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Recognition and Enforcement of Foreign Judgments in China
China Justice Observer, Volume 1, Issue 1, July 2018
For decades, China has adopted rigorous criteria for the recognition and enforcement of foreign judgments. However,
recently China’s Supreme People’s Court (SPC) has been making efforts to change the situation, and is drafting
specific rules so as to recognize and enforce foreign judgments as far as possible. The issue begins with an
introduction to this emerging trend, given by Meng Yu and Guodong Du, Founders of China Justice Observer (CJO).
The SPC’s 4
th
Civil Division is drafting the said rules, and continues to guide and supervise the handling of cases
regarding the recognition and enforcement of foreign judgment in courts at all levels nationwide. This issue
summarizes four related articles written by Chinese judges, two of them from the SPC’s 4
th
Civil Division, and the
others from two Intermediate People’s Courts, which respectively rendered the first rulings in China to recognize and
enforce a Singaporean court judgment and a US court judgment. The issue also includes the Nanning Statement, an
instrument where the SPC and supreme courts from ASEAN countries agree to loosen the criteria for recognition and
enforcement of foreign judgments. It is also the first time for the SPC to demonstrate its attitude in an official instrument.
Should you have any questions about the issue, please contact Meng Yu (meng.yu@chinajusticeobserver.com). For
more information, please visit www.chinajusticeobserver.com.
Time to Loosen the Criteria for Recognizing and Enforcing Foreign Judgments in China MENG YU & GUODONG DU 1
China’s Supreme People’s Court is drafting rules so as to recognize and enforce foreign judgments as far
as possible.
China's Supreme Court Talks about Recognition and Enforcement of Foreign
Judgments in China
SHEN HONGYU 4
Judge Shen Hongyu (沈红雨) of China’s Supreme People’s Court, talks about the recognition and
enforcement of foreign civil and commercial judgments in China.
The Nanning Statement: A Milestone in Recognizing and Enforcing Foreign Judgments
in China
ZHANG YONGJIAN 7
Judge Zhang Yongjian (张勇健), Director of China’s Supreme People’s Court’s 4th Civil Division, talks
about the Nanning Statement.
Thus Spoke the Chinese Judge Who First Recognized and Enforced a US Court
Judgment
ZHAO QIANXI 9
Judge Zhao Qianxi (赵千喜), who rendered the first ruling to recognize and enforce a US court judgment in
China, talks about his process of reflection in hearing the case.
Thus Spoke the Chinese Judge Who First Recognized and Enforced a Singaporean
Court Judgment
JIANG XIN 11
Judge Jiang Xin (姜欣), who rendered the first ruling to recognize and enforce a Singaporean court
judgment in China, talks about what lessons China could draw from an Israeli case to promote the principle
of reciprocity.
Nanning Statement of the 2nd China-ASEAN Justice Forum 13
China’s Supreme People’s Court demonstrates its readiness, for the first time, in the Nanning Statement
to loosen the criteria for recognition and enforcement of foreign judgments.
* China Justice Observer is committed to present the real Chinese judicial system. If you need to settle disputes in China, we help you build reasonable
expectations and develop effective strategies and solutions. If you are intrigued by China’s justice, we help you explore this fascinating field.
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Time to Loosen the Criteria for Recognizing
and Enforcing Foreign Judgments in China
Authors: MENG YU & GUODONG DU, Founders of
China Justice Observer (CJO)
For decades, China has adopted rigorous criteria for the
recognition and enforcement of civil and commercial
judgments rendered by a foreign court, which resulted in
a comparatively low rate in recognizing and enforcing
foreign judgments. However, the situation will undergo
considerable changes.
1. Special rules are being drafted to loosen the
criteria for recognizing and enforcing foreign
judgments.
On 13 July 2017, China’s Supreme People’s Court (SPC)
held an expert meeting at the Wuhan University Institute
of International Law to discuss a drafted version of the
“Judicial Interpretation on the Recognition and
Enforcement of Foreign Civil and Commercial
Judgments” (关于承认与执行外国法院民商事判决的司法
解释). During the meeting, several issues lay at the heart
of the debates, including the scope of application, the
principle of reciprocity, refusal grounds and punitive
damages, as well as the competency of a foreign
jurisdiction. This is the first time for us to learn from
publicly available sources that the SPC is drafting special
rules on recognition and enforcement of foreign
judgments.
On 26 September 2017, during the Silk Road (Dunhuang)
Judicial Cooperation Forum, Judge Liu Guixiang (刘贵
祥), SPC adjudication committee member, president of
the First Circuit Court, Grand Justice of the second rank,
indicated that China is about to actively apply the
principle of reciprocity, in order to facilitate the
recognition and enforcement of foreign judgments in civil
and commercial matters in China. To achieve this goal,
the SPC is drafting the “Provisions on Several Issues
concerning the Recognition and Enforcement of Foreign
Civil and Commercial Judgments” (关于承认和执行外国
法院民商事判决若干问题的规定). The draft is said to
identify clear standards in applying the principle of
reciprocity, and to enhance transparency and facilitate
the recognition and enforcement of foreign judgments.
This means the SPC publicly recognizes for the first time
some special rules being drafted in this area.
In spite of differences in names disclosed to the public,
the two documents are very likely to be the same one.
Overall, it is in this SPC’s judicial interpretation that the
criteria for recognizing and enforcing foreign judgments
are about to loosen.
2. Rigorous criteria have long been adopted by
Chinese courts in recognizing and enforcing foreign
judgments.
Pursuant to the PRC Civil Procedure Law and its
Interpretation, five (5) main criteria for Chinese courts in
reviewing requests to recognize and enforce foreign
judgments are as follows.
i. The foreign judgment should be final and conclusive.
ii. In case of a foreign judgment in default, the absent
party should have been properly served.
iii. The foreign judgment will not be recognized if a
Chinese court has also rendered a judgment on the
same matter.
iv. Except for divorce judgments, international treaties
concluded or acceded to by the PRC or the principle of
reciprocity is a prerequisite for recognition and
enforcement of foreign judgments.
v. The foreign judgment does not contradict primary
principles of Chinese law, State sovereignty, security and
social and public interest.
Criterion No. iv is a core element. By now, China has
entered into bilateral treaties with only 33 countries for
the mutual recognition and enforcement of court
judgments. Nevertheless, as for countries having
extensive trade links with China, such as the United
States, Japan and the United Kingdom, such bilateral
treaties have not been concluded yet. The existence of a
reciprocal relationship is therefore critical for recognizing
and enforcing judgments from a foreign jurisdiction.
In practice, Chinese courts adopt a restrictive attitude
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towards the principle of reciprocity. In the SPC’s “Re the
Request for Instruction on Recognizing and Enforcing a
Japanese monetary judgment” (最高人民法院关于我国人
民法院应否承认和执行日本国法院具有债权债务内容裁判
的复函), the SPC affirmed the requested Chinese court’s
decision, holding that China had not concluded or
acceded to any international treaty with Japan on mutual
recognition and enforcement of court judgments, nor had
it established a reciprocal relationship with Japan. The
enforcement of Japanese judgments was therefore
refused for the lack of reciprocity. Following the SPC’s
reply, this view was echoed by local courts in similar
cases concerning requests to recognize and enforce
foreign judgments.
Thus, it can be said that in practice, Chinese courts
adopt the approach of de facto reciprocity, which
requires actual precedents where the foreign country has
previously recognized and enforced Chinese judgments.
3. Chinese courts’ attitudinal changes correspond
with China’s Belt and Road Initiative.
What lies underneath the fundamental shift in Chinese
courts’ attitudes towards the recognition and
enforcement of foreign judgments is in alignment with
China’s “Belt and Road initiative”, i.e., the “ Silk Road
Economic Belt and 21st-Century Maritime Silk Road”
initiative. To be more specific, Chinese courts wish to
respond to the judicial concerns and demands of both
Chinese and foreign market players, and to create a
sound legal environment for the construction of the “Belt
and Road initiative”.
Pursuant to the “Vision and Actions on Jointly Building
Silk Road Economic Belt and 21st-Century Maritime Silk
Road” (推动共建丝绸之路经济带和 21 世纪海上丝绸之路
的愿景与行动) enacted by the Chinese government in
March 2015, this “Belt and Road initiative” aims to
“promote the connectivity of Asian, European and African
continents and their adjacent seas, and will enable China
to further expand and deepen its opening-up, and to
strengthen its mutually beneficial cooperation with
countries in Asia, Europe and Africa and the rest of the
world”.
Accordingly, in June 2015, the SPC issued the “Several
Opinions of the Supreme People's Court on Providing
Judicial Services and Safeguards for the Construction of
the “Belt and Road” by People's Courts” (关于人民法院为
“一带一路”建设提供司法服务和保障的若干意见), which
emphasizes the need to broaden the scope of
international judicial assistance. In other words, for one
thing, China will conclude more bilateral or multilateral
treaties on judicial assistance, thus facilitating the
recognition and enforcement of judgments delivered by
courts from countries along the “Belt and Road”; and for
another, in the absence of such treaties, based on
mutual views in international judicial cooperation and/or
the commitments of the requesting state to grant
reciprocity, Chinese courts may grant reciprocity first,
thus promoting the formation of a reciprocal relationship.
4. Chinese courts take practical steps to promote the
recognition and enforcement of foreign judgments.
On 8 June 2017, the “Nanning Statement” (南宁声明)
was approved at the 2nd China-ASEAN Justice Forum
held in Nanning. Article 7 of the Nanning Statement
stipulates that Supreme Courts of participating countries
will “consider facilitating the appropriate mutual
recognition and enforcement of civil or commercial
judgments among different jurisdictions”; “if two countries
have not been bound by any international treaty on
mutual recognition and enforcement of foreign civil or
commercial judgments, both countries may, subject to
their domestic laws, presume the existence of their
reciprocal relationship, when it comes to the judicial
procedure of recognizing or enforcing such judgments
made by courts of the other country, provided that the
courts of the other country had not refused to recognize
or enforce such judgments on the ground of lack of
reciprocity”.
As Judge Zhang Yongjian (张勇健), Director of the SPC’s
4th Civil Division, pointed out, despite the fact that China
has long adopted de facto reciprocity in practice, the
Nanning Statement first proposed the approach of
“presumptive reciprocity” (推定互惠), i.e., to presume the
existence of a reciprocal relationship in the absence of
contrary evidence, marking significant progresses in this
field. Furthermore, Zhang also indicated that the
consensus of “presumptive reciprocity” expressed in the
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Article 7 of the Nanning Statement, is a concrete
follow-up initiative of the “Several Opinions of the
Supreme People's Court on Providing Judicial Services
and Safeguards for the Construction of the “Belt and
Road” by People's Courts”.
The year 2017 also witnessed another progress in this
field. On 12 September, China signed the Hague
Convention on Choice of Court Agreements, an
instrument for harmonizing the recognition and
enforcement of foreign judgments on the international
level. As Director-General of the Department of Treaty
and Law of Ministry of Foreign Affairs Xu Hong (徐宏) put
it, China signed the convention in order to facilitate
resolution of civil and commercial disputes among
countries along the “Belt and Road”, as well as to
promote the international trade and exchange in this
area.
5. Chinese recent cases show an increased
likelihood of foreign judgment being recognized and
enforced.
On 9 December 2016, Nanjing Intermediate People’s
Court rendered the ruling “(2016) Su 01 Xie Wai Ren No.
3” ((2016)苏 01 协外认 3 号), which marks a milestone
development. It is the first time that a Chinese court has
recognized and enforced a Singapore judgment based
on the principle of reciprocity. Among others, this case
was later included by the SPC as a guiding case in the
“Second Group of Guiding Cases involving Construction
of the “Belt and Road” (第二批涉“一带一路”建设典型案
例). The guiding cases project is an SPC-led system, in
which certain Chinese court judgments are selected and
re-issued as de facto binding guiding cases to guide the
adjudication of similar subsequent cases and ensure the
uniform application of law. It is in this case that Nanjing
Intermediate People’s Court ruled, “despite the absence
of any bilateral treaty for mutual recognition and
enforcement of judgments between P.R.C and Singapore,
a Chinese court may, based on the principle of reciprocity,
recognize and enforce a Singapore judgment,
considering that Singapore High Court has previously
enforced a Chinese judgment”.
Similarly, on 30 June 2017, Wuhan Intermediate
People’s Court issued the ruling “(2015) E Wu Han
Zhong Min Shang Wai Chu Zi No. 00026” ((2015)鄂武汉
中民商外初字第 00026 号), recognizing and enforcing a
judgment rendered by the Los Angeles Superior Court,
California, US. This is the first time that a Chinese court,
based on the principle of reciprocity, has recognized and
enforced a US court judgment. The case has drawn
much attention in China and appeared on the SPC’s
website, an indicator of the SPC’s priorities and concerns.
