THE PLIGHT, ESSENCE AND WAY OUT OF JUDICIAL SETTLEMENT OF CHINA’S INTER-REGIONAL PRIVATE LAW DISPUTES: FROM THE PERSPECTIVE OF LEGAL INTEREST COORDINATION

Li Yiming & Yi Zaicheng

TABLE OF CONTENTS

I. INTRODUCTION

II. THE PLIGHT OF JUDICIAL SETTLEMENT OF INTER-REGIONAL PRIVATE LAW                    DISPUTES IN CHINA

A. Jurisdictional Conflicts in Judicial Settlement of Inter-regional Private Law Disputes

B. Conflicts in the Application of Law

C. Current Situation of and Plight in the Recognition and Enforcement of Inter-                regional Private Law Judgments in China

III. THE ESSENCE OF THE PLIGHT

IV. NEGOTIATION IS THE WAY TO COORDINATE LEGAL INTERESTS IN INTER-                    REGIONAL PRIVATE LAW

V.  DISCUSSION ON THE SPECIFIC RULES FOR GETTING OUT OF THE PLIGHT

A. Understanding and Suggestions on Inter-regional Conflict of Jurisdictions from the      Perspective of Coordination of Legal Interests

B. Application of Law

C. Coordination of Recognition and Enforcement of Inter-regional Private Law                   Judgments

Cross-strait Four Regions in Greater China belong to different jurisdictions. In the process of judicial settlement of private law disputes between the four jurisdictions, there are legal difficulties in jurisdiction, application of law and the recognition and enforcement of court decisions. Although the internal laws of the four jurisdictions and the cross-jurisdictional bilateral agreements provide rules for the settlement of these conflicts of laws, there are no systematic and comprehensive provisions in the four jurisdictions. In other words, neither the existing unilateral rules in the four jurisdictions nor resolving inter-regional private law conflicts by reference to the rules of private international law could reflect the particularity of China’s inter-regional private law. Behind such dilemma are conflicts of legal interests, since these jurisdictions solely focus on unilateral legal interests when drafting legal rules, or pursue superficial convergence of conflict rules, we cannot fundamentally resolve the dilemma in the judicial settlement of China’s inter-regional private law disputes. In order to get out of the plight in the judicial settlement of inter-regional private law disputes in China, these jurisdictions should take the coordination of legal interests as the starting point and purpose, from soliloquy to negotiation, from independence to equal respect and communication, establishing a good communication mechanism among jurisdictions, courts, legislators and the parties concerned.

I. INTRODUCTION

Conflicts involved in inter-regional private law of China have nearly the same basic nature, principles and solutions with conflicts in private international law, but they also have their particularities. The particularities can be seen in many aspects, such as different conflicts of laws existing both between inter-sovereign states and within sovereign states, the same or similar historical and cultural traditions in the four regions cross the Straits, the interdependence and mix of the movements of people, capital and goods between four regions, and two agreements under the Closer Economic Partnership Arrangement (CEPA) and the Economic Cooperation Framework Agreement (ECFA) signed in terms of cross-jurisdictional trade rules of the real economy. The two agreements under the CEPA and the ECFA are cross-jurisdictional free trade agreements. With the introduction of supplementary agreements to these agreements, the CEPA has been improving, which will bring the four regions more closely together in terms of trade and economic relations. But this is accompanied by growing civil and commercial disputes between the four jurisdictions and the figure will continue to rise. At present, the legislation and judicial practice of judicial settlement of inter-regional private law disputes in China are still lagging behind the reality. There are some areas that hinder the development of economic and trade relations of the real economy. It is difficult for many cross-jurisdictional private law disputes to be settled through judicial ways in a timely and effective manner. What is the legal background of the plight in private law dispute settlement? What are the underlying causes? What is the theoretical way to solve this plight and what problems should we pay attention to? What should we pay attention to when we legislate and establish judicial rules? All these problems are worth combing.

II. THE PLIGHT OF JUDICIAL SETTLEMENT OF INTER-REGIONAL PRIVATE LAW DISPUTES IN CHINA

With the integration of the real economy and frequent labour turnover, civil and commercial disputes between the four regions are also increasing. If these disputes are resolved through judiciary means, it will be difficult for lawyers and judges involved in the cases to resolve these disputes in an easy way. From the perspective of the rules of private international law, there are conflicts and contradictions in the process of resolving these cross-jurisdictional civil and commercial disputes, and there are conflicts whether the exercise of jurisdiction or application of law will be adopted, as well as in the recognition and enforcement of the judgments of other courts. The particularity and complexity of the conflict of laws between the four regions make it more difficult to solve cross-jurisdictional private law disputes.

