Microsoft Word - Spring Articles Complied -- Clean 7.7.20.docx 295 COLUMBIA JOURNAL OF ASIAN LAW VOLUME 33 SPRING 2020 NUMBER 2 NOTES FORCE MAJEURE IN CHINA Bradford Olson* TABLE OF CONTENTS I. INTRODUCTION ............................................................................ 296 II. PAST AND PRESENT LAW OF FORCE MAJEURE IN CHINA ............... 299 A. HISTORY OF FORCE MAJEURE IN CHINA ................................... 299 B. CURRENT FORCE MAJEURE LAWS IN CHINA’S CONTRACT LAW 301 III. THE DATA ................................................................................. 306 A. YEAR, VENUE, AND JURISDICTION ........................................... 306 B. PARTY IDENTITY ..................................................................... 310 C. TYPE OF EVENT ....................................................................... 312 1. Article 94(1)(1) vs Article 117 ............................................. 313 D. COMMON REASONS TO FIND AN EVENT NOT FORCE MAJEURE OR THE PARTY STILL LIABLE ............................................................ 315 1. Reasons Events are Considered Foreseeable ....................... 317 2. Force Majeure Occurred After Delayed Performance .......... 320 E. TYPES OF UNDERLYING CONTRACTS ........................................ 321 * Editor-in-Chief, Colum. J. Asian L., 2019-2020. J.D. Candidate 2020, Columbia Law School. The author thanks Professor Benjamin Liebman and Professor Carol Sanger for providing helpful insight and guidance, the staff of the Columbia Journal of Asian Law for their thoughtful feedback and editing, and his family for their endless support. This note was inspired by Judge Posner’s discussion of force majeure in Northern Indiana Public Service Company v. Carbon County Coal Company, 799 F.2d 265, 274–75 (7th Cir. 1986). 296 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 F. APPEALS ................................................................................. 323 G. LIQUIDATED DAMAGES AND FORCE MAJEURE CLAUSES ........... 326 IV. ALL TOGETHER: COVID-19 ...................................................... 331 V. CONCLUSION .............................................................................. 333 I. INTRODUCTION In the first months of 2020, COVID-19 (Coronavirus) spread rapidly across the globe: on January 11, China reported 41 confirmed cases;1 by the end of the month, 21 countries reported 9976 cases;2 and as of March 18, 157 countries and regions reported 212,616 cases;3 In response to the rapid infection rate, the Chinese government issued a number of sweeping orders, requiring city quarantines and public transit closures,4 extending the Lunar New Year holiday by three days,5 and, in most cities, closing all non-essential companies.6 In addition, many businesses voluntarily shut down.7 Due to these major disruptions, many businesses found refuge in the contract doctrine of force majeure. Force majeure (French for “a 1 World Health Organization, Novel Coronavirus – China, WORLD HEALTH ORGANIZATION (Jan. 12, 2020), https://www.who.int/csr/don/12-january-2020-novel- coronavirus-china/en/. 2 Holshue et al., First Case of 2019 Novel Coronavirus in the United States, THE NEW ENGLAND JOURNAL OF MEDICINE 929, 929 (2020), https://www.nejm.org/doi/pdf/10.1056/NEJMoa2001191?articleTools=true. 3 Coronavirus COVID-19 Global Cases, CENTER FOR SYSTEMS SCIENCE AND ENGINEERING AT JOHNS HOPKINS UNIVERSITY (visited Mar. 18, 2020), https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40 299423467b48e9ecf6. 4 Aylin Woodward & Rosie Perper, Wuhan, China, and at Least 15 Other Cities Have Been Quarantined as China Attempts to Halt the Spread of the Coronavirus. That’s About 50 Million People on Lockdown, BUSINESS INSIDER (Jan. 28, 2020), https://www.businessinsider.com/wuhan-coronavirus-officials-quarantine-entire- city-2020-1. 5 Shunsuke Tabeta, China’s Industrial Core at Standstill as Cities Extend Shutdown, NIKKEI ASIAN REVIEW (Jan. 28, 2020), https://asia.nikkei.com/Spotlight/Coronavirus/China-s-industrial-core-at-standstill- as-cities-extend-shutdown. 6 Id. 7 Coronavirus: Much of ‘The World’s Factory’ Still Shut, BBC NEWS (Feb. 10, 2020), https://www.bbc.com/news/business-51439400. 2020] FORCE MAJEURE IN CHINA 297 superior force”)8 is “an event or effect that can be neither anticipated nor controlled” and “includes both acts of nature […] and acts of people.”9 Breaching parties to a contract raise this defense to be excused from performance or liability, in part or in whole.10 In the case of COVID-19, many Chinese businesses petitioned the national and local government to issue force majeure certificates. 11 These certificates prove that specific, objective force majeure events such as delays in factory reopening, transit restrictions, and production closures occurred; it does not, however, automatically terminate or modify existing contracts. 12 If one of the business’s contractual counterparties later argues the business delayed performance and breached the contract, the force majeure certification would be proof that the underlying events occurred, but it would be up to the business to show that these force majeure events caused their delay or breach, at least in part.13 As of March 11, 2020, the China Council for the Promotion of International Trade had issued 5637 force majeure certificates to 103 companies.14 Together, these certificates involve contracts worth 503.5 billion Yuan (approximately $71.44 billion USD).15 By issuing these certificates, 8 Force Majeure Definition, Black’s Law Dictionary (11th ed. 2019), available at Westlaw. 9 Id. There are common law force majeure doctrines and many civil law countries have statutory definitions of force majeure, though parties often negotiate detailed force majeure clauses. 14 Joseph M Perillo & Helen Hadjiyannakis Bender, Corbin on Contracts § 74.19; Marel Katsivela, Contracts: Force Majeure Concept or Force Majeure Clauses?, 12 UNIF. L. REV. 101 (2007). For more information about force majeure and whether COVID-19 qualifies, see Lius Perez, Tackling Uncertainty in Pandemic-Related Int’l Disputes, LAW360 (Mar. 27, 2020). 10 30 Williston on Contracts § 77:31 (4th ed. 2019). 11 Zhongguo Ribao Wang (中国日报网) [China Daily], Zhongguo Maocu Hui: Yi Kaiju Bukekangli Shishixing Zhengming 5637 Jian Yue Liu Cheng Hetong Youwang Baoliu (中国贸促会：已开具不可抗力事实性证明 5637 件六成合同有望保留) [China Council for the Promotion of International Trade: We Have Already Written Up 5637 Force Majeure Certificates and Are Hopeful 60% of Contracts Will Be Retained], Baidu ( 百 度 ) [BAIDU] (Mar. 12, 2020), https://baijiahao.baidu.com/s?id=1660913032678713071&wfr=spider&for=pc. 12 See infra Section II.B. “Current Force Majeure Laws in China’s Contract Law.” 13 Hetong Fa (合同法) [Contract Law] (promulgated by the Standing Comm. Nat’l People’s Cong., Mar. 15, 1999, effective Oct. 1, 1999) art. 118 (China), http://www.npc.gov.cn/wxzl/wxzl/2000-12/06/content_4732.htm. This will be discussed in greater detail in Section II.B. “Current Force Majeure Laws in China’s Contract Law.” 14 See China Daily, supra note 11. 15 Id. 298 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 COVID-19 joins other traditional categories of force majeure, such as natural disasters,16 wars,17 and strikes.18 Given the attention COVID-19 has brought to force majeure clauses, this Note aims to provide a glimpse into the Chinese domestic force majeure law. This Note provides a case study of 73 Chinese court cases involving force majeure claims and analyzes the underlying claims, success rates, and common reasons for and against finding force majeure.19 In recent years, in an effort to be more transparent, Chinese courts have uploaded tens of millions of judicial opinions online.20 This Note draws on a subset of these cases, all roughly 41 million cases made public between 2014 and mid-2018.21 These 73 cases consist of 30 16 22 Williston on Contracts § 59:29 (4th ed. 2019); for Chinese law, see Li Xinming, Liao Hehua yu Sanming Zhongxiang Fangdichan Kaifa Youxian Gongsi Fangwu Maimai Hetong Jiufen Yishen Minshi Panjueshu (李新明、廖荷花与三明众祥房地 产开发有限公司房屋买卖合同纠纷一审民事判决书) [Li Xinming et al. v. Zhongxiang Real Estate Development Co.], Min 0402 Minchu 2787 Hao (闽 0402民 初 2787号) [MIN 0402 MINCHU NO. 2787] (Meilie Dist. People’s Ct. 2016). 17 30 Williston on Contracts § 77:35 (4th ed. 2019); for Chinese law, see Li Xinming, supra note 16. 18 30 Williston on Contracts § 77:32 (4th ed. 2019); for Chinese law, see Li Xinming, supra note 16. 19 This Note does not discuss any cases adjudicated outside of China, whether or not the case involves China or Chinese parties. In addition, it does not analyze any cases in Chinese courts with one or more non-Chinese parties. Therefore, any issues unique to foreign (non-Chinese) parties, such as domestic favoritism and foreign language contracts, are beyond the scope of this note. This note also does not discuss any settlement issues, arbitration issues, or other alternative dispute resolution issues. 20 See infra note 21 and accompanying text. 21 A research team at Columbia Law School downloaded the dataset. The cases in this note were located by searching for specific legal provisions in the database. I then read a random selection of these cases. Each case is available on the Chinese court system’s own website, China Judgements Online (http://wenshu.court.gov.cn/). To find a case cited in this note, search the Chinese case number on China Judgements Online. For example, to find the case cited as: Shangsuren Shenzhenshi Xianghe Jixie Shebei Zulin Youxian Gongsi, Guangzhoushi Suilong Diaochuan Fuwu Youxian Gongsi yu Beishangsuren Shenzhenshi Yuesheng Jianzhu Gongcheng Youxian Gongsi Chanpin Zhiliang Sunhai Peichang Jiufen Yi An Minshi Panjueshu (上诉人深圳市祥和机械设备租赁有限公司、广州市穗龙吊船服务有 限公司与被上诉人深圳市悦盛建筑工程有限公司产品质量损害赔偿纠纷一按民 事判决书) [Xianghe Machinery Leasing Co. v. Yuesheng Construction Engineering Co.], Shen Zhongfa Min Yizhong Zi Di 1632 Hao (深中法民一终字第 1248号) [SHEN ZHONGFA MIN YIZHONG ZI NO. 1632] (Shenzhen Intermediate People’s Ct. 2011), simply search the case number in Chinese with the year in front in parenthesis (“(2011)深中法民一终字第 1248号” ) on China Judgements Online. For 2020] FORCE MAJEURE IN CHINA 299 randomly selected 22 cases that cite Chinese Contract Law Article 94(1)(1)23 and 43 randomly selected24 cases that cite Chinese Contract Law Article 117,25 two articles that involve force majeure liability.26 The Note proceeds as follows. Section II provides a background of the history of force majeure in China and its codification in modern Chinese Contract Law. Section III provides summary statistics of the 73 judicial opinions analyzed, including year adjudicated, venue, type of force majeure event, success rate, party identity, type of underlying contract, appeal outcome, presence of force majeure and/or liquidated damages clauses, and common reasons courts find force majeure inapplicable. Section IV synthesizes the analysis from Section III and applies it to the current COVID-19 crisis. Section V concludes by discussing the overall findings of the case analysis and its implications generally. Lastly, all cases analyzed in this note can be found in the appendix, along with how each case fits into the summary statistics in Section III. II. PAST AND PRESENT LAW OF FORCE MAJEURE IN CHINA A. HISTORY OF FORCE MAJEURE IN CHINA Historically, the Chinese legal system gave little attention to force majeure due to several factors. 27 First, private commercial convenience, the second column of the appendix provides the full Chinese case number for each case analyzed in this note. 22 See supra note 21. 23 Contract Law, supra note 13, art. 94(1)(1). For more information on Chinese Contract Law Article 94(1)(1), see infra Section II.B. “Current Force Majeure Laws in China’s Contract Law.” 24 See supra note 21. 25 Contract Law, supra note 13, art. 117. For more information on Chinese Contract Law Article 117, see infra Section II.B. “Current Force Majeure Laws in China’s Contract Law.” 26 The author also searched for and analyzed 50 randomly selected cases that cite article 118. However, since article 118 only involves notice and providing proof of force majeure, these cases rarely turned on whether the particular event qualified as a force majeure event. Therefore, the author decided not to include these cases in the data analysis. 27 In addition to the two factors discussed, some scholars also argue that Chinese society traditionally did not give much emphasis to the rule of law; law was dismissed as an “imperfect and even harmful effort by mortal beings to govern society.” Lester Ross, Force Majeure and Related Doctrines of Excuse in Contract Law of the People’s Republic of China, 5 J. CHINESE L. 58, 63 (1991). 300 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 practices, an indirect source of statutory law in the West, did not achieve “comparable levels of development” in China. 28 Second, the Communist Party of China rejected “several decades of market-oriented development” during the very end of the Qing dynasty and the Republic of China (1911-1949).29 It was not until the death of Mao Zedong in 1976 and the end of the Cultural Revolution that the doctrine of force majeure began to develop in China.30 The new leader, Deng Xiaoping, led a movement to shift the country from a centralized economy towards a more market- oriented economy.31 As part of this effort, China revamped its contract laws to encourage more foreign trade and investment; in particular, the National People’s Congress enacted the Economic Contract Law of the People’s Republic of China in 1981,32 the Foreign-related Economic Contract Law of the People’s Republic of China in 1985,33 and the Technology Contract Law of the People’s Republic of China in 1987.34 Each of these laws explicitly mentioned force majeure, 35 and, in contrast to its modern counterpart, the articles about contract rescission 28 Lester Ross, supra note 27, at 64. Starting with the Ming dynasty (1368–1644) and culminating with the Qing dynasty (1644–1911), China turned decisively inward and rejected trade with the West, believing it had nothing to gain from trade. Id. 29 Id. The Communist Party embraced a Stalinist view of economic development, focusing on a state-planned economy and repression of any private economy. Though the brief Hundred Flowers Period (1957) saw some development of criminal and civil law, it ended with the Anti-Rightist Campaign (1957–1958). Id. at 65. 