In this case, Wuhan Intermediate People’s Court
indicated that, “despite the fact that there are no bilateral
treaties nor international conventions on mutual
recognition and enforcement concluded between the
United States and China”, “the Claimant has established
that a US court has previously recognized and enforced
a Chinese court decision, thus the Court confirms the
existence of a reciprocal relationship between the two
countries”, based on which a Chinese court may enforce
a US court decision, provided that other criteria are met.
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China's Supreme Court Talks about
Recognition and Enforcement of Foreign
Judgments in China
Author: SHEN HONGYU, Judge of China’s Supreme
People’s Court
Judge Shen Hongyu(沈红雨) of China’s Supreme
People’s Court (SPC), who participated in the
policymaking concerning the recognition and
enforcement of foreign civil and commercial judgments in
China, focused on three issues: whether foreign courts
have jurisdiction; whether foreign courts ensure that the
parties are properly notified and enjoy the right to be
heard; and whether there exists a reciprocal relationship
between China and the country where the judgment is
rendered.
This article is a summary of the article titled “Research
on Some Difficult Problems in Recognition and
Enforcement of Foreign Civil and Commercial
Judgments” (外国民商事判决承认和执行若干疑难问题研
究) to reflect an SPC judge’s thoughts on the recognition
and enforcement of foreign civil and commercial
judgments. This article was published in “Journal of Law
Application” (法律适用) (No. 5, 2018), the author of which
is Shen Hongyu, Judge of the SPC’s 4th Civil Division.
According to related reports, Judge Shen Hongyu was
involved in the drafting of the SPC's “Judicial
Interpretation on the Recognition and Enforcement of
Foreign Civil and Commercial Judgments” (最高人民法
院关于承认与执行外国法院民商事判决的司法解释).
The article is summarized as follows:
1. The review model on foreign civil and commercial
judgments in Chinese courts.
The system of recognition and enforcement of foreign
civil and commercial judgments has only been
established in principle by the PRC Civil Procedure Law
(CPL), which only requires that the review model be
determined according to international treaties and
reciprocal relationships.
According to the bilateral judicial assistance treaties in
civil and commercial matters currently signed by China,
the conditions for Chinese courts to recognize and
enforce foreign judgments mainly include:
i. The foreign judgment is already legally effective or
enforceable;
ii. The judgment-making foreign court is a court of
competent jurisdiction;
iii. The losing party’s litigation rights are guaranteed;
iv. There are no inconsistent judgments;
v. The foreign judgment is not obtained through fraud.
It can thus be seen that Chinese courts only conduct
formal review on foreign civil and commercial judgments,
that is, the courts only adopt formal review based on the
conditions for recognition required by the law, while do
not examine in substance whether the fact-finding and
application of laws in the foreign judgment are correct
and reasonable.
2. Chinese courts review the competence of foreign
courts.
The competence of judgment-making foreign courts is a
prerequisite for Chinese courts to recognize and enforce
the foreign judgments.
The author believes that Chinese courts should examine
whether foreign courts have jurisdiction pursuant to
Chinese jurisdiction rules, which include the following:
(1) Foreign civil and commercial judgments must not
violate Chinese exclusive jurisdiction rules.
Exclusive jurisdiction means that Chinese courts have
dominant and exclusive jurisdiction over certain
foreign-related civil and commercial cases. Chinese laws
do not recognize that other countries have jurisdiction
over such cases.
In accordance with the CPL, these cases include:
i. Disputes arising from performance of contracts related
to Sino-foreign equity joint ventures, Sino-foreign
contractual joint ventures or Sino-foreign cooperation
and development of natural resources, shall be subject
to the jurisdiction of Chinese courts;
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ii. Disputes arising from immovable property shall be
subject to the jurisdiction of the people's court at the
location of the immovable property;
iii. Disputes arising from harbor operations shall be
subject to the jurisdiction of the people's court at the
location of the harbor;
iv. Disputes over succession shall be subject to the
jurisdiction of the people's court of the place where the
decedent had his domicile upon his death, or where the
principal part of his estate is located
(2) The choice of foreign court agreements between
parties must comply with Chinese laws.
The consensual jurisdiction rules in Chinese law mainly
include:
i. Parties to a dispute over a contract or other proprietary
rights and interests may, through written agreement,
choose the court in the location of the defendant’s
domicile, where the contract is performed or signed, in
the location of the plaintiff’s domicile, in the location of
the subject matter, or in other place which has practical
connections with the dispute to exercise jurisdiction.
ii. After the court accepts the case, if a party raises no
objection to jurisdiction and responds to the action, the
people's court accepting the case shall be deemed to
have jurisdiction.
iii. Where a business operator uses standard-form terms
to enter into a jurisdictional agreement with a consumer,
but fails to take reasonable measures to bring the
consumer's attention to it, the people’s court shall uphold
the claim by the consumer claims that the jurisdictional
agreement is invalid.
(3) Chinese courts have neither rendered judgments on
the same dispute nor recognized and enforced the
judgments on the same dispute rendered by courts of
other countries and regions.
(4) The parties did not reach a written agreement for
arbitration with respect to the same dispute.
3. Chinese courts review whether the
judgment-making foreign court ensures due process
and sufficiently guarantees the parties' litigation
rights.
When examining whether the foreign civil and
commercial judgment has guaranteed the parties’ rights
to due process, Chinese courts mainly focus on the
following five issues:
(1) On the legal criteria for determining whether the
service procedure is legal
The author considers that Chinese courts should
determine whether the service is legal according to the
law of the country where the judgment is rendered.
On one hand, most of the bilateral treaties on judicial
assistance signed by China provide that whether a
proper notification is served is determined pursuant to
the law of the country where the judgment is rendered.
On the other hand, for court judgments originating from
other countries that do not have treaty relationships with
China, Chinese courts should also determine whether
the judgment is properly served according to the law of
the country where the judgment is rendered. However,
such service procedure should not go below the
minimum standard for proper notification required by
Chinese laws.
(2) Service to China must not violate the CPL’s
compulsory provisions regarding service
More specifically:
i. Service within China should be conducted pursuant to
treaties or through diplomatic channels. In addition, no
foreign agency or individual may serve documents within
the territory of China without the permission of Chinese
competent authorities.
ii. When acceding to the Hague Convention on the
Service Abroad of Judicial and Extrajudicial Documents
in Civil and Commercial Matters (The Hague Service
Convention), China explicitly opposed service by post.
(3) Whether the legal notification method should include
service by public notice
The CPL stipulates that when it is not possible to serve
upon exhaustion of all kinds of service methods, the
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service by public notice can be adopted. Therefore, the
author believes that if the law of the country where the
judgment is rendered allows the service by public notice
and the conditions applied are basically similar to those
of Chinese laws, then the Chinese court should confirm
the legality of the service by public notice.
(4) Whether the foreign court's service should be
accompanied by the corresponding translation based on
the nationality of the losing defendant
The author believes that in terms of the service
conducted in accordance with a bilateral judicial
assistance treaty or the Hague Service Convention, it
should be determined whether translation should be
provided pursuant to the requirements of the
international treaty. However, if the foreign court
conducts the service within the territory of that foreign
country, it shall be determined according to the laws of
that country.
(5) Where even if the judgment-making foreign court has
a flaw in the notification procedure, the parties have
already appeared in court to respond to the case, which
means that the parties have actually enjoyed the right of
defense, the Chinese court cannot refuse to recognize
and enforce the foreign judgment on the ground of
inadequate notice.
4. How should Chinese courts treat a reciprocal
relationship?
The CPL stipulates that the principle of reciprocity is a
prerequisite for the recognition and enforcement of
foreign judgments, but the law does not provide a clear
explanation for the principle of reciprocity. Therefore,
there are discrepancies among Chinese courts on how to
determine the existence of reciprocity.
For a long time, China has insisted on de facto
reciprocity, that is, if there is no precedent showing that
either country has recognized and enforced the
judgment of the other country, then there is no
corresponding reciprocal relationship between the two
countries.
The author considers that de facto reciprocity not only
makes it difficult for foreign civil and commercial
judgments to be recognized and enforced by Chinese
courts, but also potentially causes foreign courts to
refuse to recognize Chinese judgments on the basis of
the principle of reciprocity, and has also led to a large
number of parallel proceedings.
The author believes that in order to serve the
construction of China’s “Belt and Road initiative”,
Chinese courts should rationally loosen the criteria for
reciprocal relationships, thus promoting cooperation in
cross-border recognition and enforcement of judgments
between countries.
The author also indicates that the “Several Opinions of
the Supreme People's Court on Providing Judicial
Services and Safeguards for the Construction of the ‘Belt
and Road’ by People's Courts” (关于人民法院为“一带一
路”建设提供司法服务和保障的若干意见) issued by the
SPC in 2015 and the “Nanning Statement” (南宁声明)
approved by the 2nd China-ASEAN Justice Forum in
2017 are breakthroughs made by Chinese courts
regarding the principle of reciprocity. (CJO has also
noticed this trend.)
The author puts forward her suggestions on the
approach China can take in the future regarding the
issue of reciprocity:
(1) Clarifying the criteria of reciprocity in legislation or
judicial interpretation
The author argues that in terms of determining the
existence of reciprocity, China should judge the
possibility of recognition and enforcement of Chinese
judgments in the foreign country according to the law of
the country where the judgment is rendered (de jure
reciprocity), rather than compulsorily requires a de facto
reciprocity between the two countries.
(2) Diversifying forms and channels for building a
reciprocal relationship
In addition to signing a judicial assistance treaty, China
can further broaden its channels for establishing a
reciprocal relationship, including:
i. Making reciprocal commitments through diplomatic
channels by the two countries;
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ii. Reaching a judicial memorandum of understanding or
consensus on mutual recognition and enforcement of
judgments.
For example, China has for the first time tried to establish
a presumptive reciprocity with ASEAN countries under
certain conditions through a judicial consensus in the
“Nanning Statement”.
(3) Determining the application of the principle of
reciprocity and its exceptions according to the categories
of different judgments
At present, Chinese parties may apply to a Chinese court
for recognition of a foreign divorce judgment, without the
requirement of the existence of a reciprocal relationship
between the foreign country and China.
The author believes that, in addition to divorce
judgments, China may consider, by legislation or judicial
interpretations, explicitly refraining from applying the
principle of reciprocity in judgments concerning the civil
right and the civil capacity of a citizen and a legal entity,
as well as an adoptive or guardian relationship.
(4) Clarifying the burden of proof for the principle of
reciprocity
The author argues that in principle, Chinese courts
should determine ex officio whether there is a reciprocal
relationship between China and the country where the
judgment is rendered, but Chinese courts may also
require the parties concerned to provide foreign laws.
Since the case law in foreign countries is constantly
evolving, whether there exists a precedent showing that
the country where the judgment is rendered has
recognized or not recognized the judgment of a domestic
court applies appropriately only as one of the
considerations, rather than a decisive factor, in
determining a reciprocal relationship.
The Nanning Statement: A Milestone in
Recognizing and Enforcing Foreign
Judgments in China
Author: ZHANG YONGJIAN, Judge of China’s Supreme
People’s Court (SPC), Director of the SPC’s 4th Civil
Division.
In the Nanning Statement, Chinese courts made a
commitment to loosen the criteria for recognizing and
enforcing foreign judgments in China. Thus, the
“Nanning Statement” (南宁声明) is regarded as a
milestone in this field, demonstrating a major shift in the
attitude of Chinese courts.
This post is a summary of the Article titled “The New
Trend in Practical Developments of the Principle of
Reciprocity under the Background of the ‘Belt and Road
Initiative’” (“一带一路”背景下互惠原则实践发展的新动向),
published in the “People’s Court Daily” (人民法院报) on
20 June 2017. The writer of the Article is Judge Zhang
Yongjian (张勇健), Director of China’s Supreme People’s
Court’s 4th Civil Division. The People's Court Daily is a
newspaper which is affiliated to China’s Supreme
People’s Court (SPC).
The Article is summarized as follows:
On 8 June 2017, the Nanning Statement was approved
at the 2
nd
China-ASEAN Justice Forum held in Nanning.
In the Article 7 of the Nanning Statement, the consensus
of “presumptive reciprocity” is reached by all participating
countries. This marks a dramatic change in the
recognition and enforcement of foreign judgments in
China.
