Where to File Application for Enforcing Foreign Judgments in China – Breakthrough for Collecting Judgments in China Series (VIII)

Key takeaways:

The 2021 Conference Summary provides the supplementary rules on jurisdiction in cases of the recognition and enforcement of foreign judgments in China.
As the general rule of jurisdiction, the Chinese court of the place where the respondent is domiciled or where the enforceable property is located has the jurisdiction.
As a supplementary jurisdiction rule, the Chinese court at the place of the applicant’s domicile is the competent court. This rule applies only for applications for recognition (rather than enforcement or recognition and enforcement concurrently) of foreign judgments in China.
The time limit for filing a jurisdictional challenge is 15 days for respondents domiciled in China, and 30 days for those not domiciled in China.

2022 BREAKTHROUGH FOR COLLECTING JUDGMENTS IN CHINA

PDF Version

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 34 and 38 of the 2021 Conference Summary, which provide supplementary rules on the jurisdiction of Chinese courts in cases of recognition and enforcement of foreign judgments.

Table of Contents

I. Where to file an application in China, and with which competent court?

Texts of the 2021 Conference Summary

Article 34 of the 2021 Conference Summary [Supplementary Jurisdiction Rule -the Court at the Place of the Applicant’s Domicile]:

“Where an applicant applies for recognizing a judgment or ruling of a foreign court, but the respondent has no domicile within the territory of China, and its property is not within the territory of China, the application may come under the jurisdiction of the intermediate people’s court of the place where the applicant has his domicile.”

Interpretations

1. The 2021 Conference Summary provides a supplementary rule on jurisdiction of Chinese courts in cases of recognition and enforcement of foreign judgments.

2. General jurisdiction rule: the court of the place where the respondent is domiciled or where the enforceable property is located has the jurisdiction.

As the general rule on jurisdiction, the applicant shall apply for recognition and enforcement of the foreign judgment to the court in the place where the respondent is domiciled or where the enforceable property is located.

To be more specific, under this rule, in cases where the applicant wishes to apply for recognition and enforcement of foreign judgments concurrently:

(1) where the respondent has a domicile in China, the intermediate court in the place where the Respondent is domiciled may have jurisdiction over the case; or

(2) where the enforceable property of the respondent is located in China, the intermediate court in the place where the property is located may also have jurisdiction over the case.

If the respondent and his/her property are not in China, the Chinese court cannot take actual enforcement actions and thus will not admit cases involving enforcement.

3. Supplementary jurisdiction rule: the court at the place of the applicant’s domicile

If the applicant only wishes to apply for recognition of a foreign judgment – such as a divorce judgment – and does not involve the enforcement of that judgment, such case will not involve actual enforcement by the Chinese court. In such cases, the supplementary jurisdictional rule can apply, which grants jurisdiction to the court at the place of the applicant’s domicile.

In other words, if the applicant applies for recognition of foreign judgment only, but the respondent has no domicile in China, and his/her property is not in China either, it can be under the jurisdiction of the intermediate people’s court in the place where the applicant is domiciled.

II. How to challenge the jurisdiction of the Chinese court

Texts of the 2021 Conference Summary

Article 38 of the 2021 Conference Summary [Jurisdictional Challenge]:

“After the people’s court has accepted an application for recognition and enforcement of a judgment or ruling of a foreign court, if the respondent challenges the jurisdiction, the respondent shall file the challenge within 15 days upon the date of receiving the application copy; where the respondent has no domicile within the territory of China, the challenge shall be filed within 30 days upon the date of receipt of the application copy.

The people’s court shall examine and render a ruling on the jurisdictional challenge filed by the respondent. If the party is not satisfied with the ruling on the jurisdictional challenge, he may file an appeal.”

Interpretations

1. Time limit for filing a jurisdictional challenge

If the respondent considers that the Chinese court has no jurisdiction over the application for recognition and enforcement of the foreign judgment, he/she should file the challenge within a specified time limit. Specifically:

(1) where the respondent has domicile within the territory of China, he/she shall file such challenge within 15 days upon the date of receipt of the application copy;

(2) where the respondent has no domicile within the territory of China, the challenge shall be filed within 30 days from the date of receipt of the application copy.

The 15-day period is in line with the time limit for filing a jurisdictional challenge in other civil litigation cases in China. The 30-day period, however, is an exception provided for the respondents who are not domiciled in China, so that they can have enough time to deal with cross-border affairs.

2. Examination of a jurisdictional challenge

The Chinese court shall render a ruling after examining the jurisdictional challenge filed by the respondent. The ruling is subject to appeal.

In China, challenging the court’s jurisdiction and appealing its ruling are common strategies used by the defendants/respondents to delay the proceedings. Chinese courts are not happy with this and attempt to restrict those jurisdictional challenges in which the litigation is clearly delayed in bad faith. Nevertheless, such strategies are still common in practice.

Therefore, the applicant needs to be aware that the respondent may also adopt similar strategies in cases of recognition and enforcement of foreign judgments.

Do you need support in cross-border trade and debt collection?
CJO Global's team can provide you with China-related cross-border trade risk management and debt collection services, including: 
(1) Trade Dispute Resolution
(2) Debt Collection
(3) Judgments and Awards Collection
(4) Anti-Counterfeiting & IP Protection
(5) Company Verification and Due Diligence
(6) Trade Contract Drafting and Review
If you need our services, or if you wish to share your story, you can contact our Client Manager: 
Susan Li (susan.li@yuanddu.com).
If you want to know more about CJO Global, please click here.
If you want to know more about CJO Global services, please click here.
If you wish to read more CJO Global posts, please click here.