Recognition and Enforcement of Foreign Judgments...
As discussed above,judicial authority is the core part of a country’s judicial sovereignty,which is an important component of this country’s sovereignty.Since a country’s sovereignty is regarded sacrosanct,generally every country adopts an initial attitude of not recognizing judgments made by foreign courts.However,along with the increasingly frequent commercial cooperation among countries,a country’s economic development can be greatly influenced by others.Therefore,giving recognition and enforcement to each other’s court judgments under the principle of reciprocity and certain conditions will better enhance the commercial collaboration among countries.This has already become the trend of legislative development in most countries.21 China,undoubtedly,is not an exception.
At present,Chinese system of the recognition and enforcement of foreign judgment is based on two primary sources: domestic rules and bilateral conventions.To be more specific,Civil Procedure Law of the People’s Republic of China (hereinafter referred to as “CPL”) as well as its judicial interpretation,and bilateral judicial assistance agreements made between China and other countries or regions,constitute the major bases upon which the system of the recognition and enforcement of foreign judgment is established.
2.1 Domestic Rules Regarding Recognition and Enforcement of Foreign Judgments
The law applying to recognition and enforcement of foreign judgments in China is found in Chapter 27,Part Four,containing Articles 276-283,of the Law of Civil Procedure of the People’s Republic of China.This Chapter is headed “Judicial Assistance.” Among these provisions,Articles 281 and 282 are most relevant which provide the process and requirements to enforce foreign judgments by the People’s Court.These two Articles provide as follows:
If a legally effective judgment or written order made by a foreign court requires recognition and enforcement by a People’s Court of the People’s Republic of China,the party concerned may directly apply for recognition and enforcement to the intermediate People’s Court of the People’s Republic of China which has jurisdiction.The foreign court may also,in accordance with the provisions of the international treaties concluded or acceded to by that foreign country and the People’s Republic of China or with the principle of reciprocity,request recognition and enforcement by a People’s Court.
In the case of an application or request for recognition and enforcement of a legally effective judgment or written order of a foreign court,the People’s Court shall,after examining it in accordance with the international treaties concluded or acceded to by the People’s Republic of China or with the principle of reciprocity and arriving at the conclusion that it does not contradict the basic principles of the law of the People’s Republic of China nor violate state sovereignty,security and social and public interest of the country,recognize the validity of the judgment or written order,and,if required,issue a writ of execution to enforce it in accordance with the relevant provisions of this Law; if the application or request contradicts the basic principles of the law of the People’s Republic of China or violates state sovereignty,security and social and public interest of the country,the People’s Court shall not recognize and enforce it.
The content of these two articles may be analyzed as follows:
First,there are two alternatives to start the process: (1) the foreign judgment creditor may file a petition directly with the competent intermediate People’s Court for recognition and enforcement of the judgment which is called “enforcement by petition”; (2) the foreign judgment court may make a judgment recognition and enforcement request to the competent intermediate People’s Court which is called “judge-referred enforcement.” It should be noted that the foreign court request in this regard shall be directed to the competent intermediate People’s Court through the means provided in the treaties to which both China and the forum country have joined,or on the basis of reciprocity.If neither treaty nor reciprocity exists,a diplomatic channel is usually employed.For purposes of the recognition and enforcement of a foreign judgment,the competent court shall be the intermediate People’s Court of the place where the judgment debtor resides or his property is located.22
Second,after the Chinese court receives the application,the first thing it should examine is whether China has concluded or acceded to any relevant bilateral or multilateral international treaties with the foreign country where the judgment-making court is located,or whether any relevant reciprocity fact exists between these two countries.If either prerequisite is satisfied,the People’s Court shall execute further examination with respect to this foreign judgment in accordance with provisions of certain treaty and the conditions prescribed in relevant Chinese laws about recognition and enforcement of foreign judgments; if neither prerequisite is satisfied,the court shall end the case because it lacks the basis to examine this foreign judgment.