The contents of the Article 7 of the Nanning Statement
are as follows:
Regional cross-border transactions and investments
require a judicial safeguard based on appropriate mutual
recognition and enforcement of judicial judgments
among countries in the region. Subject to their domestic
laws, Supreme Courts of participating countries will keep
good faith in interpreting domestic laws, try to avoid
unnecessary parallel proceedings, and consider
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facilitating the appropriate mutual recognition and
enforcement of civil or commercial judgments among
different jurisdictions. If two countries have not been
bound by any international treaty on mutual recognition
and enforcement of foreign civil or commercial
judgments, both countries may, subject to their domestic
laws, presume the existence of their reciprocal
relationship, when it comes to the judicial procedure of
recognizing or enforcing such judgments made by courts
of the other country, provided that the courts of the other
country had not refused to recognize or enforce such
judgments on the ground of lack of reciprocity.
Pursuant to the PRC Civil Procedure Law (CPL),
Chinese courts should recognize and enforce foreign
civil and commercial judgments in accordance with
international treaties and the principle of reciprocity.
However, international treaties have played a limited role
in China because of the fact that, on the one hand, China
has not yet acceded to the Hague Convention on Choice
of Court Agreements, and on the other hand, the number
of bilateral treaties on judicial assistance in civil and
commercial matters which China has concluded,
including the contents of recognizing and enforcing
foreign civil and commercial judgments in China, is
relatively small. In contrast, for Chinese courts, the
principle of reciprocity is more important with respect to
the recognition and enforcement of foreign judgments.
In the past, China held a relatively conservative position
on the recognition and enforcement of foreign judgments,
which led to three consequences: (1) Foreign judgments
could not be easily recognized and enforced by Chinese
courts; (2) It may give rise to cross-border parallel
proceedings; (3) Foreign courts, in response to China’s
practices, under the principle of reciprocity, also refused
to recognize the judgments rendered by Chinese courts.
Now, in the new era of the “Belt and Road Initiative”, the
SPC holds the view that Chinese courts should properly
determine the review standards of the principle of
reciprocity and strengthen the mechanism of the
recognition and enforcement of foreign judgments. In this
case, the lawful rights and interests of business entities
from countries along the “Belt and Road” shall be
safeguarded, and a fair and efficient legal environment
for the construction of the “Belt and Road Initiative” will
be created.
Therefore, in the Nanning Statement, the consensus on
the principle of reciprocity, which is reached between
judiciaries of China and ASEAN countries, as well as
South-Asian countries, is a critical first step forward
taken by the SPC. To be more specific:
First, the consensus was proposed by the SPC and
supported by ASEAN countires, showing that China and
ASEAN will be open, pragmatic and cooperative in their
mutual recognition and enforcement of civil and
commercial judgments. Undoubtedly, this shall be
viewed as a model of judicial cooperation under the “Belt
and Road Initiative”.
Second, the consensus promotes the new development
of the principle of reciprocity.
The principle of reciprocity can be divided into conclusive
reciprocity and presumptive reciprocity. The former
requires domestic courts to ascertain that there exist
relevant legal provisions (de jure reciprocity) or actual
precedents (de facto reciprocity) where domestic
judgments could be or have been recognized and
enforced in that foreign country. The latter requires that
domestic courts should presume the existence of a
reciprocal relationship between two countries, provided
that there is no evidence that the courts of the other
country had refused to recognize or enforce domestic
judgments.
Presumptive reciprocity reduces the applicant’s burden
of proof for establishing the existence of the reciprocal
relationship, thereby increasing the possibility of
confirming the existence of the reciprocal relationship
between two countries. On this occasion, it will help to
improve the possibility of the recognition and
enforcement of foreign judgments in China.
Previously, China has long adopted de facto reciprocity
in practice. It is the Nanning Statement that first
proposed the approach of presumptive reciprocity and
therefore it marks the significant breakthrough in this
field compared with the past practices of Chinese courts.
Third, the consensus reflects that Chinese courts have
Thus	Spoke	the	Chinese	Judge	Who	First	Recognized	and	Enforced	a	US	Court	Judgment	 	
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taken a positive attitude in advocating and gradually
expanding the international judicial cooperation, as well
as actively promoting the formation of reciprocal
relationships.
In June 2015, the SPC issued the “Several Opinions of
the Supreme People's Court on Providing Judicial
Services and Safeguards for the Construction of the ‘Belt
and Road’ by People's Courts” (关于人民法院为“一带一
路”建设提供司法服务和保障的若干意见), which
emphasizes the need to broaden the scope of
international judicial assistance. In other words, for one
thing, China will conclude more bilateral or multilateral
treaties on judicial assistance, thus facilitating the
recognition and enforcement of judgments delivered by
courts from countries along the “Belt and Road”; and for
another, in the absence of such treaties, based on
mutual views in international judicial cooperation and/or
the commitments of the requesting state to grant
reciprocity, Chinese courts may grant reciprocity first,
thus promoting the formation of a reciprocal relationship.
The consensus of presumptive reciprocity in the Article 7
of the Nanning Statement meets the requirements
mentioned above.
The SPC believes that the consensus, without doubt, will
encourage more countries along the “Belt and Road” to
take the position of presumptive reciprocity when
cooperating with China, and in the meantime, an
agreement is bound to be reached when it comes to
strengthening the cooperation with Chinese courts in
respect of the recognition and enforcement of judgments.
Admittedly, all these will facilitate the developments of
the dispute settlement mechanism under the “Belt and
Road Initiative”.
Thus Spoke the Chinese Judge Who First
Recognized and Enforced a US Court
Judgment
Authors: ZHAO QIANXI & Li Shuangli, Judges of Wuhan
Intermediate People’s Court
Zhao Qianxi (赵千喜), one of the authors of this article, is
the presiding judge who created a precedent to
recognize and enforce a US judgment in China in
2017.The process of reflection in hearing the case
introduced by him can help us to better understand the
court’s reasoning. We can conclude that this case may
be more of an omen rather than a coincidence.
This post summarizes the article titled “Judicial Review
of the Application of Recognition and Enforcement of
Foreign Judgments—A Comparative Analysis of
Legislation and Judicial Cases in China and the US” (论
承认和执行外国法院判决申请之司法审查——以中美两国
的立法和司法案例为分析对象). Written by Zhao Qianxi
and Li Shuangli (李双利) - judges of Wuhan Intermediate
People’s Court, this article was published in “Journal of
Law Application” (法律适用) (No. 5, 2018). Zhao Qianxi,
one of the authors, is the presiding judge of the “Case of
Petitioner-Liu Li and Respondent-Tao Li and Tong Wu’s
application for recognition and enforcement of a foreign
civil judgment” (申请人刘利与被申请人陶莉、童武申请承
认和执行外国法院判决一案) (hereinafter referred to as
the “Wuhan case”), which marks the first time that China
recognizes and enforces a US judgment. “Journal of Law
Application” is a periodical of the China National Judges
College, which is affiliated with China’s Supreme
People's Court (SPC), and is the major education and
training institution for Chinese judges.
The article is summarized as follows:
The author mentions that the “Wuhan case” in which he
sits is the first case in China to recognize and enforce a
US civil judgment based on the principle of reciprocity.
Decided by the Los Angeles Superior Court, California,
this American civil judgment is about a share transfer
agreement dispute between the applicant and the
respondent. The author also mentions that shortly before
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the “Wuhan Case” ruling was handed down, the
Nanchang Intermediate People's Court of Jiangxi
Province rejected the application of the applicants
Herbert Truhe et al. for recognition and enforcement of a
personal damages compensation judgment rendered by
the Superior Court of Pennsylvania (hereinafter referred
to as the “Nanchang case”), on the ground that there
existed neither international treaties on mutual
recognition and enforcement of court judgments nor
reciprocity between China and the US.
The author expresses regret about the opposite results
of the two cases and implicitly conveys his disagreement
concerning the Nanchang court's refusal to recognize
and enforce the American judgment in the “Nanchang
case”. It can thus be seen that different courts in China
may have different views on whether to recognize a US
judgment. However, since Zhao Qianxi's article is
published in the periodical of the National Judges
College, it is reasonable to assume that his views have
been supported by the SPC.
The author also refers to certain views in China that
where a state court or even a federal court in the US
recognizes a Chinese judgment, it does not necessarily
mean that there exists a reciprocal relationship between
China and the US. The “Nanchang case” supports this
view and concludes that there is no reciprocal
relationship between China and the US. However, the
author expressly indicates that he did not take this view
into the “Wuhan case”.
The author holds the following views:
1. When examining whether there exists the de facto
reciprocity between two countries, a Chinese court
mainly reviews whether there is a precedent that the
other country recognized and enforced Chinese
judgments, rather than examining the specific laws
invoked by the other country when it decided to
recognize and enforce Chinese court judgments.
Regardless of whether the foreign court referred to the
principle of reciprocity in its judgment, as long as the
foreign court has previously recognized and enforced
Chinese court judgments, this country can be regarded
as having a de facto reciprocal relationship with China.
2. A Chinese court does not need to rigorously examine
the similarities and differences between the foreign
judgment, whose recognition was applied by the
applicant, and the Chinese judgment already recognized
by the foreign country. In other words, even if there are
differences between the foreign judgment and the
Chinese judgment, in matters such as nationalities of
parties, causes of action, amounts in controversy etc.,
these differences should not prevent the Chinese court
from recognizing the existence of a de facto reciprocal
relationship.
3. Although the de facto reciprocity is reflected in foreign
court judgments of specific cases, due to differences in
the judicial systems of different countries, Chinese courts
should not require relevant courts of the two countries to
fully correspond to each other in terms of the type of
cases or the hierarchy of courts, let alone set restrictions
that the foreign judgments need to be decided by the
Supreme Courts of foreign countries.
4. The "reciprocity" prescribed by the PRC Civil
Procedure Law should refer to the reciprocal relationship
between countries. It should not be regarded as the
relationship between China and specific districts of a
foreign country or a certain level of judicial authority, for
this view is inconsistent with the general definition of the
subject of international relations in international law and
could also result in the fragmentation of reciprocal
relationships.
5. When the system of a foreign country is federalism
and a Chinese judgment is recognized according to a
state law rather than a federal law, even though it is not
enough to conclude that China has established a
comprehensive reciprocal relationship with that country
as a whole, it should be determined that there is at least
a reciprocal relationship between China and the state of
the foreign country.
It is noteworthy that the author indicates the content of
the “Provisions on Several Issues concerning the
Recognition and Enforcement of Foreign Civil and
Commercial Judgments” (Consultation Paper) (《关于承
认和执行外国法院民商事判决若干问题的规定》(征求意见
稿)) in the article. The Provisions are highly likely to be
Thus	Spoke	the	Chinese	Judge	Who	First	Recognized	and	Enforced	a	Singaporean	Court	Judgment	 	
www.chinajusticeobserver.com	 	 11	 Recognition	and	Enforcement	of	Foreign	Judgments	in	China	
the judicial interpretation currently drafted by the SPC on
recognition and enforcement of foreign judgments, the
exact one which is mentioned by CJO before. This
shows that the judge who decides the “Wuhan case” may,
to some extent, have participated in the drafting of the
judicial interpretation. What’s more, the “Wuhan case”
ruling is probably influenced by the said draft. Even the
judge choosing to recognize and enforce the US
judgment may have acted under instructions from the
SPC. Therefore, the “Wuhan case” may not be a
coincidence, but an omen. The importance of the
“Wuhan case” is much more likely to exceed the
expectations of most people.
Thus Spoke the Chinese Judge Who First
Recognized and Enforced a Singaporean
Court Judgment
Authors: JIANG XIN, Judge of Nantong Intermediate
People’s Court; Chen Liang, Judge of Jiangsu High
People’s Court
Jiang Xin (姜欣), one of the two authors of this article, is
the Chinese Judge who recognized and enforced a
Singaporean judgment for the first time in 2016. By
analyzing the Israeli case where the Supreme Court of
Israel recognized and enforced a civil and commercial
judgment rendered by Nantong Intermediate People’s
Court, Jiang Xin concluded that China could draw
lessons from this case to promote the principle of
reciprocity when recognizing and enforcing foreign
judgments. Such opinion is very likely to be the same
initiative that drives Jiang Xin to recognize the
Singaporean judgment.
This post summarizes the article titled “Current Condition,
Influence and Promotion over Principle of Reciprocity in
Recognizing and Enforcing Foreign Judgments---Taking
the Supreme Court of Israel’s Judgment to Recognize
and Enforce Nantong Intermediate People’s Court’s
Judgment as an Example” (承认和执行外国法院判决中
互惠原则的现状、影响与改进——从以色列承认和执行南
通中院判决案出发). This article was published in
“Journal of Law Application” (法律适用) (No. 5, 2018).