A. Jurisdictional Conflicts in Judicial Settlement of Inter-regional Private Law Disputes

The first outstanding feature of the inter-regional private law disputes between the four regions is the inconsistency of jurisdictional rules. Because courts in each region decide whether to exercise jurisdiction by their own laws when trying civil and commercial cases, and there are differences in the legislation of jurisdiction in the four jurisdictions. Some of these differences concern the differences in the principles of basic jurisdiction between different jurisdictions. For example, the difference between the doctrine of ‘competent jurisdiction’ in Hong Kong and the principles of common territorial jurisdiction and personal jurisdiction in China’s mainland tends to cause the situation that both the China’s mainland and Hong Kong have jurisdictions in a case involving both parties. In addition, there are differences in specific jurisdictions, such as consent jurisdiction and exclusive jurisdiction rules. Therefore, the conflict of jurisdictions in China’s cases involving inter-regional private law is inevitable, and parallel proceedings and forum shopping tend to appear in judicial practices.

In judicial practices, the conflict of jurisdictions will also affect the recognition and enforcement of judgments awarded in foreign jurisdictions. In the four jurisdictions across the Straits, the jurisdictions of foreign courts over cases are an important condition for judging whether their judgments can be recognized and enforced locally, and the basis for the judgment is local law rather than foreign law. Therefore, one of the most serious consequences brought by jurisdictional conflicts is that judgments are not recognized and enforced locally. Specifically, the basic classifications of jurisdictions in the four regions are basically the same, but the basic doctrines and specific contents of the jurisdictions of cases involving private law are quite different, which easily leads to the above problems.

Even if procedural laws of different courts provide the same provisions on jurisdiction and the same point of connection for the exercise of jurisdiction, there will be conflicts in the application of jurisdiction because there are two or more facts meeting the point of connection in the same legal relationship or because the two parties have different identifications of connecting factors. China’s mainland, Hong Kong and Macao Special Administrative Regions treat cross-jurisdictional civil and commercial cases by analogy as foreign-related cases, and apply local rules regarding the jurisdiction of foreign-related civil and commercial cases. In addition, the three jurisdictions have not yet reached a multilateral agreement on civil and commercial jurisdiction, and their original practices will continue, so the conflict of civil and commercial jurisdiction is inevitable. Although the three jurisdictions can avoid conflicts of jurisdiction through their own unilateral legislation, due to the lack of communication and consensus, unilateral legislation cannot fundamentally eliminate conflicts of jurisdiction. Therefore, co-ordination and resolutions of those conflicts are not only the premise to ensure reciprocal recognition and enforcement of judgments between jurisdictions, but also the urgent need to safeguard the legitimate rights and interests of parties concerned, ensure the stability of civil and commercial legal relations and promote economic exchanges among jurisdictions.

B. Conflicts in the Application of Law

From the point of view of the principle of private international law, the process of law application is to apply conflict norms in local laws on the basis of qualitative and classification of cases, and to find the applicable law ultimately according to conflict norms. In the process of judicial settlement of inter-regional private law disputes in China, courts of the four regions have the following characteristics in the application of laws, especially in the application of conflict norms. Firstly, courts in different jurisdictions can use conflict norms consciously and actively use different methods of choice of law to determine the substantive law applicable to cross-jurisdictional private law cases. Secondly, in a considerable number of cases, judges in different jurisdictions exclude the substantive law of other jurisdictions specified in the conflict rules on the ground of the reservation of public order, and apply their own substantive laws to resolve cross-jurisdictional private law disputes. Thirdly, conflict norms regarding flexibility and subjectivity, such as the application of the principle of party autonomy and the principle of closest contact, are frequently applied, but there are greater randomness in the application of these rules, and finally the place of court is more likely to be regarded as the place with the most significant relationship, and thus the lex fori is applied as the proper law. Fourthly, when considering the application of the law, these courts pay little attention to identification and fail to strictly distinct substantive and procedural issues. Fifthly, due to sharing a common statutory tradition, China’s mainland, Macao and Taiwan region tend to converge on conflict norms. For example, in the application of laws in contract disputes, the choice of the parties for the application of the law will be first considered, and the most significant relationship will be used as the point of contact to find proper law if they do not have; in addition, conflict rules are applied based on the place of things when resolving the conflicts of real right law; and in infringement cases, conflict rules are used mainly on the basis of lex loci delicti. From the perspective of Hong Kong law, there is no systematic law to regulate conflicts in Hong Kong, and laws to regulate conflicts of international private law are scattered in some relevant case law and statutory law. However, there is also the application of the law on general issues, including identification, renvoi, public policy, property relations, contractual relations, torts, and marriage and family issues, in addition, a tendency of convergence can be seen in Hong Kong in the conflict of laws concerning the choice of law.

Although there is convergence in the conflict rules in China’s private inter-regional law, it is still in form, and great differences still exist in the understanding and application of the substance of specific conflict rules. In terms of the understanding and application of the principle of closest connection in the four jurisdictions, one big difference is that Hong Kong uses the centre of gravity theory in the common law to analyze and determine the place with the most significant relationship, while the other three jurisdictions use characteristic performance, and even between China’s mainland, Taiwan region and Macao, which share the same statutory tradition, the understandings of characteristic performance is still different.