It merits emphasizing that it remains unclear on the test to determine the existence of reciprocity in some cases.Basically,the principle of mutual reciprocity would appear to require that the relations between China and the foreign country where the judgment was rendered,be such that each routinely gives full faith and credit to one another’s judgments.However,in some cases such mutuality may be difficult to substantiate—as between China and a given foreign country,the issue will arise for the first time and there will be no prior practice between the two that can be referred to,as a basis for asserting mutual reciprocity.Chinese judicial practice seems to show that Chinese courts,under this circumstance,tend to deny the existence of mutual reciprocity,leading to the effect of foreign judgments being disregarded.For example,in the case of Gomi Akira v.Dalian Fari Seafood Ltd.,23 where a Japanese national requested on a liability transfer,the Intermediate People’s Court of Dalian City ruled against recognition and enforcement of the Japanese judgment on the ground that there existed neither judicial assistance agreement nor reciprocity between China and Japan.This case has aroused debate among Chinese scholars,some scholars criticize the attitude of the Intermediate People’s Court of Dalian,arguing that in the circumstance where there lacks the precedent of reciprocity between China and the relevant foreign countries,Chinese People’s Court should presume the existence of reciprocity in the absence of contrary evidence.They believe that taking such a cooperative and positive stance will lead to a win-win resolution.[2]
Fortunately,the SPC has expressed its positive and cooperative attitude towards the test to determine the existence of the reciprocity against the background of the Belt and Road Initiative.As mentioned in Chapter three of Part Five,the SPC issued a policy document entitled “Several Opinions of the Supreme People’s Court on Providing Judicial Services and Safeguards for the Construction of the Belt and Road by Peoples’ Courts” (hereinafter,“B&R Opinion”) on 16 June 2015.Entitled “The people’s courts shall strengthen international judicial assistance with countries along the ‘Belt and Road’ and effectively safeguard the lawful rights and interests of Chinese and foreign parties”,Paragraph Six of the B&R Opinion states that:
The people’s courts shall positively explore and strengthen regional judicial assistance,cooperate with the relevant departments in releasing the model texts of new-type judicial assistance agreements at appropriate time,promote the conclusion of bilateral and multilateral judicial assistance agreements,and promote the mutual recognition and enforcement of judgments rendered by countries along the “Belt and Road.” Under the circumstance where some countries have not concluded judicial assistance agreements with China,on the basis of the international judicial cooperation and communication intentions and the counterparty’s commitment to offering mutual judicial benefits to China,the people’s courts of China may consider the prior offering of judicial assistance to parties of the counterparty,positively promote the formation of reciprocal relationship,and actively initiate and gradually expand the scope of international judicial assistance.The people’s courts shall,in strict accordance with the international treaties concluded between China and countries along the “Belt and Road” or jointly participated in by them,actively handle such judicial assistance requests as service of judicial documents,investigation and evidence collection,and recognition and enforcement of judgments rendered by foreign courts,and provide efficient and convenient judicial remedies for the lawful rights and interests of Chinese and foreign parties.
Furthermore,the SPC issued another policy document entitled “Opinions of the Supreme People’s Court on Further Providing Judicial Services and Safeguards for the Construction of the Belt and Road by People’s Courts” (hereinafter “2019 B&R Opinions”) on 9 December 2019.Paragraphs 19 and 24 of the 2019 B&R Opinions states respectively that the people’s courts shall take active measures to facilitate the judgment recognition and enforcement,and that the people’s courts shall apply the principle of presumptive reciprocity when hearing cases concerning the recognition and enforcement of judgments from international commercial courts,so as to promote the mutual recognition and enforcement in this very field on a step-by-step basis.(https://www.daowen.com)
Third,only when the People’s Court confirms in its primary review that one of the above-mentioned prerequisites is satisfied,will it keep on going through the following aspects to determine if the concerned foreign judgment can be eventually recognized and enforced: (1) this foreign judgment must be already legally effective on the basis of the laws in the originating country.Additionally,in case the Chinese court could not decide clearly whether this judgment is effective,the applicant should submit the proving documents from the foreign court which made the judgment; (2) this judgment does not contradict the basic principles of the law of the People’s Republic of China nor violate the state sovereignty,security and social,public interest of China;[3](3) the judgment-making foreign court must be a court of competent jurisdiction; (4) the judgment was made strictly according to relevant procedures required in the originating applicant country and the party which loses the lawsuit has already had sufficient opportunity to respond; (5) China has not yet accepted or decided the same lawsuit brought by the same parties,nor has she already recognized this foreign judgment.