30 Id. at 65–66. 31 Id. at 59 (citing H. HARDING, CHINA’S SECOND REVOLUTION, REFORM AFTER MAO (1987); The People’s Republic of China After 40 Years (Special Issue), 119 CHINA Q. 419 (1989)). 32 Jingji Hetong Fa (经济合同法) [Economic Contract Law] (promulgated by the Standing Comm. Nat’l People’s Cong., Dec. 13, 1981, effective July 1, 1982) preamble (China), http://www.npc.gov.cn/wxzl/wxzl/2000-12/06/content_4408.htm. 33 Shewai Jingji Hetong Fa (涉外经济合同法) [Foreign Economic Contract Law] (promulgated by the Standing Comm. Nat’l People’s Cong., Mar. 21, 1985, effective July 1 1985) preamble (China), http://www.npc.gov.cn/wxzl/gongbao/2000- 12/06/content_5004455.htm. 34 Jishu Hetong Fa (技术合同法) [Technology Contract Law] (promulgated by the Standing Comm. Nat’l People’s Cong., June 23, 1987, effective Nov. 1, 1987) preamble (China), http://www.npc.gov.cn/wxzl/wxzl/2000-12/06/content_4484.htm. 35 Economic Contract Law, supra note 32, arts. 27, 32–34; Foreign-related Economic Contract Law, supra note 33, arts. 24–25, 29. 2020] FORCE MAJEURE IN CHINA 301 in the domestic laws focused heavily on government actions as a basis for rescission.36 On March 15, 1999, at the second session of the ninth National People’s Congress, the Congress adopted the Contract Law of the People’s Republic of China.37 The law took effect on October 1, 1999, and, simultaneously, repealed the three previously-mentioned laws that co-governed contract law: the Economic Contract Law of the People’s Republic of China, the Foreign-related Economic Contract Law of the People’s Republic of China, and the Technology Contract Law of the People’s Republic of China.38 Thus, the force majeure articles in each of the three prior laws were repealed and replaced by force majeure articles in a single law. B. CURRENT FORCE MAJEURE LAWS IN CHINA’S CONTRACT LAW Contract Law of the People’s Republic of China explicitly mentions force majeure in three instances.39 The first mention is in 36 Economic Contract Law, supra note 32, art. 27(2) (conclusion or amending of state plan as basis for rescission); Ross, supra note 27, 75–76 (arguing article 27(3) of Economic Contract Law, which lists stopping or changing production as a basis for rescission, is intended to cover state-ordered closure); Economic Contract Law, supra note 32, art. 33 (inability to perform due to higher-level authorities); cf. Foreign- related Economic Contract Law, supra note 33, arts. 24–25, 29 (no explicit reference to government actions). For further discussion of the force majeure articles of these prior laws, see Ross, supra note 27, at 71–83. 37 Contract Law, supra note 13, preamble. 38 Id. art. 428. 39 Outside of Contract Law, force majeure is also explicitly referenced in article 153 of the General Principles of the Civil Law. Minfa Tongze (民法通则) [General Principles of the Civil Law] (promulgated by the Standing Comm. Nat’l People’s Cong., Apr. 12, 1986, effective Jan. 1, 1987, revised Aug. 27, 2009) art. 153 (China). http://www.npc.gov.cn/wxzl/wxzl/2000-12/06/content_4470.htm. Besides Contract Law, this note does not discuss force majeure in other areas of substantive law in China. For a discussion of force majeure in other substantive law, see Wei Hongchun (魏宏春), Qiantan “Qinquan Zeren Fa” Zhong de Bukekangli (浅谈《侵权责任法》 中的不可抗力) [A Brief Talk About Force Majeure in Tort Law], 311 Fazhi yu Jingji (法制与经济) [LEGAL & ECON.] 20 (2012), (discussing force majeure in Chinese Tort Law); Cao Xianfeng & Kong Fanxue (曹险峰&孔凡学 ), Lun Bukekangli Zai Huanjing Wuran Zeren Zhong de Faguifan Shiyong – Jianping “Qinquan Zeren Fa” Di 29 Tiao (论不可抗力在环境污染责任中的法规范适用—兼评《侵权责任法》 第 29条) [Regarding the Legal Use of Force Majeure with Environmental Pollution Liability – Comments with Tort Law Article 29], 5 Dangdai Faxue (当代法学) 302 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 article 94, which falls under chapter 6, entitled “Termination of Rights and Obligations.” 40 Article 94 lists circumstances under which a contract may be rescinded.41 The first states: “[t]he parties to a contract may rescind the contract [if] … the purpose of the contract is impossible to realize because of force majeure.”42 Both the force majeure event and the impossibility to achieve the purpose of the contract are important elements. 43 The purpose of this article is to enumerate the several circumstances when a party can rescind a contract, terminating their obligation to perform.44 However, it does not define force majeure or provide guidance on notice, damages, or burdens of proof. The second explicit mention of force majeure in Chinese Contract Law is in article 117, which falls under chapter 7, “Responsibility for Breaching a Contract.”45 Article 117 states: A party who was unable to perform a contract due to force majeure is exempted from liability in part or in whole in light of the impact of the event of force majeure, except otherwise provided by law. Where an [CONTEMPORARY L. REV.] 101 (2013), (discussing the use of force majeure in environmental pollution cases). 40 The Chinese chapter name is 权利义务终止. 41 The Chinese term jiechu (解除) has been translated as cancellation, termination, and rescission. For the purpose of this note, 解除 will be translated as rescission. 42 Contract Law, supra note 13, art. 94(1)(1) (“有下列情形之一的，当事人可以解 除合同：（一）因不可抗力致使不能实现合同目的”). In this note, this article is cited as 94(1)(1), not 94(1). This is because the cases cite “Contract Law Article 94 Paragraph 1 Section 1” (“《中华人民共和国合同法》第九十四条第一款第一项”). 43 See Xu Linfa, Qiu Rongquan deng yu Anji Xian Lingtong Zhiye Youxian Gongsi Zulin Hetong Jiufen Yishen Minshi Panjueshu (徐林法、邱荣泉等与安吉县灵通纸 业有限公司租赁合同纠纷一审民事判决书) [Xu Linfa v. Lingtong Paper Co.], Hu De Shangchu Zi Di 223 Hao (湖德商初字第 223号) [HU DE SHANGCHU ZI NO. 223] (Deqing Cty. People’s Ct. 2012) (though the government’s change in regulation and forced removal of machinery from a leased factory constituted force majeure, because the plaintiff could still use the leased factory building, it was not impossible to achieve the purpose of the contract). 44 Article 91 enumerates circumstances where a party’s contractual rights and obligations terminate. Contract Law, supra note 13, art. 91. Article 91(2) lists “rescission of a contract.” Id. art. 91(2) (“第九十一条 有下列情形之一的，合同 的权利义务终止：…（二）合同解除”). Therefore, if a contract is rescinded due to force majeure events via article 94(1)(1), then the contractual rights and obligations of the parties terminate. 45 The Chinese chapter name is 违约责任. 2020] FORCE MAJEURE IN CHINA 303 event of force majeure occurred after the party’s delay in performance, it is not exempted from liability. For purposes of this Law, force majeure means any objective circumstance which is unforeseeable, unavoidable and insurmountable.46 Article 117 serves two important functions: it defines force majeure and specifies the scope of obligations that may be avoided. Article 117 defines force majeure across Chinese Contract Law as any “objective circumstance which is unforeseeable, unavoidable and insurmountable.”47 The courts interpret this definition as including three elements: unforeseeable, unavoidable, and insurmountable.48 However, in practice they focus heavily on unforeseeable.49 Chinese academics discuss three types of force majeure: “objective” (客观), “subjective” ( 主观), and “compromise” (折中).50 In this context, objective force majeure is defined as an event that has no relation to the party’s subjective factors, occurs outside of the parties, and does not normally 46 Contract Law, supra note 13, art. 117. 47 Id. (“本法所称不可抗力，是指不能预见、不能避免并不能克服的客观情况”). Here, 不能预见 is defined as “unforeseeable,” 不能避免 is defined as “unavoidable,” and 不能克服 is defined as “insurmountable.” 48 See, e.g., Yichang Donghai Nengyuan Kaifa Youxian Gongsi, Tao Jijun Gongyong Reli Hetong Jiufen Ershen Minshi Panjueshu (宜昌东海能源开发有限公司、陶纪 军供用热力合同纠纷二审民事判决书) [Yichang Donghai Energy Development Co., Ltd. v. Tao Jijun], E 05 Minzhong 712 Hao (鄂 05民终 712号) [E 05 MINZHONG NO. 712] (Yichang Intermediate People’s Ct. 2017) (“因此不可抗力应当符合“不能 预见、不能避免、不能克服”三大要件”[“[T]herefore, force majeure must conform to the three major elements: unforeseeable, unavoidable, and insurmountable.”]). 49 See infra Section III.D. “Common Reasons to Find an Event Not Force Majeure or the Party Still Liable.” 50 Wang Yi (王轶), Xinguan Feiyan Yiqing, Bukekangli yu Qingshi Biangeng (新冠 肺炎疫情、不可抗力与情势变更) [COVID-19, Force Majeure, and Change of Circumstance], 3 Faxue (法学) [L. SCI.] 36, 37–38 (2020) (discusses the similarities and differences between each of the three types of force majeure); Lu Qian & Fan Guohua (鲁茜&范国华), Zhengfu Xingwei Yinfa de Shangpinfang Yuqi Jiaofu Falü Wenti Fenxi (政府行为引发的商品房逾期交付法律问题分析) [Analysis of Legal Issues from Delayed Delivery of Commercial Housing Caused by Government Actions], Zhengfu yu Fazhi (政府与法治) [GOV. & RULE OF L.] 50, 51–52 (2018). 304 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 occur; 51 subjective force majeure is defined as an event that is unavoidable despite the party’s subjective utmost attention; 52 and compromise force majeure not only considers the party’s subjective factors (whether the parties have paid the appropriate attention), but also emphasizes objective aspects (whether it is an abnormal event that occurred outside of the parties).53 Commentators agree that Chinese courts follow the compromise view of force majeure—in essence, a blend of the subjective and objective views of force majeure.54 As for scope of obligations, courts excuse all or a portion of a party’s obligation based on the impact of the force majeure event.55 However, when the force majeure event in question occurs after the party delayed performance, the party may not use force majeure to excuse its obligations under the contract.56 Article 118 is the only other article in Chinese Contract Law that explicitly references force majeure. Article 118 states: If a party is unable to perform a contract due to force majeure, it shall timely notify the other party so as to mitigate the loss that may be caused to the other party, and shall provide proof of force majeure within a reasonable time.57 Article 118 focuses on the responsibility of the party claiming force majeure to notify the other party of the force majeure event and to 51 Wang Yi, supra note 50, at 38 (“不可抗力是与当事人主观因素无关、发生在当 事人外部的、非通常发生的事件”). 52 Id. at 37–38 (“不可抗力是指当事人主观上虽尽最大注意仍不能防止其发生的 事件”). 53 Id. at 38 (“不可抗力既要考虑当事人的主观因素，即当事人是否尽到了应有的 注意；又要强调客观方面，即是否属于当事人以外的原因发生的异常事故”). 54 Id. at 38; Lu Qian & Fan Guohua, supra note 50, at 51. 55 Contract Law, supra note 13, art. 117 (“因不可抗力不能履行合同的，根据不可 抗力的影响，部分或者全部免除责任”). This is also subject to other laws. Id. (“但 法律另有规定的除外”). 56 Id. (“当事人迟延履行后发生不可抗力的，不能免除责任”). 57 Id. art. 118. 2020] FORCE MAJEURE IN CHINA 305 provide proof58 of force majeure within a reasonable time.59 To mount a successful force majeure defense, the party claiming force majeure must prove each of the three elements (unforeseeable, unavoidable, and insurmountable); a failure to prove one element is fatal.60 In addition to the statutory language of China’s Contract Law, the Supreme People’s Court of China has issued two important judicial interpretations 61 related to Contract Law. 62 Under article 26 of the second judicial interpretation of Contract Law, if major changes from business risks that were unforeseeable (but not force majeure) cause performance to be clearly unfair or frustrate the purpose of the contract, 58 Proof is sometimes in the form of a force majeure certification issued by the Chinese government. Companies that apply for them and are granted certificates if the underlying event qualifies as force majeure. For example, as of March 3, 2020, the Chinese government has issued 4811 force majeure certificates to companies due to the outbreak of the coronavirus. See China Council for the Promotion of International, supra note 12. Importantly, force majeure certificates are not the only type of proof allowed. In contrast, in the prior contract law, force majeure certificates were technically required to raise a force majeure defense, but in practice not absolutely required. Economic Contract Law, supra note 32, art. 34; Ross, supra note 27, at 78– 9. 59 Contract Law, supra note 13, art. 118. 60 Id. art. 117. 61 Under Chinese law, the Supreme People’s Court of China may issue judicial interpretations, which are interpretations of questions involving the specific application of law and decrees, independent of any specific case. Guanyu Jiaqiang Falü Jieshi Gongzuo de Jueyi (关于加强法律解释工作的决议 ) [Resolution Providing an Improved Interpretation of the Law], art. 2 (promulgated by Standing Committee of the National People’s Congress, June 10, 1981, effective June 10, 1981), http://www.lawinfochina.com/display.aspx?lib=law&id=28&CGid=; Lifa Fa (立法 法) [Legislative Law] (promulgated by Standing Comm. Nat’l People’s Cong., Mar. 15, 2000, effective Mar. 15, 2015) art. 104 (China), http://www.npc.gov.cn/zgrdw/npc/dbdhhy/12_3/2015-03/18/content_1930713.htm; Susan Finder, The Supreme People’s Court and Interpreting the law, revisited, SUPREME PEOPLE’S COURT MONITOR (July 10, 2015), https://supremepeoplescourtmonitor.com/2015/07/10/the-supreme-peoples-court- and-interpreting-the-law-revisited-part-one/. 62 Guanyu Shiyong “Zhonghua Renmin Gongheguo Hetongfa” Ruogan Wenti de Jieshi (1) (关于适用《中华人民共和国合同法》若干问题的解释（一）) [Interpretation Regarding Questions about Using Contract Law (1)] (promulgated by the Supreme People’s Ct. Dec. 1, 1999, effective Dec. 29, 1999), http://www.mofcom.gov.cn/article/b/bf/200207/20020700031352.shtml; Guanyu Shiyong “Zhonghua Renmin Gongheguo Hetongfa” Ruogan Wenti de Jieshi (2) (关 于适用《中华人民共和国合同法》若干问题的解释（二）) [Interpretation Regarding Questions about Using Contract Law (2)] (promulgated by the Supreme People’s Ct. Apr. 24, 2009, effective May 13, 2009). 306 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 the courts should decide the issue of rescission using principles of fairness combined with the specific situation.63 Chinese courts also recognize a change of circumstances defense, apart from force majeure. 64 Though many scholars argue change of circumstance and force majeure are two completely different doctrines, the difference is not always so clear in application. 65 However, one important, clear difference is the remedy: the remedy for force majeure is partial or total excuse of performance and/or rescission, whereas the remedy for change of circumstance is modification. 