C. Current Situation and Plight of the Recognition and Enforcement of Inter-regional Private Law Judgments in China

Recognition and enforcement is the most important part of the final settlement of foreign-related civil and commercial disputes or cross-jurisdictional civil and commercial disputes. Sources of legal validity for the recognition and enforcement of cross-jurisdictional private law judgments in the four regions mainly include: internal law of each jurisdiction; bilateral agreements between jurisdictions; and national law enacted by the central legislature governing China’s mainland, Hong Kong and Macao. 

1. Rules of Internal Law. — Currently, sources of law for the recognition and enforcement of the judgments delivered in the courts of foreign jurisdictions are mainly the internal law of each jurisdiction. These rules are relatively comprehensive, specific and can be applied in the judicial practices, but they fail to distinguish private law cases involving foreign countries and private law cases involving foreign jurisdictions, which have unilateral features.

2. Bilateral Agreement on Judicial Assistance. — The multilateral agreements between jurisdictions have yielded results in China’s mainland, Hong Kong and Macao. In terms of the recognition and enforcement of inter-regional civil and commercial judgments, there has been a lack of legal basis for reciprocal recognition and enforcement between China’s mainland, Hong Kong and Macao, which is dominated by unilateral intra-regional laws and regulations, making the judicial settlement of inter-regional private law disputes lack of enforcement guarantees, and thus the protection of the rights and interests of the parties is difficult to achieve. Thanks to the efforts of these three regions, the Supreme People’s Court, in 2006, reached the Arrangement between China’s Mainland and Hong Kong Special Administrative Region on Reciprocal Recognition and Enforcement of the Decisions of Civil and Commercial Cases under Consensual Jurisdiction (hereinafter referred to as the Arrangement between China’s mainland and Hong Kong) and the Arrangement between China’s Mainland and Macao Special Administrative Region on the Reciprocal Recognition and Enforcement of Civil and Commercial Judgments (hereinafter referred to as the Arrangement between China’s mainland and Macao) with the Hong Kong Special Administrative Region and the Macao Special Administrative Region respectively. The Arrangement between China’s mainland and Macao came into force as of April 1, 2006, and the Arrangement between China’s mainland and Hong Kong came into force as of August 1, 2008. These two inter-regional judicial assistance agreements are important legal sources for reciprocal recognition and enforcement of the court judgments delivered between China’s mainland and Hong Kong and Macao. 

However, these two arrangements have not fundamentally achieved the recognition and enforcement of the court judgments delivered between the three regions, which can be seen in the specific content of the two Arrangements. The object of judicial assistance determined in the Arrangement between China’s mainland and Hong Kong is only the final and enforceable judgments of the civil and commercial cases in which courts in China’s mainland and Hong Kong have written jurisdiction agreements. The Arrangement between China’s mainland and Hong Kong have further restrictions on the above provision. The ‘certain legal relationship’, on which jurisdiction can be negotiated, stated in the Arrangement between China’s mainland and Hong Kong refers to a civil or commercial contract between the parties concerned, excluding a contract of employment or a contract to which a natural person is involved as a party for purposes of personal consumption, family affairs or other non-commercial purposes. In addition, even the cases where the parties agree to choose jurisdiction are not within the adjustment scope of the Arrangement between China’s mainland and Hong Kong. In the consultation process between China’s mainland and Hong Kong, China’s mainland hoped to make the Arrangement between China’s mainland and Hong Kong become a judicial assistance agreement that can adjust all civil and commercial cases between the two regions, just like the Arrangement between China’s mainland and Macao. However, Hong Kong did not accept the proposal and insisted on imposing significant restrictions on the adjustment scope of the Arrangement between China’s mainland and Hong Kong. In contrast, the Arrangement between China’s mainland and Macao should cover more cases than the Arrangement between China’s mainland and Hong Kong, since they share the same statutory tradition. This arrangement shall govern the reciprocal recognition and enforcement of judgments of civil and commercial cases (including the labour dispute cases in China’s mainland and the civil labour cases in the Macao Special Administrative Region) between China’s mainland and the Macao Special Administrative Region, and the judgments and verdicts of civil damages involved in criminal cases, but it shall not be applicable to administrative cases. The Arrangement between China’s mainland and Macao governs a relatively wide range of inter-regional civil and commercial cases, and has basically no restrictions and omissions on the coverage of civil and commercial cases between China’s mainland and Macao. However, there are some differences between judicial concept and judicial environment, and thus the actual effect of this arrangement in judicial practice remains to be observed. The great difference between the two arrangements made by China’s mainland with Hong Kong and Macao respectively also reflects the differences between the legal systems of China’s mainland, Hong Kong and Macao. This is the particularity of China’s inter-regional conflict of laws, and also a major hindrance to the resolution of conflict of laws and the coordination of inter-regional conflict of laws.

On January 18, 2019, the Supreme People’s Court and Hong Kong Special Administrative Region reached the Arrangement between China’s Mainland and Hong Kong Special Administrative Region on Reciprocal Recognition and Enforcement of the Decisions of Civil and Commercial Cases. After this arrangement comes into effect, the judgment of the case can basically achieve circulation between China’s mainland and Hong Kong, greatly saving judicial resources of the two places. After being converted into local legislation in Hong Kong and converted into judicial interpretation in China’s mainland, the judgment will take effect simultaneously in both places. The arrangement has made comprehensive and detailed provisions on the scope and content of judgments in civil and commercial cases, procedures and methods of application for recognition and enforcement, the examination of jurisdiction of the court of first instance, the situation of non-recognition and enforcement, and relief approaches, etc. There are many innovations and breakthroughs.