The authors are Chen Liang (陈亮) and Jiang Xin. Chen
Liang is Judge of Jiangsu High People’s Court and Jiang
Xin is Judge of Nantong Intermediate People’s Court.
Meanwhile, Jiang Xin is the Judge who recognized and
enforced a Singaporean judgment for the first time in
2016. “Journal of Law Application” is a periodical of the
China National Judges College, which is affiliated with
China’s Supreme People's Court (SPC) and is the major
education and training institution for Chinese judges.
The article is summarized as follows:
On 14 August 2017, the Israeli Supreme Court affirmed
the Tel Aviv District Court’s decision, ruling that a
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judgment rendered by Nantong Intermediate People’s
Court would be recognized and enforced in Israel. (See
Yitzhak Reitman v. Jiangsu Overseas Group Co Ltd.,Civil
Case 7884/15). This is a landmark case because for the
first time, an Israeli court recognized and enforced a
Chinese court judgment based on principle of reciprocity.
Chinese judges and scholars have focused their
extensive attention on this case from the early beginning
of the trial.
The Israeli Judge who tried this case, Y. Danziger, points
out that the main issue in this case lies in whether a
reciprocal relationship existed between China and Israel
at that moment. When the case was tried, there existed
neither relevant international treaty between the two
countries, nor any precedent where a Chinese court had
ever discussed whether an Israeli judgment could be
enforced or not. Under such circumstance, it remains
doubtful whether an Israeli court could prove the
reasonable possibility that an Israeli judgment could be
enforced in China.
Judge Y. Danziger believes that apart from the tendency
in Chinese judicial system to recognize and enforce
foreign judgments, the norms on which the principle of
reciprocity is based should also be taken into
consideration, such as efficiency, stability of judicial and
commercial community, as well as promotion of the
reciprocal relationship with other countries.
On one hand, refusing to enforce foreign judgments will
lead to repeated litigations over the same dispute; on the
other hand, such refusal will also harm the judicial
stability and the commercial stability on which foreign
corporations rely in conducting business with Israel.
Nowadays, the commercial relationship between China
and Israel develops quite fast. Refusing to recognize and
enforce Chinese judgments in Israel simply because
there is no Chinese precedent where an Israeli judgment
was enforced will cast shadow over both the reciprocal
relationship and the commercial relationship between
two countries.
Author of the article believes that Chinese courts could
be inspired by Judge Y. Danziger’s opinion. The
recognition and enforcement of foreign judgments could
avoid inconsistent judgments. Moreover, litigants’ burden
for litigation could be reduced and commercial
transaction could be stabilized. Such a result will be
beneficial to all involved countries. On the contrary,
refusal of recognition and enforcement of foreign
judgments will increase the transaction costs in
international commercial trade, which actually
establishes unreasonable trade barrier.
It is also the author’s opinion that Chinese courts should
abandon the attitude that refusing to recognize and
enforce foreign judgments could prevent or revenge the
foreign courts from not recognizing Chinese judgments.
Chinese courts should believe that the principle of
reciprocity could not only promote the recognition and
enforcement of Chinese judgments in foreign countries,
but also strengthen the international corporation in the
recognition and enforcement of judgments.
The author holds that there is no need for Chinese courts
to worry about such situation where a Chinese court has
recognized and enforced a foreign judgment while the
foreign court does not treat the Chinese judgment the
way itself was treated. Because the international trade
and investment have been extremely frequent, the
judicial corporation between countries is a “repeated
game playing” rather than a “single game playing.” In the
repeated game playing, if a country could repeatedly
reward countries that choose corporation, while punish
those who abandon the principle of reciprocity, a mutual
trust relationship could thus be gradually established and
“mutual corporation” could finally be achieved.
Nanning	Statement	of	the	2nd	China-ASEAN	Justice	Forum	 	
www.chinajusticeobserver.com	 	 13	 Recognition	and	Enforcement	of	Foreign	Judgments	in	China	
Nanning Statement of the 2nd China-ASEAN
Justice Forum
The 2nd China-ASEAN Justice Forum was held in
Nanning Guangxi Zhuang Autonomous Region of the
People's Republic of China on June 8, 2017. The Forum
was hosted by the Supreme Court People's Court of the
People's Republic of China (hereinafter referred to as
("the SPC") and sponsored by High People's Court of
Guangxi Zhuang Autonomous Region. H.E. Mr. ZHOU
Qiang, Chief Justice of the People's Republic of China
and President of the SPC; Hon. Mr. YOU Ottara,
Vice-President of the Supreme Court of the Kingdom of
Cambodia; Hon. Mr. Takdir RAHMADI, Deputy Chief
Justice on Resource Development of the Supreme Court
of the Republic of Indonesia; H.E. Mr. Khamphane
SITTHIDAMPHA, President of the People's Supreme
Court of the Lao People's Democratic Republic; Hon. Mr.
Tan Sri Richard MALANJUM, Chief Judge of High Court
of Sabah and Sarawak and Justice of the Federal Court
of Malaysia; H.E. Mr. HTUN HTUN OO, Chief Justice of
the Republic of the Union of Myanmar; Hon. Mr. Andres
B. REYES, JR., Presiding Justice of the Court of Appeal
of the Republic of the Philippines as observer; Hon. Mr.
Steven CHONG, Justice, Judge the Appeal of the
Supreme Court of the Republic of Singapore, H.E. Mr.
Veerapol TUNGSUWAN, President of the Supreme
Court of the Kingdom of Thailand; and Hon. Mr.
NGUYEN Van Thuan, Deputy Chief Justice of the
Supreme Court People's Court of the Socialist Republic
of Viet Nam attended the Forum and addressed in the
sessions. Hon. Mr. AKP Mochtan, Deputy
Secretary-General of the ASEAN Secretariat also
attended the Form. Besides, H.E. Mr. Sayed Yousuf
HALEM, Chief Justice of the Supreme Court of the
Islamic Republic of Afghanistan; Hon. Mr. Hasan Foez
SIDDIQUE, Justice of the Appellate Division of the
Supreme Court of the People's Republic of Bangladesh;
Hon. Mr. Hari Krishna Karki, Justice of the Supreme
Court of Nepal; H.E. Mr. Main Saqib Nisar, Chief Justice
of the Islamic Republic of Pakistan; and H.E. Mr.
Wewage Priyasath Gerad DEP, Chief Justice of the
Democratic Socialist Republic of Sri Lanka also attended
the Forum and addressed in the sessions as guests of
honor of the SPC.
In friendly, practical and constructive atmosphere, the
delegates and special guests of honor extensively
exchanged opinions under the theme of Justice in the
Internet Era and Regional Judicial Cooperation,
centering on specific topics including Informatization of
Court Work, Judicial Transparency on the Internet,
Coordination and Integration of Commercial Laws of the
Countries in the Region, Building Cross-Border Disputes
Resolution Mechanism in the Region and Strengthening
International Judicial Assistance in the Region. Theses,
discussions have laid down a solid foundation for
enhancing and deepening international judicial
exchanges and cooperation. The Forum, convinced of
the necessity to establish and maintain persistent
exchanges and cooperation among judiciaries of China
and ASEAN countries, as well as South Asian countries,
reached the following consensus.
I. The Forum commend the exchanges and
cooperation between China and ASEAN countries since
the adoption of the Nanning Statement in the First
China-ASEAN Justice Forum in various forms, such as
bilateral high-level visits, information exchanges and
judges training. The participants of the Forum will push
forward with more exchanges and cooperation among
judiciaries of China and ASEAN countries, as well as
South-Asian countries.
II. As the participants of the Forum noticed, with the
development of the Belt and Road Initiative, the ever-
expanding trade and personal exchanges among China
and ASEAN countries, as well as South-Asian countries,
the needs of judicial cooperation have been continuously
increasing.
III. Supreme Court of participating countries will pay
closer attention and respond to the trend of
informatization and endeavor to adopt information
technology means according to their capacity and
conditions, in order to improve judicial capability and
practices, efficiently resolve disputes, and better ensure
judicial fairness. The Forum supports judiciaries in
expanding the applicability of information technology
Nanning	Statement	of	the	2nd	China-ASEAN	Justice	Forum	 	
www.chinajusticeobserver.com	 	 14	 Recognition	and	Enforcement	of	Foreign	Judgments	in	China	
services to make more transparent and efficient work of
courts, as well as to make implementation of justice
more widely accessible to the society.
IV. The principle of judicial transparency is a
fundamental part of important means to promote judicial
fairness and to improve judicial practice. Supreme
Courts of participating countries will pay more attention
to continuously increasing judicial transparency and
credibility, based on common international standards and
practices combining with their respective national
situations. Meanwhile, the protection of personal
information and privacy, national security and public
interests shall be also taken into consideration.
V. As transnational trades and investment thriving
around the region, the increasing urgency to further
explore coordinating and integrating the commercial law
of each country has been recognized. To the extent
permitted by domestic laws, Supreme Courts of
participating countries will consider engaging in
comparative study and communication on their
respective commercial laws and in smoothing out
conflicts, in pursuit of coordination and complementation
of their commercial laws to the greatest extent.
VI. Improving cross-border disputes resolution
mechanism is conducive to foster a well-ordered legal
environment for transnational trades and investment in
the region. To the extent permitted by domestic laws,
Supreme Courts of participating countries will actively
consider the adoption of mediation and other alternative
disputes resolution mechanism.
VII. Regional cross-border transactions and investments
require a judicial safeguard based on appropriate mutual
recognition and enforcement of judicial judgments
among countries in the region. Subject to their domestic
laws, Supreme Courts of participating countries will keep
good faith in interpreting domestic laws, try to avoid
unnecessary parallel proceedings, and consider
facilitating the appropriate mutual recognition and
enforcement of civil or commercial judgements among
different jurisdictions. If two countries have not been
bound by any international treaty on mutual recognition
and enforcement of foreign civil or commercial
judgments, both countries may, subject to their domestic
laws, presume the existence of their reciprocal
relationship, when it comes to the judicial procedure of
recognizing or enforcing such judgments made by courts
of the other country, provided that the courts of the other
country had not refused to recognize or enforce such
judgments on the ground of lack of reciprocity.
VIII. Supreme courts of participating countries from
ASEAN support the SPC in founding both the Judges
Exchange and Training Base for China-ASEAN
Countries and the Legal and Judicial Information Center
for China-ASEAN Countries in Guangxi, China, as well
as the International Judicial Assistance Research Base
for China-ASEAN Countries in Yunnan, China, so as to
jointly promote more connected, pragmatic and efficient
judicial exchange and cooperation among courts of
China and ASEAN countries.
This Statement written in Chinese and English is
adopted on June 8, 2017 in Nanning, China.
www.chinajusticeobserver.com	 	 15	 Recognition	and	Enforcement	of	Foreign	Judgments	in	China	
About China Justice Observer (CJO)
China Justice Observer is committed to present the real Chinese judicial system. If you need to settle disputes in China,
we help you build reasonable expectations and develop effective strategies and solutions. If you are intrigued by
China’s justice, we help you explore this fascinating field.
CJO is co-founded by Guodong Du and Meng Yu. Guodong Du is a lawyer of Dentons Beijing Office. Meng Yu is a
researcher and received her PhD from China University of Political Science and Law. Our friends in China’s legal
profession also contribute to the CJO.
Each month we focus on one to two topics, and we compile and publish all related posts in one issue. Particular
attention has been paid in recent months to the following topics, with more newsletters coming soon.
Ø Recognition and Enforcement of Foreign Judgments in China;
Ø Recognition and Enforcement of Foreign Arbitral Awards in China;
Ø China’s Justice under Belt and Road Initiative;
Ø How Chinese Courts Work;
Ø Sue in China;
Ø AI and Big Data in China’s Justice; and
Ø China’s Legal Profession.
For more issues, please feel free to download via the link: chinajusticeobserver.com/guides
If you wish to know more about Chinese judicial system, or if you would like to discuss with us about the post, or share
your views and suggestions, please contact Meng Yu via e-mail at meng.yu@chinajusticeobserver.com.
If you need legal services for the recognition and enforcement of foreign judgments and arbitral awards in China,
please contact Guodong Du via e-mail at guodong.du@chinajusticeobserver.com. Mr. Du has been a practicing lawyer
for over ten years in China, and specializes in cross-border dispute resolution, in particular in the recognition and
enforcement of foreign judgments and arbitral awards in China.
