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29 September, 2018
The Supreme Court of Singapore and the Supreme People's Court (SPC) of the People's Republic of China recently signed a Memorandum of Guidance (MOG), which is expected to make it easier for money judgments issued by the Singapore courts to be recognized and enforced in the Chinese courts (and vice-versa).
It is generally accepted that enforcing a foreign judgment in China is no walk in the park. China is currently not a party to any general convention catering to the recognition and enforcement of foreign judgments. Further, only a very small number of countries have a bilateral treaty with China concerning recognition and enforcement of judgments. Like most countries which have no enforcement treaty with China, a Singapore court judgment is only enforceable when reciprocity between Singapore and China can be shown, among other things.
Therefore, the MOG with Singapore is a unique development. First, it adds much-needed clarity on the standards and procedure to be applied by the Chinese courts when faced with recognition and enforcement of a Singapore court judgment. Second, the MOG is expected to increase consistency in how the various Chinese courts will enforce a Singapore court judgment. Third, the MOG should make it easier for a party to show reciprocity between Singapore and China when applying for enforcement.
The following key points should be noted when seeking to enforce a Singapore court judgment in China:
- The Chinese courts will only recognize and enforce a final and conclusive money judgment.
- The Chinese courts will not recognize and enforce judgments related to intellectual property and competition law.
- The Chinese courts will not review the merits of a Singapore judgment but said judgment may be challenged for, among other things, being contrary to the basic principles of China, or lack of notice.
While the MOG is not a treaty, it is still expected to improve the prospects of Singapore court judgments being enforced in China.
With the MOG, commercial parties can now give greater consideration to resolving their disputes in the Singapore courts with a view to enforcement in China. Further, as the MOG extends to judgments issued by the Singapore International Commercial Court (SICC), non-Singaporean parties with dealings with Chinese parties can choose the SICC as their dispute resolution forum and proceed to enforce the judgment in China.
The MOG should also be of interest to parties involved in the Belt and Road Initiative (BRI). Singapore is gearing itself to be a legal services partner for the BRI. In recent years, Singapore has increased cooperation with China on mediation and arbitration.
For further information, please contact:
June (Junghye) Yeum, Partner, Clyde & Co
june.yeum@clydeco.com
