6 March, 2017
On December 9, 2016, the Nanjing Intermediate People's Court issued Case No. (2016) Su-01 Xie-Wai-Ren-3 Civil Judgment, pursuant to the application by Kolmar Group AG, the applicant, for the recognition and enforcement of a judgment by the High Court of Singapore, Case No. O13 Civil Judgment, dated October 22, 2015. This was the first instance where a Chinese court ruled for the recognition and enforcement of a Singaporean court judgment, and the new judicial cooperative practice possesses the significance of a milestone.
Article 282 of The Civil Procedure Law of the People's Republic of China stipulates that, "where an application or a request is made for the recognition and enforcement of an effective judgment or ruling issued by a foreign court, the People's Court will, after conducting a review in accordance with international treaties the People’s Republic of China is a party to, or in accordance with the principle of reciprocity, decide on recognizing the effectiveness of the ruling and the necessity of enforcement according to its conclusion where believed that the judgment or ruling does not violate basic principles of Chinese law or Chinese national sovereignty, security, and the social public interest, and thereby issue an judicial order in accordance with the relevant provisions of this law … " . In China's judicial practice, the recognition and enforcement of foreign court judgments generally needs to be carried out in accordance with the international treaties concluded between the foreign country and China. And if there is no international treaty between the two countries, in principle, Chinese courts can only recognize and enforce foreign judgments according to the principle of reciprocity. And in the case of Singapore, although Singapore and China signed The People's Republic of China and the Republic of Singapore Treaty on Civil and Commercial Judicial Assistance in 1997, such Treaty, however, does not contain relevant provisions on the recognition and enforcement of foreign court judgments. Therefore, the recognition and enforcement of the Singaporean court judgment can only be based on the principle of reciprocity.
For a long time in judicial practice, only in rare instances have Chinese courts recognized and enforced foreign court judgments in accordance with the reciprocity principle. In most cases, Chinese courts have rejected applicant requests on the grounds that no international treaty for the recognition and enforcement of court judgments existed between China and the foreign country, or there being no basis for reciprocity. For example, in the Dalian Intermediate People's Court hearing of the 1994 case regarding Gomi Akira's application for recognition and enforcement of a Japanese court ruling, given that China and Japan did not have an international treaty for the mutual recognition and enforcement of court judgments, and given that there was no basis for reciprocity, the Dalian Court refused to recognize and enforce the Japanese court judgment. Since then, most Chinese courts have following suits conforming to the reasoning of the Dalian Intermediate People's Court in the case of Gomi Akira, and where there has been no corresponding treaty between China and the particular foreign country, as well as no basis for reciprocity, Chinese courts accordingly have refused to recognize and enforce such foreign judgments. And on the issue of what is a "reciprocal basis," judicial practice has not yet formed a unified and clear standard.
The Nanjing Intermediate People's Court ruling for the recognition and enforcement of a Singaporean court judgment in this instance was one of the few cases where the court recognized and enforced the judgment of a foreign court on the basis of the principle of reciprocity, and was also a first instance of a Chinese court recognizing and enforcing a Singaporean court judgment in general. In that case, the Nanjing Court relied on a January 2014 judgment of the High Court of Singapore regarding the latter’s recognition of a Chinese court civil judgment from Jiangsu Province for determining that a reciprocal relationship existed between China and Singapore and recognizing and enforcing the judgment of the High Court of Singapore.
It is worth noting that, although in the present case the Nanjing Intermediate People's Court recognized and enforced the Singaporean court judgment involving a different Chinese court (the Suzhou Intermediate People's Court), the Suzhou Court and the Nanjing Court were still both located in the jurisdiction of Jiangsu Province. And on the issue of inter-provincial courts, it remains to be seen whether the reciprocity principle will equally apply and it will be necessary for judicial practice to further clarify such standard.
In recent years, with the continuous increase of international trade, it has not been uncommon for foreign courts to conduct jurisdictional analysis based on agreements by parties or conflict of law principles of private international law. And at present, most countries still have not signed international treaties with China for the mutual recognition and enforcement of court decisions. In this case, if foreign court judgments cannot obtain recognition and enforcement in China, parties will undoubtedly find that to be a large obstacle. And furthermore, foreign courts already have wide precedent for the recognition and enforcement of Chinese court decisions; for example, a 2006 Berlin, Germany High Court judgment recognized a Wuxi Intermediate People's Court judgment regarding the effectiveness of an arbitration agreement; and in the 2009 case of Hubei Gezhouba Sanlian Industrial Co., Ltd. et. al. v. Robinson Helicopter Co., Inc., the California US federal district court case recognized and enforced a judgment by China's Hubei Provincial High Court. In this situation, one must ask: Can Chinese courts reference the thinking of the Nanjing Intermediate People's Court and the foreign courts which have already recognized and enforced Chinese court judgments, and maintain a relationship of reciprocity between such countries in ruling for the recognition and enforcement of judgments of these foreign courts? In this regard, we must wait and see. In any event, the Nanjing Intermediate People's Court's enforcement of the Singapore High Court judgment is an excellent precedent of a Chinese court acknowledging recognition and enforcement of a foreign court judgment on the basis of the reciprocity principle; we can hope that, in the future, there will be more Chinese courts that can overcome geographical restrictions, and according to evidence of reciprocity, decide to recognize and enforce foreign judgments in such a way to further promote the inter-cooperation of international courts and the development of international exchange.
For further information, please contact:
CHEN, Luming , Partner, Jun He
chenluming@junhe.com
