How Chinese Courts Identify Foreign Judgments as Final and Conclusive? – Breakthrough for Collecting Judgments in China Series (IV)

Key takeaways:

The 2021 Conference Summary clarifies the scope of ‘foreign judgments’, which includes those foreign judgments/rulings/decisions/orders on substantive disputes in civil and commercial cases, as well as those made in criminal cases on civil damages, while excludes foreign interim measures.
Chinese courts need to examine the validity and finality of a foreign judgment in accordance with the laws of the country where the judgment is rendered.
If a foreign judgment is found not final or inconclusive, Chinese courts would render a ruling to dismiss the application. After the dismissal, the applicant may choose to re-apply when the application satisfies the requirements for acceptance later on.

2022 BREAKTHROUGH FOR COLLECTING JUDGMENTS IN CHINA

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China published a landmark judicial policy on the enforcement of foreign judgments in 2022, embarking on a new era for judgment collection in China.

The judicial policy is the “Conference Summary of the Symposium on Foreign-related Commercial and Maritime Trials of Courts Nationwide” (hereinafter the “2021 Conference Summary”, 全国法院涉外商事海事审判工作座谈会会议纪要) issued by the China’s Supreme People’s Court (SPC) on 31 Dec. 2021.

As part of the ‘Breakthrough for Collecting Judgments in China Series’, this post introduces Articles 41 to 43 of the 2021 Conference Summary, addressing the criteria for Chinese courts in reviewing whether a foreign judgment is final and binding.

Like courts in many other jurisdictions, Chinese courts will only recognize and enforce final and conclusive foreign judgments. Then, what kind of legal documents will be identified by Chinese courts as final and conclusive foreign judgments, also referred to as ‘legally binding foreign judgments or rulings’ as indicated in the 2021 Conference Summary?

Table of Contents

I. What is a judgment or ruling？

Texts of the 2021 Conference Summary

Article 41 of the 2021 Conference Summary [Standards for Determining the Foreign Court Judgment or Ruling]:

“The people’s court shall, subject to the substance of a judgment or ruling of a foreign court, review and identify whether such judgment or ruling is a ‘judgment or ruling’ as provided in Article 289 of the PRC Civil Procedure Law (CPL).

Judgments, rulings, decisions, orders and other legal instruments made by foreign courts on substantive disputes in civil and commercial cases, as well as legal instruments made in criminal cases on civil damages, shall be identified as ‘judgments and rulings’ as specified in Article 289 of the CPL, but excluding preservation orders and other procedural legal documents made by foreign courts.”

Interpretations

1. Such legal instruments as judgments, rulings, decisions and orders made by foreign courts on substantive disputes in civil and commercial cases and on civil damages in criminal cases may be recognized and enforced by the Chinese courts.

2. According to our experience, generally, legal instruments issued by foreign courts for the payment of court fees and lawyer’s fees in civil and commercial cases may also be recognized and enforced by Chinese courts.

3. Interim measures (also known as ‘preservation measures/orders’ in China) or other procedural legal documents issued by foreign courts cannot be recognized and enforced by a Chinese court. This is also consistent with the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.

II. What is a binding judgment or ruling？

Texts of the 2021 Conference Summary

Article 42 of the 2021 Conference Summary [Determination of the Binding Judgment or Ruling]:

“The people’s court shall examine whether a judgment or ruling has come into legal effect pursuant to the laws of the country where the judgment is made. A judgment or ruling pending appeal or in the process of appeal shall not fall within the scope of ‘judgment or rulings which have come into legal effect’ as stipulated in Article 289 of the CPL.”

Interpretations

1. Chinese courts will need to ascertain foreign laws

The Chinese courts will examine whether the foreign judgment or ruling has legal effect in accordance with the laws of the country where the judgment is rendered, and confirm whether it is a judgment pending appeal or still in the process of appeal.

As a result, the Chinese court needs to first ascertain the laws of the country where the judgment is rendered.

2. You need to help the Chinese court to ascertain foreign laws

More often than not, you may find some Chinese local courts are not very good at ascertaining foreign laws. In this case, if the applicant wants to win the case, he/she needs to provide some help to the Chinese court in determining the legal effect of the foreign judgment or ruling.

For instance, applicants may choose to provide the texts of the foreign laws, together with official inquiry channels to facilitate the verification by Chinese courts.

For another example, where the authorities in the country where the judgment is rendered can issue documents to evidence that the judgment or ruling has come into effect, it is advisable for the applicant to have such documents prepared.

III. What happens if the judgment has not come into effect or its authenticity cannot be determined?

Texts of the 2021 Conference Summary

Article 43 of the Summary [Situations where authenticity and finality of judgment cannot be confirmed]:

“When the people’s court reviews the application for recognition and enforcement of a foreign court judgment or ruling, in case it cannot confirm the authenticity of the foreign court judgment or ruling upon examination or the judgment or ruling has not come into legal effect, the people’s court shall render a ruling to dismiss the application. After the application is dismissed, if the applicant re-applies and the application satisfies the requirements for acceptance, the people’s court shall accept such application.”

Interpretations

1. You need to prove the authenticity of the foreign judgment or ruling

It is advisable for the applicant to provide some instruments endorsed by competent authorities for the Chinese court to determine whether the foreign judgment or ruling is authentic or not.

For example, if the competent authority in the country where the judgment is rendered can prove that the judgment is authentic, the applicant had better prepare such documents. It is advisable to have such documents, as well as to have the original of the judgment notarized in the country where the judgment is rendered and authenticated by China’s Embassy and consulate in the said country.

2. You need to prove that the foreign judgment or ruling has come into effect

The best way is to have the relevant supporting documents issued by the competent authority in the country where the judgment is rendered, or to have the judgment or ruling on which the finality is clearly stated.

If the above method is inapplicable, you need to assist the Chinese court to make the determination in accordance with the law of the country where the judgment is rendered.

For example, if the law provides that the judgment becomes effective in case the parties do not appeal within 10 days upon the service of the judgment, then you will need to:

i. provide the law to the Chinese court;

ii. remind the Chinese court of the date rendering the judgment or ruling;

iii. prove that the judgment or ruling has been legally served to the parties; and

iv. ensure that the respondent has no evidence to prove that he/she has appealed and that the case is under appeal.

3. If it is difficult to determine the authenticity of the judgment or the judgment has not come into effect, the Chinese court will dismiss the application.

Such dismissal is simply made under such situation at that time.

If you have enough evidence to prove that the judgment is authentic or legally binding, or you have obtained the final and effective judgment afterwards, you may apply to the Chinese court for recognition and enforcement of the foreign court judgment or ruling again.

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