3. National Laws Enacted by the Central Legislature.— National laws enacted by the central legislature are mainly stipulated in two basic laws. According to article 95 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, ‘the Hong Kong Special Administrative Region may, through consultations and in accordance with law, maintain juridical relations with the judicial organs of other parts of the country, and they may render assistance to each other.’ According to article 93 of the Basic Law of the Macao Special Administrative Region of the People’s Republic of China, ‘the Macao Special Administrative Region may, through consultations and in accordance with law, maintain judicial relations with the judicial organs of other parts of the country, and they may render assistance to each other.’ These two provisions in the two basic laws are only principles, and they need to be further clarified in the specific system.

Overall, Taiwan region’s unilateral rules are relatively comprehensive in terms of the recognition and enforcement of court judgments of private law cases and internal law compared with the other three regions. In terms of bilateral agreements on the recognition and execution of private law cases between China’s mainland and Hong Kong and Macao, the Arrangement between China’s mainland and Macao is relatively comprehensive and systematic. In contrast, the Arrangement between China’s mainland and Hong Kong still in its primary stage, which has limited help in resolving cross-jurisdictional private law disputes. But after the Arrangement between China’s Mainland and Hong Kong Special Administrative Region on Reciprocal Recognition and Enforcement of the Decisions of Civil and Commercial Cases come into effect, it is a big step in dealing with this issue. In addition, national sources of law for the recognition and enforcement of the recognition and enforcement of the court’s judgments delivered in foreign jurisdictions are just provisions from the two basic laws for which it is difficult to be applied in judicial practice. All these problems are tests for the increasingly close economic and trade relations between the four regions.

III. THE ESSENCE OF THE PLIGHT

Although each jurisdiction’s internal norms and cross-jurisdictional agreements on mutual judicial assistance help a lot to resolve private law settlements between the four regions both in the application of law and the recognition and enforcement of court judgments, there are still many shortcomings and difficult problems to solve. Formally, although these problems are mainly caused by the differences in internal legislation and administration of justice of foreign-related civil and commercial cases between the four regions and the limitations with only bilateral judicial assistance agreements, these differences and limitations have historical necessity and reasonability. However, from a practical and long term view, such differences and limitations need to be coordinated and overcome. And since these problems are diverse and complex, the way to find a solution from these rules will lead to one-sided views of these problems, thus resulting in failure to find a complete solution, just as the poem says, ‘the true face of Lushan mountain is lost to my sight, for it is right in this mountain that I reside.’ Therefore, it is necessary for us to think more deeply about the plight in the judicial settlement of the above inter-regional private law disputes and find out the underlying causes beyond the legal differences and seek solutions accordingly.

Just as the saying goes, ‘all people work for their own benefits.’ In cross-jurisdictional disputes, the participants in private law relations come for their benefits and struggle for their benefits. In fact, the process of resolving disputes is also the struggle process for each party’s legal interests. From the point of view of the parties concerned, the purpose of seeking cross-jurisdictional private law dispute settlement is to make their own interests recognized and protected by law as far as possible. The essence of the disputes in jurisdiction, conflict of laws and judicial assistance, caused by the differences of laws between different jurisdictions, is the conflicts of legal interests. There are also conflicts of legal interests among lawmakers, judiciaries and law-abiding persons. 

The classical interpretation of legal interests can be seen from Pound’s  point of view, a famous jurist. He held that ‘a demand or desire or expectation which human beings, either individually or in groups or associations or relations, seek to satisfy, of which, therefore, the adjustment of human relations and ordering of human behaviour through the force of a politically organized society must take account.’ The mission or function of law or legal order is not to create interests, but to recognize, determine, realize and safeguard interests. There is no doubt that the central or core mission of private international law is to resolve conflicts of laws, but this is not its fundamental starting point and ultimate goal. Its fundamental starting point is to solve the disputes of legal interests, and its purpose is also to distribute legal interests among the relevant parties in a reasonable manner. Therefore, in order to get out of the plight of judicial settlement of disputes in China’s inter-regional private law, we must consider and find solutions from the perspective of legal interests. In order to resolve inter-regional private law disputes in China through judicial means, we must consider, and find a solution from the perspective of legal interests.

