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China: Supreme Court Issues Rules on Internet Courts, Allowing for Blockchain Evidence

(Sept. 21, 2018) On September 3, 2018, China’s Supreme People’s Court (SPC) issued a judicial interpretation on the hearing of cases by the country’s newly created internet courts. Taking effect on September 7, 2018, the SPC Provisions on the Hearing of Cases by Internet Courts (SPC Interpretation) allows evidence stored and verified on blockchain platforms to be used in legal disputes heard by the three internet courts in Hangzhou, Beijing, and Guangzhou. (Zuigao Renmin Fayuan Guanyu Hulianwang Fayuan Shenli Anjian Ruogan Wenti de Guiding (Fa Shi [2018] No. 16, Sept. 3, 2018, effective Sept. 7, 2018) (in Chinese), SPC website.)

The internet courts are dedicated to handling internet-related cases, the court proceedings for which generally take place online. (SPC Interpretation art. 1.) In August 2017, China opened its first internet court in Hangzhou, a city known as the country’s e-commerce hub. In the past year, the Hangzhou Internet Court has heard over 12,000 cases, with the average duration of an online hearing being 28 minutes, taking only 40% of the time a traditional offline hearing takes. (Wang Mengyao, Zuigaofa: Hulianwang Fayuan Shen’an Ying Quancheng Zaixian, Shenli Wanggou deng 11 Lei Anjian [SPC: Internet Court Trials All Conducted Online, Covering Eleven Types of Cases Such As Online Shopping], XINHUA (Sept. 8, 2018).)

On September 7, 2018, the SPC announced that two more internet courts, in Beijing and Guangzhou, would officially start operation this month. In the meantime, China is closing two railroad courts in Beijing and Guangzhou, which specialized in handling criminal and civil cases concerning railway transportation, as part of the country’s judicial reform. (Id.)

The SPC Interpretation clarifies the types of disputes to be heard by the internet courts, which include disputes arising from online shopping, internet service contracts, online financial loans, ownership and infringement of online copyright, and domain names. (SPC Interpretation art. 2.)

According to the Interpretation, the current three internet courts are to hear first-instance cases within the jurisdiction of their own cities. (Id. art. 2.) Most appeals will be heard by the intermediate courts in their respective jurisdictions. Online copyright-ownership and infringement disputes and domain-name disputes heard by the Beijing and Guangzhou Internet Courts, however, are to be appealed to the Intellectual Property Courts in Beijing and Guangzhou, respectively. (Id. art. 3.)

Under the SPC Interpretation, the internet courts may consider evidence provided by defendants and plaintiffs that can be proven authentic through electronic signatures, time stamps, hash value checks, and tamper-proof verification methods stored on blockchain platforms. (Id. art. 11; Nathan Graham, Blockchain Evidence Legally Binding, Says China’s Supreme Court, ETHNEWS (Sept. 7, 2018).) In fact, the Hangzhou Internet Court has recently accepted blockchain-based evidence in a case involving online copyright infringement. The plaintiff in the case reportedly captured the violating websites and their source code, and then uploaded the data to a blockchain platform, creating an immutable record of the copyright infringement. The Court held that, on the premise that the technical verification was consistent and other evidence could be mutually verified, such electronic data could be used as evidence. (Id.)