Abstract: The lack of international treaties and the application of de facto reciprocity in Chinese courts, are the very reasons that account for the limited number of judgments from common law countries being recognized and enforced in China. It is thus suggested that China improve the reciprocity criteria, conclude more guidance memorandums, and accede to multilateral conventions.
So far, Chinese judgments have been recognized or enforced by the courts of common law countries such as the United States, Singapore, the United Kingdom, Australia, and Canada. According to the judicial practice of recognition and enforcement of foreign civil and commercial judgments by Chinese courts from 1994 to June 2019, apart from divorce judgments, the judgments of common law countries recognized by Chinese courts are only those of Singapore and the United States. Among the foreign judgments that China refuses to recognize and enforce, six (6) come from common law countries, mainly involving the United Kingdom, Australia, the United States, and Malaysia. The main reason for this phenomenon lies in the lack of bilateral or multilateral treaties between China and common law countries on mutual recognition and enforcement of civil and commercial judgments, as well as de facto reciprocity adopted in judicial practice in China.
I. Difficulties in Concluding Bilateral Treaties
If China can conclude bilateral treaties with common law countries, it can also be used as a way of cooperation, but the conclusion of bilateral treaties is not easy.
Firstly, although bilateral treaties are easier to negotiate and conclude than multilateral treaties, the process of signing and ratifying bilateral treaties is time-consuming and labor-intensive. For example, the Treaty between the People’s Republic of China and the Republic of Argentina on Civil and Commercial Judicial Assistance was signed on 9 April 2001, but it took 10 years before it finally came into force on 9 October 2011. Moreover, China has not yet concluded bilateral treaties concerning the recognition and enforcement of civil and commercial judgments with common law countries.
Secondly, there are some differences between China and common law countries in terms of recognition and enforcement conditions of foreign civil and commercial judgments. Taking Australia as an example, compared to those in the bilateral treaties concluded by China with other countries, the conditions for recognition and enforcement of judgments required by Australia’s common law mechanism are more complicated especially in terms of jurisdiction and restrictions on money judgments.[1] Some Australian scholars have pointed out that it is not clear whether the bilateral treaties concluded between China and Australia can facilitate mutual recognition and enforcement of judgments between the two sides. Especially when the interests of creditors are insignificant in Australian judgments while the judgment debtors may face greater risks of being subject to enforcement in Australia, Australia’s legislators may also hesitate to conclude such bilateral agreements.[2]
II. Uncertainty in De Facto Reciprocity
In China’s judicial practice, if foreign countries have precedents for recognizing and enforcing Chinese judgments, it is possible that their judgments will be recognized and enforced in Chinese courts in the future based on de facto reciprocity. In fact, China has already recognized and enforced the judgments of Singapore and the United States based on de facto reciprocity. However, in 2017, when a party applied to the Nanchang Intermediate People’s Court of Jiangxi Province for recognition and enforcement of the judgment of Philadelphia Court in the First Judicial District of Pennsylvania, although the application was also based on the precedent of recognition and enforcement of Chinese judgments by American courts, the Nanchang Intermediate People’s Court refused to recognize and enforce the judgment of the Philadelphia court on the grounds that neither treaty relations nor reciprocity exists between China and the United States.
In this regard, some Australian scholars believe that although it can prove that foreign courts have recognized and enforced Chinese judgments, it does not mean that all Chinese courts will automatically recognize the existence of reciprocity with that foreign country. Since China’s conditions on reciprocity are also subject to uncertainty, we can only consider other ways to protect the interests of Australian judgment creditors.[3]
III. How to Promote the Recognition and Enforcement of Judgments between China and Common Law Countries
1. Conduct bilateral cooperation through the guidance memorandum
Further promoting bilateral cooperation based on mutual recognition and enforcement of civil and commercial judgments is a successful model between China and Singapore. Since matters on the recognition and enforcement of civil and commercial judgments are not covered by the China-Singapore bilateral judicial assistance agreements, on 31 August 2018, Justice Zhou Qiang (周强), President of the Supreme People’s Court (SPC) of China, and Justice Sundaresh Menon, Chief Justice of the Supreme Court of Singapore, signed the Memorandum of Guidance between the Supreme People’s Court of the People’s Republic of China and the Supreme Court of the Republic of Singapore on Recognition and Enforcement of Money Judgments in Commercial Cases (hereinafter referred to as MOG), which further clarified the scope and conditions of mutual recognition and enforcement of judgments between the two countries, thus providing clearer guidance for the future judicial practice. According to Article 2 of the MOG, although the MOG is not legally binding, it is undoubtedly still of great significance in strengthening judicial cooperation and guiding court practice between the two countries in terms of mutual recognition and enforcement of judgments.
2. Improve the application of reciprocity
In recent years, the foreign judgments recognized by Chinese courts based on de facto reciprocity have also shown an increasing trend. Viewed from the recognition and enforcement of Chinese judgments by common law countries, it is possible that the judgments of Australia, Canada, the United Kingdom and some state courts in the United States will be recognized and enforced by Chinese courts in the future based on de facto reciprocity.
In addition, it is noteworthy that although the Supreme Court of Victoria, Australia, refused to recognize and enforce a judgment rendered by Ningbo Intermediate People’s Court of Zhejiang Province, China on 30 April 2019, the grounds therefor lie mainly in the abuse of process in the original judgment.[4]
Based on the criterion of de facto reciprocity in judicial practice in China, the requirements of de facto reciprocity between Australia and China have been met. However, if viewed from the criterion of presumptive reciprocity, the refusal to recognize and enforce the Chinese judgment in 2019 may be the basis for the absence of reciprocity. But since there is no clear standard of presumptive reciprocity in China’s legislation and judicial practice, this case does not necessarily affect the establishment of de facto reciprocity between China and Australia.
