Chapter I General Provisions
Article 1 These rules, made in accordance with the Opinions of the Supreme People’s Court on the People’s Court Supporting and Ensuring the High-Level Reform and Opening Up of Pudong New Area and Building of a Leading Area for Socialist Modernization and in regard to the functions and responsibilities of the Shanghai Financial Court (the “Court”), are formulated to address the important, representative and pressing legal issues in the financial markets, meet the needs of financial reform and innovation for clear guidance on rules and stress testing of legal risks, prevent financial risks, facilitate the regulation of causes of action, and support the building of Shanghai into an international financial center.
Article 2 Test case scheme refers to the proceeding in which financial institutions, transacting parties, or other parties concerned petition to the Court to consider, as a test case, any dispute in relation to facts and legal issues with high relevance to the market that may arise from a proposed or ongoing cutting-edge financial activity which requires urgent legal clarification, and upon the hearing of which the Court provides clear guidance on the rules to the financial markets.
The test case scheme does not fall within the civil procedures, but can refer to the principles and spirits of the civil procedure regime.
Article 3 The test case scheme shall apply the following principles:
Adequate consultation. The parties to a test case shall, through consultation, agree on the main facts and the issues of the case to fully, adequately, and expressly present the dispute between them.
Openness and transparency. Except where prohibited by law or detrimental to the rights and interests of the parties, test cases shall be tried openly by taking full advantage of the judicial technologies and the relevant information and materials shall be disclosed on a timely and complete basis.
Good faith. The parties to a test case shall cooperate with each other in good faith, focus on the substantive issues, and minimize the unnecessary procedural disputes to advance the hearing of the case.
Extensive participation. Non-parties such as relevant financial regulatory authorities, financial self-regulatory organizations, and industry experts may opine on a test case.
Prohibition of abuse. The parties to a test case shall not abuse the test case scheme. The Court will proactively review all necessary matters ex officio to maintain public order in the financial markets.
Chapter II Initiation Procedure
Article 4 The parties to a financial transaction and other parties concerned may, upon agreement, petition in writing to the Court to initiate a test case.
Financial regulatory authorities and financial self-regulatory organizations may provide guidance and assistance to the above parties in the petition process.
Article 5 All of the following conditions must be met to initiate a test case:
(1) The case pertains to a financial and commercial dispute;
(2) The parties have no dispute over the basic facts of the case;
(3) The underlying legal issues are specific and clear; and
(4) The underlying legal issues are significant and typical.
Article 6 Parties that intend to initiate a test case shall submit a test case application.
The application shall clearly state:
(1) that the case is initiated under the test case scheme;
(2) the specific claims for which the application is submitted;
(3) the basic facts and legal issues of the test case;
(4) the reasons that the underlying legal issues are significant and typical;
(5) that the parties have reached a written consensus on initiating the test case and applying the rules of the test case scheme.
Article 7 The parties to a test case shall in principle retain attorneys to represent them in the proceedings.
The attorneys presenting the parties shall abide by the professional ethics and code of conduct; possess a good track record and extensive knowledge, skill, and experience in financial and commercial litigation; be familiar with financial innovations and practices at home and abroad and be able to prudently perform their duties as required by the test case scheme.
Article 8 The Court will register and accept a application if it meets the conditions for a test case.
Article 9 The Court charges no fees for acceptance of a test case.
Chapter III Pretrial Procedure
Article 10 The parties to a test case shall not raise objections to procedural matters unless they have agreed otherwise.
Article 11 The judicial panel for a test case shall comprise experienced financial judges and renowned experts from financial, legal, and other relevant fields. Members of the panel shall be notified to the parties to the case three days before the first hearing.
Any panel member who has an interest in the test case which may undermine a fair hearing shall disqualify himself from the case.
Article 12 The respondent in a test case shall, within fifteen days upon receiving the application, submit a written statement of defense. Where the claimant objects to the statement of defense, it may within ten days of the receipt thereof submit a statement of reply.
The statements of defense and statements of reply shall include arguments on the factual and legal issues of the test case and the detailed reasoning supporting those arguments.
Where the parties fail to raise and respond to defense on the merits of the case per the preceding paragraphs, the Court may terminate the test case procedure.
