Perspective | The Validity of Jurisdiction Agreement When There is No Actual Connection to the Disputed Matter
Published:
2024-12-11
In judicial practice, there have been differing views among various levels of people's courts, including the Supreme Court, regarding the validity of agreed jurisdiction that has no actual connection to the dispute. In summary, the prevailing view recognizes the autonomy of the parties' intentions and deems the agreed jurisdiction valid. However, considering the origins of governance and the normal order of civil litigation, it is instead determined that the agreed jurisdiction in internet finance-related cases is invalid.
Introduction
In judicial practice, there have been differing views among various levels of people's courts, including the Supreme Court, regarding the validity of agreed jurisdiction that has no actual connection to the dispute. In summary, it recognizes the autonomy of the parties' will and deems the agreed jurisdiction valid, but considers the agreed jurisdiction in internet finance cases invalid from the perspective of source governance and normal civil litigation order.
In the case of the loan contract dispute between R Bank JN Branch and borrower A, the "Personal Consumer Loan Contract" signed by both parties stipulates that the People's Court of Z District has jurisdiction. However, borrower A's residence is in LW District, R Bank JN Branch is located in J District, and the signing location stipulated in the contract is Z District. The issue here is whether the agreed jurisdiction is valid when there is no actual connection between the agreed jurisdiction and the dispute.
The Supreme People's Court has two different views on whether the agreed jurisdiction is valid when there is no actual connection to the dispute. The first view holds that although the court of agreed jurisdiction is a clear stipulation by both parties in the contract, if there is no evidence to prove that the court of agreed jurisdiction has an actual connection to the dispute or if it is determined that the court of agreed jurisdiction has no actual connection to the dispute, then recognizing the court of agreed jurisdiction as the competent court will inevitably lead to a large number of "off-site" cases flooding into the court of agreed jurisdiction, which not only disrupts the normal civil litigation jurisdiction order but also easily causes the court of agreed jurisdiction to be overwhelmed. Therefore, the agreed jurisdiction clause in question can be deemed invalid. To unify the judgment standards and serve financial regulation, it is advisable to determine the People's Court of the place of contract performance as the competent court according to Article 24 of the Civil Procedure Law of the People's Republic of China and Article 18 of the Supreme People's Court's Interpretation on the Application of the Civil Procedure Law of the People's Republic of China, as supported by cases such as (2022) Supreme Court Civil Jurisdiction No. 27, (2023) Supreme Court Civil Jurisdiction No. 110, and (2023) Supreme Court Civil Jurisdiction No. 26. The second view holds that although the place of contract signing determined by the parties in the court jurisdiction clause is not the actual place of contract signing, it can serve as a connecting point for determining the court of agreed jurisdiction. This is an act of self-determination on how to exercise litigation rights, and as long as it does not violate mandatory or prohibitive legal provisions and does not disrupt the normal civil litigation jurisdiction order, it complies with the provisions of Article 35 of the Civil Procedure Law of the People's Republic of China. Therefore, the agreed jurisdiction should be deemed valid, as supported by cases such as (2022) Supreme Court Civil Jurisdiction No. 55.
The author believes that whether the agreed jurisdiction is valid when there is no actual connection to the dispute should be comprehensively handled by considering the actual circumstances of the case, source governance work, and whether it affects the normal litigation jurisdiction order.
For non-internet finance cases, although the place of contract signing agreed by the parties has no actual connection to the dispute, it is a true expression of the parties' intentions and an act of self-disposing of litigation rights. It does not violate the legal provisions on hierarchical jurisdiction and exclusive jurisdiction, nor does it violate mandatory or prohibitive legal provisions, and should be deemed valid.
For internet finance cases, which are characterized by a large number of cases, widespread involvement, and significant social public opinion impact, directly recognizing the validity of agreed jurisdiction clauses that have no actual connection to the dispute will inevitably lead to a large number of cases entering the same off-site court. This not only easily disrupts the normal civil litigation jurisdiction order but also does not meet the requirements of source governance work and social stability maintenance. Therefore, it should also be deemed that the agreed jurisdiction is invalid, and the jurisdiction court should be determined according to the Civil Procedure Law and relevant judicial interpretations. Considering the characteristic of "specific plaintiff and non-specific defendant" in internet finance cases, where the subject matter of the dispute is monetary payment, the financial institution, as the receiving party of the money, has its location as the place of contract performance. Therefore, the People's Court at the location of the financial institution can be designated as having jurisdiction over the case.
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