It should be noted that from the general spirit of Article 282,Chinese law is adopting the “general review procedure” instead of the “substantive review procedure.” This latter procedure signifies the approach which demands the court,where enforcement is sought,to examine the foreign judgments on both issues of law and fact,including the legal procedures involved and the factual evidence of the case,etc.Rejection of this approach means that the Chinese courts will not undertake to re-try the substantive merits of the case.
Fourth,if the foresaid aspects are all satisfied,the People’s Court shall render an order on the recognition of the foreign judgment.Where an execution is necessary,a writ of execution shall be issued and enforced in accordance with the relevant provisions of the CPL; otherwise the People’s Court shall refuse its recognition and enforcement.
Fifth,under the situation where no commonly concluded international treaties nor reciprocity facts exist between the applicant country and China,the parties may choose to bring a new suit with respect to the same case facts to the People’s Court which has jurisdiction in accordance with Chinese laws,and the Chinese court will hear and decide the lawsuit over again under Chinese law,as Article 544 of the Interpretation of CPL issued by the Supreme People’s Court provides as follows:
In the event that a party concerned applies to a competent intermediate people’s court of the People’s Republic of China for recognition and enforcement of a legally binding judgment/ruling rendered by a foreign court,in the absence of any international treaty concluded by and between the country of domicile of the foreign court and the People’s Republic of China or jointly acceded to by the said foreign country and the People’s Republic of China,and in the absence of any reciprocal relationship,the said intermediate people’s court shall render a ruling to dismiss the application,unless the party concerned applies to the people’s court for recognizing a legally binding divorce judgment rendered by the foreign court.Where the application for recognition and enforcement is dismissed by a ruling,the party concerned may file a lawsuit to the competent people’s court.
An example is Standard Chartered Asia Ltd.v.Guangxi Zhuang Autonomous Region Huajian Company.24 Both the plaintiff and the debtor,Hong Kong Orient City Company,were incorporated in Hong Kong.Guangxi Zhuang Autonomous Region Huajian Company,the defendant guarantor,was a mainland company.The plaintiff brought a lawsuit before the Hong Kong Higher Court against the debtor and the guarantor.Given the absence of a judicial assistance agreement between Hong Kong and Chinese mainland at that time,the judgment of the Hong Kong Court could not be enforced in Chinese mainland.Therefore,the plaintiff sued the guarantor in Chinese mainland for the same cause of action.The People’s Court concerned accepted the case and rendered judgment.25
It should be emphasized that,on the other hand,a Chinese People’s Court sometimes may render judgment over a person or property that is not within the territory of China.Under this circumstance,the judgment creditor may directly apply to a competent foreign court for enforcement.If necessary,the People’s Court may also send the enforcement request to a foreign court under the provisions of bilateral or international treaties to which both China and the foreign country are members.Absent these treaties,the request may be made on the basis of reciprocity.If required by a foreign court,the People’s Court may issue a certificate of judgment to the judgment creditor.Article 280 of the Civil Procedure Law provides as follows:
If a party applies for enforcement of a legally effective judgment or written order made by a People’s Court,and the opposite party or his property is not within the territory of the People’s Republic of China,the applicant may directly apply for recognition and enforcement to the foreign court which has jurisdiction.The People’s Court may also,in accordance with the relevant provisions of the international treaties concluded or acceded to by China,or with the principle of reciprocity,request recognition and enforcement by the foreign court.
In practice,out of complicated political and legal reasons,it is infrequent that foreign countries recognize the judgments rendered by Chinese Courts.
2.2 International Treaties and Bilateral Agreements
As for the international treaties,though China,as a member of Hague Private International Law Conference,is actively participating in the drafting work of the Convention on Jurisdiction and Enforcement of Foreign Judgments in Civil and Commercial Matters,this Convention has turned out to be abortive.Thus,there are still legal obstacles in recognition and enforcement of foreign judgments in China merely based on international treaties.Furthermore,China has already acceded to Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters.Although this convention does not involve recognition and enforcement of foreign judgments,it does improve the enforcement situation of foreign judgments by allowing for service of process of the effective foreign judgments on relevant parties who are living in China.It should be noted that in 2017,China signed the Hague Choice of Court Convention,but has not ratified so far.
As for the bilateral agreements,China has signed bilateral treaties with certain countries for the mutual recognition and enforcement of one another’s judgments.26 Thus far these bilateral treaties extend to relatively few States.Most western developed countries are not parties to any such agreements with China,insofar as the distrust of Chinese political and legal system still prevails in those countries.