66 Because of this distinction, some scholars have argued that courts decide between force majeure and change of circumstance by working backwards; first, they determine the warranted remedy, and then they choose the corresponding defense.67 III. THE DATA A. YEAR, VENUE, AND JURISDICTION This Note predominantly analyzes cases between 2011 and 2018, with one case from 2008. The vast majority (85%) were adjudicated between 2014 and 2017, 15 years after the passage of Chinese Contract Law. Table 1 below shows the number of cases I read from each year. 63 Interpretation Regarding Questions about Using Contract Law (2), supra note 62, art. 26. 64 Id. Given the extensive Chinese language scholarship involving comparisons of the change of circumstance and force majeure defenses, this note does not engage in such an analysis. Instead, the discussion of change of circumstance simply serves to provide more background about the Chinese legal system and related defenses in Chinese Contract Law. 65 See Han Shiyuan (韩世远), Bukekangli, Qingshi Biangeng yu Hetong Jiechu (不可 抗力、情事变更与合同解除 ) [Force Majeure, Change of Circumstances and Contract Rescission], 11 Faxue Luntan (法学论坛) [LEGAL FORUM] 61, 62; Wan Fang (万方), Woguo Qingshi Biangeng Zhidu Yaojian ji Dingwei Moshi zhi Fansi (我国情 势变更制度要件及定位模式之反思 ) [Reflections on the Requirements and Orientation of China’s Change of Circumstance], 212 Faxue Pinglun (法学评论) [L. REV.] 57, 57–58 (2018); Ye Lin (叶林), Lun Bukekangli Zhidu (论不可抗力制度) [Discussing the Force Majeure System], 1(5) Beifang Faxue (北方法学) [NORTHERN LEGAL SCI.] 36, 40 (2007). 66 Contract Law, supra note 13, art. 94; Interpretation Regarding Questions about Using Contract Law (2), supra note 62, art. 26. 67 See Han Shiyuan, supra note 65, at 62. 2020] FORCE MAJEURE IN CHINA 307 Year Number of Cases Percent of Cases 2008 1 1.37% 2011 1 1.37% 2012 3 4.11% 2013 4 5.48% 2014 8 10.96% 2015 18 24.66% 2016 17 23.29% 2017 19 26.03% 2018 2 2.74% Table 1: The year each case was adjudicated and the percent of cases adjudicated in that year in the sample. In China, the first administrative division lower than national is the provincial level, which consists of provinces, autonomous regions, and direct-administered municipalities. 68 Mainland China has 22 provinces,69 five autonomous regions,70 and four direct-administered municipalities. 71 Each province, autonomous region, and direct- administered municipality has three levels of Local People’s Courts: Higher People’s Courts, Intermediate People’s Courts, and Basic People’s Courts. 72 In addition, there are several specialty courts, including 11 Maritime Courts, and 75 Railway Transport Courts.73 At 68 Susan V. Lawerence & Michael F. Martin, Understanding China’s Political System, CONGRESSIONAL RESEARCH SERVICE, at 9 (2013), https://fas.org/sgp/crs/row/R41007.pdf. 69 The People’s Republic of China’s official province count of 23 includes the 22 mainland provinces and Taiwan. However, though the PRC claims sovereignty over Taiwan, it does not control the island. Id. 70 Autonomous regions are province-sized regions that have a large population of minority groups. They are Guangxi, Inner Mongolia, Tibet, Xinjiang, and Ningxia. Id. 71 Direct-administered municipalities are cities that are governed directly by the national government rather than through a provincial government. They are Beijing, Shanghai, Chongqing, and Tianjin. Id. 72 Chenyang Zhang, Magnificent Four-level Pyramid – China’s Court System, CHINA JUSTICE OBSERVER (May 18, 2019), https://www.chinajusticeobserver.com/a/magnificent-four-level-pyramid-chinas- court-system 73 Id. In addition to maritime and railway courts, China also has three Intellectual Property Courts, three Internet Courts, and one Financial Court. Id. 308 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 the very top, the Supreme People’s Court of China serves as the court of last resort.74 Province/Autonomous Region/Direct- Administered Municipality Intermediate People’s Court Basic People’s Court Total Guangdong 9 3 1375 Zhejiang 1 3 4 Guangxi 1 2 3 Gansu 0 4 4 Shandong 4 2 6 Shaanxi 0 2 2 Fujian 1 3 4 Hunan 0 3 3 Jiangsu 1 3 4 Sichuan 1 2 3 Henan 2 0 2 Liaoning 1 0 1 Anhui 3 2 5 Shanxi 1 2 3 Hebei 1 1 2 Chongqing 1 2 3 Guizhou 4 0 4 Jiangxi 1 0 1 Hubei 2 1 3 Jilin 0 1 1 Beijing 0 1 1 Total 34 37 7376 74 Id. 75 The total number of cases for Guangdong includes one case in the Guangzhou Maritime Court. Yuangao Zhanjiang Shi Guantong Wuliu Youxian Gongsi yu Beigao Zhongguo Waiyun Guangdong Zhanjiang Chuyun Gongsi Matou Zulin Hetong Jiufen Yishen Minshi Panjueshu (原告湛江市冠通物流有限公司与被告中国外运广东湛 江储运公司码头租赁合同纠纷一审民事判决书) [Guantong Logistics Co. v. China Sinotrans Storage and Transportation Co.], Guang Hai Fa Chu Zi Di 288 Hao (广海 法初字第 288号) [GUANG HAI FA CHU NO. 288] (Guangzhou Maritime Court 2012). 76 The total number of cases includes one case in the Supreme People’s Court, as well as one case in the Guangzhou Maritime Court mentioned supra note 75. Beijing Jiangong Yijian Gongcheng Jianshe Youxian Gongsi yu Tianjin Jinfa Xin Cailiao 2020] FORCE MAJEURE IN CHINA 309 Table 2: Jurisdiction and venue of each case. Percentage represents the portion of the given court level or province in that court or province. Unsurprisingly, the majority of cases (50.68%) were in the main court of first impression, the Basic People’s Court.77 As the main court of first impression, the Basic People’s Court hears an overwhelming number of cases. 78 In contrast, the Intermediate People’s Court is overrepresented in the data; the data include 34 intermediate level cases (46.57%), but only 10.2% of civil cases on China’s online case repository (China Judgments Online) were adjudicated at the intermediate level.79 In addition, the data include one case from the Guangzhou Maritime Court (which does not have the same hierarchical court system) and one case from the Supreme People’s Court.80 As for jurisdiction, 21 of the 31 provinces, autonomous regions, and direct-administered municipalities are represented, as well as the Supreme People’s Court. The most heavily represented jurisdiction is Guangdong province, which is the most populous province in China and Youxian Gongsi Jianshe Gongcheng Shigong Hetong Jiufen Shenqing Zaishen Minshi Caidingshu (北京建工一建工程建设有限公司与天津金发新材料有限公司建设工 程施工合同纠纷申请再审民事裁定书) [Beijing Construction Engineering Co. v. Jinfa New Material Co.], Minshen Zi Di 1632 Hao (民申字第 1632号) [MINSHEN ZI NO. 1632] (Supreme People’s Ct. of China 2013). 77 Under the Chinese court system, the Intermediate- and Higher-level courts can also be the court of first impression. Yifan Wang et al., A Brief Introduction to the Chinese Judicial System and Court Hierarchy, ASIAN LAW CENTRE (2017), http://law.unimelb.edu.au/__data/assets/pdf_file/0004/2380684/ALC-Briefing-Paper- 6-Wang,-Biddulph,-Godwin_5.pdf. In other words, they serve as the court of first impression for some types of cases and as a court of appeal for others. Id. All of the cases at the Intermediate level included in the appendix of this note were appeals; none of them involved the Intermediate level court acting as the court of first impression. 78 China’s own online case repository includes 57,192,102 civil case. 50,547,251 were adjudicated at the Basic People’s Court. Zhongguo Caipan Wenshu Wang (中国裁判 文 书 网 ) [China Judgements Online], http://wenshu.court.gov.cn/website/wenshu/181217BMTKHNT2W0/index.html?pag eId=a9aa59f983b420d9c92497d7e0f6fc8b&s21=%E4%B8%8D%E5%8F%AF%E6 %8A%97%E5%8A%9B. 79 Id. 6,018,526 of the 57,192,102 civil cases were adjudicated at the Intermediate level. 80 See Guantong Logistics Co. v. China Sinotrans Storage and Transportation Co., supra note 75; see also Beijing Construction Engineering Co. v. Jinfa New Material Co., supra note 76. 310 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 the province with the largest economy. 81 No other provincial-level region is similarly represented in the sample. B. PARTY IDENTITY This subsection discusses the legal identity of the parties involved in each of the cases and looks to whether there is a correlation between party identity and the success rate of the force majeure defense. Table 3 shows the number and success rate of cases, categorized by both the plaintiff’s and defendant’s legal identity (either individual, company, or government). Here, “government” includes city governments82 as well as government committees.83 81 As of 2018, Guangdong has a population of 113.46 million and a GDP of 9.73 trillion Chinese yuan (1.47 trillion US Dollars). National Data, NATIONAL BUREAU OF STATISTICS OF CHINA, http://data.stats.gov.cn/english/easyquery.htm?cn=E0103. If Guangdong was its own country, it would rank 13th in the world by GDP, in between South Korea and Australia. GDP by Country, WORLDOMETER, https://www.worldometers.info/gdp/gdp-by-country/. 82 See, e.g., Shen Yan yu Jiumiao Zhen Zhengfu Jiufen An Ershen Minshi Panjueshu (沈岩与旧庙镇政府纠纷案二审民事判决书) [Shen Yan v. Jiumiao Town Gov’t], Fu Shen Min Zai Zi Di 41 Hao (阜审民再字第 41号) [FU SHEN MIN ZAI ZI NO. 41] (Fuxin Intermediate People’s Ct. 2015). 83 See, e.g., Li Xingguang yu Fujian Sheng Lianjiang Xian Pandu Xiang Dongyan Cun Min Weiyuanhui Nongcun Tudi Chengbao Hetong Jiufen Ershen Minshi Panjueshu ( 李星光与福建省连江县潘渡乡东雁村民委员会农村土地承包合同纠纷二审民事 判决书) [Li Xingguang v. Dongyan Villager Committee], Rong Min Zhong Zi Di 130 Hao (榕民终字第 130 号) [RONG MIN ZHONG ZI NO. 130] (Fujian Intermediate People’s Ct. 2014); Sun Hongjiang, Yantai Shi Muping Qu Renmin Zhengfu Dayao Jiedao Banshichu Yangjiaodu Cun Min Weiyuanhui Hetong Jiufen Ershen Minshi Panjueshu (孙洪江、烟台市牟平区人民政府大窑街道办事处羊角埠村民委员会 合同纠纷二审民事判决书) [Sun Hongjiang v. Yangjiaobu Villager Committee], Lu 06 Min Zhong 125 Hao (鲁 06民终 125号) [LU 06 MIN ZHONG NO. 125] (Yantai Intermediate People’s Ct. 2017). 2020] FORCE MAJEURE IN CHINA 311 Plaintiff Individual Plaintiff Company Plaintiff Government Total Defendant Individual 7 (71.4%) 5 (40%) 4 (100%) 16 (68.75%) Defendant Company 42 (21.43%) 10 (80%) 1 (100%) 53 (33.96%) Defendant Government 2 (100%) 1 (100%) 0 (N/A) 3 (100%) Total 51 (31.37%) 16 (68.75%) 5 (100%) Table 3: Lists number of cases where the plaintiff and defendant are individuals, companies, or a combination of both. The percent in parenthesis indicates the percent of cases with the corresponding party identities where the force majeure defense was successful. This table does not include: Wang Chunjun v. Liban Village Economic Cooperative (Individual vs. Cooperative).84 The majority of parties raising a force majeure defense are companies, not individuals. Where the defendant is a company, its force majeure defense is significantly less successful against an individual, as opposed to another company. One potential reason for this is the prevalence of the sophisticated party argument;85 a court faced with the choice of placing liability on an individual or a company would rather place liability on the company because it is sophisticated and likely is financially better able to bear liability.86 84 Yu Chunjun yu Shengzhou Shi Shanhu Jiedao Li Bancun Jingji Hezuoshe Qiye Zulin Jingying Hetong Jiufen Ershen Minshi Panjueshu (王春君与嵊州市剡湖街道 里坂村经济合作社企业租赁经营合同纠纷二审民事判决书) [Wang Chunjun v. Liban Village Economic Cooperative], Zhe Shao Shang Zhong Zi Di 383 Hao (浙绍 商终字第 383 号) [ZHE SHAO SHANG ZHONG ZI NO. 383] (Shaoxing Intermediate People’s Ct. 2012). 85 See infra Section III.D.1. “Reasons Events are Considered Foreseeable.” 86 See, e.g., He Dongru yu Conghua Guotai Tiantong Fangdichan Kaifa Youxian Gongsi Shangpinfang Yuzshou Hetong Jiufen Ershen Minshi Panjueshu (何冬茹与从 化国泰天彤房地产开发有限公司商品房预售合同纠纷二审民事判决书) [He Dongru v. Guotai Tiantong Real Estate Development Co.], Sui Zhong Fa Min Wu Zhong Zi Di 641 Hao (穗中法民五终字第 641号) [SUI ZHONG FA MIN WU ZHONG ZI NO. 641] (Guangzhou City Intermediate People’s Ct. 2015); Liu Yafu, Chen Xiangling Su Chenzhou Junlian Fangdichan Kaifa Youxian Gongsi Fangwu Maimai Hetong Jiufen Yi An Yishen Minshi Panjueshu (刘亚夫、陈湘玲诉郴州君联房地产 开发有限公司房屋买卖合同纠纷一案一审民事判决书) [Liu Yafu v. Junlian Real 312 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 In every other configuration besides plaintiff company versus defendant individual, the defendant’s force majeure defense succeeded more often than not. C. TYPE OF EVENT This subsection discusses the success rate of force majeure defenses by underlying event. Table 4 represents all of the claims raised by parties in the 73 cases listed in appendix 1. Rather than categorizing by case, Table 4 classifies and categorizes the individual force majeure events raised by parties.87 Each event has been categorized under a main category (e.g. Government Action) and a sub-category (e.g. Land Confiscation). The number listed in each cell represents the total number of claims raised that fall into the given subcategory or overall category. The percentages listed in parenthesis represent the percent of claims found to be force majeure. Estate Development Co.], Xiang 1002 Min Chu 1103 Hao (湘 1002民初 1103号) [XIANG 1002 MIN CHU NO. 1103] (Beihu Dist. People’s Ct. 2017); Xia Fangmin yu Chongqing Gangtie Jituan Duoli Fangdichan Gufen Youxian Gongsi Fangwu Maimai Hetong Jiufen Yishen Minshi Panjueshu (夏方敏与重庆钢铁集团朵力房地产股份 有限公司房屋买卖合同纠纷一审民事判决书) [Xia Fangmin v. Iron and Steel Group Duoli Real Estate Co.], Chang Fa Min Chu Zi Di 04138 Hao (长法民初字第 04138号) [CHANG FA MIN CHU ZI NO. 04138] (Changshou Dist. People’s Ct. 2014); cf. Mou Xiuting yu Lanzhou Lanshi Jituan Youxian Gongsi, Lanzhou Lanshi Jituan Youxian Gongsi Shengda Fuwu Bu Fangwu Zulin Hetong Jiufen Yishen Minshi Panjueshu (牟秀婷与兰州兰石集团有限公司、兰州兰石集团有限公司圣达服务 部房屋租赁合同纠纷一审民事判决书) [Mou Xiuting v. Lanshi Group Co.], Qi Min Chu Zi Di 30096 Hao (七民初字第 30096号) [QI MIN CHU ZI NO. 30096] (Qilihe Dist. People’s Ct. 2014) (court declined to place liability on the defendant real estate company where government confiscated underlying real estate for subway construction). 87 The core data are the individual force majeure event raised by the parties. Therefore, cases where the parties raised more than one different force majeure event have been listed in multiple places in the tables (e.g., if one party claims heavy rain, new regulations, and theft were all force majeure, the case has been listed under weather – rain, government action – new law/regulation, and other). In a few situations, both the lower court opinion and the appeal are present in the dataset. Those cases have been listed separately because a separate tribunal heard the case and could have ruled differently on the point of force majeure. For more about appeals, see infra section III.G. “Liquidated Damages and Force Majeure Clauses.” 