The theories of jurists make great contributions to the development of private international law. When reviewing these theories, we hold that these theories will basically be demonstrated from the conflict of legal interests behind the conflict of laws. For example, Collie’s ‘governmental interest analysis’ and Ehrenzweig’s ‘lex fori approach’ are designed to expand the coverage of lex fori so as to protect the interests of the state in which a legal action is brought. Fuller took his idea one step further in the Babcock v. Jackson case of 1936 that the proper law should be the law of the state with the greatest interest in solving a particular problem. It was after studying and reviewing the above cases that Rees established ‘the most significant relationship rule’, which has become an international choice of law in contemporary times and has been widely used in national legislation, national justice and international treaties. There are different judgment rules for the most significant relationship in common law countries and civil law countries, but these rules have one thing in common: the method of interest analysis for various elements involved in the case. According to ‘the doctrine of coordination of laws’ put forward by Franz Kuhn, a private international law scholar, behind the conflict of laws is the conflict of legal interests, and the starting point and fundamental purpose of resolving the conflict of laws should be the coordination of legal interests. Kegel, on the basis of comparing the similarities and differences between the laws of civil law countries and those of common law countries, and studying the American history of the theories concerning conflict of laws, put forward the interest theory. According to the interest theory, lawmakers and judiciaries should study not only the interests of states, but also the interests of the international community, and combine the two to consider and analyze the application of law, thus making the final determination. 

The author thinks that the coordination theory is also reasonable in terms of the consideration and settlement of inter-regional private law disputes in China from the perspective of the conflict of legal interests. This is because the inter-regional private law conflicts in Greater China also appear as the conflicts and struggles of legal interests. Furthermore, the interest relationship and conflict of interests behind the plight in judicial settlement private international law. The cross-strait-four-places are four separate jurisdictions, in which there are interests between individuals or between individuals and society as well as laws governing such interests. When these interest relationships cross jurisdictions, the components of these relationships are governed by different legal systems. Since these elements are governed by their respective legal systems, different legal systems are involved in these interest relationships at the same time. When these legal systems act on the same interest relationship at the same time, conflict of laws will emerge. Therefore, it can be seen that the conflict of laws is caused not only by the differences between legal systems involved in a cross-jurisdictional interest relationship, but also the coexistence of the dominance of legal systems over the same interest relationship. Finally, it is demonstrated by the conflict of jurisdictions, the conflict of application of law and the difficulty in recognizing and enforcing the judgments of the foreign courts. Although the inter-regional private law governing civil and commercial relations across the four places is formally represented in the adjustment to the conflicts of civil and commercial laws concerning foreign affairs, its essence is to coordinate legal interests in cross-jurisdictional civil and commercial exchanges, and to establish a fair and reasonable new order of cross-jurisdictional civil and commercial cases, so as to provide institutions to ensure the flow of personnel and the win-win economic interaction.

IV. NEGOTIATION IS THE WAY TO COORDINATE LEGAL INTERESTS IN INTER-REGIONAL PRIVATE LAW

We believe that since the coordination of legal interests of the four regions is unique, their distinctive characteristics should be applied in the methodology. The coordination of interests should be based on sufficient communication. Therefore, we believe that Habermas’s discourse theory of law is the way to coordinate the legal interests involved in private inter-regional law. Legal negotiation links the acceptability of judicial decisions not only with the quality of arguments, but with the structure of the debate process. The validity of legal discourse depends on the validity of legal communication between legal subjects, and the legitimacy of law and the rationality of the administration of justice are achieved through the communicative rationality of legal discourse. 

The conflicts of private law between the four regions, whether they are the conflicts of jurisdictions, the conflicts of law application or the difficulties in the recognition and enforcement of court decisions, all embody the following characteristics. Firstly, unilateral legislation within the jurisdiction. Each jurisdiction uses its internal law as the main source of law to resolve the conflict of laws and has few bilateral coordination agreements, and lack of communication with other jurisdictions. In terms of legal level, the only two bilateral coordination agreements in 2006, the Arrangement between China’s mainland and Hong Kong and the Arrangement between China’s mainland and Macao, are still low-level arrangements among the three jurisdiction courts. The most important thing is that the two arrangements still lack sufficient communication and consultation. Secondly, from the perspective of legal paradigm, the above two arrangements are embodied in the expert opinions formed after a certain communication between courts. Whether the opinions of the parties involved in civil and commercial relations and the opinions of the legislative and interpretative bodies of the basic law are fully taken into account in the cross-regional exchanges is unknown. But given to the plight in private inter-regional law in Greater China, there are still many problems mentioned above in lawmaking and administration of justice. 

Habermas held that the fundamental crisis of modern rule of law lies in the lack of legitimacy of law itself, so the solution is to seek the way to ensure legitimate law. Thus, according to the solution, the settlement should be based on the interaction between subjects rather than on the isolated individual perspective; the settlement must be based on democracy with the participation of the public in lawmaking, instead of on the government imposing laws from top to bottom; the settlement must ensure that individuals are not assimilated by collectives, rather than simply replacing individual will with collective will; the settlement must ensure that private autonomy and public autonomy are mutually premised, rather than opposing or integrating them. Rules of private inter-regional law governing the four regions are mostly unilateral norms, which are mainly demonstrated in the unilateral regulation of internal law in each jurisdiction. This situation is like a one-man show, lacking of communication and coordination between relevant stakeholders in jurisdictions, which leads to the fact that the legal interests of the parties involved in private inter-regional law cannot be effectively coordinated.  