For more information, please visit the CJO website (www.chinajusticeobserver.com), or subscribe to our newsletters
(subscribe.chinajusticeobserver.com)。
For regular updates, please follow us on:
Facebook (facebook.com/chinajusticeobserver),
Twitter (twitter.com/chinajusticeobs ),
LinkedIn(linkedin.com/company/china-justice-observer), or
Google+(plus.google.com/u/2/100148743408819041240).

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Recognition and enforcement of foreign judgments in china vol. 1 no. 1 cjo

  • 1. Recognition and Enforcement of Foreign Judgments in China China Justice Observer, Volume 1, Issue 1, July 2018 For decades, China has adopted rigorous criteria for the recognition and enforcement of foreign judgments. However, recently China’s Supreme People’s Court (SPC) has been making efforts to change the situation, and is drafting specific rules so as to recognize and enforce foreign judgments as far as possible. The issue begins with an introduction to this emerging trend, given by Meng Yu and Guodong Du, Founders of China Justice Observer (CJO). The SPC’s 4 th Civil Division is drafting the said rules, and continues to guide and supervise the handling of cases regarding the recognition and enforcement of foreign judgment in courts at all levels nationwide. This issue summarizes four related articles written by Chinese judges, two of them from the SPC’s 4 th Civil Division, and the others from two Intermediate People’s Courts, which respectively rendered the first rulings in China to recognize and enforce a Singaporean court judgment and a US court judgment. The issue also includes the Nanning Statement, an instrument where the SPC and supreme courts from ASEAN countries agree to loosen the criteria for recognition and enforcement of foreign judgments. It is also the first time for the SPC to demonstrate its attitude in an official instrument. Should you have any questions about the issue, please contact Meng Yu (meng.yu@chinajusticeobserver.com). For more information, please visit www.chinajusticeobserver.com. Time to Loosen the Criteria for Recognizing and Enforcing Foreign Judgments in China MENG YU & GUODONG DU 1 China’s Supreme People’s Court is drafting rules so as to recognize and enforce foreign judgments as far as possible. China's Supreme Court Talks about Recognition and Enforcement of Foreign Judgments in China SHEN HONGYU 4 Judge Shen Hongyu (沈红雨) of China’s Supreme People’s Court, talks about the recognition and enforcement of foreign civil and commercial judgments in China. The Nanning Statement: A Milestone in Recognizing and Enforcing Foreign Judgments in China ZHANG YONGJIAN 7 Judge Zhang Yongjian (张勇健), Director of China’s Supreme People’s Court’s 4th Civil Division, talks about the Nanning Statement. Thus Spoke the Chinese Judge Who First Recognized and Enforced a US Court Judgment ZHAO QIANXI 9 Judge Zhao Qianxi (赵千喜), who rendered the first ruling to recognize and enforce a US court judgment in China, talks about his process of reflection in hearing the case. Thus Spoke the Chinese Judge Who First Recognized and Enforced a Singaporean Court Judgment JIANG XIN 11 Judge Jiang Xin (姜欣), who rendered the first ruling to recognize and enforce a Singaporean court judgment in China, talks about what lessons China could draw from an Israeli case to promote the principle of reciprocity. Nanning Statement of the 2nd China-ASEAN Justice Forum 13 China’s Supreme People’s Court demonstrates its readiness, for the first time, in the Nanning Statement to loosen the criteria for recognition and enforcement of foreign judgments. * China Justice Observer is committed to present the real Chinese judicial system. If you need to settle disputes in China, we help you build reasonable expectations and develop effective strategies and solutions. If you are intrigued by China’s justice, we help you explore this fascinating field.
  • 2. Time to Loosen the Criteria for Recognizing and Enforcing Foreign Judgments in China www.chinajusticeobserver.com 1 Recognition and Enforcement of Foreign Judgments in China Time to Loosen the Criteria for Recognizing and Enforcing Foreign Judgments in China Authors: MENG YU & GUODONG DU, Founders of China Justice Observer (CJO) For decades, China has adopted rigorous criteria for the recognition and enforcement of civil and commercial judgments rendered by a foreign court, which resulted in a comparatively low rate in recognizing and enforcing foreign judgments. However, the situation will undergo considerable changes. 1. Special rules are being drafted to loosen the criteria for recognizing and enforcing foreign judgments. On 13 July 2017, China’s Supreme People’s Court (SPC) held an expert meeting at the Wuhan University Institute of International Law to discuss a drafted version of the “Judicial Interpretation on the Recognition and Enforcement of Foreign Civil and Commercial Judgments” (关于承认与执行外国法院民商事判决的司法 解释). During the meeting, several issues lay at the heart of the debates, including the scope of application, the principle of reciprocity, refusal grounds and punitive damages, as well as the competency of a foreign jurisdiction. This is the first time for us to learn from publicly available sources that the SPC is drafting special rules on recognition and enforcement of foreign judgments. On 26 September 2017, during the Silk Road (Dunhuang) Judicial Cooperation Forum, Judge Liu Guixiang (刘贵 祥), SPC adjudication committee member, president of the First Circuit Court, Grand Justice of the second rank, indicated that China is about to actively apply the principle of reciprocity, in order to facilitate the recognition and enforcement of foreign judgments in civil and commercial matters in China. To achieve this goal, the SPC is drafting the “Provisions on Several Issues concerning the Recognition and Enforcement of Foreign Civil and Commercial Judgments” (关于承认和执行外国 法院民商事判决若干问题的规定). The draft is said to identify clear standards in applying the principle of reciprocity, and to enhance transparency and facilitate the recognition and enforcement of foreign judgments. This means the SPC publicly recognizes for the first time some special rules being drafted in this area. In spite of differences in names disclosed to the public, the two documents are very likely to be the same one. Overall, it is in this SPC’s judicial interpretation that the criteria for recognizing and enforcing foreign judgments are about to loosen. 2. Rigorous criteria have long been adopted by Chinese courts in recognizing and enforcing foreign judgments. Pursuant to the PRC Civil Procedure Law and its Interpretation, five (5) main criteria for Chinese courts in reviewing requests to recognize and enforce foreign judgments are as follows. i. The foreign judgment should be final and conclusive. ii. In case of a foreign judgment in default, the absent party should have been properly served. iii. The foreign judgment will not be recognized if a Chinese court has also rendered a judgment on the same matter. iv. Except for divorce judgments, international treaties concluded or acceded to by the PRC or the principle of reciprocity is a prerequisite for recognition and enforcement of foreign judgments. v. The foreign judgment does not contradict primary principles of Chinese law, State sovereignty, security and social and public interest. Criterion No. iv is a core element. By now, China has entered into bilateral treaties with only 33 countries for the mutual recognition and enforcement of court judgments. Nevertheless, as for countries having extensive trade links with China, such as the United States, Japan and the United Kingdom, such bilateral treaties have not been concluded yet. The existence of a reciprocal relationship is therefore critical for recognizing and enforcing judgments from a foreign jurisdiction. In practice, Chinese courts adopt a restrictive attitude
  • 3. Time to Loosen the Criteria for Recognizing and Enforcing Foreign Judgments in China www.chinajusticeobserver.com 2 Recognition and Enforcement of Foreign Judgments in China towards the principle of reciprocity. In the SPC’s “Re the Request for Instruction on Recognizing and Enforcing a Japanese monetary judgment” (最高人民法院关于我国人 民法院应否承认和执行日本国法院具有债权债务内容裁判 的复函), the SPC affirmed the requested Chinese court’s decision, holding that China had not concluded or acceded to any international treaty with Japan on mutual recognition and enforcement of court judgments, nor had it established a reciprocal relationship with Japan. The enforcement of Japanese judgments was therefore refused for the lack of reciprocity. Following the SPC’s reply, this view was echoed by local courts in similar cases concerning requests to recognize and enforce foreign judgments. Thus, it can be said that in practice, Chinese courts adopt the approach of de facto reciprocity, which requires actual precedents where the foreign country has previously recognized and enforced Chinese judgments. 3. Chinese courts’ attitudinal changes correspond with China’s Belt and Road Initiative. What lies underneath the fundamental shift in Chinese courts’ attitudes towards the recognition and enforcement of foreign judgments is in alignment with China’s “Belt and Road initiative”, i.e., the “ Silk Road Economic Belt and 21st-Century Maritime Silk Road” initiative. To be more specific, Chinese courts wish to respond to the judicial concerns and demands of both Chinese and foreign market players, and to create a sound legal environment for the construction of the “Belt and Road initiative”. Pursuant to the “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road” (推动共建丝绸之路经济带和 21 世纪海上丝绸之路 的愿景与行动) enacted by the Chinese government in March 2015, this “Belt and Road initiative” aims to “promote the connectivity of Asian, European and African continents and their adjacent seas, and will enable China to further expand and deepen its opening-up, and to strengthen its mutually beneficial cooperation with countries in Asia, Europe and Africa and the rest of the world”. Accordingly, in June 2015, the SPC issued the “Several Opinions of the Supreme People's Court on Providing Judicial Services and Safeguards for the Construction of the “Belt and Road” by People's Courts” (关于人民法院为 “一带一路”建设提供司法服务和保障的若干意见), which emphasizes the need to broaden the scope of international judicial assistance. In other words, for one thing, China will conclude more bilateral or multilateral treaties on judicial assistance, thus facilitating the recognition and enforcement of judgments delivered by courts from countries along the “Belt and Road”; and for another, in the absence of such treaties, based on mutual views in international judicial cooperation and/or the commitments of the requesting state to grant reciprocity, Chinese courts may grant reciprocity first, thus promoting the formation of a reciprocal relationship. 4. Chinese courts take practical steps to promote the recognition and enforcement of foreign judgments. On 8 June 2017, the “Nanning Statement” (南宁声明) was approved at the 2nd China-ASEAN Justice Forum held in Nanning. Article 7 of the Nanning Statement stipulates that Supreme Courts of participating countries will “consider facilitating the appropriate mutual recognition and enforcement of civil or commercial judgments among different jurisdictions”; “if two countries have not been bound by any international treaty on mutual recognition and enforcement of foreign civil or commercial judgments, both countries may, subject to their domestic laws, presume the existence of their reciprocal relationship, when it comes to the judicial procedure of recognizing or enforcing such judgments made by courts of the other country, provided that the courts of the other country had not refused to recognize or enforce such judgments on the ground of lack of reciprocity”. As Judge Zhang Yongjian (张勇健), Director of the SPC’s 4th Civil Division, pointed out, despite the fact that China has long adopted de facto reciprocity in practice, the Nanning Statement first proposed the approach of “presumptive reciprocity” (推定互惠), i.e., to presume the existence of a reciprocal relationship in the absence of contrary evidence, marking significant progresses in this field. Furthermore, Zhang also indicated that the consensus of “presumptive reciprocity” expressed in the
  • 4. Time to Loosen the Criteria for Recognizing and Enforcing Foreign Judgments in China www.chinajusticeobserver.com 3 Recognition and Enforcement of Foreign Judgments in China Article 7 of the Nanning Statement, is a concrete follow-up initiative of the “Several Opinions of the Supreme People's Court on Providing Judicial Services and Safeguards for the Construction of the “Belt and Road” by People's Courts”. The year 2017 also witnessed another progress in this field. On 12 September, China signed the Hague Convention on Choice of Court Agreements, an instrument for harmonizing the recognition and enforcement of foreign judgments on the international level. As Director-General of the Department of Treaty and Law of Ministry of Foreign Affairs Xu Hong (徐宏) put it, China signed the convention in order to facilitate resolution of civil and commercial disputes among countries along the “Belt and Road”, as well as to promote the international trade and exchange in this area. 5. Chinese recent cases show an increased likelihood of foreign judgment being recognized and enforced. On 9 December 2016, Nanjing Intermediate People’s Court rendered the ruling “(2016) Su 01 Xie Wai Ren No. 3” ((2016)苏 01 协外认 3 号), which marks a milestone development. It is the first time that a Chinese court has recognized and enforced a Singapore judgment based on the principle of reciprocity. Among others, this case was later included by the SPC as a guiding case in the “Second Group of Guiding Cases involving Construction of the “Belt and Road” (第二批涉“一带一路”建设典型案 例). The guiding cases project is an SPC-led system, in which certain Chinese court judgments are selected and re-issued as de facto binding guiding cases to guide the adjudication of similar subsequent cases and ensure the uniform application of law. It is in this case that Nanjing Intermediate People’s Court ruled, “despite the absence of any bilateral treaty for mutual recognition and enforcement of judgments between P.R.C and Singapore, a Chinese court may, based on the principle of reciprocity, recognize and enforce a Singapore judgment, considering that Singapore High Court has previously enforced a Chinese judgment”. Similarly, on 30 June 2017, Wuhan Intermediate People’s Court issued the ruling “(2015) E Wu Han Zhong Min Shang Wai Chu Zi No. 00026” ((2015)鄂武汉 中民商外初字第 00026 号), recognizing and enforcing a judgment rendered by the Los Angeles Superior Court, California, US. This is the first time that a Chinese court, based on the principle of reciprocity, has recognized and enforced a US court judgment. The case has drawn much attention in China and appeared on the SPC’s website, an indicator of the SPC’s priorities and concerns. In this case, Wuhan Intermediate People’s Court indicated that, “despite the fact that there are no bilateral treaties nor international conventions on mutual recognition and enforcement concluded between the United States and China”, “the Claimant has established that a US court has previously recognized and enforced a Chinese court decision, thus the Court confirms the existence of a reciprocal relationship between the two countries”, based on which a Chinese court may enforce a US court decision, provided that other criteria are met.
