The Recognition And Enforcement Of Foreign Judgment/arbitral Award On The Territory Of China

Introduction

Introduction

The recognition and enforcement of a foreign judgment/arbitral award in China not only affects the right and interest of the parties to the judgment/arbitral award, but can be a matter of sovereignty. In todays international community, it becomes popular one state recognizes the judgment/arbitral award made by a foreign court/arbitration organization based on certain conditions, which brings convenience to the parties to the judgment/arbitral award and promotes the friendship of the states involved.

Under current China law, China may recognize and enforce a foreign judgment made by a foreign state with whom China has legal aid agreement/treaty or such recognition and enforcement is based on reciprocal condition. In addition, China court may conduct procedural examination to the foreign judgment to make sure such judgment is not contrary to the fundamental principles of China law and will not affect Chinas sovereignty, security and public interest.

Recognition and enforcement of foreign judgments in China

1. Who has the right to apply for recognition and enforcement of foreign judgments in China?

Under China law, the application for recognition and enforcement of foreign judgment in China can be filed by either foreign court or a party to the judgment. Any other third party is not qualified to file such application.

2. Which court in China may receive the application?

In China, courts are classified into 4 levels. The Supreme Court is located in Beijing. Every province has a high court which is located in the capital city of each province. Intermediate court is set in big cities and primary court in small city or county.

Under China law, application of recognition and enforcement of a foreign judgment can only be filed to the intermediate court. The intermediate court which has the jurisdiction over the application may have the following situations:

a)if the other party to the foreign judgment is an individual (mostly Chinese), the intermediate court shall be the one where his/her domicile place is located;

b)if the other party is a company (mostly China registered company), the intermediate court shall be the one where the companys main office is located;

c)if the other party has no domicile place or main office in China, but only have property in China, the intermediate court shall be the one where the property is located.

3. Under which situations the application of recognition and enforcement may be denied?

Under one of the following situations, the application may be denied by China court :

a)According to China law, the foreign court which issues the judgment has no jurisdiction over the case;

b)According to foreign law under which the judgment is made, the judgment has not become effective;

c)According to foreign law under which the judgment is made, the losing party is not duly summoned by the court;

d)The party to the judgment is deprived of the possibility to defend for himself, or is deprived of having a proper representative when he has limited liability to litigation;

e)A final and binding judgment has been issued for the same matter and between the same parties by China court, or such proceeding is pending, or China court has recognized a judgment made by a third state to the same case.

f)The recognition and enforcement may be contrary to the fundamental principle of China law or policy.

4. What will be the result for application?

The China court, after receiving the application, may conduct examination to the application and make a decision. If the judgment is recognized, an enforcement order may be issued and the enforcement will follow Chinese law on civil enforcement. However, if the application is denied, the decision will be final and no appeal is available.

5. General documents to be submitted to China court

When filing application of recognition and enforcement, the following documents shall be submitted:

a)the court judgment copy (if the judgment itself does not indicate if it is final and binding, a confirmation document shall be issued by the foreign court accordingly);

b)return of service, or documents proving the judgment has been duly served;

c)confirmation document from the foreign court indicating the losing party has been duly summoned, or the losing party has proper representative if it has limited liability for litigation;

d)an application letter and all translation documents.

Recognition and enforcement of foreign arbitral awards in China

Under current China law, China may recognize and enforce a foreign arbitral award issued in a state with whom China has legal aid agreement/treaty or such recognition and enforcement is based on reciprocal condition.

Convention on the Recognition and Enforcement of Foreign Arbitral Awards(the New York Convention) dated 10 June 1958 is an treaty governing international recognition and enforcement of foreign arbitral awards.

The China intermediate court where the other party is located or the property is located may receive the application filed by the party to the foreign arbitral award.

According to the New York Convention, states are obligated to recognize the foreign arbitral award unless it falls under any of the situations in article 5, which are mainly related to a) the validity of arbitration agreement; b) procedural matter including the party against whom the award is invoked is not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; c) the award deals with matters beyond the scope of the submission to arbitration; d) the composition of the arbitral authority or the arbitral procedure is not in accordance with the agreement of the parties; e) the parties to award is under some incapacity; f) the recognition or enforcement is contrary to the public policy of China.

Conclusion

In our experience, the parties to the judgment or arbitral award more likely become the applicant in recognition and enforcement since they are affected the judgment directly. In dealing with the recognition and enforcement, the coordination and communication with China court is a must. Furthermore, how to find the right court and how to find the location of the other party to the judgment or arbitral award or his property in China is the matter which shall be done prior to the application in China. However, since the party is not familiar with the legal system in China, the legal support from a qualified and experienced Chinese lawyer is necessary. Therefore, it is advised the party to the judgment or arbitral award shall communicate with the lawyer in advance and seek their advice before any action is taken.

by: Erex Chen

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