in judicial practice is usually boundby social and legal systems. Caution is always needed, especially when foreign lawsfrom a country with different social and legal systems are applied in domestic judicialprocesses. The reasons include:

(a) The functions and objectives of a legal system tend to be substantially different indifferent social systems. This may emerge both in the area of public law and in thearea of private law, involving ownership, contract, or property succession.

(b) When a foreign law or precedent is invoked, special attention should be paid to itsliteral meaning, as well as to the social circumstances in which it operates, and toother laws or regulations with which it may be grouped together. In simple words, aholistic perspective should be taken.

3. Higher requirement of judicial staffOne of the prerequisites for using foreign or comparative law in the domestic judicialprocess is that the judicial staff be equipped with a good knowledge of law, especiallyof comparative law. At present, most Chinese judiciaries fall far short of thisrequirement. Yet more emphasis upon normative judicial interpretations jointly madeby the Supreme People’s Court and the Supreme People’s Procuratorate, rather thanindividual interpretations by the judge who hears the case, is a characteristic of China’sjudicial interpretation. In fact, where current laws are ambiguous or no proper laws areusable; these normative interpretations contribute to clarification and specification ofthe laws or filling the legal vacuum. On account of this, we suggest that on the one

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hand, more consideration should be devoted to the application of foreign and com-parative law; on the other hand, the Judicial Committee of the Supreme People’s Courtshould undertake the task of considering and offering uniform judicial interpretations,sometimes by resorting to foreign law and comparative law as the interpretative means,to offset the impact of shortage of legal knowledge in the judiciary.

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