  • 5. China's Supreme Court Talks about Recognition and Enforcement of Foreign Judgments in China www.chinajusticeobserver.com 4 Recognition and Enforcement of Foreign Judgments in China China's Supreme Court Talks about Recognition and Enforcement of Foreign Judgments in China Author: SHEN HONGYU, Judge of China’s Supreme People’s Court Judge Shen Hongyu(沈红雨) of China’s Supreme People’s Court (SPC), who participated in the policymaking concerning the recognition and enforcement of foreign civil and commercial judgments in China, focused on three issues: whether foreign courts have jurisdiction; whether foreign courts ensure that the parties are properly notified and enjoy the right to be heard; and whether there exists a reciprocal relationship between China and the country where the judgment is rendered. This article is a summary of the article titled “Research on Some Difficult Problems in Recognition and Enforcement of Foreign Civil and Commercial Judgments” (外国民商事判决承认和执行若干疑难问题研 究) to reflect an SPC judge’s thoughts on the recognition and enforcement of foreign civil and commercial judgments. This article was published in “Journal of Law Application” (法律适用) (No. 5, 2018), the author of which is Shen Hongyu, Judge of the SPC’s 4th Civil Division. According to related reports, Judge Shen Hongyu was involved in the drafting of the SPC's “Judicial Interpretation on the Recognition and Enforcement of Foreign Civil and Commercial Judgments” (最高人民法 院关于承认与执行外国法院民商事判决的司法解释). The article is summarized as follows: 1. The review model on foreign civil and commercial judgments in Chinese courts. The system of recognition and enforcement of foreign civil and commercial judgments has only been established in principle by the PRC Civil Procedure Law (CPL), which only requires that the review model be determined according to international treaties and reciprocal relationships. According to the bilateral judicial assistance treaties in civil and commercial matters currently signed by China, the conditions for Chinese courts to recognize and enforce foreign judgments mainly include: i. The foreign judgment is already legally effective or enforceable; ii. The judgment-making foreign court is a court of competent jurisdiction; iii. The losing party’s litigation rights are guaranteed; iv. There are no inconsistent judgments; v. The foreign judgment is not obtained through fraud. It can thus be seen that Chinese courts only conduct formal review on foreign civil and commercial judgments, that is, the courts only adopt formal review based on the conditions for recognition required by the law, while do not examine in substance whether the fact-finding and application of laws in the foreign judgment are correct and reasonable. 2. Chinese courts review the competence of foreign courts. The competence of judgment-making foreign courts is a prerequisite for Chinese courts to recognize and enforce the foreign judgments. The author believes that Chinese courts should examine whether foreign courts have jurisdiction pursuant to Chinese jurisdiction rules, which include the following: (1) Foreign civil and commercial judgments must not violate Chinese exclusive jurisdiction rules. Exclusive jurisdiction means that Chinese courts have dominant and exclusive jurisdiction over certain foreign-related civil and commercial cases. Chinese laws do not recognize that other countries have jurisdiction over such cases. In accordance with the CPL, these cases include: i. Disputes arising from performance of contracts related to Sino-foreign equity joint ventures, Sino-foreign contractual joint ventures or Sino-foreign cooperation and development of natural resources, shall be subject to the jurisdiction of Chinese courts;
  • 6. China's Supreme Court Talks about Recognition and Enforcement of Foreign Judgments in China www.chinajusticeobserver.com 5 Recognition and Enforcement of Foreign Judgments in China ii. Disputes arising from immovable property shall be subject to the jurisdiction of the people's court at the location of the immovable property; iii. Disputes arising from harbor operations shall be subject to the jurisdiction of the people's court at the location of the harbor; iv. Disputes over succession shall be subject to the jurisdiction of the people's court of the place where the decedent had his domicile upon his death, or where the principal part of his estate is located (2) The choice of foreign court agreements between parties must comply with Chinese laws. The consensual jurisdiction rules in Chinese law mainly include: i. Parties to a dispute over a contract or other proprietary rights and interests may, through written agreement, choose the court in the location of the defendant’s domicile, where the contract is performed or signed, in the location of the plaintiff’s domicile, in the location of the subject matter, or in other place which has practical connections with the dispute to exercise jurisdiction. ii. After the court accepts the case, if a party raises no objection to jurisdiction and responds to the action, the people's court accepting the case shall be deemed to have jurisdiction. iii. Where a business operator uses standard-form terms to enter into a jurisdictional agreement with a consumer, but fails to take reasonable measures to bring the consumer's attention to it, the people’s court shall uphold the claim by the consumer claims that the jurisdictional agreement is invalid. (3) Chinese courts have neither rendered judgments on the same dispute nor recognized and enforced the judgments on the same dispute rendered by courts of other countries and regions. (4) The parties did not reach a written agreement for arbitration with respect to the same dispute. 3. Chinese courts review whether the judgment-making foreign court ensures due process and sufficiently guarantees the parties' litigation rights. When examining whether the foreign civil and commercial judgment has guaranteed the parties’ rights to due process, Chinese courts mainly focus on the following five issues: (1) On the legal criteria for determining whether the service procedure is legal The author considers that Chinese courts should determine whether the service is legal according to the law of the country where the judgment is rendered. On one hand, most of the bilateral treaties on judicial assistance signed by China provide that whether a proper notification is served is determined pursuant to the law of the country where the judgment is rendered. On the other hand, for court judgments originating from other countries that do not have treaty relationships with China, Chinese courts should also determine whether the judgment is properly served according to the law of the country where the judgment is rendered. However, such service procedure should not go below the minimum standard for proper notification required by Chinese laws. (2) Service to China must not violate the CPL’s compulsory provisions regarding service More specifically: i. Service within China should be conducted pursuant to treaties or through diplomatic channels. In addition, no foreign agency or individual may serve documents within the territory of China without the permission of Chinese competent authorities. ii. When acceding to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters (The Hague Service Convention), China explicitly opposed service by post. (3) Whether the legal notification method should include service by public notice The CPL stipulates that when it is not possible to serve upon exhaustion of all kinds of service methods, the
  • 7. China's Supreme Court Talks about Recognition and Enforcement of Foreign Judgments in China www.chinajusticeobserver.com 6 Recognition and Enforcement of Foreign Judgments in China service by public notice can be adopted. Therefore, the author believes that if the law of the country where the judgment is rendered allows the service by public notice and the conditions applied are basically similar to those of Chinese laws, then the Chinese court should confirm the legality of the service by public notice. (4) Whether the foreign court's service should be accompanied by the corresponding translation based on the nationality of the losing defendant The author believes that in terms of the service conducted in accordance with a bilateral judicial assistance treaty or the Hague Service Convention, it should be determined whether translation should be provided pursuant to the requirements of the international treaty. However, if the foreign court conducts the service within the territory of that foreign country, it shall be determined according to the laws of that country. (5) Where even if the judgment-making foreign court has a flaw in the notification procedure, the parties have already appeared in court to respond to the case, which means that the parties have actually enjoyed the right of defense, the Chinese court cannot refuse to recognize and enforce the foreign judgment on the ground of inadequate notice. 4. How should Chinese courts treat a reciprocal relationship? The CPL stipulates that the principle of reciprocity is a prerequisite for the recognition and enforcement of foreign judgments, but the law does not provide a clear explanation for the principle of reciprocity. Therefore, there are discrepancies among Chinese courts on how to determine the existence of reciprocity. For a long time, China has insisted on de facto reciprocity, that is, if there is no precedent showing that either country has recognized and enforced the judgment of the other country, then there is no corresponding reciprocal relationship between the two countries. The author considers that de facto reciprocity not only makes it difficult for foreign civil and commercial judgments to be recognized and enforced by Chinese courts, but also potentially causes foreign courts to refuse to recognize Chinese judgments on the basis of the principle of reciprocity, and has also led to a large number of parallel proceedings. The author believes that in order to serve the construction of China’s “Belt and Road initiative”, Chinese courts should rationally loosen the criteria for reciprocal relationships, thus promoting cooperation in cross-border recognition and enforcement of judgments between countries. The author also indicates that the “Several Opinions of the Supreme People's Court on Providing Judicial Services and Safeguards for the Construction of the ‘Belt and Road’ by People's Courts” (关于人民法院为“一带一 路”建设提供司法服务和保障的若干意见) issued by the SPC in 2015 and the “Nanning Statement” (南宁声明) approved by the 2nd China-ASEAN Justice Forum in 2017 are breakthroughs made by Chinese courts regarding the principle of reciprocity. (CJO has also noticed this trend.) The author puts forward her suggestions on the approach China can take in the future regarding the issue of reciprocity: (1) Clarifying the criteria of reciprocity in legislation or judicial interpretation The author argues that in terms of determining the existence of reciprocity, China should judge the possibility of recognition and enforcement of Chinese judgments in the foreign country according to the law of the country where the judgment is rendered (de jure reciprocity), rather than compulsorily requires a de facto reciprocity between the two countries. (2) Diversifying forms and channels for building a reciprocal relationship In addition to signing a judicial assistance treaty, China can further broaden its channels for establishing a reciprocal relationship, including: i. Making reciprocal commitments through diplomatic channels by the two countries;
  • 8. The Nanning Statement: A Milestone in Recognizing and Enforcing Foreign Judgments in China www.chinajusticeobserver.com 7 Recognition and Enforcement of Foreign Judgments in China ii. Reaching a judicial memorandum of understanding or consensus on mutual recognition and enforcement of judgments. For example, China has for the first time tried to establish a presumptive reciprocity with ASEAN countries under certain conditions through a judicial consensus in the “Nanning Statement”. (3) Determining the application of the principle of reciprocity and its exceptions according to the categories of different judgments At present, Chinese parties may apply to a Chinese court for recognition of a foreign divorce judgment, without the requirement of the existence of a reciprocal relationship between the foreign country and China. The author believes that, in addition to divorce judgments, China may consider, by legislation or judicial interpretations, explicitly refraining from applying the principle of reciprocity in judgments concerning the civil right and the civil capacity of a citizen and a legal entity, as well as an adoptive or guardian relationship. (4) Clarifying the burden of proof for the principle of reciprocity The author argues that in principle, Chinese courts should determine ex officio whether there is a reciprocal relationship between China and the country where the judgment is rendered, but Chinese courts may also require the parties concerned to provide foreign laws. Since the case law in foreign countries is constantly evolving, whether there exists a precedent showing that the country where the judgment is rendered has recognized or not recognized the judgment of a domestic court applies appropriately only as one of the considerations, rather than a decisive factor, in determining a reciprocal relationship. The Nanning Statement: A Milestone in Recognizing and Enforcing Foreign Judgments in China Author: ZHANG YONGJIAN, Judge of China’s Supreme People’s Court (SPC), Director of the SPC’s 4th Civil Division. In the Nanning Statement, Chinese courts made a commitment to loosen the criteria for recognizing and enforcing foreign judgments in China. Thus, the “Nanning Statement” (南宁声明) is regarded as a milestone in this field, demonstrating a major shift in the attitude of Chinese courts. This post is a summary of the Article titled “The New Trend in Practical Developments of the Principle of Reciprocity under the Background of the ‘Belt and Road Initiative’” (“一带一路”背景下互惠原则实践发展的新动向), published in the “People’s Court Daily” (人民法院报) on 20 June 2017. The writer of the Article is Judge Zhang Yongjian (张勇健), Director of China’s Supreme People’s Court’s 4th Civil Division. The People's Court Daily is a newspaper which is affiliated to China’s Supreme People’s Court (SPC). The Article is summarized as follows: On 8 June 2017, the Nanning Statement was approved at the 2 nd China-ASEAN Justice Forum held in Nanning. In the Article 7 of the Nanning Statement, the consensus of “presumptive reciprocity” is reached by all participating countries. This marks a dramatic change in the recognition and enforcement of foreign judgments in China. The contents of the Article 7 of the Nanning Statement are as follows: Regional cross-border transactions and investments require a judicial safeguard based on appropriate mutual recognition and enforcement of judicial judgments among countries in the region. Subject to their domestic laws, Supreme Courts of participating countries will keep good faith in interpreting domestic laws, try to avoid unnecessary parallel proceedings, and consider
