Hangzhou Internet Court: On the Fly

By: Han-Mei Tso and Jude Yi

Hangzhou, the capital of China’s Zhejiang Province, is indicating its potential and appeal for internet innovation by being the hottest city for thousands of internet companies to call home, including the most notable industry bellwether, Alibaba. Adding more buzz to this city’s internet atmosphere, a pioneer judicial innovation – the one and only Internet Court in China – has recently been established in Hangzhou. The Internet Court was unveiled on August 18, 2017, the result of a conclusion decision reached during the 36th Meeting of the Central Leading Group for Deepening Overall Reform, held on June 26, 2017 and headed by the Chinese President Xi Jinping. The Internet court has begun to accept and hear cases.

The exploding development of internet technology and business has brought huge economic growth for China. Meanwhile, legal disputes connected with internet transactions, such as e-commerce, O2O, internet finance etc., have also surged. Take Alibaba for example, lawsuits filed against Alibaba increased from under 100 cases per year during 2011-2013, to 110 cases during the first two months of 2015. In August 2015, the judicial system of Zhejiang Province initiated the Online Court Pilot Program – predecessor of the Internet Court – designating four basic courts and the Intermediate Court of Hangzhou as the first pilot courts handling internet transaction disputes, internet payment disputes, internet copyright disputes and appeals thereof. Entire proceedings are carried out online, including the filing of complaints, service of process, evidence exchange, mediation, and trial.

This year, the creative online disposition of internet-related disputes was moved up a notch to beget the brand new Internet Court. The Internet Court only hears cases which fall under the five categories which are listed below:

  • Disputes over online shopping contracts – where a vendor exhibits his or her subject matter and offers to sell, a vendee searches and finds the information of the subject matter on the internet and expresses acceptance of the offer. The two parties then establish a sales contract based on an agreement, and a dispute occurs over the engagement or performance of the contract.
  • Product liability disputes – where, in the case of online shopping, a product manufactured/sold by a manufacturer/vendor has caused personal injury or property damage to others, or poses a risk to others, and the manufacturer/vendor is alleged to be liable.
  • Disputes over network service contracts – where a dispute occurs over the engagement or performance of a contract in which a network service provider provides access to the internet or content service to a consumer.
  • Disputes over loan agreements and petty loan agreements engaged and performed via the internet – where, in the case of agreements engaged and performed online, a dispute occurs over, either a loan agreement in which a borrower asks for a loan from a financial institution and repays the loan when due including payment of interest, or a petty loan agreement in which a borrower asks for a petty loan from a financial institution or a petty loan company and repays the loan when due including payment of
  • Disputes over internet copyright – where disputes occur over infringement of the right to disseminate one’s works via information networks.

As with the previous Online Court Pilot Program, the Internet Court brings all aspects of the proceeding online, thus eliminating the need for plaintiffs and defendants to be physically present in court. This practice and procedure is particularly convenient since in most cases the vendor and the buyer in online transactions, are in different regions of the country, or, are in different countries altogether. One only needs to register one’s true identity on the Court’s Litigation Platform (http://www.netcourt.gov.cn/) before he or she can submit a complaint online. A recent trial heard on September 18 was efficiently carried out in little more than 20 minutes, with the plaintiff, who resides in mainland China, the defendant, located in Taiwan, and the judge sitting in front of their respective computers. Without the new online system, it would have taken much longer to serve the defendant with the complaint, not to mention the inconvenience of him traveling to Hangzhou to attend the trial.

The Internet Court has been operational for over a month now. In this short period of time, it has received more than 900 complaints, most of which relate to online shopping and service contracts as well as product liability disputes. Nonetheless, the highest damage claim, 5 million RMB, came from a copyright infringement case – Zhejiang Radio and Television Group suing Migu Video Technology Limited and Migu Cultural (both are subsidiaries of China Mobile, one of the biggest mobile network operators) for unlicensed online broadcasting of a current, popular reality show called Running Man.

As the court’s docket continues to grow and with influential cases on the rise, it is worth observing where the Internet Court stands in the country’s judicial system and how well it plays its role.