2020] FORCE MAJEURE IN CHINA 313 Force Majeure Event Article 94(1)(1) Article 117 Overall Government Action 19 (89.5%) 39 (12.8%) 57 (38.6%) Land Confiscation 9 (88.8%) 2 (100%) 11 (90.9%) Other Executive Action 3 (66.7%) 14 (0%) 17 (11.8%) Law/Regulation 5 (100%) 17 (11.8%) 22 (31.8%) Utilities/Infrastructure 2 (100%) 6 (16.6%) 8 (37.5%) Weather 2 (100%) 10 (30%) 12 (41.6%) Natural Disasters 2 (100%) 0 (N/A) 2 (100%) Unusual Weather 0 (N/A) 10 (30%) 10 (30%) Other 9 (88.8%) 7 (14.3%) 16 (56.3%) Total Force Majeure Claims 30 (90%) 56 (16.1%) 86 (41.9%) Table 4: Categorization of claims. The number represents the number of cases that raise each claim, and the percent represents the percent of claims found to be force majeure. Importantly, this data only reflects adjudicated decisions; it does not include cases that settled, claims parties chose not to litigate, or negotiations between parties without a final judicial opinion. Due to litigation costs, parties are most likely to be reflected in the data set if their force majeure claim could come out either way. It is important to keep this in mind while analyzing the data; it only reflects its input (adjudicated cases) and nothing else. 1. Article 94(1)(1) vs Article 117 The first notable observation is the stark difference in success rate between cases that cite articles 94(1)(1) and 117.88 Overall, courts found 90% of force majeure claims that cited article 94(1)(1) to be force majeure;89 a paltry 16.1% of force majeure claims that cited article 117 were found to be force majeure.90 The likely reason for this is based on the different purpose each article serves. Article 117 supplies a definition of force majeure and limits the scope of excuse to force 88 For a discussion of the differences between Chinese Contract Law articles 94(1)(1) and 117, see supra Section II.B. “Current Force Majeure Laws in China’s Contract Law.” 89 See Table 4. 90 Id. 314 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 majeure events that occur before a party delays performance.91 In other words, the two main reasons a court would cite article 117 are to either provide the definition of force majeure or to state that though an event might be considered force majeure on its own, it does not excuse performance because the event occurred after the party delayed performance. Both of these are likely citations if the court believes the party raising the force majeure defense should not be excused from liability. In contrast, article 94(1)(1)’s focus is on whether it is impossible to achieve the purpose of the contract.92 Thus, the most likely reason to cite article 94(1)(1) is to determine whether it is impossible to achieve the purpose of the contract, not whether the claimed force majeure event is in fact force majeure. Two category subsets illustrate this difference. First, under the “Weather” category, both natural disaster claims cited article 94(1)(1) and all unusual weather claims cited article 117.93 This reflects the fundamental difference between article 94(1)(1) and article 117: article 94(1)(1) focuses on whether a force majeure event makes it impossible to achieve the purpose of the contract, whereas article 117 focuses on whether an event is force majeure.94 Thus, when a party argues that a contract should be terminated due to a natural disaster, because natural disasters are a classic type of force majeure, the court focuses on whether the natural disaster makes the purpose of the contract impossible to achieve. On the other hand, when a party argues that a contract should be terminated due to unusual weather (e.g., heavy rain, winter etc.), since these are not clear, quintessential examples of force majeure, the court focuses its analysis on the foreseeability of the weather. Second, cases involving land confiscation mostly cite article 94(1)(1), whereas all other types of government events disproportionately cite article 117.95 In most of the land confiscation cases, the underlying contract is a lease or purchase of real estate. Once the government confiscates the land, the issue changes from whether the confiscation was force majeure to whether the purpose of the contract was impossible to achieve. In contrast, many of the other government cases involved temporary closures or issues with government regulations and applying for permits and certifications. Often, courts in 91 Contract Law, supra note 13, art. 117. 92 Id. art. 94(1)(1). 93 See Table 4. 94 See supra Section II.B. “Current Force Majeure Laws in China’s Contract Law.” 95 See Table 4. 2020] FORCE MAJEURE IN CHINA 315 those cases focused on whether the defendant was in a position to foresee the claimed force majeure event at the time the contract was signed, and therefore cited to the definitional article 117. D. COMMON REASONS TO FIND AN EVENT NOT FORCE MAJEURE OR THE PARTY STILL LIABLE This section and the corresponding subsections discuss common reasons the party raising the force majeure defense was unsuccessful. Table 5 categorizes the court’s rationale. Similar to Table 4, each of the reasons stated by the court has been categorized into several bolded categories. The main category, “not unforeseeable, unavoidable, or insurmountable,” is a direct reference to the definition of force majeure provided by article 117.96 Its four subcategories enumerate the main reasons a court found that a potential force majeure event did not fit the statutory definition of force majeure. The other main categories represent reasons not directly related to the definition of force majeure, such as providing insufficient evidence that the event qualified as force majeure. 96 Contract Law, supra note 13, art. 117. 316 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 Reason Force Majeure Defense Unsuccessful Number of Cases Reason Cited Not unforeseeable, unavoidable, or insurmountable 34 Sophisticated party (Should Have Known) 12 Knew or Could Have Known of Event at Time of Signing 8 Law/Regulation Change Not a Substantive Change 6 Other reasons 8 Purpose not frustrated 1 Barred by Force Majeure Clause in Contract 2 Event occurred after delay 7 Insufficient Evidence 6 Other 7 No Reason Given 5 Total 62 Table 5: Reasons courts gave for finding party not excused. When analyzing a force majeure event under the definition of unforeseeable, unavoidable, and insurmountable, the courts focused almost exclusively on whether the event was unforeseeable. Upon finding it lacking, they simply state that the event is also not unavoidable or insurmountable.97 97 Yuangao Zhang Jun yu Beigao Nanjing Guangjia Zhiye Youxian Gongsi Shangpinfang Yushou Hetong Jiufen Yian de Minshi Panjueshu (原告张俊与被告南 京广佳置业有限公司商品房预售合同纠纷一案的民事判决书) [Zhang Jun v. Guangjia Real Estate Co.], Su 0111 Min Chu 5613 Hao (苏 0111民初 5613号) [SU 0111 MIN CHU NO. 5613] (2016) (court found events not unforeseeable but did not discuss or analyze whether events were unavoidable or insurmountable); cf. Li Xinming v. Zhongxiang Real Estate Development Co., supra note 16 (analyzed all three elements, though the analysis of unforeseeable was longer than the analysis of unavoidable and insurmountable combined). 2020] FORCE MAJEURE IN CHINA 317 1. Reasons Events are Considered Foreseeable As mentioned, the unforeseeable element is the most analyzed of the three elements. Therefore, in the majority of cases where the court rejected an event as not force majeure, the court reasoned that the event was not unforeseeable. One common reason courts found an event not unforeseeable was because the party claiming force majeure, by virtue of it being a sophisticated party in that market, should have known this could happen, so the event was not unforeseeable. A typical case is Li Zhuofeng v. Guotai Tiantong Real Estate Development Co. 98 Li Zhuofeng entered into a contract with Guotai Tiantong Real Estate Development Company (“Guotai”) for the sale of a yet-to-be-built apartment. 99 The contract included a transfer date and a liquidated damages clause that calculated damages based on the number of days the transfer was late. However, the contract was silent on force majeure liability.100 Well after the transfer date, Guotai still had not transferred the apartment, so Li Zhuofeng sued for damages based on the liquidated damages clause. Guotai argued that the company delayed performance because of weather, demolition, and government related issues, and that the contract should be terminated due to force majeure. In rejecting Guotai’s force majeure defense, the lower court reasoned that, as a real estate development company, Guotai should have made a reasonable prediction on timing and made sure to negotiate for a long enough performance window to deal with these issues.101 The sophisticated party rationale was also used by other courts to reject force majeure defenses based on issues with government 98 Li Zhuofeng yu Conghua Shi Guotai Tiantong Fangdichan Kaifa Youxian Gongsi Shangpinfang Yuzshou Hetong Jiufen Ershen Minshi Panjueshu (李灼锋与从化市国 泰天彤房地产开发有限公司商品房预售合同纠纷二审民事判决书) [Li Zhuofeng v. Guotai Tiantong Real Estate Development Co.], Sui Zhong Fa Min Wu Zhong Zi Di 597 Hao (穗中法民五终字第 597号) [SUI ZHONG FA MIN WU ZHONG ZI NO. 597] (Guangzhou Intermediate People’s Ct. 2015). 99 Id. 100 For a discussion of force majeure clauses and liquidated damages clauses, see infra Section III.G. “Liquidated Damages and Force Majeure Clauses.” 101 Id. “Guotai Tiantong Company, as a real estate development enterprise, should have reasonably anticipated and reserved enough time to deal with weather, demolition, and other issues in the real estate development process.” (“国泰天彤公司 作为房地产开发企业对于房地产开发过程中的天气、拆迁等事件应有合理预期， 预留足够的时间予以应对”). 318 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 approvals,102 financial troubles due to paying fines from other court cases, 103 public bidding, 104 residential utilities stoppages, 105 construction stoppages due to major events, 106 and government- sanction demolition.107 This is a “better position” argument. Courts in these cases reasoned that between an individual and a development company, the development company is in a better position ex ante to predict these potential issues and provide a more accurate timeline.108 As for the broader “should have known” or “could have known” argument,109 two interesting cases stood out. The first involved a new environmental regulation, where Tao Jijun sued Yichang Donghai 102 Xiantao Tianxia Dichan Kaifa Youxian Gongsi, Dai Wenyan Shangpinfang Xiaoshou Hetong Jiufen Ershen Minshi Panjueshu (仙桃天下地产开发有限公司、 戴文燕商品房销售合同纠纷二审民事判决书) [Tianxia Real Estate Development Co. v. Dai Wenyan], E 01 Min Zhong 269 Hao (鄂 01民终 269号) [E 01 MIN ZHONG NO. 269] (Wuhan City Intermediate People’s Ct. 2018); Chongqing Huateng Shiye Fazhan Youxian Gongsi yu Peng Xiaoyong, Wen Hongying Fangwu Maimai Hetong Jiufen Ershen Minshi Panjueshu (重庆华腾实业发展有限公司与彭小勇、温红英 房屋买卖合同纠纷二审民事判决书) [Huateng Indstrial Development Co. v. Peng Xiaoyong], Yu Er Zhong Fa Min Zhong Zi Di 01533 Hao (渝二中法民终字第 01533 号 ) [YU ER ZHONG FA MIN ZHONG ZI NO. 01533] (Chongqing City Second Intermediate People’s Ct. 2015). 103 Zhu Xiaolian yu Conghua Guotai Tiantong Fangdichan Kaifa Youxian Gongsi Shangpinfang Yushou Hetong Jiufen Yishen Minshi Panjueshu (朱小莲与从化国泰 天彤房地产开发有限公司商品房预售合同纠纷一审民事判决书) [Zhu Xiaolian v. Guotai Tiantong Real Estate Development Co.], Yue 0184 Min Chu 2509 Hao (粤 0184 民初 2509 号) [YUE 0184 MIN CHU NO. 2509] (Conghua Dist. People’s Ct. 2016). 104 Jiangmen Shi Jianghai Qu Lianhai Beilu Jianshe Touzi Youxian Gongsi, Huang Bing Shangpinfang Yuhsou Hetong Jiufen Ershen Minshi Panjueshu (江门市江海区 连海北路建设投资有限公司、黄兵商品房预售合同纠纷二审民事判决书) [Lianhai North Road Construction Investment Co. v. Huang Bing], Yue 07 Min Zhong 3126 Hao (粤 07 民终 3126 号) [YUE 07 MIN ZHONG NO. 3126] (Jiangmen City Intermediate People’s Ct. 2017). 105 He Dongru v. Guotai Tiantong Real Estate Development Co., supra note 86. 106 Zhang Jun v. Guangjia Real Estate Co., supra note 97. 107 Li Xinming v. Zhongxiang Real Estate Development Co., supra note 16. 108 See supra notes 68, 71–74 and accompanying text. 109 In this Note, the difference between the “sophisticated party” and “knew or could have known” reasons is that the sophisticated party argument relies on the party’s sophistication to argue that they should have known about the issue, whereas the “knew or could have known” argument relies on specific circumstances to argue that the party either actually knew about what happened or easily could have known, without specific reference to the party’s level of sophistication. 2020] FORCE MAJEURE IN CHINA 319 Energy Development Limited (“Donghai”) over a utilities contract.110 Under the contract, Donghai agreed to provide centralized heating to Tao Jijun’s apartment starting that winter for no less than 20 years.111 Five years into performance, the government passed regulations barring the use of small thermal steam generators to provide power.112 Donghai stopped providing heat and Tao Jijun sued.113 Donghai argued this new regulation constituted force majeure.114 In rejecting this defense, the court noted that because of increasing societal awareness of environmental protection and Donghai’s implied awareness of the environmental issues with its power generation methods, the regulation was neither unforeseeable nor unavoidable. 115 In other words, the regulation targeted a harm that society at large knew about and Donghai ought to have known about. The second case also involved a new regulation, but the force majeure defense was rejected for a different reason. In the case, Lan Hai sued Hisense Properties Limited (“Hisense”) for breaching a real estate purchase contract by not transferring the real property in the designated window. 116 Hisense raised a force majeure defense, arguing that a government notice about applying for initial housing registration altered the registration requirements, causing Hisense’s registration to be denied and therefore delaying performance.117 The court rejected this argument, finding that the government’s notice merely clarified which government bodies were in charge of each portion of an existing, comprehensive registration system.118 It further stated that because the laws laying out this comprehensive registration system were already effective when Lan Hai and Hisense entered into the real estate purchase contract, Hisense should have foreseen that the local government would 110 Yichang Donghai Energy Development Co. v. Tao Jijun, supra note 48. 