(You Yunting) In the widely-covered corporate espionage dispute between Sany Heavy Industry (“Sany”) and Zoomlion Heavy Industry Science & Technology Development Co., (“Zoomlion”), Sany has criticized the Hanshou Public Security Bureau (“Police”) in Changde City, Hunan Province, stating that it did not have jurisdiction to investigate the case and that its investigation was in violation of the law. The Hanshou Police, however, replied there is no problem with it handling this investigation. As of now, there has been no final decision in the case, but the jurisdiction issue it has raised has captured the public attention. Coincidently, the author also believes that there are Police jurisdictional issues in the recent Tabao malicious review extortion case.

According to the report, the Hangzhou Police recently uncovered a case concerning malicious poor reviews on Taobao.com and arrested seven criminal suspects for the crime of extortion. The report further states that “the Hangzhou Police office has paid great attention to the case and appointed a case investigation team led by the criminal investigation unit of the Shangcheng Police, guided by the municipal criminal investigation unit, and with assistance from Police officers from other locations. This team arrested seven criminal suspects (including one female).” This attack on the malicious reviewers that have plagued Taobao sellers is definitely a good development. In the author’s opinion, however, there may have some legal problems with the Shangcheng District Police investigating the case, and it would have been more proper to have been handled by Xihu District Police, the place criminal conduct occurred.

First, where did the crime occur? According to Article 15 of the Rules for Public Security Organs on Procedure for Handling Criminal Cases (“Rules”):

“The criminal cases shall be within the jurisdiction of the public security organs in the place where the crime occurred. Where it is more appropriate for the public security organs in the place of the suspect’s domicile to handle the case, such public security organs may have jurisdiction.”

If the Police office in Shangcheng District acquired the jurisdiction by this article, then the Shangcheng District should be one of the places where this crime occurred. Under common legal understanding, the place where the crime occurred includes the place where the crime was prepared, the place where the crime was conducted, and the place where the consequences of the crime were felt. This case is somewhat special because it involves the internet, so the location of Taobao Inc., the transaction platform runner, could be viewed as the place where the crime was conducted.

The question, however, is that even though Taobao.com is in Hangzhou, its domicile is in not in that Shangchen District. On Taobao’s website, it lists its contact address as Xihu International Technology Building, No.391 Wener Road, Hangzhou City (note: the link is in Chinese). Additionally, the author has acted in negotiations for clients with Taobao.com in IPR issues, and the place where the negotiations occured was in Xihu District of Hangzhou City. So, if the Police in Hangzhou would like to get the jurisdiction over the claim because the crime was occurred in the city, the case should be taken by the Police in Shangcheng District.

Second, should the case be investigated by the municipal Police or the district Police? As stipulated in Article 18 of the Rules:

“The public security organs of the county level investigate the criminal cases within in their administrative area; the city and higher public security organs handle major crimes involving foreign elements, major economic crimes, major groups crimes, and criminal cases that that would be difficult for lower level public security organs to investigate.”

This article specifies a clear division of duty in the Police system, namely, jurisdiction over normal cases is held by county level public security organs, while jurisdiction over major cases is held by the municipal public security organs. Although the case is claimed to be the first crime case of its kind, it actually involves very little money, with each negative reviewer only blackmailing for several hundred yuan. At the same time, due to records kept by Taobao.com of the entire extortion process, including the chat history, payment records, identity information, and bank information, the investigation of the case did not exhaust that much energy. For this reason, the case appears to be a simple case of extortion. So, by the above regulation, it should fall within the jurisdiction of the county level POLICE.

Thirdly, can the municipal Police designate the jurisdiction of the case? As provided in Article 17 of the Rules:

“For the criminal cases with unclear jurisdiction, jurisdiction can be negotiated among the public security organs. Jurisdiction may be designated by the higher level public security organs in cases with disputed jurisdiction or special circumstances.”

The place were the crime occurred in the case is very clear and there should be no argument over jurisdiction. Based on statements in the report, the actual situation of this case is likely that Taobao reported the case directly to the Hangzhou municipal Police, who then designated the Shangcheng District Police to investigate with supervision from the Hangzhou municipal Police. But, the problem is that this is not a major case, so even if Taobao reported the case to the Hangzhou municipal Police, jurisdiction should have then been transferred to the Xihu District Police, where the crime occurred, rather than being directly given to the Shangcheng District Police, where the crime did not occur.

There might be readers who ask: If the Hangzhou Police caught the criminals, why are lawyers still finding fault? Is the author suggesting that if the Police do not have jurisdiction then the suspect should be set free? The author’s answer is no. The fight against the crime by the Police without a doubt benefits the progress of society. But, criminal cases also involve individual freedom, so the investigation should be very strict and proper, and we have the right to demand that the public security organs handle this case according to the rules. No one can ensure that he will not have disputes with others, and if in the course of a dispute, you find yourself arrested by a Police without jurisdiction then jurisdiction might be a significant issue.

In closing, although this case is not complicated, it still involves a lot of tedious details. The chat history and transaction records of each suspect may be filed as high as a man’s waist, and dealing with so many documents no doubt entails a lot of work. So, the author would like to send his sincere thanks to the Police officers who investigated the case and judicial officers who are handling it.

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You Yunting：86-21-52134918  youyunting@debund.com/yytbest@gmail.com

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