Establishment of Urumqi Free Trade Zone Court: A Specialized Tribunal for Foreign-Related Commercial Disputes
Published 1 April 2025
Yu Du
On 20 March 2025, the Urumqi Free Trade Zone Court (Urumqi FTZ Court) was officially inaugurated in the China (Xinjiang) Free Trade Zone (Xinjiang FTZ). This court, the first of its kind in Xinjiang, is tasked with handling first-instance foreign-related civil and commercial cases, intellectual property disputes, and domestic civil and commercial matters that are closely tied to high-level open economic practices in the Urumqi area of Xinjiang FTZ. The court’s primary goal is to provide equitable, convenient, efficient, and precise foreign-related judicial services for both Chinese and foreign parties.
The Xinjiang FTZ, established in November 2024, encompasses three key regions: Urumqi, Kashgar, and Khorgos. It represents China’s first free trade zone in the northwestern border area, marking a critical step in enhancing regional commerce and international trade.
As part of its innovative approach, the Urumqi FTZ Court has introduced a range of international commercial mediation resources provided by the Supreme People’s Court (SPC). It has developed a comprehensive system for litigation, mediation, and arbitration, offering a one-stop solution for dispute resolution. Further, the court has established mechanisms for seamless integration between international commercial mediation and arbitration. This includes providing multilingual services, foreign language translation, foreign law verification, foreign-related notarization, and legal resource search services, ensuring that foreign parties have access to essential resources and assistance in navigating Chinese legal proceedings.
Upon its inauguration, the court heard its first case in a public session - a dispute over an international goods sales contract. The court panel adhered strictly to legal procedures, allowing both parties to present their arguments and thoroughly reviewing the facts. The court delivered its decision on the spot, supporting the plaintiff’s claims. This case serves as a strong precedent for the Urumqi FTZ Court's commitment to efficient, high-quality foreign-related commercial dispute resolution.
The court also released several key documents, including the Silk Road Economic Belt Legal Services Area Free Trade Trial White Paper, the Court Rules for the Urumqi FTZ Court (Trial Implementation), and the Model Clauses for Agreement Jurisdiction of the Urumqi FTZ Court. These documents provide foreign entities with essential information on how to handle business-related disputes within the Urumqi FTZ Court. In addition, the court unveiled four representative cases covering international goods sales contracts, intellectual property, and financial disputes, which serve as vital references for businesses to understand the legal framework and safeguard against commercial risks.
As highlighted in the White Paper, as of January 2025, over 1,425 foreign-related commercial, intellectual property, contract, and financial cases had been processed by the Xinjiang legal service area, demonstrating the region’s growing importance in international commerce.
Notably, the Court Rules specify that foreign companies and organizations involved in litigation are no longer required to submit consularization for documents, provided that the documents meet the conditions stipulated under the Apostille Convention. This streamlines the legal process, making it more accessible for foreign entities. The court also outlines a clear mechanism for verifying foreign law, which can be done through multiple channels, including judicial assistance, relevant embassies, and legal expert input.
The Model Clauses for Agreement Jurisdiction provided by the court offer a practical framework for companies to incorporate jurisdictional clauses in their contracts. These clauses ensure greater predictability in dispute resolution, reduce uncertainties related to jurisdiction, legal application, and service of process, and minimize the risk of international parallel litigation. They also facilitate the recognition and enforcement of rulings abroad.
The basic jurisdiction clause is as follows:
“Any dispute arising from or in connection with this agreement shall be resolved through amicable negotiations between the parties. If the negotiations fail, the parties irrevocably agree that the Urumqi FTZ Court in the China (Xinjiang) FTZ shall have exclusive jurisdiction over the dispute, and the relevant litigation shall be filed with the Urumqi FTZ Court in the China (Xinjiang) FTZ and shall be subject to the judicial jurisdiction of the People’s Republic of China.”
