What’s forum selection clause

A forum selection clause for agreement relating to China, is a cause agreed by parties in an agreement to decide the jurisdictional court for disputes arising between parties if the execution of a business contract relating to China.

What’s the rules about forum selection in China

As per the Civil Procedure Law of P.R.China, contract dispute or other property right dispute, if it’s litigated against a defendant without domicile in China, could be submitted to a court of jurisdiction with place where the contract is signed, the contract is fulfilled, the object of the litigation is located, the detainable property is located, the tort occurred, or representative agency resides, when any of the following meets:

The contract is signed or fulfilled in the territory of China;

The litigating object is located at the territory of China;

There is defendant’s property detainable in t he territory of China;

There is a representative agency of defendant in the territory of China

As per the Civil Procedure Law of P.R.China, for a contract dispute or other property right dispute, the parties could choose, in written, the following court to exercise jurisdiction: the domicile of the defendant, the place of fulfilment, the signing place of contract, the domicile of plaintiff, the place of object and etc that has an actual connection with the dispute, without violation to the level jurisdiction and the special jurisdiction.

Forum selection is needed for making a good contract

Some foreigners, when doing business with Chinese, don’t have a formal contract or have a formal contract without a forum selection clause. When  a dispute is raised out of the contract or connection with the contract, there isn’t a clear court of jurisdiction to exercise power on it.

The forum selection cause appears to be important when in a dispute, it’s also relating to the governing law, the legal procedure, and language for trial and etc.

As a practising lawyer for more than ten years, I advise all foreigners to not forget to conclude a formal contract with a forum selection clause when making international business with Chinese individuals or companies.

More information about forum selection relating to China, you could find our contact page to reach a lawyer to request an advice.