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China's Supreme Court invites foreigners for first time

China Daily By Hou Liqiang, June 12, 2014 Adjust font size:

The Supreme People's Court invited foreign diplomats on Wednesday for the first time to attend a case involving foreign interests.

Domestic and foreign experts said the invitation shows the openness of China's judicial system and will help improve the country's investment environment for foreign enterprises.

Representatives from Pakistan and the Republic of Korea, a scholar from Germany and dozens of law students and media representatives attended the court hearing.

At the hearing, Thumb Environmental, a company in Fujian province, disputed a capital contribution issue with Sino-Environment Technology Group, its parent company based in Singapore.

A lawsuit was filed in April 2012 at Fujian High People's Court, which at the time ruled that Sino-Environment Technology must pay 45 million yuan ($7.2 million) to Thumb Environmental.

Thumb Environmental, registered in 2000, had been given approval to raise its registered capital from 130 million yuan to 380 million in 2008. But in May 2009, Sino-Environment Technology stopped contributing capital after a contribution of about 185 million yuan.

Sino-Environment Technology argued in court that it had changed the legal representative of Thumb Environmental and that the replacement, Cosimo Borrelli, had already withdrawn the lawsuit.

Thumb Environmental said the legal representative had yet to be changed.

On Wednesday, the court accepted Sino-Environment's argument and overturned the verdict from Fujian High People's Court.

A diplomat, speaking on condition of anonymity, said the public hearing shows the openness of China's judicial system.

"The quality of the deliberation, the quality of the debate, the quality of the arguments were extremely high and can be compared with those in any countries," he said.

Nils Pelzes, a Max Planck Institute research fellow who attended the hearing, said its openness will help to improve the investment environment for foreign companies.

"It's very valuable because it not only affects the situation of the two companies, but you also have to keep in mind that it will affect a lot of cases in which parent companies are unable to really control their subsidiaries," he said.

"China provides a framework for work on an international level by recognizing the foreign appointments of administrators," he added.

Shen Sibao, a business law professor at the University of International Business and Economics in Beijing, said the public hearing will make foreign investors feel more confident in protecting their interests in China.

He said it is very important to guarantee their interest in juridical practice to attract foreign investment.

The case shows that China's judicial system is just, open and transparent and ensures that foreign companies are treated the same as domestic companies in China's judicial system, he added.

Liu Jingdong, an international economics law expert at the Chinese Academy of Social Sciences, said opening the court to the public and foreigners shows the transparency of China's judicial system.

"It's significant to promote the openness and transparency of cases involving foreign interests," Liu said.

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