  • 9. The Nanning Statement: A Milestone in Recognizing and Enforcing Foreign Judgments in China www.chinajusticeobserver.com 8 Recognition and Enforcement of Foreign Judgments in China facilitating the appropriate mutual recognition and enforcement of civil or commercial judgments among different jurisdictions. If two countries have not been bound by any international treaty on mutual recognition and enforcement of foreign civil or commercial judgments, both countries may, subject to their domestic laws, presume the existence of their reciprocal relationship, when it comes to the judicial procedure of recognizing or enforcing such judgments made by courts of the other country, provided that the courts of the other country had not refused to recognize or enforce such judgments on the ground of lack of reciprocity. Pursuant to the PRC Civil Procedure Law (CPL), Chinese courts should recognize and enforce foreign civil and commercial judgments in accordance with international treaties and the principle of reciprocity. However, international treaties have played a limited role in China because of the fact that, on the one hand, China has not yet acceded to the Hague Convention on Choice of Court Agreements, and on the other hand, the number of bilateral treaties on judicial assistance in civil and commercial matters which China has concluded, including the contents of recognizing and enforcing foreign civil and commercial judgments in China, is relatively small. In contrast, for Chinese courts, the principle of reciprocity is more important with respect to the recognition and enforcement of foreign judgments. In the past, China held a relatively conservative position on the recognition and enforcement of foreign judgments, which led to three consequences: (1) Foreign judgments could not be easily recognized and enforced by Chinese courts; (2) It may give rise to cross-border parallel proceedings; (3) Foreign courts, in response to China’s practices, under the principle of reciprocity, also refused to recognize the judgments rendered by Chinese courts. Now, in the new era of the “Belt and Road Initiative”, the SPC holds the view that Chinese courts should properly determine the review standards of the principle of reciprocity and strengthen the mechanism of the recognition and enforcement of foreign judgments. In this case, the lawful rights and interests of business entities from countries along the “Belt and Road” shall be safeguarded, and a fair and efficient legal environment for the construction of the “Belt and Road Initiative” will be created. Therefore, in the Nanning Statement, the consensus on the principle of reciprocity, which is reached between judiciaries of China and ASEAN countries, as well as South-Asian countries, is a critical first step forward taken by the SPC. To be more specific: First, the consensus was proposed by the SPC and supported by ASEAN countires, showing that China and ASEAN will be open, pragmatic and cooperative in their mutual recognition and enforcement of civil and commercial judgments. Undoubtedly, this shall be viewed as a model of judicial cooperation under the “Belt and Road Initiative”. Second, the consensus promotes the new development of the principle of reciprocity. The principle of reciprocity can be divided into conclusive reciprocity and presumptive reciprocity. The former requires domestic courts to ascertain that there exist relevant legal provisions (de jure reciprocity) or actual precedents (de facto reciprocity) where domestic judgments could be or have been recognized and enforced in that foreign country. The latter requires that domestic courts should presume the existence of a reciprocal relationship between two countries, provided that there is no evidence that the courts of the other country had refused to recognize or enforce domestic judgments. Presumptive reciprocity reduces the applicant’s burden of proof for establishing the existence of the reciprocal relationship, thereby increasing the possibility of confirming the existence of the reciprocal relationship between two countries. On this occasion, it will help to improve the possibility of the recognition and enforcement of foreign judgments in China. Previously, China has long adopted de facto reciprocity in practice. It is the Nanning Statement that first proposed the approach of presumptive reciprocity and therefore it marks the significant breakthrough in this field compared with the past practices of Chinese courts. Third, the consensus reflects that Chinese courts have
  • 10. Thus Spoke the Chinese Judge Who First Recognized and Enforced a US Court Judgment www.chinajusticeobserver.com 9 Recognition and Enforcement of Foreign Judgments in China taken a positive attitude in advocating and gradually expanding the international judicial cooperation, as well as actively promoting the formation of reciprocal relationships. In June 2015, the SPC issued the “Several Opinions of the Supreme People's Court on Providing Judicial Services and Safeguards for the Construction of the ‘Belt and Road’ by People's Courts” (关于人民法院为“一带一 路”建设提供司法服务和保障的若干意见), which emphasizes the need to broaden the scope of international judicial assistance. In other words, for one thing, China will conclude more bilateral or multilateral treaties on judicial assistance, thus facilitating the recognition and enforcement of judgments delivered by courts from countries along the “Belt and Road”; and for another, in the absence of such treaties, based on mutual views in international judicial cooperation and/or the commitments of the requesting state to grant reciprocity, Chinese courts may grant reciprocity first, thus promoting the formation of a reciprocal relationship. The consensus of presumptive reciprocity in the Article 7 of the Nanning Statement meets the requirements mentioned above. The SPC believes that the consensus, without doubt, will encourage more countries along the “Belt and Road” to take the position of presumptive reciprocity when cooperating with China, and in the meantime, an agreement is bound to be reached when it comes to strengthening the cooperation with Chinese courts in respect of the recognition and enforcement of judgments. Admittedly, all these will facilitate the developments of the dispute settlement mechanism under the “Belt and Road Initiative”. Thus Spoke the Chinese Judge Who First Recognized and Enforced a US Court Judgment Authors: ZHAO QIANXI & Li Shuangli, Judges of Wuhan Intermediate People’s Court Zhao Qianxi (赵千喜), one of the authors of this article, is the presiding judge who created a precedent to recognize and enforce a US judgment in China in 2017.The process of reflection in hearing the case introduced by him can help us to better understand the court’s reasoning. We can conclude that this case may be more of an omen rather than a coincidence. This post summarizes the article titled “Judicial Review of the Application of Recognition and Enforcement of Foreign Judgments—A Comparative Analysis of Legislation and Judicial Cases in China and the US” (论 承认和执行外国法院判决申请之司法审查——以中美两国 的立法和司法案例为分析对象). Written by Zhao Qianxi and Li Shuangli (李双利) - judges of Wuhan Intermediate People’s Court, this article was published in “Journal of Law Application” (法律适用) (No. 5, 2018). Zhao Qianxi, one of the authors, is the presiding judge of the “Case of Petitioner-Liu Li and Respondent-Tao Li and Tong Wu’s application for recognition and enforcement of a foreign civil judgment” (申请人刘利与被申请人陶莉、童武申请承 认和执行外国法院判决一案) (hereinafter referred to as the “Wuhan case”), which marks the first time that China recognizes and enforces a US judgment. “Journal of Law Application” is a periodical of the China National Judges College, which is affiliated with China’s Supreme People's Court (SPC), and is the major education and training institution for Chinese judges. The article is summarized as follows: The author mentions that the “Wuhan case” in which he sits is the first case in China to recognize and enforce a US civil judgment based on the principle of reciprocity. Decided by the Los Angeles Superior Court, California, this American civil judgment is about a share transfer agreement dispute between the applicant and the respondent. The author also mentions that shortly before
  • 11. Thus Spoke the Chinese Judge Who First Recognized and Enforced a US Court Judgment www.chinajusticeobserver.com 10 Recognition and Enforcement of Foreign Judgments in China the “Wuhan Case” ruling was handed down, the Nanchang Intermediate People's Court of Jiangxi Province rejected the application of the applicants Herbert Truhe et al. for recognition and enforcement of a personal damages compensation judgment rendered by the Superior Court of Pennsylvania (hereinafter referred to as the “Nanchang case”), on the ground that there existed neither international treaties on mutual recognition and enforcement of court judgments nor reciprocity between China and the US. The author expresses regret about the opposite results of the two cases and implicitly conveys his disagreement concerning the Nanchang court's refusal to recognize and enforce the American judgment in the “Nanchang case”. It can thus be seen that different courts in China may have different views on whether to recognize a US judgment. However, since Zhao Qianxi's article is published in the periodical of the National Judges College, it is reasonable to assume that his views have been supported by the SPC. The author also refers to certain views in China that where a state court or even a federal court in the US recognizes a Chinese judgment, it does not necessarily mean that there exists a reciprocal relationship between China and the US. The “Nanchang case” supports this view and concludes that there is no reciprocal relationship between China and the US. However, the author expressly indicates that he did not take this view into the “Wuhan case”. The author holds the following views: 1. When examining whether there exists the de facto reciprocity between two countries, a Chinese court mainly reviews whether there is a precedent that the other country recognized and enforced Chinese judgments, rather than examining the specific laws invoked by the other country when it decided to recognize and enforce Chinese court judgments. Regardless of whether the foreign court referred to the principle of reciprocity in its judgment, as long as the foreign court has previously recognized and enforced Chinese court judgments, this country can be regarded as having a de facto reciprocal relationship with China. 2. A Chinese court does not need to rigorously examine the similarities and differences between the foreign judgment, whose recognition was applied by the applicant, and the Chinese judgment already recognized by the foreign country. In other words, even if there are differences between the foreign judgment and the Chinese judgment, in matters such as nationalities of parties, causes of action, amounts in controversy etc., these differences should not prevent the Chinese court from recognizing the existence of a de facto reciprocal relationship. 3. Although the de facto reciprocity is reflected in foreign court judgments of specific cases, due to differences in the judicial systems of different countries, Chinese courts should not require relevant courts of the two countries to fully correspond to each other in terms of the type of cases or the hierarchy of courts, let alone set restrictions that the foreign judgments need to be decided by the Supreme Courts of foreign countries. 4. The "reciprocity" prescribed by the PRC Civil Procedure Law should refer to the reciprocal relationship between countries. It should not be regarded as the relationship between China and specific districts of a foreign country or a certain level of judicial authority, for this view is inconsistent with the general definition of the subject of international relations in international law and could also result in the fragmentation of reciprocal relationships. 5. When the system of a foreign country is federalism and a Chinese judgment is recognized according to a state law rather than a federal law, even though it is not enough to conclude that China has established a comprehensive reciprocal relationship with that country as a whole, it should be determined that there is at least a reciprocal relationship between China and the state of the foreign country. It is noteworthy that the author indicates the content of the “Provisions on Several Issues concerning the Recognition and Enforcement of Foreign Civil and Commercial Judgments” (Consultation Paper) (《关于承 认和执行外国法院民商事判决若干问题的规定》(征求意见 稿)) in the article. The Provisions are highly likely to be
  • 12. Thus Spoke the Chinese Judge Who First Recognized and Enforced a Singaporean Court Judgment www.chinajusticeobserver.com 11 Recognition and Enforcement of Foreign Judgments in China the judicial interpretation currently drafted by the SPC on recognition and enforcement of foreign judgments, the exact one which is mentioned by CJO before. This shows that the judge who decides the “Wuhan case” may, to some extent, have participated in the drafting of the judicial interpretation. What’s more, the “Wuhan case” ruling is probably influenced by the said draft. Even the judge choosing to recognize and enforce the US judgment may have acted under instructions from the SPC. Therefore, the “Wuhan case” may not be a coincidence, but an omen. The importance of the “Wuhan case” is much more likely to exceed the expectations of most people. Thus Spoke the Chinese Judge Who First Recognized and Enforced a Singaporean Court Judgment Authors: JIANG XIN, Judge of Nantong Intermediate People’s Court; Chen Liang, Judge of Jiangsu High People’s Court Jiang Xin (姜欣), one of the two authors of this article, is the Chinese Judge who recognized and enforced a Singaporean judgment for the first time in 2016. By analyzing the Israeli case where the Supreme Court of Israel recognized and enforced a civil and commercial judgment rendered by Nantong Intermediate People’s Court, Jiang Xin concluded that China could draw lessons from this case to promote the principle of reciprocity when recognizing and enforcing foreign judgments. Such opinion is very likely to be the same initiative that drives Jiang Xin to recognize the Singaporean judgment. This post summarizes the article titled “Current Condition, Influence and Promotion over Principle of Reciprocity in Recognizing and Enforcing Foreign Judgments---Taking the Supreme Court of Israel’s Judgment to Recognize and Enforce Nantong Intermediate People’s Court’s Judgment as an Example” (承认和执行外国法院判决中 互惠原则的现状、影响与改进——从以色列承认和执行南 通中院判决案出发). This article was published in “Journal of Law Application” (法律适用) (No. 5, 2018). The authors are Chen Liang (陈亮) and Jiang Xin. Chen Liang is Judge of Jiangsu High People’s Court and Jiang Xin is Judge of Nantong Intermediate People’s Court. Meanwhile, Jiang Xin is the Judge who recognized and enforced a Singaporean judgment for the first time in 2016. “Journal of Law Application” is a periodical of the China National Judges College, which is affiliated with China’s Supreme People's Court (SPC) and is the major education and training institution for Chinese judges. The article is summarized as follows: On 14 August 2017, the Israeli Supreme Court affirmed the Tel Aviv District Court’s decision, ruling that a
