Jurisdiction after Adding Additional Defendants in Civil Procedure

Lifei Jiang

In trial practice, an involved party may often apply to add an additional defendant or a third party during the trial period. When an additional defendant is added, there may involve the issue of the jurisdictional court change. Typically, hierarchical jurisdiction and exclusive jurisdiction systems are not affected by additional defendants, so they will not be discussed; this article will focus on whether the district jurisdiction will change or not.

In district jurisdiction, under the principle of constant jurisdiction, in order to reduce litigation costs, increase efficiency, and restore the civil and economic legal relations in the dispute as soon as possible, the jurisdiction of the case remains constant based on the time when the case was filed. The court that has jurisdiction over the case when the case was filed will not lose its jurisdiction due to changes of the facts during the trial. According to this principle, even if additional defendants are added, the jurisdictional court should still remain unchanged. However, in the judicial explanation for the Civil Procedure Law, Article 37 states that: “Once a case is accepted, the jurisdiction of the people’s court that has accepted the case shall not be affected by the changes in the domiciles or habitual residences of the parties concerned”; Article 39 states that “Where a people’s court confirms its jurisdiction over a case after examining the objections raised against its jurisdiction, the jurisdiction of the people’s court shall not be changed in the event that the party concerned files a counterclaim, adds or modifies litigation requests, etc., except where the provisions on hierarchical jurisdiction or exclusive jurisdiction are violated.” These two judicial explanations are the constant principles of jurisdiction, but did not clearly state “additional defendant” as a situation where the principle of constant jurisdiction applies. Therefore, the question is raised: when an additional defendant is added in civil procedure, will district jurisdiction be affected?

According to Article 21 of the Civil Procedure Law: “A civil lawsuit brought against a citizen shall be under the jurisdiction of the people’s court located in the place where the defendant has his domicile; if the defendant’s domicile is different from his habitual residence, the lawsuit shall be under the jurisdiction of the people’s court located in the place of his habitual residence.” Considering the Civil Procedure Law’s principle of “the plaintiff follows the defendant”, if there is no exclusive jurisdiction and both parties did not make a written agreement to choose the jurisdictional court, the jurisdiction should belong to the court in the district of the defendant’s domicile (or habitual residence). However, after an additional defendant is added, it is highly likely that the new defendant has a different domicile (or habitual residence). Thus, the question is: if the new jurisdictional court specified by relevant laws and regulations is different from the previous court that accepted the case, should the principle of constant jurisdiction be applied?

In order to place the above question in better context, an example based on the Guaranty Law is as follows. According to Article 129 of the judicial explanation for the Guaranty Law, “When a dispute between the principal and the guarantee contract is brought to court, jurisdiction of the case shall be determined on the basis of the principal contract.” In typical guarantees, the guarantor has the right of plea for preference claims; however, in joint guarantees, the plaintiff has the right to choose to sue the principal debtor or the joint guarantor. Thus, the following situation could occur: the plaintiff brings up the lawsuit against the joint guarantor, and it is already accepted by the court in the joint guarantor’s domicile; then later, the plaintiff adds the principal contract’s debtor as an additional defendant. In this case, the court specified based on the constant jurisdiction principle and  the judicial explanation for the Guaranty Law is different, so the above question is raised.

In practice, there have been cases similar to the scenario above: in the (2016) Ji 0391 Min Chu No. 691 Peng Wang vs. Chunzhi Zhang & co. guarantee contract dispute case, the plaintiff brought a suit against the guarantor based on the guarantee contract, and by the defendant’s application, the court added the party involved in the principal contract as a joint defendant. Afterwards, the defendant made a jurisdiction objection; the court held that the objection was valid, and transferred the case to the court determined based on the principal contract. In the (2016) Ji 0104 Min Chu No. 2779 case, the plaintiff first sued the guarantor, and then applied to add the debtor as a joint defendant. After the court added the defendant, it applied the Guaranty Law judicial explanation and transferred the case of its own accord.

Therefore, it can be seen that in practice, the more common practice is to determine jurisdiction based on the Guaranty Law judicial explanation. In addition, other than the defendant bringing up a jurisdiction objection, courts can also transfer the case to the court determined by the principal contract of their own accord.

The author also believes that under this type of situation, the jurisdictional court should be determined based on the principal contract as stated in the Guaranty Law judicial explanation. This is because the Guaranty Law and its judicial explanation were established to promote fund and commodity circulation, and thus guarantee the realization of creditors’ rights. On the other hand, the purpose of the constant jurisdiction principle is to save judicial costs, increase litigation efficiency, try civil cases promptly, and confirm civil rights and obligations relations. Therefore, the constant jurisdiction principle focuses on efficiency, while the Guaranty Law judicial explanation focuses on the realization of creditors’ rights and reflects the principle of fairness. Therefore, when the jurisdictional court specified by each law is different, efficiency should yield to fairness. Resolving the dispute and realizing rights fairly and justly should be placed at the highest priority.