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Under Chinese law, not all costs follow the event. In practice, the Chinese courts have long been reluctant in upholding a claim for the litigant’s lawyers' fees. In March 2017, a different approach was espoused by the Supreme People's Court of China – the highest level of Court in China - in Wu Xiaoguang v Li Qiang & Others [2016] Supreme Court Civil Final No. 613 (the "Wu Xiaoguang case").
Here, the borrowers under a loan agreement had defaulted on repayment. The court ordered repayment of the principal sum, and further ordered the borrowers to pay the claimant's lawyers' fees in full. Notably, there was a provision in the loan agreement that the borrowers shall bear the lender's lawyers' fees in the event of default, and the court found no reason not to uphold such an agreement.
Even though China does not have the principle of 'binding precedents', the Wu Xiaoguang case is likely to be followed or at least considered by the lower courts as persuasive guidance in future cases. However, it cannot be said that the Supreme People's Court intended to lay down a general rule for all successful litigants to recover their lawyers' fees in all civil cases, as it dealt with the specific situation where the contract between the litigants expressly provided for the recoverability of lawyers' fees.
On 4 November 2017, the Standing Committee of the PRC National People's Congress released the newly revised Anti-Unfair Competition Law, which came into operation on 1 January 2018 ("2018 Version"). The 2018 Version has re-defined the "unfair competition conduct", which new definition has emphasised the need to protect market competition order as well as the interests of business operators and consumers. Its amendments and updates also reflect the new types of unfair competition behaviors which are not included under the current Anti-Unfair Competition Law. One of such amendments is to prohibit unauthorised use of others' domain names, website names and web pages. A new clause is also included to deal with unfair competition in the field of Internet, prohibiting conduct that interferes with or sabotages the normal operation of other online businesses by technical means including, among others, inserting a link and forcing a redirection of webpages; misleading users into altering, closing or uninstalling other online products or services provided by others; and maliciously causing incompatibility with other online products or services provided by others etc.
Besides the newly added behaviors, the 2018 Version has also amended and improved existing clauses on commercial bribery, misleading commercial promotion, infringement of trade secrets, prize-giving sales and commercial defamation. In addition, supervision and inspection measures are further reinforced and penalties on unfair competition behaviors are substantially increased. The 2018 Version also draws a line between Anti-Competition Law and PRC Anti-Monopoly Law ("AML"), and deletes the provisions overlapping or even inconsistent with the AML and other laws.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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