However, viewed from the recognition and enforcement of Chinese judgments by common law countries, reciprocity is not a factor for consideration. They focus more on examining issues such as international jurisdiction, due process, violation of natural justice and whether the foreign judgment is a money judgment. Considering that common law countries do not require reciprocity for recognition and enforcement of Chinese judgments, Chinese courts should also appropriately loosen the reciprocity criteria when it comes to the recognition and enforcement of judgments from common law countries, especially when the country of origin has no precedent for recognizing and enforcing foreign judgments, and takes the consensus of future cooperation and exchange between the two countries as one of the reciprocity criteria.
In accordance with Article 6 of the Several Opinions of the Supreme People’s Court on the Provision of Judicial Services and Guarantees by the People’s Court for the BRI Construction (最高人民法院关于人民法院为一带一路建设提供司法服务和保障的若干意见) in 2015 (hereinafter referred to as the “BRI Construction Opinions”), [5]the Chinese court may request the parties and their agents to provide the conditions of the other party’s country on the recognition and enforcement of foreign judgements, with a view to considering whether Chinese judgments may be recognized and enforced by the other party’s country in the future if the corresponding conditions are met, which will serve as the judicial consensus on cooperation and exchange, and thus reciprocity will be first granted by China.
Furthermore, the MOG between China and Singapore can also serve as a good starting point for the establishment of a reciprocal relationship through diplomatic channels. According to Article 6 of the MOG, Chinese courts may recognize and enforce Singaporean judgments based on reciprocity. [6] Such a provision can also be deemed as a further deepening and improvement of the application of the principle of reciprocity based on the BRI Construction Opinions, and can also be used to widen the approaches in establishing of a reciprocal relationship. [7] In view of the fact that a few common law countries have recognized and enforced the judgments of China, China can, on the basis of de facto reciprocity, further actively promote and clarify the reciprocal relationship with the relevant common law countries by means of memorandum or judicial consensus, improve the certainty of the application of reciprocity, as well as further promote the mutual recognition and enforcement of civil and commercial judgments between China and common law countries.
3. Promote multilateral treaties
The 2005 Hague Choice of Court Convention, as the most important convention on the jurisdiction and the recognition and enforcement of civil and commercial judgments of the international community in the 21st century, is essentially a convention on recognition and enforcement of judgments based on the choice of court agreement.[8] The key clause of the Convention is related to the recognition and enforcement of judgments. Contracting states must undertake the obligation to recognize and enforce the judgments rendered by the selected court, thus providing a clear and unified legal basis for the recognition and enforcement of Chinese judgments.[9] China signed the Convention in December 2017 but has not yet ratified the same. As to common law countries, the Convention has entered into force for Singapore and the United Kingdom, while the United States has signed the Convention. If China ratifies the Hague Choice of Court Convention, there will be a multilateral-rule basis in the future as to the recognition and enforcement of judgments between China and some common law countries, and in the meantime, the uncertainty of the principle of reciprocity can be avoided.
On the Diplomatic Conference of 2 July 2019, the Hague Conference on Private International Law passed the Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (hereinafter referred to as the Judgment Convention). Once the Judgment Convention enters into force and is implemented in the future, it will have a far-reaching impact on the free flow of civil and commercial judgments around the world, and will also bring more opportunities and challenges to the recognition and enforcement mechanism of judgments in China. According to the Judgment Convention, in view of the wide range of judgments that can be recognized and enforced and the limited opportunities for defendants to object to the recognition and enforcement, the Judgment Convention undoubtedly provides more opportunities for mutual recognition and enforcement of judgments between China and common law countries.
References:
[1] See Richard Garnett, “Increasing Co-Operation between Australia and China in the Recognition and Enforcement of Judgments”, (2018) 19 Melbourne Journal of International Law, p. 5.
[2] See Richard Garnett, “Increasing Co-Operation between Australia and China in the Recognition and Enforcement of Judgments”, (2018) 19 Melbourne Journal of International Law, pp. 5-6.
[3]See Richard Garnett, “Increasing Co-Operation between Australia and China in the Recognition and Enforcement of Judgments”, (2018) 19 Melbourne Journal of International Law, p. 8.
[4]Xu v Wang, [2019] VSC 269, para. 183.
[5]《最高人民法院关于人民法院为“一带一路”建设提供司法服务和保障的若干意见》第6条：“在沿线一些国家尚未与我国缔结司法协助协定的情况下，根据国际司法合作交流意向、对方国家承诺将给予我国司法互惠等情况，可以考虑由我国法院先行给予对方国家当事人司法协助，积极促成形成互惠关系，积极倡导并逐步扩大国际司法协助范围。”法发〔2015〕9号。
[6]《中华人民共和国最高人民法院和新加坡共和国最高法院关于承认与执行商事案件金钱判决的指导备忘录》第6条：“目前两国尚无有关一方判决可在另一方法院承认与执行的条约。在此情况下，根据《中华人民共和国民事诉讼法 》的规定，中华人民共和国法院可以在互惠基础上，根据申请人的申请，承认与执行新加坡法院的判决。”
[7]参见沈红雨：《外国民商事判决承认和执行若干疑难问题研究》，载《法律适用》2018年第5期，第15页。
[8]参见肖永平，朱磊主编：《批准<选择法院协议公约>之考量》，法律出版社2017年版，第132页。
[9]参见肖永平：《批准<选择法院协议公约>的利弊分析及我国的对策》，载《武大国际法评论》2017年第5期，第2页。
Contributors: Yahan Wang 王雅菡