111 Id. 112 Id. 113 Id. 114 Id. 115 Id. 116 Jinan Haixin Zhiye Youxian Gongsi yu Lan Mei Fangwu Maimai Hetong Jiufen Ershen Minshi Panjueshu (济南海信置业有限公司与兰梅房屋买卖合同纠纷二审 民事判决书) [Hisense Real Estate Co. v. Lan Mei], Lu 01 Min Zhong 7264 Hao (鲁 01 民终 7264 号) [LU 01 MIN ZHONG NO. 7264] (Jinan Intermediate People’s Ct. 2017). 117 Id. 118 Id. 320 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 issue this kind of procedural, clarifying notice.119 This reasoning is similar to another common reason for rejection: the change in law did not substantively affect the legal rights of the party. Perhaps this court, like the court in Liu Yong v. Rongsheng Real Estate Development Co. with respect to burden of proof,120 was worried that if any change in regulation could be considered force majeure, a party could delay performance forever, knowing that if it was sued to perform, it would have an air-tight force majeure defense. Alternatively, courts may be worried about getting in the way of important government functions; if the threshold for triggering force majeure by changes in laws is too low, governments may be less willing to issue important clarifications. However, in so doing, the courts adopt an expansive view of foreseeability. 2. Force Majeure Occurred After Delayed Performance A common reason courts found an event not force majeure was because the event occurred after the party delayed performance. Article 117 addresses this situation directly, stating that a party’s contractual obligation may not be excused by a force majeure event that occurs after the party has already delayed performance.121 The most straightforward cases involving this issue are ones where the only claimed force majeure event clearly occurred after the party had delayed performance. For example, in Kong Feng v. Hengfa Real Estate Development Co.,122 the 119 Id. 120 Liu Yong yu Rongsheng (Xuzhou) Fangdichan Kaifa Youxian Gongsi Shangpinfang Xiaoshou Hetong Jiufen Ershen Minshi Panjueshu (刘勇与荣盛（徐 州）房地产开发有限公司商品房销售合同纠纷二审民事判决书) [Liu Yong v. Rongsheng Real Estate Development Co.], Su 03 Min Zhong 8530 Hao (苏 03民终 8530号) [SU 03 MIN ZHONG NO. 8530] (2017) (“另上诉人该主张因涉及到合同内 容的变更，应由主张合同内容变更的一方即上诉人承担相应的举证责任，否则 ，上诉人可以政策调整为由无期限的延长房屋权属登记的时间从而予以抗辩免 责，进而不用承担相应的违约责任，这显然对被上诉人是不公平的” [“The burden of proof for appellant’s claim involving changing the contract should be borne by the party advocating changing the contract, i.e., the appellant. Otherwise, the appellant rely on a government policy adjustment to indefinitely extend the timeframe for house ownership registration and, therefore, not bear the corresponding liability for breach of contract. This is obviously unfair to the appellee.”]). 121 Contract Law, supra note 13, art. 117. See supra Section II.B. “Current Force Majeure Laws in China’s Contract Law.” 122 Kong Feng, Kong Hui, Kong Shen yu Guangzhou Hengfa Fangdichan Kaifa Youxian Gongsi Fangwu Chaiqian Anzhi Buchang Hetong Jiufen Ershen Minshi 2020] FORCE MAJEURE IN CHINA 321 defendant argued that an archeological dig constituted force majeure, but the dig occurred three months after the defendant was required to perform.123 A more interesting case is Beijing Construction Engineering Co. v. Jinfa New Material Co.124 Here, the defendant claimed winter weather was force majeure and requested a corresponding reduction in the penalty laid out by the liquidated damages clause in their contract.125 However, the contract’s final performance date was in early November, before the winter weather happened. 126 In addition, the defendant claimed that changes to the property certification process that occurred prior to performance were force majeure. 127 Taken together, the defendant argued that the regulation changes caused the company to delay performance into the winter, at which point the winter weather also delayed performance.128 Because the court ruled that the changes in regulations were not force majeure, it found the winter weather to be a force majeure event occurring after the defendant delayed performance and it was therefore not a basis for termination or excuse. 129 However, its opinion suggested that had the change in regulation been considered force majeure, the winter weather would have also partially excused liability. E. TYPES OF UNDERLYING CONTRACTS This section discusses the types of contracts involved in the cases analyzed in this note and the corresponding success rates of the force majeure defense. Similar to Tables 4 and 5, the main categories are in bold and the corresponding subcategories below the main category are not in bold. Panjueshu (孔丰、孔晖、孔申与广州恒发房地产开发有限公司房屋拆迁安置补 偿合同纠纷二审民事判决书) [Kong Feng v. Hengfa Real Estate Development Co.], Sui Zhong Fa Min Wu Zhong Zi Di 1889 Hao (穗中法民五终字第 1889号) [SUI ZHONG FA MIN WU ZHONG ZI NO. 1889] (Guangzhou City Intermediate People’s Ct. 2014). 123 Id. 124 Beijing Construction Engineering Co. v. Jinfa New Material Co., supra note 76. 125 Id. 126 Id. 127 Id. 128 Id. 129 Id. 322 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 Type of Contract Number of Cases (Percent of Total) Force Majeure (Percent of cases finding force majeure) Real Estate 53 (72.60%) 18 (33.96%) Real Estate Purchase 35 (47.95%) 5 (14.29%) Real Estate Lease 17 (23.29%) 13 (76.47%) Other Real Estate 1 (1.37%) 0 (0%) Other130 20 (27.40%) 16 (75%) Table 6: Cases categorized by underlying contract type and the corresponding force majeure defense success rate. Most of the cases analyzed involve real estate contracts (72.97%).131 Of note, the force majeure success rate for cases involving real estate contracts is much lower than for all other types of contracts combined. However, not all real estate contracts are created equally; there is more than a 60% difference in success rates of force majeure between real estate purchases (14.29%) and real estate leases (76.47%).132 The main reason for this stark difference is the different contexts in which force majeure defenses are used between real estate purchases and real estate leases. In the case of real estate purchases, the predominant issue was the defendant’s delay in transferring the underlying real estate due to issues with government procedures, regulation change, or weather.133 In contrast, real estate leases usually 130 Each subcategory had 3 or fewer cases. The included contract types are: Bus Transit Agreement, Construction Contract, Utility Contract, Development Contract, Management Contract, Moveable Asset Purchase, Land Conservation Agreement, Water Reservoir Contract, Supply Contract, Equipment Lease, Mining Rights, Land Use Contract, and Goods Transport Agreement. 131 Table 6. 132 Id. 133 See, e.g., Wu Zhenhong yu Xi Ziyu Fangdichan Kaifa Youxian Gongsi Shangpinfang Xiaoshou Hetong Jiufen Yishen Panjueshu (伍镇鸿与西紫域房地产 开发有限公司商品房销售合同纠纷一审民事判决书) [Wu Zhenhong v. Xi Ziyu Real Estate Development Co.], Jiang Min Chu Zi Di 468 Hao (江民初字第 468号) [JIANG MIN CHU ZI NO. 468] (Liujiang Cty. People’s Ct. 2015) (heavy rain delayed performance); Xia Fangmin v. Iron and Steel Group Duoli Real Estate Co., supra note 86 (upgrade to ministry infrastructure); Yuangao Xiong Xiuying yu Beigao Yibin Shi Nanxi Qu Xinlei Fangdichan Kaifa Youxian Gongsi Shangpinfang Xiaoshou Hetong 2020] FORCE MAJEURE IN CHINA 323 involved the government confiscating the underlying real estate for use in a different development or government plan.134 F. APPEALS This subsection discusses cases at the appellate level and their holding with respect to the lower court’s judgment. Under Civil Procedure Law, parties have the right to file an appeal135 to the people’s court at the next highest level.136 The appeals court (referred to as the court of second-instance) has four options: Jiufen Minshi Yishen Panjueshu (原告熊秀英与被告宜宾市南溪区鑫磊房地产开 发有限公司商品房销售合同纠纷民事一审判决书) [Xiong Xiuying v. Xinlei Real Estate Development Co.], Chuan 1503 Min Chu 1520 Hao (川 1503民初 1520号) [CHUAN 1503 MIN CHU NO. 1520] (Nanxi Dist. People’s Ct. 2016) (change to local approvals procedure); Zhang Jun v. Guangjia Real Estate Co., supra note 97 (new regulation restricting work hours); Tianxia Real Estate Development Co. v. Dai Wenyan, supra note 102 (natural gas approval denied). 134 See, e.g., Guantong Logistics Co. v. China Sinotrans Storage and Transportation Co., supra note 75 (confiscation of leased port); Chen Guanglong yu Yulin Shi Guopin Shiza Gongsi Tudi Zulin Hetong Jiufen Ershen Minshi Panjueshu (陈广龙与玉林市 果品是杂公司土地租赁合同纠纷二审民事判决书) [Chen Guanglong v. Guopin Shiza Co.], Yu Zhong Min Yizhong Zi Di 128 Hao (玉中民一终字第 128号) [YU ZHONG MIN YIZHONG ZI NO. 128] (Yulin Intermediate People’s Ct. 2014) (government transferred possession rights of underlying leased real estate); Shaoguan Shi Wujiang Qu Xilian Zhen Yangshan Cun Huangshaping Yongfa Shichang, Chen Yulin deng yu Shaoquan Shi Wujiang Qu, Shaoguan Shi Wuijang Qu Huangshaping Cun Xiaozu Tudi Zulin Hetong Jiufen Yishen Minshi Panjueshu (韶关市武江区西联 镇阳山村黄沙坪永发石场、陈育麟等与韶关市武江区、韶关市武江区黄沙坪村 小组土地租赁合同纠纷一审民事判决书) [Yongfa Quarry v. Huangshaping Village Group], Shao Wu Fa Min Yi Chu Zi Di 40 Hao (韶武法民一初字第 40号) [SHAO WU FA MIN YI CHU ZI NO. 40] (Wujiang Dist. People’s Ct. 2015) (confiscation of leased quarry); Lanzhou Yatai Shiyou Jixie Peitao Youxian Gongsi yu Lanzhou Lanshi Jituan Youxian Gongsi, Lanzhou Lanshi Jituan Youxian Gongsi Shengda Fuwu Bu Fangwu Zulin Hetong Jiufen Yishen Minshi Panjueshu (兰州亚泰石油机 械配套有限公司与兰州兰石集团有限公司、兰州兰石集团有限公司圣达服务部 房屋租赁合同纠纷一审民事判决书) [Yatai Petroleum Machine Co. v. Lanshi Group Co.], Qi Min Chu Zi Di 30037 Hao (七民初字第 30037 号) [QI MIN CHU ZI NO. 30037] (Qilihe Dist. People’s Ct. 2014) (land confiscated due to subway construction). 135 Minshi Susong Fa (民事诉讼法) [Civil Procedure Law] (promulgated by Standing Comm. Nat’l People’s Cong., Apr. 9, 1991, effective Apr. 9, 1991, revised Oct. 28, 2007, revised Aug. 31, 2012) art. 50 (China), https://www.spp.gov.cn/sscx/201502/t20150217_91465.shtml (last visited April 24, 2020). 136 Id. art. 147. 324 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 (1) if the facts were clearly ascertained and the law correctly applied in the original judgment, the appeal shall be rejected and the original judgment shall be sustained; (2) if the law was incorrectly applied in the original judgment, the judgment shall be amended according to law; (3) if in the original judgment the facts were incorrectly ascertained or were not clearly ascertained and the evidence was inconclusive, the judgment shall be rescinded and the case remanded by an order to the original people’s court for retrial, or the people’s court of second instance may amend the judgment after investigating and clarifying the facts; or (4) if in the original judgment a violation of the prescribed procedure may have affected the correctness of the judgment, the judgment shall be rescinded and the case remanded by an order to the original people’s court for retrial.137 Each of the cases analyzed fell under either subsection 1 or subsection 2. This decision is usually final.138 In Table 7 below, the left-most column represents the lower court’s finding and the upper-most horizontal row represents the appeals court’s finding with respect to the lower court’s judgment. 137 Id. art. 153. 138 Id. art. 158. Cf. Beijing Construction Engineering Co. v. Jinfa New Material Co., supra note 76 (two trials before reaching the Supreme People’s Court of China). 2020] FORCE MAJEURE IN CHINA 325 Sustained Amended and Changed Force Majeure Outcome Amended but Did Not Change Force Majeure Outcome Lower Court Held Force Majeure 12 1 1 Lower Court Held Not Force Majeure 21 0 0 Table 7: Decision of the court of second instance with respect to the original judgment. Almost none of the intermediate level courts overturned or disagreed with the lower courts. However, this was not universal. For example, in Chen Guanglong v. Guopin Shiza Co.,139 Chen Guanglong and Guopin Shiza Co. (“Guopin”) entered into a lease of state-owned land. 140 Later, the city government permitted Guopin to reform its property rights system and publicly transfer property rights (including rights to the land already leased to Chen Guanglong).141 The lower court held that the property rights system reform and the transfer of the rights of the leased property constituted a force majeure event that frustrated the purpose of the lease, and therefore could be terminated.142 Though the intermediate court agreed with the lower courts conclusion, it found the reliance on force majeure improper.143 The intermediate court noted that the lease was clear about what property rights were involved and it allowed Guopin to transfer the property during the term of the lease, provided that Guopin gave adequate notice.144 Since Guopin gave notice and transferred the property rights, the lease should be terminated by its own terms. 145 In other words, the intermediate court looked to the language of the contract for termination rather than labeling the property 139 Chen Guanglong v. Guopin Shiza Co., supra note 134. 140 Id. 141 Id. 142 Id. 143 Id. 144 Id. 145 Id. 326 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 right system reform and subsequent public exchange of property rights for the land as force majeure. Though Chinese court cases are not binding law, there is ample evidence to show that Chinese judges consider other court cases when deciding an issue.146 One reason for this decision might be to send a signal to lower courts that these kinds of changes involving state-owned land should not be considered force majeure and, instead, courts should follow the terms of the contracts the parties enter into. G. LIQUIDATED DAMAGES AND FORCE MAJEURE CLAUSES This section looks at what relationship the presence of a force majeure or liquidated damages clause has with the outcome. The force majeure defense goes hand in hand with liability; without potential liability, there is no reason to raise the defense. In most of the cases, especially housing cases, the contracts include a liquidated damages clause that provides an amount or formula that indicates how much the party that breaches the contract must pay in the event it breaches the contract. 