Recognition and Enforcement of Foreign-Related Civil and Commercial Judgments in China（Part 2）

Introduction

By October 2021, China had entered into bilateral judicial assistance agreements with 39 countries on civil and commercial matters, 38 of which had come into effect, 34 of which stipulated the conditions for recognition and enforcement of judgments issued by foreign courts. In addition, Chinese courts have recognized and enforced commercial judgments of courts in Singapore and the United States under the principle of reciprocity. Judgments of Chinese courts have also been recognized and enforced by courts in Germany, Singapore, the United States, Israel and other countries. From 2018 to 2020, Chinese courts accepted 1,301 applications for recognition and enforcement of civil and commercial judgments by foreign courts, and concluded 1,226 cases, of which 1,142 were recognized and enforced, involving more than 30 countries.[1]

Content

III. Operational Procedures for Recognition of Foreign Judgments

1. Application Methods

As for the judicial practice of various countries, there are generally two approaches to apply for recognition and enforcement of foreign court judgments. One is directly submitted by the parties to the foreign court; the other one is the courts issuing the judgment submit the case to the foreign court in accordance with the international treaties signed or through diplomatic channels.

Where an application is made to China for recognition and enforcement of a judgment of a foreign court, if the country issuing the judgment has concluded a bilateral judicial assistance treaty with China, the application shall be conducted in accordance with the provisions of the treaty; if there is no treaty relationship, the parties may directly apply to a Chinese court, or a foreign court may apply in accordance with the principle of reciprocity.

Article 544 of the Interpretation of civil Procedure Law stipulates that if a party applies to a competent intermediate people’s court for recognition and enforcement of a legally effective judgment issued by a foreign court, if the country where the court is located have not concluded or joined an international treaty with China, and there is no reciprocal relationship, the application shall be rejected, except where the parties apply to the people’s court for recognition of a legally effective divorce judgment made by a foreign court. If the application for recognition and enforcement is rejected by a ruling, the party concerned may bring a suit in a people’s court.

The application to a Chinese court must be in writing and must be accompanied by the original judgment and a certified Chinese translation. If a foreign country has signed a bilateral judicial assistance treaty with China, the party concerned shall submit relevant documents to the Chinese court in accordance with the provisions of the treaty.

Applications for recognition and enforcement of civil judgments from Hong Kong, Macao and Taiwan shall be filed directly with the intermediate people’s courts that have jurisdiction in China.

1. Application Documents

To apply for recognition and enforcement of a judgment of a foreign court in China, the applicant shall submit the following documents:

1. Application Form: the application shall state the basic information of the applicant and respondent, the request, facts and reasons on which it is based；
2. Applicant’s identity certificate or registration certificate, identity certificate of legal representative and responsible person and power of attorney；
3. The original or certified copy of the effective judgment/award issued by the court or the arbitration body; and
4. Evidence.

If the materials submitted are in a foreign language, a Chinese translation shall also be provided.

A certified Chinese translation may be certified by the following means:

1. Notarized by foreign notary organizations, authenticate by authorized agencies of the Ministry of Foreign Affairs, and Chinese embassies and consulates abroad;
2. Notarized by foreign embassies and consulates directly; or
3. Notarized by domestic notary authorities.

Jurisdiction

According to China’s Civil Procedure Law, intermediate people’s courts in China accept applications for recognition and enforcement of judgments of foreign courts. In addition, the Provisions of the Supreme People’s Court on Some Issues Concerning the Jurisdiction of Civil and Commercial Cases Involving Foreign Elements clearly points out that civil and commercial cases involving foreign elements in the first instance shall be subject to the jurisdiction of the following people’s courts:

(1) the people’s court of an economic and technological development zone (such a zone shall be established under the approval of the State Council);

(2) the intermediate people’s court at the locality of a provincial or autonomous regional capital or a municipality directly under the Central Government;

(3) the intermediate people’s court of a special economic zone or a city directly under the State planning;

(4) any other intermediate people’s court designated by the Supreme People’s Court;

(5) the higher people’s court.