How to shake off the plight and the crisis? Habermas thought that only by starting from the relationship between the subjects and replacing the dominance of purposive activities with the communicative action oriented by understanding, can we get out of the misunderstanding and the plight. The mutual understanding between subjects is what Habermas’ communicative rationality wants to achieve. ‘Interaction is in accordance with the norms that must be observed, in which expectations of each other’s behaviour are stipulated, and must be understood and recognized by at least two actors (persons).’ ‘Another distinct advantage of communicative behaviour designed for the purpose of mutual understanding is that it reveals the knowledge background contained in the behaviour, which automatically enters the process of inter-subject interpretation.’

According to Habermas, the basis of communicative action is human’s communicative rationality, the basic point is interpersonal understanding and cooperation, the process is the consultation and discussion, and the aim is to reach a compromise or consensus on relevant issues. In order to ensure an effective communication process, thus avoiding the risk of dissents, the discourse procedure should be an ideal situation: everyone is eligible to participate in discussions on matters related to himself; all people have equal status in discussions; participants are free to express their opinions on the topics of discussions without any external restrictions; what matters is compelling reasons, not anything else; The law generated through the paradigm of procedural law may still be wrong or illegitimate, but the communication procedure is characterized by publicity and reflection, and thus errors and illegitimacy can be corrected through continuous discourse. 

The Basic Law of Hong Kong and the Basic Law of Macao both provide corresponding provisions on this point in articles 95 and 93 respectively: The Hong Kong Special Administrative Region and the Macao Special Administrative Region may, through consultations and in accordance with law, maintain juridical relations with the judicial organs of other parts of the country, and they may render assistance to each other. The Arrangement between China’s mainland and Hong Kong and the Arrangement between China’s mainland and Macao are the products of such consultation. Therefore, in terms of legal principle, the settlement of private law disputes between the four regions has a theoretical basis, and has had some practices. Can such negotiation rules in the field of judicial assistance be analogized in the conflict of jurisdictions and conflict of laws? How does the communication procedure in judicial assistance involve publicity and reflection? All these problems need further discussion. Moreover, the way we can rely on is negotiation and communication. 

‘We can think that all parts of life worlds, such as cultural patterns, legal systems and personality structures, are the concentration and accumulation of understanding process, coordination process and socialization process that run through communicative actions.’ Habermas maintained that people should solve social contradictions, social disputes and conflicts through sincere dialogue, and strengthen communication by dialogue, ensuring people reach consensus on the basis of mutual understanding. ‘Understanding achievement is a process of producing identification, based on mutually agreed validity requirements.’ In terms of the settlement of inter-regional private law disputes in Greater China, the only law that counts as legitimate is one that could be rationally accepted by all citizens in a discursive process of opinion-and-will-formation, in which it is based on the validity of verbal communication and the possibility of reaching a specific normative consensus, and all parties concerned can reach consensus on laws through rational discourse and discursive vindication with equality and freedom, and through coordination of will. In this sense, we believe that when resolving inter-regional legal conflicts in China, we must respect each other’s social, political, economic and legal systems, recognize that all jurisdictions are equal, that jurisdictions are equal in legislative and judicial fields, and that relevant legal affairs must be negotiated on an equal footing. At the same time, it also requires all jurisdictions to guarantee the equal civil and commercial legal status of citizens of foreign jurisdictions in their legislative and judicial process, and to give equal protection to their legitimate rights and interests. 

V. DISCUSSION ON THE SPECIFIC RULES FOR GETTING OUT OF THE PLIGHT

In the judicial settlement of inter-regional private law between the four regions, especially between China’s mainland and Hong Kong as well as Macao, a background that we must face is one country, two systems. One country, two systems is a basic principle and policy put forward by the Chinese government to solve the problems concerning national reunification. The core principle of the two systems is the high degree of autonomy. Since we are discussing the settlement of inter-regional private law conflicts under the background of one country, two systems, the attempt to introduce uniform inter-regional conflict of laws and substantive law concerning legal conflicts in a short time runs counter to this background. Judging from the law itself, the difference between legal systems is also the driving force for vitality, publicity and continuous improvement of the law, just as ancient Chinese philosophers said: ‘harmony in diversity’. In the international community, people have already realized the importance of differences to our world. For example, the Convention on Biological Diversity issued by the United Nations recognizes the importance of biodiversity and diversity to the earth, especially for human development. Therefore, it is impossible to have a conflict of laws to resolve all inter-regional private law conflicts between the four regions. Even if there is a substantive law which can resolve all inter-regional private law conflicts, the result may be disastrous. Thus, in resolving the inter-regional private law conflicts between the four regions, we should only discuss coordination, not unification. 

In the settlement of inter-regional private law disputes between the four regions, it is very important to consider how to coordinate legal interests as a whole, whether in lawmaking or establishing judicial rules. Among the interests involved, what kind of legal interests is the most important and should be first specified in the internal coordination rules of each jurisdiction and bilateral arrangements? Legal interests of different subjects at different levels will be involved in inter-regional private law disputes. The forms and contents of these legal interests will be different. Specifically, there will be the interests of the parties concerned, the interests of different jurisdictions, the public interests in different jurisdictions and the whole cross-jurisdictional public interests. When resolving inter-regional private law disputes involving these different levels of legal interests, we face a common problem: which interest should be given priority in coordination? Based on the characteristics of private law, private interests of the parties concerned are the first legal interests to be considered in coordination. 

