Enforcing commercial judgments in China

Cross-border transactions have grown so rapidly in the globalization era that it is now quite common for a litigant to receive a judgment from a court in one country and then need to enforce it in another. When dealing with China-related deals involving mainland parties or assets, it is important to understand if and how China recognizes and enforces foreign judgments.

The Civil Procedure Law and the Supreme People’s Court-released Interpretation of the Civil Procedure Law used to recognize and enforce such judgments in China. According to Chinese law, it is possible to enforce foreign judgments in China, based on either treaties or the principle of reciprocity. Judgments made in Taiwan, Macau and Hong Kong can be enforced in China under respective reciprocal arrangements.

China has sealed bilateral judicial cooperation treaties with many countries, including Bulgaria, Poland, Russia, Hungary, Spain, Italy, France, Greece, and some developing nations, for the recognition and enforcement of foreign commercial judgments. Only commercial judgments made in these countries are recognized and enforced in China. Under the treaties, when determining if a foreign judgment can be recognized and enforced, Chinese courts examine certain points, including: i) whether the foreign judgment is final and effective; ii) whether the court rendering the judgment has jurisdiction over the case; iii) whether the litigation procedure conducted in the foreign court is fair and legitimate, ensuring parties involved have been duly served and given opportunities to present their cases; iv) whether conflicting judgments exist; and v) whether enforcement of a foreign judgment will contradict with the basic principles of PRC law or the public interest.

Tom Zhang is a partner at GoldenGate Lawyers. He can be contacted on +86 10 8589 0501 or by email at tzhang@goldengatelawyers.com

Tim Meng is the managing partner at GoldenGate Lawyers. He can be contacted on +86 10 8589 0501 or by email at tmeng@goldengatelawyers.com