  • 13. Thus Spoke the Chinese Judge Who First Recognized and Enforced a Singaporean Court Judgment www.chinajusticeobserver.com 12 Recognition and Enforcement of Foreign Judgments in China judgment rendered by Nantong Intermediate People’s Court would be recognized and enforced in Israel. (See Yitzhak Reitman v. Jiangsu Overseas Group Co Ltd.,Civil Case 7884/15). This is a landmark case because for the first time, an Israeli court recognized and enforced a Chinese court judgment based on principle of reciprocity. Chinese judges and scholars have focused their extensive attention on this case from the early beginning of the trial. The Israeli Judge who tried this case, Y. Danziger, points out that the main issue in this case lies in whether a reciprocal relationship existed between China and Israel at that moment. When the case was tried, there existed neither relevant international treaty between the two countries, nor any precedent where a Chinese court had ever discussed whether an Israeli judgment could be enforced or not. Under such circumstance, it remains doubtful whether an Israeli court could prove the reasonable possibility that an Israeli judgment could be enforced in China. Judge Y. Danziger believes that apart from the tendency in Chinese judicial system to recognize and enforce foreign judgments, the norms on which the principle of reciprocity is based should also be taken into consideration, such as efficiency, stability of judicial and commercial community, as well as promotion of the reciprocal relationship with other countries. On one hand, refusing to enforce foreign judgments will lead to repeated litigations over the same dispute; on the other hand, such refusal will also harm the judicial stability and the commercial stability on which foreign corporations rely in conducting business with Israel. Nowadays, the commercial relationship between China and Israel develops quite fast. Refusing to recognize and enforce Chinese judgments in Israel simply because there is no Chinese precedent where an Israeli judgment was enforced will cast shadow over both the reciprocal relationship and the commercial relationship between two countries. Author of the article believes that Chinese courts could be inspired by Judge Y. Danziger’s opinion. The recognition and enforcement of foreign judgments could avoid inconsistent judgments. Moreover, litigants’ burden for litigation could be reduced and commercial transaction could be stabilized. Such a result will be beneficial to all involved countries. On the contrary, refusal of recognition and enforcement of foreign judgments will increase the transaction costs in international commercial trade, which actually establishes unreasonable trade barrier. It is also the author’s opinion that Chinese courts should abandon the attitude that refusing to recognize and enforce foreign judgments could prevent or revenge the foreign courts from not recognizing Chinese judgments. Chinese courts should believe that the principle of reciprocity could not only promote the recognition and enforcement of Chinese judgments in foreign countries, but also strengthen the international corporation in the recognition and enforcement of judgments. The author holds that there is no need for Chinese courts to worry about such situation where a Chinese court has recognized and enforced a foreign judgment while the foreign court does not treat the Chinese judgment the way itself was treated. Because the international trade and investment have been extremely frequent, the judicial corporation between countries is a “repeated game playing” rather than a “single game playing.” In the repeated game playing, if a country could repeatedly reward countries that choose corporation, while punish those who abandon the principle of reciprocity, a mutual trust relationship could thus be gradually established and “mutual corporation” could finally be achieved.
  • 14. Nanning Statement of the 2nd China-ASEAN Justice Forum www.chinajusticeobserver.com 13 Recognition and Enforcement of Foreign Judgments in China Nanning Statement of the 2nd China-ASEAN Justice Forum The 2nd China-ASEAN Justice Forum was held in Nanning Guangxi Zhuang Autonomous Region of the People's Republic of China on June 8, 2017. The Forum was hosted by the Supreme Court People's Court of the People's Republic of China (hereinafter referred to as ("the SPC") and sponsored by High People's Court of Guangxi Zhuang Autonomous Region. H.E. Mr. ZHOU Qiang, Chief Justice of the People's Republic of China and President of the SPC; Hon. Mr. YOU Ottara, Vice-President of the Supreme Court of the Kingdom of Cambodia; Hon. Mr. Takdir RAHMADI, Deputy Chief Justice on Resource Development of the Supreme Court of the Republic of Indonesia; H.E. Mr. Khamphane SITTHIDAMPHA, President of the People's Supreme Court of the Lao People's Democratic Republic; Hon. Mr. Tan Sri Richard MALANJUM, Chief Judge of High Court of Sabah and Sarawak and Justice of the Federal Court of Malaysia; H.E. Mr. HTUN HTUN OO, Chief Justice of the Republic of the Union of Myanmar; Hon. Mr. Andres B. REYES, JR., Presiding Justice of the Court of Appeal of the Republic of the Philippines as observer; Hon. Mr. Steven CHONG, Justice, Judge the Appeal of the Supreme Court of the Republic of Singapore, H.E. Mr. Veerapol TUNGSUWAN, President of the Supreme Court of the Kingdom of Thailand; and Hon. Mr. NGUYEN Van Thuan, Deputy Chief Justice of the Supreme Court People's Court of the Socialist Republic of Viet Nam attended the Forum and addressed in the sessions. Hon. Mr. AKP Mochtan, Deputy Secretary-General of the ASEAN Secretariat also attended the Form. Besides, H.E. Mr. Sayed Yousuf HALEM, Chief Justice of the Supreme Court of the Islamic Republic of Afghanistan; Hon. Mr. Hasan Foez SIDDIQUE, Justice of the Appellate Division of the Supreme Court of the People's Republic of Bangladesh; Hon. Mr. Hari Krishna Karki, Justice of the Supreme Court of Nepal; H.E. Mr. Main Saqib Nisar, Chief Justice of the Islamic Republic of Pakistan; and H.E. Mr. Wewage Priyasath Gerad DEP, Chief Justice of the Democratic Socialist Republic of Sri Lanka also attended the Forum and addressed in the sessions as guests of honor of the SPC. In friendly, practical and constructive atmosphere, the delegates and special guests of honor extensively exchanged opinions under the theme of Justice in the Internet Era and Regional Judicial Cooperation, centering on specific topics including Informatization of Court Work, Judicial Transparency on the Internet, Coordination and Integration of Commercial Laws of the Countries in the Region, Building Cross-Border Disputes Resolution Mechanism in the Region and Strengthening International Judicial Assistance in the Region. Theses, discussions have laid down a solid foundation for enhancing and deepening international judicial exchanges and cooperation. The Forum, convinced of the necessity to establish and maintain persistent exchanges and cooperation among judiciaries of China and ASEAN countries, as well as South Asian countries, reached the following consensus. I. The Forum commend the exchanges and cooperation between China and ASEAN countries since the adoption of the Nanning Statement in the First China-ASEAN Justice Forum in various forms, such as bilateral high-level visits, information exchanges and judges training. The participants of the Forum will push forward with more exchanges and cooperation among judiciaries of China and ASEAN countries, as well as South-Asian countries. II. As the participants of the Forum noticed, with the development of the Belt and Road Initiative, the ever- expanding trade and personal exchanges among China and ASEAN countries, as well as South-Asian countries, the needs of judicial cooperation have been continuously increasing. III. Supreme Court of participating countries will pay closer attention and respond to the trend of informatization and endeavor to adopt information technology means according to their capacity and conditions, in order to improve judicial capability and practices, efficiently resolve disputes, and better ensure judicial fairness. The Forum supports judiciaries in expanding the applicability of information technology
  • 15. Nanning Statement of the 2nd China-ASEAN Justice Forum www.chinajusticeobserver.com 14 Recognition and Enforcement of Foreign Judgments in China services to make more transparent and efficient work of courts, as well as to make implementation of justice more widely accessible to the society. IV. The principle of judicial transparency is a fundamental part of important means to promote judicial fairness and to improve judicial practice. Supreme Courts of participating countries will pay more attention to continuously increasing judicial transparency and credibility, based on common international standards and practices combining with their respective national situations. Meanwhile, the protection of personal information and privacy, national security and public interests shall be also taken into consideration. V. As transnational trades and investment thriving around the region, the increasing urgency to further explore coordinating and integrating the commercial law of each country has been recognized. To the extent permitted by domestic laws, Supreme Courts of participating countries will consider engaging in comparative study and communication on their respective commercial laws and in smoothing out conflicts, in pursuit of coordination and complementation of their commercial laws to the greatest extent. VI. Improving cross-border disputes resolution mechanism is conducive to foster a well-ordered legal environment for transnational trades and investment in the region. To the extent permitted by domestic laws, Supreme Courts of participating countries will actively consider the adoption of mediation and other alternative disputes resolution mechanism. VII. Regional cross-border transactions and investments require a judicial safeguard based on appropriate mutual recognition and enforcement of judicial judgments among countries in the region. Subject to their domestic laws, Supreme Courts of participating countries will keep good faith in interpreting domestic laws, try to avoid unnecessary parallel proceedings, and consider facilitating the appropriate mutual recognition and enforcement of civil or commercial judgements among different jurisdictions. If two countries have not been bound by any international treaty on mutual recognition and enforcement of foreign civil or commercial judgments, both countries may, subject to their domestic laws, presume the existence of their reciprocal relationship, when it comes to the judicial procedure of recognizing or enforcing such judgments made by courts of the other country, provided that the courts of the other country had not refused to recognize or enforce such judgments on the ground of lack of reciprocity. VIII. Supreme courts of participating countries from ASEAN support the SPC in founding both the Judges Exchange and Training Base for China-ASEAN Countries and the Legal and Judicial Information Center for China-ASEAN Countries in Guangxi, China, as well as the International Judicial Assistance Research Base for China-ASEAN Countries in Yunnan, China, so as to jointly promote more connected, pragmatic and efficient judicial exchange and cooperation among courts of China and ASEAN countries. This Statement written in Chinese and English is adopted on June 8, 2017 in Nanning, China.
  • 16. www.chinajusticeobserver.com 15 Recognition and Enforcement of Foreign Judgments in China About China Justice Observer (CJO) China Justice Observer is committed to present the real Chinese judicial system. If you need to settle disputes in China, we help you build reasonable expectations and develop effective strategies and solutions. If you are intrigued by China’s justice, we help you explore this fascinating field. CJO is co-founded by Guodong Du and Meng Yu. Guodong Du is a lawyer of Dentons Beijing Office. Meng Yu is a researcher and received her PhD from China University of Political Science and Law. Our friends in China’s legal profession also contribute to the CJO. Each month we focus on one to two topics, and we compile and publish all related posts in one issue. Particular attention has been paid in recent months to the following topics, with more newsletters coming soon. Ø Recognition and Enforcement of Foreign Judgments in China; Ø Recognition and Enforcement of Foreign Arbitral Awards in China; Ø China’s Justice under Belt and Road Initiative; Ø How Chinese Courts Work; Ø Sue in China; Ø AI and Big Data in China’s Justice; and Ø China’s Legal Profession. For more issues, please feel free to download via the link: chinajusticeobserver.com/guides If you wish to know more about Chinese judicial system, or if you would like to discuss with us about the post, or share your views and suggestions, please contact Meng Yu via e-mail at meng.yu@chinajusticeobserver.com. If you need legal services for the recognition and enforcement of foreign judgments and arbitral awards in China, please contact Guodong Du via e-mail at guodong.du@chinajusticeobserver.com. Mr. Du has been a practicing lawyer for over ten years in China, and specializes in cross-border dispute resolution, in particular in the recognition and enforcement of foreign judgments and arbitral awards in China. For more information, please visit the CJO website (www.chinajusticeobserver.com), or subscribe to our newsletters (subscribe.chinajusticeobserver.com)。 For regular updates, please follow us on: Facebook (facebook.com/chinajusticeobserver), Twitter (twitter.com/chinajusticeobs ), LinkedIn(linkedin.com/company/china-justice-observer), or Google+(plus.google.com/u/2/100148743408819041240).