A. Understanding and Suggestions on Inter-regional Conflict of Jurisdictions from the Perspective of Coordination of Legal Interests

In inter-regional private law cases, the underlying causes of the conflict of jurisdictions in civil cases are the differences and conflicts of political and economic interests between different jurisdictions. Behind the conflicts of jurisdictional rules are conflicts of various legal interests between different jurisdictions. Therefore, it is necessary to coordinate at the international level on the basis of equality and mutual benefits and interest balance. For example, we can set up an organization among jurisdictions, such as an inter-regional jurisdiction coordination organization, which should be established by specific institutions in the four regions on the basis of consultation and mutual understanding. As long as all parties can reach a consensus, realize that legal differences will harm everyone’s interests, and sincerely want to eliminate such differences, such organizations can be established through efforts. The most important way to solve the jurisdictional conflicts in the private inter-regional law is to take into account the legal interests of other jurisdictions, the interests of the parties involved in cross-regional private law activities and other interests in the legislation and private law of determining the jurisdiction of the private inter-regional law cases in the four regions across the Straits.

In terms of lawmaking, there are several requirements for legislators about internal lawmaking. First, legislators are required to reduce the number of provisions concerning exclusive jurisdiction, and limit the coverage of exclusive jurisdiction enjoyed by courts to matters concerning public policies and the most important interests of the jurisdiction. Second, in order to avoid and eliminate the positive inter-regional conflict of jurisdictions of private laws, legislators should consider the general practice of different jurisdictions within the region, and try their best to make jurisdiction norms of their jurisdictions recognized by other jurisdictions; while in order to avoid and eliminate the negative inter-regional conflict of jurisdictions of private laws, legislators should adopt bilateral conflict norms as far as possible to determine the jurisdictions of inter-regional private law cases, and provide provisions in some aspects which may lead to negative conflicts. Considering that forum shopping by agreement between the parties is an effective way to promote harmonization of the norms of jurisdictions in inter-regional private law and eliminate conflict of jurisdictions between jurisdictions in specific cases, the scope of choosing courts by agreement between the parties should be expanded as far as possible in lawmaking. 

In terms of administration of justice, the conflict of jurisdictions of inter-regional private law cases in Greater China can be avoided and eliminated through the theory of coordination of legal interests, which is the legislation of courts of different jurisdictions based on the relevant jurisdictions of the court. The specific rules are as follows: first, the right of the parties to choose jurisdictional court by agreement shall be fully guaranteed; as long as the agreement is not inconsistent with the norms of exclusive jurisdiction of its jurisdiction, the absolute validity of this agreement should be granted and recognized, thereby excluding other jurisdictions of any kind. Second, if the parties in a case fail to find an appropriate jurisdictional court in the relevant jurisdictions, in order to eliminate the negative inter-regional conflict of jurisdictions over such inter-regional private law cases, the court in the relevant jurisdiction should expand its jurisdiction on the basis of some connection between the case and the jurisdiction and accept and hear the relevant cases. In addition, in terms of the coordination of legal interests, whether we can learn from the forum non convenience in foreign law or the Brussels Regime of EU to coordinate jurisdictional conflicts is also worthy of in-depth study, both in the legislation and administration of justice regarding the coordination of conflict of jurisdictions.

B. Application of Law

Today, against the background of more frequent cross-jurisdictional civil and commercial exchanges in Greater China, we should give full play to the role of private inter-regional law in coordination of interests. From this point of view, in order to promote the sound development of cross-jurisdictional civil and commercial exchanges in Greater China, safeguard the legitimate rights and interests of parties in different jurisdictions, and coordinate the interests of all parties concerned, we can, from the following aspects, coordinate the conflicts concerning the application of inter-regional private law in China.

First, to coordinate convergent conflict norms between different jurisdictions. As mentioned earlier, in terms of the application of private inter-regional law in Greater China, there is a convergence in the forms of conflict norms. We believe that in the process of legislation and judicature of conflict rules in various jurisdictions, we should proceed from the perspective of coordination of legal interests. Firstly, for general types of civil and commercial cases, such as contract, marriage, inheritance, family and other areas, we should pay more attention to the interests of both parties and converge to the principle of party autonomy in conflict norms. Secondly, in the tort area such as product liability, each jurisdiction should attach importance to the protection of the interests of the weak parties. When choosing traditional conflict rules, we may consider the conflict of laws of protecting the interests of the weak so as to apply laws beneficial to the weak parties, which is also a trend in private international law. Thirdly, in the field of cross-jurisdictional environmental tort, in order to protect the interests of the whole, the court shall consider the protection of public interests as an important factor in the application of conflict norms.

