A court in Zhejiang Province, China, rendered a ruling on 1 December 2017 recognizing and enforcing a French judgment of Bobigny Commercial Court. The issue in this case is whether the French Court has jurisdiction over the dispute.
Un tribunal de la province du Zhejiang en Chine a rendu le 1er décembre 2017 une décision reconnaissant et exécutant un jugement français du tribunal de commerce de Bobigny. La question en l'espèce est de savoir si le tribunal français est compétent pour connaître du litige.
1. Overview
On 1 December 2017, the Jinhua Intermediate People's Court of Zhejiang Province (the "Jinhua Court") rendered a civil ruling “[2016] Zhe 07 Xie Wai Ren No. 1” ([2016] 浙07协外认1号) recognizing and enforcing the civil judgment (Case No. 2010F00300, Judgement No. 2011F01203) rendered by the Bobigny Commercial Court of the French Republic (the "French Court", in French: Tribunal de commerce de Bobigny) on 18 October 2011.
The Jinhua Court recognized the French judgment in accordance with the Agreement on Judicial Assistance in Civil and Commercial Matters between the Government of the French Republic and the Government of the People's Republic of China (“the Agreement”, in French: Accord d’entraide Judiciaire en Matière Civile et Commerciale entre le Gouvernement de la République Française et le Gouvernement de la République Populaire de Chine du 4 Mai 1987) . The Agreement entered into force on 8 February 1988.
In accordance with Article 22 of the Agreement, “Court decisions are not recognized or executed in one of the following situations:
l) Where the decision is rendered by an incompetent court according to the jurisdiction rules contained in the law of the requested Party;
2) Where the court of the requesting Party, in matters of status or capacity of natural persons, applied a law other than that which would have been applicable according to the rules of private international law the requested Party, unless the application of the designated law had resulted in the same outcome;
3) Where the decision, according to the law of the Party where it was rendered, has not become final or is not enforceable;
4) Where the summon has not been duly served on the party against whom the decision is invoked, and the party, therefore, could not appear in court;
5) Where the compulsory execution of the decision infringes the sovereignty or security of the requested Party or proves to be contrary to its public policy;
6) Where the court of the requested Party has already made a decision on a dispute between the same parties, based on the same facts and claims, and such decision has become final;
or a third country’s decision, which concerns a dispute between the same parties, based on the same facts and claims, has already been recognized in the requested Party.”
2. Case Summary
Sase Tablissement Sacholiet ("Sacholiet") registered in Paris, France, ordered a batch of goods from Daoming Optics & Chemical Co., Ltd. ("Daoming") through Stetestrite International Co., Ltd. ("Stetestrite") registered in Taiwan. The parties have disputes over the quality of the goods.
On 16 February 2010, Sacholiet filed a lawsuit against Stetestrite in Bobigny Commercial Court of France (the "French Court").
On 27 May 2010, Stetestrite filed a complaint with the French Court, applying for adding Daoming to the litigation, and requested the French Court to decide that Daoming should undertake the obligations of Stetestrite as required by the French Court in the judgment. On 16 June 2011, Daoming appeared in court and read the complaint filed by Stetestrite.
On 18 October 2011, the French Court rendered a judgment requiring Stetestrite to repay the amount equivalent to US$233,535.74 in Euro to Sacholiet while Daoming to assume the obligations of Stetestrite as required by the French Court in the judgment.
The judgment was served on Daoming on 4 November 2011 but Daoming failed to appeal during the appeal period.
On 25 February 2014, the judges of the Paris Court of Appeal rendered a ruling confirming that the entire proceedings were closed and the first instance decision had entered into force.
The respondent Daoming argued that the goods were sold by it to Stetestrite and then resold by Stetestrite to Sacholiet. Therefore, Daoming put forward two defenses: first, the French Court only has jurisdiction over the disputes of the sale contract between Sacholiet and Stetestrite, rather than the disputes of the sale contract between Stetestrite and Daoming; second, the French Court failed to reasonably review the sale contract between Stetestrite and Daoming.
The Jinhua Court did not support the respondent's two defenses.
The Jinhua Court did not support the first defense because it held that, on the one hand, Daoming appeared and argued in the French Court and did not raise any objection to jurisdiction. Therefore, according to the CPL, the court in question is considered to have jurisdiction. On the other hand, the case acceptance by the French Court does not violate the compulsory provisions of the CPL regarding tier jurisdiction and exclusive jurisdiction.
As for the second defense, the Jinhua Court held that no substantive review should be made. According to the aforementioned Sino-French Agreement, the Jinhua Court shall not make any substantive review on the ruling rendered by the French Court. Therefore, the Jinhua Court will not review the second defense raised by Daoming.
Consequently, the Jinhua Court ruled that the civil judgment of the French Court should be recognized and enforced, and the application fee should be RMB500, which shall be borne by the respondent Daoming.
3. Commentary
It is noteworthy that in the case mentioned in this post, the Chinese court reviews whether the French Court has jurisdiction over the case in accordance with the law of the requested Party (i.e., the CPL), which is based on the provisions of Article 22 (1) of the Sino-French Bilateral Agreement, that is, where, according to the jurisdiction rules contained in the law of the requested Party, the decision is rendered by an incompetent court, the court of the requested Party shall not recognize and enforce the said decision.
In accordance with Article 127 of the CPL, if the parties concerned have an objection to jurisdiction after the court accepts the case, they shall raise an objection during the complaint submission. Unless it is contrary to tier jurisdiction and exclusive jurisdiction, if the parties concerned fail to raise an objection to jurisdiction and appear in court for argument, it shall be deemed that the court in question is competent.
Daoming did not raise an objection to jurisdiction and appeared in court for argument. Therefore, according to the said provisions of the CPL, the French Court has jurisdiction over the case.
If you would like to acquire the full text of the decision, or to discuss with us about the post, or share your views and suggestions, please contact Ms. Meng Yu (meng.yu@chinajusticeobserver.com).
If you need legal services for the recognition and enforcement of foreign judgments and arbitral awards in China, please contact Mr. Guodong Du (guodong.du@chinajusticeobserver.com ). Du and his team of experienced attorneys will be able to assist you.
Contributors: Guodong Du 杜国栋 , Meng Yu 余萌
