On December 31, 2021, the PRC Supreme People’s Court issued the Minutes of the Symposium on the Trial of Commercial Cases Involving Foreign Elements and Maritime Cases by Courts Nationwide (the “Minutes”). This Minutes offers guidance on many practical problems related to the trial of commercial cases involving foreign elements and maritime cases, which include the application for recognition and enforcement of foreign judgments in China. As Chinese lawyers, we are often consulted about this issue, so we prepare the following articles for your reference.

I. What is recognition and enforcement of foreign judgments?

Recognition and enforcement of foreign judgments refers to the procedure where the court in a country, subject to certain legal procedures, recognizes the effectiveness of the judgment made by a competent foreign court and enforces such foreign judgment with domestic enforcement measures.

Recognition of foreign judgments means that the foreign judgments are deemed to have equal legal effects as domestic judgments. This can prevent the parties from filing a new lawsuit in another country based on the same facts. Enforcement of foreign judgments is based on the recognition of such foreign judgments, and it is meant to protect the rights of the winning party by facilitating the enforcement of effective judgments.

II. What conditions are to be met for a foreign judgment to be recognized and enforced in China?

1. The foreign country should have a treaty or reciprocal relations with China.

(1) Fundamental principle: an international treaty takes precedence over reciprocal relations.

It is made clear in the Minutes that when the court hears a case of application for recognition and enforcement of a foreign judgment, it shall first examine whether such country and China have concluded or both entered into some international treaty. If there is any applicable international treaty, such international treaty shall apply. If not, or if the international treaty contains no relevant provisions, the Minutes may apply.

(2) Reciprocal relations

According to the Minutes, reciprocal relations may be deemed established if—

i. According to the laws of the country where the foreign court is located, the civil and commercial judgments made by Chinese courts may be recognized and enforced by the courts in the country;

ii. China has reached reciprocal understanding or consensus with the country where the foreign court making the judgment is located;

iii. The foreign court has made a reciprocal commitment to China through diplomatic means or China has made a reciprocal commitment to the country where the foreign court is located through diplomatic means, provided that no evidence shows that the foreign court has ever denied recognition or enforcement of judgments made by Chinese courts on the grounds of no reciprocal relations.

To determine whether there are reciprocal relations, the court shall examine the conditions on a case-by-case basis.

(3) Special circumstances

It is noteworthy that the Minutes excludes its applicability to the recognition and enforcement of judgments made on such cases as bankruptcy cases, intellectual property cases, unfair competition cases and monopoly cases, since these cases are special and regional in nature. Provisions of the Supreme People’s Court on the Issues Concerning Acceptance by People’s Courts of Application for Recognition of Divorce Decrees Granted by Foreign Courts stipulates that applying for recognition and enforcement of divorce decrees granted by foreign courts does not require a treaty or reciprocal relations as a prerequisite. But such recognition and enforcement is limited to dissolution of the marriage, excluding other issues, such as child support, property division, and living expense sharing.

This should be easy to understand because if a treaty or reciprocal relations become a prerequisite, many divorce decrees granted by foreign courts will be unrecognizable, thus leading to surging situations of bigamy.

2. The judgment has become effective.

3. The foreign court should have jurisdiction.

For example, the foreign judgment may not violate the arbitration agreement. And it should not be the case where there is an effective arbitration agreement and the absent party has not made an explicit waiver of the arbitration agreement.

4. Such circumstances should not occur where the respondent was not legally summoned or did not have the opportunity to make statements or present defense properly though legally summoned or the parties with no litigation capacity are not fully represented.

5. The foreign judgment may not be obtained by fraud.

6. There may not be any other judgment on the same dispute made by the court. The court should not have recognized and enforced any judgment or arbitration award on the same dispute made by a third country.

7. The foreign judgment may not violate the basic principles of the PRC laws or the sovereignty, the security and social public interests of the PRC.

If you have any query about how to apply for recognition and enforcement of foreign judgments in China, do not hesitate to contact us via administrator@legalandwise.com.

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