[Comment]
The establishment of the Urumqi FTZ Court marks a significant step forward in resolving foreign-related commercial disputes in China’s northwest region. The court’s focus on foreign-related commercial disputes and its introduction of international mediation and arbitration services offer companies a much-needed legal platform that bridges the gap between Chinese and international legal systems. From a strategic perspective, businesses entering the Chinese market or already operating within the Urumqi FTZ should consider incorporating clear jurisdictional clauses in their contracts to ensure that any potential disputes, particularly those involving IP rights, are handled efficiently by the Urumqi FTZ Court. This proactive approach to dispute resolution, combined with the court’s innovative mechanisms, can significantly enhance the protection of foreign IP assets in China.
The Xinjiang FTZ, established in November 2024, encompasses three key regions: Urumqi, Kashgar, and Khorgos. It represents China’s first free trade zone in the northwestern border area, marking a critical step in enhancing regional commerce and international trade.
As part of its innovative approach, the Urumqi FTZ Court has introduced a range of international commercial mediation resources provided by the Supreme People’s Court (SPC). It has developed a comprehensive system for litigation, mediation, and arbitration, offering a one-stop solution for dispute resolution. Further, the court has established mechanisms for seamless integration between international commercial mediation and arbitration. This includes providing multilingual services, foreign language translation, foreign law verification, foreign-related notarization, and legal resource search services, ensuring that foreign parties have access to essential resources and assistance in navigating Chinese legal proceedings.
Upon its inauguration, the court heard its first case in a public session - a dispute over an international goods sales contract. The court panel adhered strictly to legal procedures, allowing both parties to present their arguments and thoroughly reviewing the facts. The court delivered its decision on the spot, supporting the plaintiff’s claims. This case serves as a strong precedent for the Urumqi FTZ Court's commitment to efficient, high-quality foreign-related commercial dispute resolution.
The court also released several key documents, including the Silk Road Economic Belt Legal Services Area Free Trade Trial White Paper, the Court Rules for the Urumqi FTZ Court (Trial Implementation), and the Model Clauses for Agreement Jurisdiction of the Urumqi FTZ Court. These documents provide foreign entities with essential information on how to handle business-related disputes within the Urumqi FTZ Court. In addition, the court unveiled four representative cases covering international goods sales contracts, intellectual property, and financial disputes, which serve as vital references for businesses to understand the legal framework and safeguard against commercial risks.
As highlighted in the White Paper, as of January 2025, over 1,425 foreign-related commercial, intellectual property, contract, and financial cases had been processed by the Xinjiang legal service area, demonstrating the region’s growing importance in international commerce.
Notably, the Court Rules specify that foreign companies and organizations involved in litigation are no longer required to submit consularization for documents, provided that the documents meet the conditions stipulated under the Apostille Convention. This streamlines the legal process, making it more accessible for foreign entities. The court also outlines a clear mechanism for verifying foreign law, which can be done through multiple channels, including judicial assistance, relevant embassies, and legal expert input.
The Model Clauses for Agreement Jurisdiction provided by the court offer a practical framework for companies to incorporate jurisdictional clauses in their contracts. These clauses ensure greater predictability in dispute resolution, reduce uncertainties related to jurisdiction, legal application, and service of process, and minimize the risk of international parallel litigation. They also facilitate the recognition and enforcement of rulings abroad.
The basic jurisdiction clause is as follows:
“Any dispute arising from or in connection with this agreement shall be resolved through amicable negotiations between the parties. If the negotiations fail, the parties irrevocably agree that the Urumqi FTZ Court in the China (Xinjiang) FTZ shall have exclusive jurisdiction over the dispute, and the relevant litigation shall be filed with the Urumqi FTZ Court in the China (Xinjiang) FTZ and shall be subject to the judicial jurisdiction of the People’s Republic of China.”
[Comment]
The establishment of the Urumqi FTZ Court marks a significant step forward in resolving foreign-related commercial disputes in China’s northwest region. The court’s focus on foreign-related commercial disputes and its introduction of international mediation and arbitration services offer companies a much-needed legal platform that bridges the gap between Chinese and international legal systems. From a strategic perspective, businesses entering the Chinese market or already operating within the Urumqi FTZ should consider incorporating clear jurisdictional clauses in their contracts to ensure that any potential disputes, particularly those involving IP rights, are handled efficiently by the Urumqi FTZ Court. This proactive approach to dispute resolution, combined with the court’s innovative mechanisms, can significantly enhance the protection of foreign IP assets in China.