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Recognition and Enforcement of Foreign Judgment in China

The law applying to the enforcement of foreign judgments in China is found in Chapter XXIX, containing Articles 262-270 of the Law of Civil Procedure of the People’s Republic of China. This Chapter is headed Judicial Assistance. These articles are as follows:

Article 267 Where a legally effective judgment or ruling made by a foreign court requires the people’s court in the PRC to acknowledge its validity and execute it, the applicant may directly request a competent intermediate people’s court to do so, or the foreign court may request the people’s court to do so, according to the international treaties which China has concluded or to which China is party or in accordance with the principle of mutual reciprocity.

Article 268 In the case of an application or request for recognition and enforcement of a legally effective judgment or written order of a foreign court, the people's court shall examine it in accordance with the international treaties concluded or acceded to by the People's Republic of China, or according to the principle of reciprocity. If the court arrives at the conclusion that it does not contradict the basic principles of the law of the People's Republic of China nor violate the State sovereignty, security and social and public interest of the country, recognise the validity of the judgment or written order, and, if required, issue a writ of execution to enforce it in accordance with the relevant provisions of this Law. If the application or request contradicts the basic principles of the law of the People's Republic of China or violates the State sovereignty, security and social and public interest of the country, the people's court shall not recognise and enforce it.

Article 269 If an award made by a foreign arbitral organ requires the recognition and enforcement by a people's court of the People's Republic of China, the party concerned shall directly apply to the intermediate people's court of the place where the party subjected to enforcement has his domicile or where his property is located. The people's court shall deal with the matter in People's Republic of China or with the principle of reciprocity.

Article 267 provides for enforcement at the initiative of either (a) the party concerned, viz the successful party in the proceedings, or (b) the foreign court which rendered the judgment. Some conditions exist. One is that the judgment or ruling be legally effective. This could be interpreted as having two dimensions:

(1) That the judgment or ruling be legally effective in the foreign jurisdiction where it was rendered. The question might arise as to whether a judgment that can be appealed from is legally effective. International practice indicates that the decision of a trial court is effective for the purposes of foreign enforcement, notwithstanding that the losing party has a right of appeal. If the judgment has been appealed against but the appeal has not been determined, then the foreign court where enforcement is sought would presumably stay enforcement pending resolution of the appeal, provided that the appellant acts in a timely way.

(2) That the judgment or ruling is legally effective in China (it may not be if it contravenes the basic principles of PRC law – see Article 268).

Article 267 may also be interpreted as conditioning consideration of the application for enforcement by reference two alternative factors: (a) the existence of a relevant international treaty to which China and, inter alia, the country where judgment was rendered, for the mutual enforcement of one another’s court judgments, or (b) the principle of mutual reciprocity.

Treaties: China has signed bilateral treaties with certain countries for the mutual recognition and enforcement of one another’s judgments. Thus far these bilateral treaties extend to relatively few States. The United States of America and Australia, for example, are not party to any such agreements with the PRC.7 There is no evidence to date of successful foreign judgment enforcement pursuant to these treaties.

Reciprocity: in the alternative, enforcement may be justified according to the principle of mutual reciprocity. This would appear to require that the relations between the PRC and the foreign country where the award was rendered, be such that each routinely gives full faith and credit to one another’s judgments, perhaps according to certain uncontentious conditions which are accepted internationally. In the early days such a mutuality may be difficult to substantiate – as between the PRC and a given foreign country the issue will arise for the first time and there will be no prior practice between the two that can be referred to, as a basis for asserting mutuality. It may be that a country with a developed legal system does have a history of foreign judgment recognition independently of treaty obligations made good through legislation by, for example, domestic legislative provision for foreign judgment enforcement, or in the case of the common law jurisdictions, by a process of judicial precedent. In the United States, for example, legislation8 (applying in addition to the common law) makes provision for foreign judgment enforcement in defined circumstances. It would follow that an applicant from, say, the US, for enforcement of a US judgment in the PRC, could argue that as the potential exists for the enforcement of a PRC judgment in China, the Chinese court should invoke the reciprocity principle in return as its own law recognises the principle.

Article 268 provides for the consideration by the people’s court of the application for enforcement, by reference to the same matters listed in article 267, that is, a relevant international treaty or de facto reciprocity, where either is extant. The provision introduces a further matter – consideration of whether the judgment or ruling contravenes the basic principles of law of the PRC, and whether it violates State sovereignty or the security and social and public interest of the country. If there is such a contravention or violation, the court is not to enforce it. If the court finds otherwise, and determines that there is an applicable treaty or reciprocity, then the court is to recognise the judgment or order and if necessary make an order for its enforcement.

In practice, most foreign divorce judgment will be recognized and enforced in China. As a China international law lawyer, I have successfully applied for the recognition and enforcement of foreign divorce agreement in China. This does not mean that China is open to recognize and enforce all judgment. Those commercial or monetary judgment is unlikely to be recognized and enforced in China without multilateral or bilateral treaties.

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China Lawyer BLog AuthorPeter Zhu, an experienced China attorney licensed to practice law for more than ten years, the author of this China Lawyer blog, welcomes any enquiry or consultation related to Chinese law.