147 Often, the triggering event is a failure to perform the contract by a certain day—for example, failure to transfer a house within a few months of signing the contract.148 Thus, the case reaches the court because one party sues the other for damages pursuant to the liquidated damages clause, and the breaching party raises the defense of force majeure in the hopes of avoiding paying damages. This argument is 146 Eric C. Ip, The Supreme People’s Court and the Political Economy of Judicial Empowerment in Contemporary China, 24 COLUM. J. ASIAN L. 367, 409–10 (2011); Benjamin Liebman & Tim Wu, China’s Network Justice, 8 CHI. J. INT’L L. 257 (2007). For a discussion of China’s newest Guiding Cases System, see Guilherme Rizzo Amaral, China’s Guiding Cases System and Its Potential Impact on Arbitration, CHINA GUIDING CASES PROJECT, at n.1 (Mar. 15, 2018). 147 See, e.g., Wu Zhenhong v. Xi Ziyu Real Estate Development Co., supra note 133 (housing contract contained liquidated damages clause stipulating real estate development company must pay purchaser 0.001% of the total housing price already paid to real estate development company if real estate development company delays house transfer by one to 120 days, and 0.005% if it delayed performance by more than 120 days). 148 See, e.g., id. (failure to transfer house within seven months of signing); Tianxia Real Estate Development Co. v. Dai Wenyan, supra note 102 (failure to transfer house within 11 months of signing). 2020] FORCE MAJEURE IN CHINA 327 usually a request to reduce the number of days counted in the liquidated damages clause.149 Table 8 below categorizes the cases by whether the court opinion indicates the underlying contract has a force majeure clause, a liquidated damages clause, both, or neither. Does the Court explicitly reference a force majeure clause in the contract? Yes No Does the Court explicitly reference a liquidated damages clause in the contract? Yes 23 (26.09%) 20 (10%) No 14 (78.57%) 16 (81.25%) Table 8: Whether the court explicitly referenced a force majeure and/or liquidated damages clause in the opinion. The percentages represent the percent of corresponding cases where the force majeure defense was successful. Comparing the presence of these two clauses is interesting because the Supreme People’s Court has issued a binding judicial interpretation150 about the legal limits of liquidated damages clauses.151 149 See, e.g., Wei Tingyang, Zhang Qiufang deng yu Luzhai Xian Dule Fangdichan Kaifa Youxian Gongsi Shangpinfang Yushou Hetong Jiufen Yishen Minshi Panjueshu (韦廷样、张秋芳等与鹿寨县都乐房地产开发有限公司商品房预售合同纠纷一 审民事判决书) [Wei Tingyan v. Dule Real Estate Development Co.], Gui 0223 Min Chu 71 Hao (桂 0223民初 71号) [GUI 0223 MIN CHU NO. 71] (Luzhai Cty. People’s Ct. 2018) (court compared days of water utility stoppage and days with major rainfall to reduce the number of days the defendant delayed performance without double- counting days). 150 All official judicial interpretations (not to be confused with judicial opinions) are binding on both the Supreme People’s Court and all lower courts. Eric C. Ip, supra note 146, at 382, 393; see also Keith J. Hand, Understanding China’s System for Addressing Legislative Conflicts: Capacity Challenges and the Search for Legislative Harmony, 26 COLUM. J. ASIAN L. 139 (2013). 151 Interpretation Regarding Questions about Using Contract Law (2), supra note 62, art. 29. The second line reads: “If the liquidated damages agreed to by the parties exceeds the losses caused by 30%, the liquidated damages can generally be considered ‘excessively higher than the losses caused’ as stipulated in the second paragraph of Article 114 of Contract Law.” Id. (“当事人约定的违约金超过造成损失的百分之三 十的，一般可以认定为合同法第一百一十四条第二款规定的‘过分于造成的损 失’”). 328 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 Because of this judicial interpretation, the defendant’s argument usually progresses in this order: (1) force majeure fully excuses performance; (2) force majeure partially excuses performance; and (3) the total liquidated damages should be lowered to the ceiling set by the judicial interpretation on liquidated damages. 152 Faced with this series of arguments, the court can reduce damages by either finding force majeure excuses all or partial performance, finding the total liquidated damages is above the ceiling set by the judicial interpretation, or both. In some cases, the court looked to the explicit language of the force majeure clause to determine whether performance was excused.153 For example, in Longshunda Transportation Co. v. Shenzhen Eastern Public Transportation Co., 154 Longshunda and Eastern Public Transportation Company (“Eastern Public”) entered into a bus transit agreement where Longshunda leased 23 busses to Eastern Public and allowed Eastern Public to operate the number 995 bus route for 5 years.155 Article 8 of the contract provided the force majeure clause: 152 See, e.g., Li Zhuofeng v. Guotai Tiantong Real Estate Development Co., supra note 98; Ren Deyong yu Shangqiu Zhongzheng Zhiye Youxian Gongsi Shangpinfang Xiaoshou Hetong Jiufen Ershen Minshi Panjueshu (任德永与商丘中正置业有限公 司商品房销售合同纠纷二审民事判决书) [Ren Deyong v. Zhongzheng Real Estate Co.], Yu 14 Min Zhong 3780 Hao (豫 14民终 3780号) [YU 14 MIN ZHONG NO. 3780] (Shangqiu City Intermediate People’s Ct. 2016); Bian Jianxun, Bian Songjie yu Pei Xian Hengsheng Fangdichan Kaifa Youxian Gongsi Fangwu Maimai Hetong Jiufen Yishen Minshi Panjueshu (卞建勋、卞松杰与沛县恒盛房地产开发有限公司房屋 买卖合同纠纷一审民事判决书 ) [Bian Jianxun v. Hengsheng Real Estate Development Co.], Su 0322 Min Chu 3839 Hao (苏 0322民初 3839号) [SU 0322 MIN CHU NO. 3839] (Pei Cty. People’s Ct. 2017). 153 See, e.g., Guangdong Chenshi Baichuan Wuliu Youxian Gongsi Gonglu Huowu Yunshu Hetong Jiufen Ershen Minshi Panjueshu (广东陈氏百川物流有限公司公路 货物运输合同纠纷二审民事判决书) [Charm Eastern Freight Market Mingshengfa Freight Information Service Department v. Chen’s Baichuan Logistics Co.], Yue 71 Min Zhong 81 Hao (粤 71民终 81号) [YUE 71 MIN ZHONG NO. 81] (Guangzhou Intermediate Railway Transport Ct. 2016) (court looked to force majeure clause to determine theft did not qualify as force majeure). 154 Shenzhen Shi Longshunda Yunshu Youxian Gongsi yu Chen Shuo, Shenzhen Shi Dongbu Gonggong Jiaotong Youxian Qiye Chengbao Jingying Hetong Jiufen Ershen Minshi Panjueshu (深圳市龙顺达运输有限公司与陈硕、深圳市东部公共交通有 限企业承包经营合同纠纷二审民事判决书) [Longshunda Transportation Co. v. Shenzhen Eastern Public Transportation Co.], Shen Zhong Fa Shang Zhong Zi Di 2295 Hao (深中法商终字第 2295号) [SHEN ZHONG FA SHANG ZHONG ZI NO. 2295] (2015). 155 Id. 2020] FORCE MAJEURE IN CHINA 329 During the operational time of this agreement, [Eastern Public] may not unilaterally terminate the contract or subcontract the vehicles to a third party, otherwise, [Longshunda] has the right to take back the vehicles, not return [Eastern Public’s] security deposit, and all harms caused by this are borne by [Eastern Public]. If government policy-related or force majeure elements makes performance of this contract impossible, this contract automatically terminates, and the parties are to proceed as though the contract’s lease time came due.156 During the course of the lease, the local government changed transit regulations, allowing only specially permitted transit companies to operate certain bus routes, including the number 995 bus route.157 Since Eastern Public was not considered a specially permitted transit company, it could no longer operate line 995.158 Longshunda then sued Eastern Public for damages due to the depressed value of the leased buses.159 In rejecting the Longshunda’s claim, the lower court looked to the language of the force majeure clause, noting that the transit regulation change clearly qualified as a “government policy-related or force majeure element” and therefore the contract automatically terminated and damages were to be calculated as though the contract finished.160 In contrast, the court in Hongshun Sandstone Co. v. Fuzhou Water Conservation Bureau looked to the force majeure clause to find that the claim did not qualify as force majeure.161 Here, Fuzhou Water Conservation Bureau entered into a contract with Hongshun Sandstone to a mining rights contract where Hongshun Sandstone had the right to 156 Id. (emphasis added) (“在本协议经营期内，乙方不得单方终止合同或将车辆 转包给他人，否则，甲方有权收回车辆，没收保证金，所造成的损失由乙方承 担，如因政府政策性或不可抗力因素导致本协议无法履行时，本协议自行终止， 双方按合同满期处理”). 157 Id. 158 Id. 159 Id. 160 Id. (“其后因深圳市公共交改革，该协议自动终止”). 161 Fuzhou Shi Hongshun Shashi Youxian Gongsi, Fuzhou Shi Shuiliju Hetong Jiufen Ershen Minshi Pnajueshu (抚州市鸿顺砂石有限公司、抚州市水利局合同纠纷二 审民事判决书) [Hongshun Sandstone Co. v. Fuzhou Water Conservation Bureau], Gan 10 Min Zhong 895 Hao (赣 10 民终 895 号) [GAN 10 MIN ZHONG NO. 895] (Fuzhou City Intermediate People’s Ct. 2016). 330 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 mine in a specified area of Fuzhou city for two years.162 However, the contract contained a broad force majeure clause: If city-level or above government projects involving river dredging, flood prevention, or key projects require the removal of riverway sandpit installations or require occupying and using the purchased portion of the river, [Hongshun Sandstone] must unconditionally obey and may not use issues with investments or the inability to mine normally as a reason to request compensation or extend the length of granted mining rights. Besides an earthquake or war, if any natural disaster or policy influences [Hongshun Sandstone’s] ability to mine, [Hongshun Sandstone] automatically bears all loses and [Fuzhou Water Conservation Bureau] is not responsible.163 During the course of the contract, Hongshun Sandstone sent a request to Fuzhou Water Conservation Bureau to extend the length of the mining rights by one year for free, citing interruptions in mining operations from a government flood prevention project, the winter flood season, and dike construction.164 Fuzhou Water Conservation Bureau responded, agreeing to extend mining rights for 141 days.165 Hongshun Sandstone then sued Fuzhou Water Conservation Bureau, requesting an extension for 20 months.166 The court rejected Hongshun Sandstone, finding that Fuzhou Water Conservation Bureau had already adequately remedied167 the effect of the flood prevention project by extending 162 Id. 163 Id. (emphasis added) (“如因市级以上人民政府的河道整治、防洪工程建设及 重点工程建设需要拆除河道采砂设施或占用买受河段的，鸿顺公司必须无条件 服从，不得以投资或影响采区无法正常开采为由要求赔偿或延长砂石开采权时 间，除地震和战争以外，因自然灾害和国家政策因素造成原告开采影响的，由 鸿顺公司自行承担一切损失，抚州市水利局概不负责等内容”). 164 Id. 165 Id. 166 Id. 167 For a discussion of the importance of the availability of government compensation to force majeure, see Li Hu (李虎), Daozhi Hetong Buneng Lüxing de Zhengfu Chouxiang Xingzheng Xingwei Keshi Wei Bukekangli (导致合同不能履行的政府 抽象行政行为可视为不可抗力) [Abstract Government Actions That Lead to Failure 2020] FORCE MAJEURE IN CHINA 331 mining rights for 141 days, that the dike construction fit into the force majeure clause, absolving Fuzhou Water Conservation Bureau of liability, and that another part of the contract stipulated that flood season was a no-mining period.168 IV. ALL TOGETHER: COVID-19 Pandemics are a traditional type of force majeure. COVID-19 almost certainly qualifies as a pandemic: SARS qualified as force majeure, and COVID-19 has infected more people, caused more death, and led to sweeping, country-wide lockdowns. However, there will still be a question of causation.169 Though entities can apply for force majeure certifications, they still need to show that the force majeure event caused the delay in performance. For frustration of purpose, courts may take a narrow view. In Xu Linfa v. Lingtong Paper Co., 170 the court focused on what the lease involved: a factory building, rather than the machinery inside of it. Once government regulations required the removal of the machinery, the purpose was not frustrated because the leased factory could still be used. In the context of COVID-19, it is possible the court could use similar logic to argue that any similar orders would not frustrate the purpose. However, this seems like an unlikely outcome. The sophisticated party argument will not be as convincing in this context. Usually, it is used to argue that one party, by virtue of its sophistication, should understand the potential issues with performance. to Perform a Contract Can be Regarded as Force Majeure], 20 Renmin Sifa (人民司 法) [THE PEOPLE’S JUDICATURE] 83 (2009). 168 Hongshun Sandstone Co. v. Fuzhou Water Conservation Bureau, supra note 161. The Hongshun Sandstone also raised other possible force majeure events, including road construction, road closure, and local village strife. The court declined to find the Fuzhou Water Conservation Bureau liable for any of these other events, reasoning that the road construction was an important civic project and that the Fuzhou Water Conservation Bureau was the wrong party to sue for damages with respect to these claims. Id. 169 Gong Baihua (龚柏华), Guoji Shangshi Hetong Bukekangli Tiaokuan de “Xinguan Feiyan” Yiqing Shiyong Falü Wenti (国际商事合同不可抗力条款对“新冠肺炎”疫 情适用法律问题) [Legal Issues with Applying International Commercial Contract Force Majeure Clauses to COVID-19], 27(2) Shanghai Duiwai Jingji Daxue Xuebao (上海对外经济大学学报) [J. OF SUIBE] 5, 13 (2020) (discusses the importance of case-specific showing of causation). 170 Xu Linfa v. Lingtong Paper Co., supra note 43. 332 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 However, these issues are relatively common issues, e.g., government approval delays, changes in regulations, and delays in demolition.171 In contrast, COVID-19 is an epidemic closer to a once-in-a-hundred-years event. Therefore, a reliance on the sophisticated party argument would have to follow a better position argument: the sophisticated party is likely the better party to bear the liability due to its financial situation and knowledge. The event occurring after delay in performance was a common reason to find an otherwise qualifying event not a source of excusal. Parties would still need to make sure that any liability they want to be excused from does not stem from a delay in performing prior to the COVID-19 outbreak. As for contracts signed during the beginning of the outbreak, courts may argue this made the situation foreseeable. It is a parallel argument to saying that a government regulation is foreseeable when the contract was signed while the regulation was in the public comment or other approval system. However, this would also be a very fact intensive inquiry, since early coverage of COVID-19 did not make clear how infectious the disease turned out to be. Since the foreseeability inquiry is at the time of signing, the correct analysis would involve what the parties knew about COVID-19 at the time of signing. However, this is an area that may lead to hindsight bias;172 as we learn more about the virus, courts may impute this knowledge on the parties. This is especially true for contracts signed between December 2019 and January 2020, before the major shutdowns began. In addition, the court will likely look to the force majeure173 and liquidated damages clauses negotiated by the parties. The data suggest that the presence of force majeure clauses increases the success rate of the defense. In other words, they are more likely than not to follow what is agreed on. As for the liquidated damages clause, courts focused on whether the clause was too penalizing to the breaching party. Here, any concern a court might have with holding that a particular event was force majeure is lessened by the fact that pandemics are a traditional type of force majeure event. Thus, they would be more likely to engage 171 Lu Qian & Fan Guohua, supra note 50, at 53 (discussing frequency of government actions). 