Second, at present, there is a situation in the field of private international law in which international model laws and the uniform laws are used to promote the harmonization of laws of countries. Compared with private international law, private inter-regional law enjoys similar or at least mutually understandable legal and cultural backgrounds. As mentioned earlier, with the integration and interdependence of economic and trade relations between the four regions, bilateral agreements on substantive economic and trade relations between different jurisdictions have been established and continuously improved. Thus, it is inevitable to eliminate or make the differences less in the application of rules in private inter-regional law and in substantive law. When conditions are appropriate, it is an ideal method to make a model law for private inter-regional law. The advantages of this method are obvious. It not only can provide a good reference, and have a material impact on the settlement of inter-regional private law conflicts, but also will not clash with the background of one country, two systems.

Third, to apply the reservation of public order in the harmonization of inter-regional law. The reservation of public order in inter-regional conflict of laws is designed to prevent the fundamental interests of the jurisdiction in which a legal action is brought from being harmed by applying laws of foreign jurisdictions. Since there are four different jurisdictions in China, the existence of the reservation of public order is reasonable. However, since private inter-regional law has its own particularity, the application of the reservation of public order in private inter-regional law should be limited in some areas compared with that of private international law. Firstly, each jurisdiction should be subject to the principle of one country, two systems in the Constitution and the Basic Law. In principle, the legal systems of foreign jurisdictions should be recognized, which means that the reservation of public order should not be applied to the legal systems of foreign jurisdictions themselves. The reservation of public order should only be aimed at the effect of the application of laws of foreign jurisdictions, and the reservation of public order should not be applied to the effect that does not harm the public order. Secondly, given the coordination of legal interests, each jurisdiction should take into account the normal communication between the people of each jurisdiction when it applies the reservation of public order. When dealing with the conflict of public interests on certain issues, we should take into account its impact on the normal communication between the people. For example, when using the reservation of public order has a wide and serious impact on the normal communication, we should avoid using the reservation of public order as far as possible. When there is a conflict of public interests on some issues, the impact of the reservation of public order on the normal exchanges between the people should be taken into account. If the use of the reservation of public order has a wide and serious impact on their communication, the reservation of public order should be avoided.

C. Coordination of Recognition and Enforcement of Inter-regional Private Law Judgments

Among the three parts of jurisdiction, application of law and judicial assistance, private law judgments have real value only when they are recognized and enforced. In terms of jurisdiction, application of law and judicial assistance, private law judgments have real value only when they are recognized and enforced. In addition, in terms of the application of the law, as mentioned above, there is no possibility of and even no need for unification. There has been quite a lot of commonalities in the application of the law in different jurisdictions, and many conflict rules are actually consistent or similar. However, there are quite differences in jurisdiction and judicial assistance, and the coordination of jurisdiction conflicts as well as the recognition and enforcement of judgments of foreign courts are the focus of our current coordination. We have discussed how to coordinate conflict of jurisdictions through lawmaking and the administration of justice. The recognition and enforcement of judgments of foreign courts are related to the coordination of jurisdiction conflicts, which means that if the conflict of jurisdictions is resolved, then the difficulties in the recognition and enforcement of judgments are solved by more than half. Therefore, there are many commonalities between the coordination of the recognition and enforcement of judgments and that of jurisdictions. 

In recent years, through making bilateral agreements on the basis of equal jurisdiction, China’s mainland, Hong Kong and Macao Special Administrative Regions have reached agreement on some areas of judicial assistance centering on the recognition and enforcement of court judgments. Following this successful practice, the two sides reach an agreement on the relevant arrangements concerning judicial assistance through mutual consultation, sign a memorandum, and then promulgate and implement them separately in accordance with their local legal procedures. This model is conducive not only to the establishment of a scientific and effective judicial assistance mechanism on the basis of equal consultation between the two sides, but also to the exercise of their respective independent judicial and final adjudication powers in accordance with the law, fully reflecting the spirit of respect for the basic law and the laws of Hong Kong and Macao. This model can help the two sides not only establish a sound and effective judicial assistance mechanism but also exercise their independent judicial power and final adjudication according to law, which fully reflects the respect for the basic law and the laws of Hong Kong and Macao. However, from the perspective of interest coordination theory, whether for the recognition and enforcement of private law judgments between China’s mainland, Hong Kong and Macao, or that between Taiwan region and other jurisdictions, there is still the need to further strengthen coordination. Van Hoecke, a scholar of legal communication theory, wrote in his book Law as Communication: ‘Law itself is also fundamentally based on communication: communication between legislators and citizens, communication between courts and litigants, communication between legislators and judiciaries, communication between the parties, and communication in a trial.’ This communication is now considered to be within the framework of legalization of law: a rational dialogue among legal persons is the ultimate guarantee for the correct interpretation and application of the law. 

Therefore, the recognition and enforcement of judgments between the four regions still need more coordination in terms of legal interests. This kind of coordination should not be limited to the improvement of the existing system regarding recognition and enforcement of inter-regional judgments, though this improvement is also necessary. The real solution is to establish communication and coordination mechanisms on the recognition and enforcement of judgments. Such a mechanism should include not only communication and coordination mechanisms between legislative organs but also that between judicial organs and between the parties concerned, legislative organs and judicial organs, and other coordination mechanisms.