The recognition and enforcement of civil and commercial judgments of Hong Kong and Macao shall be under the jurisdiction of the people’s courts of the places where the respondent has its/his/her domicile, habitual residence or property. The intermediate people’s court or the special people’s court having jurisdiction over the recognition and enforcement of civil judgments in Taiwan region of China，which is located at the place of domicile or habitual residence of the applicant or the place of domicile, habitual residence or property of the respondent.

1. Statute of Limitation

According to Article 246 of the Civil Procedure Law, the time limit for a party to apply for recognition and enforcement of a foreign-related judgment is two years. The suspension or interruption of the statute of limitation for applying for enforcement shall be governed by legal provisions regarding the suspension or interruption of the statute of limitations for instituting an action. The period shall begin from the last day of the performance period specified in a legal instrument, be calculated from the day when the period for the last stage of performance expires; or begin from the effective date of a legal instrument if the legal instrument does not specify a period of performance.

1. Examination and Disposition

The people’s court shall form a collegial panel to conduct examination. After the review,

1. If the country where the foreign court is located has not concluded or joined an international treaty with China, and there is no reciprocal relationship, the court shall reject the application;
2. If the country where the foreign court is located has concluded or acceded to an international treaty with China, or there is a reciprocal relationship, it shall rule to recognize the validity of the foreign judgment, and issue writ of execution if enforcement is necessary. If the conditions are not met, the ruling shall not be recognized and enforced.

When apply the principle of reciprocity, the parties not only have to prove that the Chinese court’s decision was once recognized and enforced in the foreign country, but also prove that judgment being applied for recognition and enforcement, if was issued by China’s court, the judgment could also be recognized and enforced by the foreign court under the same condition.

Generally, the judgments of foreign courts are not recognized in the following situations:

1. The judgment has not yet taken legal effect;
2. The foreign court issuing the judgment has no jurisdiction over the case;
3. The judgment was rendered under default and without a lawful summons;
4. The case between the parties is being tried or has been adjudicated by a Chinese court, or the judgment of a third country on the case has been recognized by a Chinese court;
5. The judgment violates the basic principles of Chinese law or endangers China’s state sovereignty, security and public interests.

The specific expressions of civil judgments against Hong Kong, Macao and Taiwan are different, but the content is roughly the same. The following part takes the non-recognition of civil judgments in Taiwan region as an example. In any of the following circumstances, the judgment shall not be recognized:

1. The civil judgment applied for recognition is made under default and without legal summons or in the absence of capacity and without proper representation;
2. Cases are under the exclusive jurisdiction of the people’s courts;
3. The parties to the case have entered into a valid arbitration agreement and have not waived the jurisdiction of arbitration;
4. The case has been adjudicated by a people’s court or arbitrated by an arbitral tribunal in mainland China;
5. The courts of Hong Kong Special Administrative Region, Macao Special Administrative Region or foreign countries have rendered judgments on the same dispute and have been recognized or recognized by a people’s court;
6. An arbitral tribunal in Taiwan, Hong Kong Special Administrative Region, Macao Special Administrative Region or a foreign country has rendered an arbitral award on the same dispute and has been recognized by a people’s court; or
7. If the recognition of the civil judgment will violate the One-China principle and other basic principles of national law or harm social and public interests, the people’s court shall rule not to recognize it.

Approach for Relief

Recognition and enforcement of foreign judgments: the ruling made by the people’s court after examination is final and takes legal effect once served.

If the people’s court refused to recognize and enforce the foreign judgment, the parties can file an another lawsuit with the people’s court on the same facts (disputes).

For civil and commercial judgments in Hong Kong, Macao and Taiwan: if the applicant refuses to accept the ruling made by the people’s court, it/he/she may file an appeal. A written order of recognition, disapproval or rejection of an application made by a people’s court shall become legally effective as soon as it is served. If a party refuses to accept the written order, it/he/she may, within 10 days from the date of service, apply to the people’s court with the next higher level for reconsideration. (Note: Although the expression is different, the content is much the same, here the authors take the Taiwan-related provisions as an example)

[1] China New, shttps://www.chinanews.com.cn/gn/2021/10-27/9596195.shtml.