172 See also id. (discussing how probability and frequency of government actions lead to hindsight bias). 173 For a discussion of types of force majeure clauses and their application to COVID- 19, see Gong Baihua, supra note 169. 2020] FORCE MAJEURE IN CHINA 333 directly with the force majeure analysis, rather than focus on whether the amount of liquidated damages was too high. V. CONCLUSION Overall, based on the analyzed cases, Chinese courts are most likely to not find force majeure where they cite article 117, the underlying contract is a real estate purchase, the defendant is a company being sued by an individual, and the court explicitly discusses a liquidated damages clause in the contract. Applied to the current COVID-19 crisis, the analysis suggests that Chinese courts will look to the force majeure clauses in the contracts, focus on case-specific causation, and rely on different reasons if they rule against a particular defendant. However, it is important to remember that these are correlations and most likely do not indicate causation; instead, they reflect the contexts where defendants tend to raise successful force majeure defenses. 334 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 Appendix of Cases Cases that cite Article 94(1)(1) Case Number Jurisdiction Pa Db K Type Type of Force Majeure Force Majeure? Liability? LDc FMd View of Lower Court opinion? （2011） 深中法民 一终字第 1248号 Shenzhen, Guangdong Intermediate People’s Court C C Equipment Lease Government Action – Law/Regulation (gondola safety changes, forced grounding) Yes No Yes No Sustain （2012） 广海法初 字第 288 号 Guangzhou Province Maritime Court C C Real Estate Lease (Port) Government Action – Land Confiscation Yes No No Yes N/A （2012） 湖德商初 字第 223 号 Deqing County, Zhejiang Basic People’s Court I C Real Estate Lease Government Action – Law/Regulation (emission regulations, forced removal of machinery) Yes Yes – purpose not frustrated Yes Yes N/A （2014） 玉中民一 终字第 128号 Yulin, Guangxi Zhuang Autonomous Region Intermediate People’s Court C I Real Estate Lease Government Action – government transferred possession right of underlying real estate Not force majeure Yes No No Amended （2015） 七民初字 第 30517 号 Qilihe, Lanzhou, Gansu Basic People’s Court C I Real Estate Lease Government Action – Land Confiscation Yes – followed notification procedure in force majeure clause No Yes Yes N/A （2015） 杭萧民初 字第 2182号 Xiaoshan, Hangzhou, Zhejiang Basic People’s Court I C Real Estate Lease Government Action – Land Confiscation Force Majeure – purpose frustrated No No No N/A （2015） 深中法商 终字第 2295号 Shenzhen, Guangdong Intermediate People’s Court C C Bus Transit Agreement Government Action – Law/Regulation (changes to transit regulations) Force Majeure – contract language No No Yes Sustain a This column refers to the identity of the plaintiff (P). “I” is an individual, “C” is a company, “G” is the government, and “Coop” is a cooperative. b This column refers to the identity of the defendant (D). “I” is an individual, “C” is a company, and “G” is the government, and “Coop” is a cooperative c This column refers to the presence of liquidated damages clauses. See supra Section III.G. “Liquidated Damages and Force Majeure Clauses.” d This column refers to the presence of force majeure clauses. See supra Section III.G. “Liquidated Damages and Force Majeure Clauses.” 2020] FORCE MAJEURE IN CHINA 335 Case Number Jurisdiction Pa Db K Type Type of Force Majeure Force Majeure? Liability? LDc FMd View of Lower Court opinion? （2015） 历城民初 字第 2648号 Licheng, Jinan, Shangdong Province Basic People’s Court I C Real Estate Purchase Other (underlying house never built, so bank did not disburse loan) Force majeure – purpose frustrated No No No N/A （2015） 咸秦民初 字第 00939号 Qindu, Xianyang, Shaanxi Basic People’s Court I C Utility Construction Other (investment issues) Force Majeure No No Yes N/A （2014） 榕民终字 第 130号 Fuzhou, Fujian Intermediate People’s Court I G Development Contract Government Action – Land Confiscation Force Majeure No Yes Yes Sustain （2013） 肇四法民 初字第 1151号 Sihui, Guangdong Basic People’s Court C I Real Estate Lease Other (building cannot meet fire safety standards) Force Majeure – can’t be changed, so neither party liable No No No N/A （2013） 岳民初字 第 1310 号 Yueyang, Hunan Basic People’s Court C C Construction Contract Other (terrain too complicated to lay natural gas pipe for remaining distance) Force Majeure – followed contract procedure to rescind No Yes Yes N/A （2012） 浙绍商终 字第 383 号 Shaoxing, Zhejiang Intermediate People’s Court I Coop Management Contract Weather – Natural Disaster (typhoon) Force Majeure No No No Sustain （2008） 下民二初 字第 748 号 Xiacheng, Hangzhou Basic People’s Court I C Asset Purchase (Heavy Cars) Government Action – Law/Regulation (change in registration requirements) Force Majeure – purpose frustrated No No No N/A （2016） 川 3301 民初 172 号 Kangding, Sichuan Basic People’s Court I I Commercial Real Estate Lease Government Action – Utilities (electricity cut off) Force Majeure – purpose frustrated. No No No N/A （2016） 苏 0115 民初 13608号 Jiangning, Nanjing, Jiangsu Basic People’s Court I I Real Estate Purchase Government Action – Law/Regulation (new law restricting real estate purchases) Force majeure – Change not within defendant’s control; defendant didn’t breach No No No N/A （2017） 鲁 06民 终 125号 Yantai, Shandong Intermediate People’s Court G I Land Conservation Agreement Weather – Natural Disaster (bug infestation) Force Majeure – government cut down trees in response No No Yes Sustain 336 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 Case Number Jurisdiction Pa Db K Type Type of Force Majeure Force Majeure? Liability? LDc FMd View of Lower Court opinion? （2017） 陕 0103 民初 896 号 Beilin, Xi’an, Shaanxi Basic People’s Court I I Commercial Real Estate Lease Government Action – Land Confiscation (unable to get business license) Not force majeure – relevant government documents had been published before parties signed the contract; plaintiff did not provide evidence that he could not get a business license because the property was in within the area to be confiscated by the government to build a subway. No No No N/A （2016） 川 33民 终 123号 e Ganzi Zang, Sichuan Intermediate People’s Court I I Real Estate Lease Government Action – Utilities (electricity cut off) Force Majeure No No No Amended （2015） 韶武法民 一初字第 40号 Wujiang, Shaoguan, Guangdong Basic People’s Court I G Real Estate Lease (Quarry) Government Action – Land Confiscation Force Majeure – can’t achieve purpose No Yes Yes N/A （2015） 阜审民再 字第 41 号 Fuxin, Liaoning Intermediate People’s Court G I Water Reservoir Contract Other (reservoir had no water) Force Majeure – neither side able to refill water No Yes Yes Sustain （2015） 铜民二初 字第 00279号f Tongling, Anhui Basic People’s Court G I Real Estate Lease Government Action – Land Confiscation Force majeure – followed contract clause No No No N/A （2016） 皖 1522 民初 456 号 Huoqiu, Anhui Basic People’s Court C C Supply Contract Other (supplied products cannot fulfil purpose of the contract) Force majeure No No Yes N/A （2016） 皖 15民 终 854号 g Liu’an, Anhui Intermediate People’s Court C C Supply Contract Other (supplied products cannot fulfil purpose of the contract) Force majeure No No Yes Sustain e This is the appeal of Jiang Lin yu Chen Jinxing Fangwu Zulin Hetong Jiufen Yishen Minshi Panjueshu (姜林与陈金兴房屋租赁合同纠纷一审 民事判决书) [Jiang Lin v. Chen Jinxing], Chuan 3301 Min Chu 172 Hao (川 3301民初 172号) [CHUAN 3301 MIN CHU NO. 172] (Kangding City People’s Court 2016). f Same underlying event as Tongling Xian Wusong Zhen Renmin Zhengfu yu Tongling Xian Suling Muye Youxian Gongsi Zulin Hetong Jiufen Ershen Minshi Panjueshu (铜陵县五松镇人民政府与铜陵县苏陵木业有限公司租赁合同纠纷二审民事判决书) [People’s Government of Wusong Town v. Suling Wood Industry Co., Ltd.], Wan 07 Min Zhong 32 Hao (皖 07民终 32号) [WAN 07 MIN ZHONG NO. 32] (Tongling City Intermediate People’s Court 2016). g This case is an appeal of Huoqiu Xian Jin Ying Shangmao Youxian Gongsi yu Huoqiu Xian Qisheng Jingmao Youxian Gongsi Gaolu Jiajiu Jiudian Xiaoshou Hetong Jiufen Yishen Minshi Panjueshu (霍邱县金樱商贸有限公司与霍邱县齐升经贸有限公司高炉家酒酒店销售合同纠 纷一审民事判决书) [Jinying Trading Co., Ltd. v. Qisheng Economic and Trade Co., Ltd.], Wan 1522 Min Chu 456 Hao (皖 1522民初 456号) [WAN 1522 MIN CHU NO. 456] (Huoqiu County People’s Court 2016). 2020] FORCE MAJEURE IN CHINA 337 Case Number Jurisdiction Pa Db K Type Type of Force Majeure Force Majeure? Liability? LDc FMd View of Lower Court opinion? （2016） 晋 0781 民初字第 98号 Jielin, Shanxi Basic People’s Court I C Cooperative Management Lease Other (department store shut down because Defendant had dispute with a third party) Force majeure – not plaintiff’s fault No No No N/A （2016） 皖 07民 终 32号 Tongling, Anhui Intermediate People’s Court G C Real Estate Lease Government Action – Land Confiscation Force majeure – followed contract clause No No Yes Sustain （2015） 鄂恩施民 初字第 03372号 Enshi, Hebei Basic People’s Court I C and I Real Estate Purchase Other (didn’t have the property right certification) Not force majeure – it was known that the defendant didn’t have the property right certification, as evidenced by the low price. No Yes Yes N/A （2015） 湛中法民 一终字第 801号 Zhanjiang, Guangdong Intermediate People’s Court I I Real Estate Lease Government Action – Other Executive Action (ordered demolition) Force majeure – unforeseeable circumstance No No Yes Sustain （2014） 七民初字 第 30037 号 Qilihe, Lanzhou, Gansu Basic People’s Court C C Real Estate Lease Government Action – Land Confiscation (subway construction) Force majeure – defendant provided appropriate notice, plaintiff’s evidence showed termination due to government action. No No Yes N/A （2014） 七民初字 第 30096 号 Qilihe, Lanzhou, Gansu Basic People’s Court I C Real Estate Lease Government Action – Land Confiscation (subway construction) Force majeure – defendant provided appropriate notice, plaintiff’s evidence showed termination due to government action. No No Yes N/A Cases that cite Article 117 Case Number Jurisdiction P D K Type Type of Force Majeure Force Majeure? Liability? LD FM View of Lower Court Opinion? （2014） 晋源民初 字第 12 号 Puyuan, Taiyuan, Shanxi Basic People’s Court C I Asset Purchase (car) Other (asset destroyed) Force majeure Yes Yes No N/A （2016） 川 1503 民初 1520号 Nanxi, Yibin, Sichuan Basic People’s Court I C Real Estate Purchase Government Action – Law/Regulation (changed local approvals) Not force majeure – the change didn’t have a substantive effect on transferring property rights Yes Yes Yes N/A 338 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 Case Number Jurisdiction P D K Type Type of Force Majeure Force Majeure? Liability? LD FM View of Lower Court Opinion? （2016） 苏 0111 民初 5613号 Pukou, Nanjing, Jiangsu Basic People’s Court I C Real Estate Purchase Government action – Law/Regulation (regulation restricting working hours) Not force majeure – first regulation finished before contract was signed; second regulation was foreseeable because the parties included a 3-month transfer window in the contract (and the stoppage only lasted a month). Yes Yes No N/A （2016） 豫 14民 终 3780 号 Shangqiu, Henan Intermediate People’s Court I C Real Estate Purchase Government Action – Other Executive Action (military halted construction over safety concerns) Weather Other (workers’ vacation) Not force majeure – vacation and weather are not plaintiff’s fault; defendant know or should have known military would not want a high building near its buildings, based on the property’s close proximity to the military buildings. Yes Yes No Sustained （2017） 甘 0111 民初 1583号 Honggu, Lanzhou, Gansu Basic People’s Court C I Utility Contract (Heating) Other (inability to pay for heating) Not force majeure – inability to pay is not force majeure Yes No No N/A （2017） 苏 0322 民初 3839号 Pei, Jiangsu Basic People’s Court I C Real Estate Purchase Government action – Utility (unable to complete inspections due to electrical equipment being constructed.) Not force majeure – Reason unclear Yes Yes No N/A （2017） 黔 27民 终 1666 号 Qiannan Buyei and Miao Autonomous Prefecture, Guizhou Intermediate People’s Court I C Real Estate Purchase Government – Law/Regulation (change in development plan) Not force majeure – defendant provided insufficient evidence Yes Yes No Sustain （2018） 桂 0223 民初 71 号 Luzha, Guangxi Basic People’s Court I C Real Estate Purchase Weather – Unusual Weather (rain) Government Action – Utilities (water and electricity closure) Force majeure – defendant provided documentation from utility and weather bureau; court reduced penalty by total number of days, less double-counted days and partial days. No Yes No N/A （2014） 穗中法民 五终字第 1889号 Guangzhou, Guangdong Intermediate People’s Court I C Real Estate Demolition Compensation Contract Government action – Other Executive Action (archeological digs) Not force majeure – event occurred after defendant was supposed to transfer the property. Yes Yes No Sustained 2020] FORCE MAJEURE IN CHINA 339 Case Number Jurisdiction P D K Type Type of Force Majeure Force Majeure? Liability? LD FM View of Lower Court Opinion? （2015） 穗中法民 五终字第 641号 Guangzhou, Guangdong Intermediate People’s Court I C Real Estate Purchase Weather – Unusual Weather (rainstorm) Government Action – unclear what kind Not force majeure – the government actions were foreseeable because defendant is a real estate company; the rainstorm occurred after defendant was contractually required to transfer the property (i.e., after delay of performance) Yes Yes No Sustained （2017） 湘1002民 初1103号 Beihu, Chenzhou, Hunan Basic People’s Court I C Real Estate Purchase Government – Utilities Weather – Unusual Weather (heavy rain) Not force majeure – no record of unusual rains; as an apartment builder, should understand the local government regulations and timeline. Yes Yes Yes N/A （2017） 晋 11民 终 986号 Lüliang, Shanxi Intermediate People’s Court I C Real Estate Purchase Government – road construction Weather – Unusual Weather Not force majeure – not enough proof; road construction was almost done when the contract was signed Yes Yes Yes Sustain （2016） 赣 10民 终 895号 h Fuzhou, Jiangxi Intermediate People’s Court C G Mining Rights Contract Several Government action -- construction Weather – Unusual Weather (winter) Other -- (disturbance) Not force majeure – the contract has a very tight clause that basically only excuses plaintiff for earthquakes and war. Court rejects view that clause adds too much liability and takes away too many rights. No No Yes Sustain （2013） 民申字第 1632号 Supreme People’s Court of China C C Construction Contract Weather – Unusual Weather (construction during winter) Force majeure – the winter weather would be force majeure, but had defendant performed per the contract, winter would have been irrelevant (force majeure event occurred after delay in performance). Yes No Yes Sustained （2015） 江民初字 第468号 Liujiang, Guangxi Zhuang Autonomous Region Basic People’s Court I C Real Estate Purchase Weather – Unusual Weather (heavy rain) Force majeure – weather bureau data showed rain patterns; contract provision stipulated: for each day with four or more hours of continuous rain, or six or more total hours of rain, defendant could transfer the property one day late. Yes Yes Yes N/A h Same underlying facts as Li Zhuofeng, supra note 98. 