Article 13 The parties to a test case shall, within thirty days upon its acceptance, submit evidence and materials relevant to the basic facts and underlying legal issues of the case.
The relevant materials shall include but are not limited to the prevailing laws, regulations, and regulatory rules, self-regulatory rules and business rules, general legal principles, foreign laws and judicial precedents, international financial transaction practices, and all other materials relevant to the test case.
Any party that is not able to submit the evidence and materials within the above period shall request the Court within this period for an extension.
Any of the above evidence and materials whose disclosure is prohibited by law or may be detrimental to the rights and interests of the parties shall not be made public.
Article 14 The judicial panel to a test case shall hold a pretrial conference to confirm that there is no factual dispute and to finalize the issues of the case. The parties and other relevant parties shall be notified to attend the conference three days before it is held.
Article 15 Before the end of the oral argument phase of a test case, individuals and organizations who are not parties to the case but possess the relevant expertise may, through the website of the Court, publicly submit written opinions on the major legal issues directly related to the case.
The judicial panel may hear the opinions of competent regulatory authorities on issues relating to financial regulation.
The judicial panel for a test case may in its judicial opinion cite or respond to the written opinions of the non-parties.
Chapter IV Trial of Test Cases
Article 16 A test case is tried through a hearing of each of the issues finalized at the pretrial conference. Each party shall present its arguments on each issue.
Article 17 The parties to a test case shall, in the context of the prevailing laws, regulations, and regulatory rules, self-regulatory rules and business rules, general legal principles, foreign laws and judicial precedents, and international financial transaction practices, present adequate, relevant argument on each of the issues.
Article 18 For the specialized issues in a test case, the Court may, upon request of the parties or its own decision ex officio, designate organizations or individuals with relevant expertise to provide written opinions and participate in the trial. Relevant fees shall be borne by the parties if the designation is made by their request, or by such parties as determined by the Court if it is made based on the Court’s decision ex officio.
Article 19 In deliberating a test case, the judicial panel shall ensure joint participation of members, adequate representation of their views, independent voting, majority decision, and preservation of dissenting opinions.
A test case shall be submitted to the Court’s Specialized Committee of Judges for discussion and decision.
Article 20 The judicial opinion for a test case refers to the ruling of the Court, made following the hearing process, as to the nature of the juridical acts in the case, the rights and obligations of the transaction parties, and other substantive issues.
The judicial opinion shall make it clear that the case in question is a test case and provide the specific reasons for selecting the case as such. The judicial opinion shall, based on the facts of the case and the legal issues in dispute among the parties, and giving full consideration to such imperatives as encouraging and regulating financial innovations, preventing financial risks, and protecting the rights and interests of financial consumers and investors, provide adequate and thorough reasoning for its holding.
Article 21 The judicial opinion for a test case shall be publicly pronounced before the parties.
The Court may invite relevant non-parties to attend the pronouncement process.
Article 22 The rules determined in test cases serve as a reference for similar financial transactions of the parties and the adjudication of similar cases by the Court.
Article 23 Where a party files an action in the Court over a dispute similar to one already resolved in test cases, the Court may provide the party an assessment of the risks of the action based on the rules determined in those test cases and encourage it to first pursue mediation.
Chapter V Supporting Schemes
Article 24 The Court makes full use of information technologies for test case initiation, pretrial preparation, hearing procedure and pronouncement of judicial opinions to facilitate the parties and relevant persons to participate in the case test.
Article 25 Except where prohibited by law or detrimental to the rights and interests of the parties, the Court shall timely disclose on its website the materials and procedural information relating to the petition for and acceptance of test cases, composition of the judicial panel, evidence and materials, facts and issues in dispute, the parties’ arguments, non-parties’ opinions, trial transcripts, and judicial opinions.
Article 26 The Court will timely prepare and publish judicial advice on the typical issues identified in test cases such as those relating to the prevention of legal risks, protection of financial consumers and investors, and improvement of regulatory regimes.
Article 27 The Court will enhance communication and establish frameworks with relevant financial regulatory authorities, financial self-regulatory organizations, financial market infrastructures, financial consumers，and investors protection organizations to jointly promote the healthy development of the financial markets.
Article 28 These rules take effect on a trial basis as of the date of publication. The Court reserves the right to interpret these rules.
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