Recognition and enforcement of Foreign Judgment in China

Recognition and enforcement of Foreign Judgment in China

The Civil Procedure Law of China provides the process to enforce judgments granted by a non-PRC court (“Foreign Judgment”) in China[1] A Foreign Judgment holder may in theory file a petition directly with the competent people’s court in China for recognition and enforcement of the Foreign Judgment, or the court that granted the Foreign Judgment (“Judgment Court”) may make a judgment recognition and enforcement request (“R&E Request”) to the competent people’s court in China, requesting that the Foreign Judgment be recognized and enforced ,but practically it is very rare for a PRC court to recognize and enforce a foreign judgment.

1. Basis for a Foreign Judgment holder to file a petition

1). Bi-lateral Treaties on reciprocal judgment recognition and enforcement

If China and the country where the forum is located are parties to a treaty on reciprocal judgment recognition and enforcement (“R&E Treaty”), the Judgment Court’s R&E Request should be directed to the competent people’s court through the means provided in the treaty.  

 China has entered into bi-lateral R&E Treaties with many countries, including France, Italy, Spain, Russia, Australia, Turkey and Argentina.[2].  

2) Multi-lateral treaties

PRC courts may also recognize and enforce Foreign Judgments under multi-lateral treaties acceded to by China, e.g. the International Convention on Civil Liability for Oil Pollution Damage 1969. There is a International Convention named CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS IN CIVIL AND COMMERCIAL MATTERS, which is specified on the matters of recognizing and enforcing Foreign Judgments but China is not party to it yet.

3)The basis of reciprocity

If an R&E Treaty does not exist between China and the country where the Judgment Court locates, PRC courts may also recognize and enforce Foreign Judgments on the basis of reciprocity, which means that judgments granted by PRC courts had been recognized and enforced in that country previously.  It remains to be seen whether one precedent case of a foreign court’s recognition and enforcement of a PRC judgment would suffice to establish reciprocity.  For example, a federal district court in the United States of America (“USA”) recognized and enforced a judgment granted by a PRC court in 2009[3].  It is not yet clear whether this would be sufficient to establish reciprocity between USA and China for the purpose of reciprocal judgement recognition and enforcement.  However, this precedent case provides a ground for prospective applicants who are holding judgements granted by USA courts and seeking to enforce the judgments in China.

2. last resort when  the Foreign Judgment holder can not file a petition

If neither treaty nor reciprocity is available to a Foreign Judgment holder, the last resort is to bring action (again) in the competent people’s court in China.  In tort cases, the competent court is the people’s court of the place where the infringing act took place or the place of domicile of the defendant.  If the defendant has no domicile in China, the people’s court of the place where the defendant’s detainable property or representative agent is located may have jurisdiction over the action.  The Foreign Judgment may be considered by the PRC court during hearing.

3.The competent court

The competent court for  recognizing and enforcing a foreign judgment is the intermediate people’s court of the place where the person (against whom the Foreign Judgment was granted) resides or where that person’s property is located.  After the competent court has reviewed the petition or the R&E Request according to any applicable international treaties concluded or acceded to by China or based on the principle of reciprocity, the competent court will decide whether to recognize and enforce the Foreign Judgment.  

4.Situations for the court to refuse to recognize and enforce a Foreign Judgment

The Civil Procedure Law of China does not specify the conditions under which a competent people’s court may refuse to recognize and enforce a Foreign Judgment.  Generally, if an R&E Treaty is available, that treaty would set forth the issues to be considered by the PRC courts in reviewing judgments granted by the courts of the country that is party to that treaty for the purpose of enforcement in China.  From our experience, R&E Requests may be refused for various reasons and circumstances, e.g. the competent people’s court may find that the relevant Foreign Judgment was made by an incompetent foreign court, the competent people’s court may hold the view that the relevant Foreign Judgment has no effect under the laws of the country where the Judgment Court locates, the same cause of action may have already proceeded to trial in China, or the recognition and enforcement of the relevant Foreign Judgment would damage Chinese sovereignty, security or public order.

---

[1] Article 266 of The Civil Procedure Law of China provides: “ After a people’s court of the People’s Republic of China reviews an application or pleading for the recognition and enforcement of a legally effective judgment or ruling rendered by a foreign court according to the international treaties concluded or acceded to by the People’s Republic of China or based on the principle of reciprocity, if the court considers that such a judgment or ruling does not contradict the basic principles of the laws of the People’s Republic of China nor violates the national, social, and public interest of China, the court may render a ruling to recognize its force. Where the enforcement is necessary, the court may issue an order to enforce a foreign judgment according to the relevant provisions of this Law. If a legally effective judgment or ruling rendered by a foreign court contradicts the basic principles of the law of the People’s Republic of China or the national, social, and public interest of China, the people’s court shall reject the application of recognition and enforcement. ”

[2] From our database, other countries are Peru, Romania, Poland, Hungary, Lithuania, Ukraine, White Russia, Greek, Cyprus, Egypt, United Arab Emirates, Kuwait, Tunisia, Morocco, DPRK, Laos, Vietnam, Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan, Bulgaria, Cuba and Mongolia.

[3] HUBEI GEZHOUBA SANLIAN INDUSTRIAL CO., LTD and HUBEI PINGHU CRUISE CO;, LTD. Vs ROBINSON HELICOPTER COMPANY, INC.,