340 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 Case Number Jurisdiction P D K Type Type of Force Majeure Force Majeure? Liability? LD FM View of Lower Court Opinion? （2015） 穗中法民 五终字第 597号i Guangzhou, Guangdong Intermediate People’s Court I C Real Estate Purchase Weather – Unusual Weather (rainstorm) Government Action – unclear what kind Not force majeure – the government actions were foreseeable because defendant is a real estate company; the rainstorm occurred after defendant was contractually required to transfer the property (i.e., after delay of performance) Yes Yes No Sustain （2016） 鄂 0281 民初 4043号 Daye, Hubei Basic People’s Court I C Real Estate Purchase Government Action – Law/Regulation (changed room size regulation) Weather – Unusual Weather (rain and high temperatures) Not force majeure – defendant did not provide enough proof that regulation change caused lost days of work; rain and high temperatures are normal and should be considered at the time of signing the contract. Yes Yes Yes N/A （2016） 粤 0184 民初 2509号 Conghua, Guangzhou Basic People’s Court I C Real Estate Purchase Other (court fees from other cases drained defendant’s cash, causing a delay in performance) Not force majeure – as a developer, defendant should foresee some issues during development. Yes Yes No N/A （2014） 长法民初 字第 04138号j Changshou, Chongqing Basic People’s Court I C Real Estate Purchase Government Action – Other Executive Action (upgrade ministry infrastructure) Not force majeure – defendant was able to use a different system; the upgrade occurred after defendant was supposed to perform. Yes Yes No N/A （2013） 天民一初 字第 1783号 Tianqiao. Jinan Basic People’s Court I C Real Estate Purchase Government Action – Other Executive Action (government document) Not force majeure – in addition, defendant had already delayed performance when the force majeure event in question happened. Yes Yes No N/A （2014） 长法民初 字第 04135号 k Changshou, Chongqing Basic People’s Court I C Real Estate Purchase Government Action – Other Executive Action (upgrade ministry infrastructure) Not force majeure – defendant was able to use a different system; the upgrade occurred after defendant was supposed to perform. Yes Yes No N/A （2015） 大舍民初 字第 170 号l Da’an, Jilin Basic People’s Court G I Project Contract Government Action – Land Confiscation (contract landed involved in new development) Force majeure – the existing contract would upset the development project and harm the public interest No No No N/A i Same underlying facts as He Dongru v. Guotai Tiantong Real Estate Development Co., Ltd., supra note 86. j Same underlying situation as Lu Chunyan, Zhang Lunyuan yu Chongqing Gangtie Jituan Duoli Fangdichan Gufen Youxian Gongsi Fangwu Maimai Hetong Jiufen Yishen Minshi Panjueshu (卢春艳、张伦原与重庆钢铁集团朵力房地产股份有限公司房屋买卖合同纠纷一审民事判 决书) [Lu Chunyan et al. v. Iron and Steel Group Duoli Real Estate Co., Ltd.], Chang Fa Min Chu Zi Di 04135 Hao (长法民初字第 04135号) [CHANG FA MIN CHU NO. 04135] (Changshou District People’s Court 2014). k Same underlying situation as Xia Fangmin v. Iron and Steel Group Duoli Real Estate Co., Ltd., supra note 86. l This case also cites article 94(1)(1). 2020] FORCE MAJEURE IN CHINA 341 Case Number Jurisdiction P D K Type Type of Force Majeure Force Majeure? Liability? LD FM View of Lower Court Opinion? （2015） 朝民初字 第 43409 号 Chaoyang, Beijing Basic People’s Court I I Real Estate Lease Government Action – Other Executive Action (renovations) Not force majeure – no other explanation Yes Yes Yes N/A （2015） 珠中法民 三终字第 254号 Zhuhai, Guangdong Intermediate People’s Court C C Land Use Contract Government Action – Land Confiscation Force majeure – since government condemned land, defendant does not need to transfer and has no liability to compensate plaintiff. No No No Sustained （2016） 闽 0504 民初 2460号 Luojiang, Quanzhou, Fujian Basic People’s Court I C Real Estate Lease Government Action – road construction Other – (local and national furniture making businesses much less profitable.) Not force majeure – road construction was done per the city government plans which were available. Change in furniture market is a market risk issue, not an unforeseeable risk. Yes Yes No N/A （2017） 冀 09民 终 4886 号 Cangzhou, Hebei Intermediate People’s Court I C Real Estate Purchase Government Action – Law/Regulation (various meetings, celebrations, and smog prevention measures) Not force majeure – No extra analysis Yes Yes No Sustain （2017） 皖 12民 终 3811 号 Fuyang, Anhui Intermediate People’s Court I C Real Estate Purchase Government Action – Other Executive Action (land transfer disallowed because land unclean (未净 地)) Not force majeure – at the time the contract was signed, the defendant knew the land was unclean. Yes Yes Yes Sustain （2017） 苏 03民 终 8530 号 Xuzhou, Jiangsu Intermediate People’s Court I C Real Estate Purchase Government Action – change of regulation Not force majeure – the changes were not substantive; concern that if any change of regulation was a force majeure event, one party could delay performance forever and disclaim liability if sued. Yes Yes Yes Sustain 342 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 Case Number Jurisdiction P D K Type Type of Force Majeure Force Majeure? Liability? LD FM View of Lower Court Opinion? （2017） 鄂05民终 712号 Yichang, Hubei Intermediate People’s Court I C Utility Contract (Heat) Government Action – Law/Regulation (new regulation energy source restriction) Not force majeure – societal knowledge of climate change makes this not unforeseeable or unavoidable; availability of government compensation makes this not insurmountable. Lastly, regulations banned some methods, not overall providing heat. Yes No No Sustain （2017） 鲁01民终 1562号m Jinan, Shandong Intermediate People’s Court I C Real Estate Purchase Government Action – new regulations Not force majeure – changes only clarified procedure; the existence of prior laws that set up the inspection system make clarifying laws foreseeable. Yes Yes Yes Sustain （2017） 鲁 01民 终 7264 号n Jinan, Shandong Intermediate People’s Court I C Real Estate Purchase Government Action – new regulations Not force majeure – changes only clarified procedure; the existence of prior laws that set up the inspection system make clarifying laws foreseeable. Yes Yes Yes Sustain （2017） 黔 06民 终 1469 号 Tongren, Guizhou Intermediate People’s Court I C Real Estate Purchase Several Government Action – Other Executive Action (government had not yet destroyed the existing building) Weather – Unusual Weather (flooding) Not force majeure – as a business, rain is foreseeable; government action only potentially affected basic utilities, not the ability to transfer the house. Yes Yes Yes Sustain m Same underlying situation as Hisense Real Estate Co., Ltd. v. Lan Mei, supra note 116 and Jinan Haixin Zhiye Youxian Gongsi yu Chen Yan Shangpinfang Xiaoshou Hetong Jiufen Ershen Minshi Panjueshu (济南海信置业有限公司与陈艳商品房销售合同纠纷二审民事判决书) [Hisense Real Estate Co., Ltd. v. Chen Yan], Ji Min Yi Zhong Zi Di 865 Hao (济民一终字第 865号) [JI MIN YI ZHONG NO. 865] (Jinan City Intermediate People’s Ct. 2015). n Same underlying situation as Jinan Haixin Zhiye Youxian Gongsi yu Yin Bo Shangpinfang Xiaoshou Hetong Jiufen Ershen Minshi Panjueshu ( 济南海信置业有限公司与银波商品房销售合同纠纷二审民事判决书) [Hisense Real Estate Co., Ltd. v. Yin Bo], Lu 01 Min Zhong 1562 Hao ( 鲁 01民终 1562号) [LU 01 MIN ZHONG NO. 1562] (Jinan Intermediate People’s Ct. 2017) and Hisense Real Estate Co., Ltd. v. Chen Yan, supra note m. 2020] FORCE MAJEURE IN CHINA 343 Case Number Jurisdiction P D K Type Type of Force Majeure Force Majeure? Liability? LD FM View of Lower Court Opinion? （2017） 黔26民终 1834号 Qiandongnan, Guizhou Intermediate People’s Court I C Real Estate Purchase Government Action – various orders to stop working; change in local plan Not force majeure – both the orders to stop working and change in local plan happened before contract formation, thus foreseeable; defendant’s lack of transfer documents breached the contract and goes against the civil principles of honesty and trustworthiness. The breach of contract (failure to transfer documents) happened before force majeure (change in local plan). Yes Yes No Sustain （2018） 鄂 01民 终 269号 Wuhan, Hubei Intermediate People’s Court I C Real Estate Purchase Government Action – Other Executive Action (natural gas approval denied) Not force majeure – as a developer, defendant is in a better position to understand the regulations around natural gas in small apartments and could have foreseen and avoided this problem. Yes No Yes Sustained （2017） 粤 07民 终 3126 号 Jiangmen, Guangdong Intermediate People’s Court I C Real Estate Purchase Government Action – Law/Regulation (change of regulation, caused bids for utilities construction to be ineffective) Not force majeure – as a developer, the risks and complications of public bidding should be foreseeable to defendant; not enough evidence to prove utility ministry illegally delayed inspections. Yes Yes No Sustain （2015） 济民一终 字第 865 号o Jinan, Shandong Intermediate People’s Court I C Real Estate Purchase Government Action – Law/Regulation Not force majeure – changes only clarified procedure; the existence of prior laws that set up the inspection system make clarifying laws foreseeable. The registration deadline is eight months after the new regulations are effective; sufficient time for the defendant to perform the obligation; unavoidableness and inability to overcome cannot be shown. Yes Yes Yes Sustain o Same underlying situation as Hisense Real Estate Co., Ltd. v. Lan Mei, supra note 116 and Hisense Real Estate Co., Ltd. v. Yin Bo, supra note n. 344 COLUMBIA JOURNAL OF ASIAN LAW [Vol. 33:295 Case Number Jurisdiction P D K Type Type of Force Majeure Force Majeure? Liability? LD FM View of Lower Court Opinion? （2015） 渝二中法 民终字第 01533号 Chongqing Second Intermediate People’s Court I C Real Estate Purchase Government Action – Law/Regulation (ownership certificate issues, part of the land was involved in a relocation plan and unable to transfer) Not force majeure – as a developer, the defendant should know what materials are needed and what the process is like for government to issue certificates; this is an issue for the developer and the utility company. Yes Yes No Sustain （2017） 湘 0111 民初 6720号 Yuhua, Changsha, Hunan Basic People’s Court I I Real Estate Purchase Government Action – Law/Regulation (local restrictions on purchasing housing) Not force majeure Yes Yes Yes N/A （2017） 豫 01民 终 18653 号 Zhengzhou, Henan Intermediate People’s Court I C Real Estate Purchase Government Action – Law/Regulation (environmental regulation) Force majeure – defendant excused for 30% because didn’t provide enough evidence to be excused for 100%; evidence submitted could not prove how much force majeure contributed to the delay. Yes/No – 70% liable Yes Yes Sustain （2017） 黔 01民 终 4816 号 Guiyang, Guizhou Intermediate People’s Court I C Real Estate Purchase Government Action – Law/Regulation (changes in law and registration procedures) Not force majeure Yes Yes No Sustain （2016） 粤 71民 终 81号 Guangzhou Railway Transport Intermediate Court C C Goods Transport Agreement Other (theft) Not force majeure – doesn’t fit the force majeure clause of the contract Yes No Yes Sustain （2016） 闽 0402 民初 2787号p Meilie, Sanming, Fujian Basic People’s Court I C Real Estate Purchase Government Action – Other Executive Action (government delayed in demolishing building) Not force majeure – government had already delayed performance when contract signed. Additionally, as a building company, should foresee the possible delay of the government demolition. Yes Yes Yes N/A p Same underlying situation as Yu Bingling yu Sanming Zhongxiang Fangdichan Kaifa Youxian Gongsi Fangwu Maimai Hetong Jiufen Yishen Minshi Panjueshu (余冰玲与三明众祥房地产开发有限公司房屋买卖合同纠纷一审民事判决书) [Yu Bingling v. Zhongxiang Real Estate Development Co., Ltd.], Min 0402 Minchu 3354 Hao (闽 0402民初 3354号) [MIN 0402 MINCHU NO. 3354] (Meilie Dist. People’s Ct. 2016). 2020] FORCE MAJEURE IN CHINA 345 Case Number Jurisdiction P D K Type Type of Force Majeure Force Majeure? Liability? LD FM View of Lower Court Opinion? （2016） 闽 0402 民初 3354号q Meilie, Sanming, Fujian Basic People’s Court I C Real Estate Purchase Government Action – Other Executive Action (government delayed in demolishing building) Not force majeure – government had already delayed performance when contract signed. Additionally, as a building company, should know government demolition is a slow process. Yes Yes Yes N/A q Same underlying situation as Li Xinming v. Zhongxiang Real Estate Development Co., Ltd., supra note 16.