China's Supreme People's Court (SPC) Friday issued a judicial interpretation applicable to the Foreign Investment Law, aiming to better protect the legitimate rights and interests of foreign investors in the country.

People's courts around the country will not support contracted parties who claim that investment contracts formed in areas not on China's negative list of foreign investment are void because the contracts have not been approved or registered by administrative authorities, according to the interpretation.

Investment contracts formed in areas where foreign investment is restricted by the negative list can still take effect as long as the parties concerned take necessary corrective measures before courts make effective judgments, said Luo Dongchuan, vice president of the SPC.

Investment contracts that did not meet the requirements of the negative list when they were signed can still be deemed effective if the negative list loosens restrictions before court judgments take effect, said Luo.

"These designs are aimed at guaranteeing the legitimate rights and interests of investors to the largest extent under the prerequisite of safeguarding the stability of foreign capital management," he said.

The interpretation will take effect on Jan 1, 2020.