*AI-generated translation, for reference only.

[Keywords] 

Civil litigation, monopoly, abuse of dominant market position, arbitration agreement, jurisdiction

Case Facts

The plaintiff, Tan [REDACTED], alleged that Changsha Ma [REDACTED] Agricultural Products Co., Ltd. (hereinafter referred to as Ma [REDACTED] Dui Company) holds a dominant market position in the vegetable supply market of Changsha County, Changsha, Hunan Province. In December 2017, Tan [REDACTED], as a vegetable wholesale trader, signed the contract in question with Ma [REDACTED] Dui Company and entered the Ji [REDACTED] Logistics Park operated by Ma [REDACTED] Dui Company. In June 2023, on the grounds that Tan [REDACTED] was also operating in the Hong [REDACTED] Market, Ma [REDACTED] Dui Company unilaterally increased the service fee rate for Tan [REDACTED] to three times the previous rate, and stated that only if Tan [REDACTED] withdrew from the Hong [REDACTED] Market could the original service fee rate be restored, and that the excess service fee already collected would not be refunded. Tan [REDACTED] believed that Ma [REDACTED] Dui Company had abused its dominant market position by restricting Tan [REDACTED] to trade only with it, requiring Tan [REDACTED] to pay service fees at an unfairly high price, and imposing differential treatment in transaction prices on traders in the same circumstances. Therefore, Tan [REDACTED] filed a lawsuit requesting the rescission of the contract in question signed between Tan [REDACTED] and Ma [REDACTED] Dui Company, and an order for Ma [REDACTED] Dui Company to refund the remaining rent, entry fee, and excess service fee, and to compensate for economic losses.

The court ascertained through trial: The contract in question provided that any dispute arising during the performance of the contract shall be resolved through friendly negotiations, and if negotiations fail, the parties may submit the dispute to the Beijing Arbitration Commission for arbitration.

The Intermediate People's Court of Changsha, Hunan Province rendered the civil ruling (2024) Xiang 01 Zhi Min Chu No. 75 on March 13, 2024, dismissing the lawsuit filed by Tan [REDACTED]. After the ruling was pronounced, Tan [REDACTED], on the ground that the case was essentially a monopoly dispute and that monopoly disputes cannot be excluded from judicial jurisdiction, filed an appeal.The Supreme People's Court rendered the civil ruling (2024) SPC IP Civil Final No. 748 on July 25, 2024, revoking the first-instance ruling and ordering that the case be remanded to the Intermediate People's Court of Changsha, Hunan Province for trial.

Judge's Opinion

The Supreme People's Court (SPC) holds that: Although the contract in question provides that disputes arising during the performance of the contract may be submitted for arbitration, the trial of this case is not limited to the contractual rights and obligations between Tan [REDACTED] and Ma [REDACTED] Dui Company as agreed in the contract in question, but also involves the determination of whether Ma [REDACTED] Dui Company holds a dominant market position and whether it has committed acts of abuse of such dominant market position. Moreover, whether Ma [REDACTED] Dui Company has committed the alleged monopolistic acts directly concerns the order of fair market competition, consumer interests, and social public interests. Therefore, the existence of an arbitration agreement between the parties cannot automatically preclude the people's court from accepting this case. This case falls within the scope of the people's court's jurisdiction.

The alleged act of abuse of dominant market position in this case occurred during the performance of the contract in question. Tan [REDACTED] claims that this act violated the Anti-Monopoly Law, rendering the contract in question impossible to continue performing, and accordingly requests the rescission of the contract and an order for Ma [REDACTED] Dui Company to bear legal liability after rescission. This case should be treated as a monopoly civil dispute, and the competent court should be determined in accordance with the jurisdictional rules for contract disputes. The court of first instance has jurisdiction over this case. The court of first instance shall accept the lawsuit filed by Tan [REDACTED].

Judgment Digest

The arbitration clause agreed by the parties in the contract cannot preclude the people's court from accepting a monopoly civil dispute arising from the performance of the contract. For a monopoly civil dispute arising from the performance of a contract, if a party brings a lawsuit requesting rescission of the contract, confirmation of invalidity of the contract, or requesting the counterparty to bear legal liability after rescission or invalidity, the competent court for the monopoly civil dispute may be determined in accordance with the jurisdictional provisions on contract disputes in the Civil Procedure Law and relevant judicial interpretations.

Related Index

Article 24 of the Civil Procedure Law of the People's Republic of China

Article 3 and Article 5 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Monopoly Civil Dispute Cases (Fa Shi [2024] No. 6)

First Instance: Civil Ruling (2024) Xiang 01 Zhi Min Chu No. 75 of the Intermediate People's Court of Changsha, Hunan Province (March 13, 2024)

Second Instance: Civil Ruling (2024) SPC IP Civil Final No. 748 of the Supreme People's Court (July 25, 2024)