Will Foreign Judgments Not Be Enforced in China Due to Public Policy?

Chinese courts will not recognize and enforce a foreign judgment if it is found that the foreign judgment violates basic principles of Chinese law or violates the public interest of China, no matter whether it reviews the application in accordance with the conditions set by the international or bilateral treaties, or on the basis of reciprocity.

However, very few cases have occurred in China where courts have ruled not to recognize or enforce foreign arbitral awards or judgments on the grounds of public policy. Applicants should not worry too much about it.

As far as we know, there are only five cases with such circumstances, among which:

I. Two cases for recognition and enforcement of foreign arbitral awards

In the case of Palmer Maritime Inc (2018), the parties concerned applied for arbitration in a foreign country even when the Chinese court had already affirmed the invalidity of the arbitration agreement. The Chinese court held accordingly that the arbitral award had violated China’s public policy.

In the case of Hemofarm DD (2008), the Chinese court held that the arbitral award contained decisions on matters not submitted to arbitration and violated China’s public policy at the same time.

For a detailed discussion, please read our earlier post “China Refuses to Recognize a Foreign Arbitral Award on the Grounds of Public Policy for the 2nd Time in 10 Years”.

II. Three cases for recognition and enforcement of foreign judgments

The Chinese court held that the use of facsimile or mail by the foreign court to serve court summons and judgment does not comply with the service methods as stipulated in relevant bilateral treaties, and undermines China’s judicial sovereignty.

For a detailed discussion, please read our earlier post, “China Refuses to Enforce Uzbekistan Judgments Twice, Due to Improper Service of Process”.

The above five cases show that Chinese courts limit the interpretation of public interest to a very narrow scope and do not extend its interpretation. Therefore, we believe that in most cases applicants should not be overly concerned.

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