Developing Chinese Private International Law for Foreign Judgments: A Substitute or a Preliminary Step to Ratify the Two HCCH Conventions?

A. De Jure reciprocity

Table One shows that lack of reciprocity is the predominant reason for unsuccessful JRE cases in China (44%). The Minutes unprecedentedly designate three circumstances where people’s courts should determine reciprocity exists between China and a foreign country. For example, the people’s court can look to the judgment-rendering country to determine if they allowed Chinese judgments to be recognized and enforced under the law. Further, some countries and China may come to a consensus or a mutually beneficial understanding that reciprocity exists between them. Finally, reciprocity may exist between China and a foreign country when either country has made a reciprocal commitment to the other through diplomatic channels or there is no evidence to suggest that the foreign country has refused to recognize and enforce a Chinese judgment for lack of reciprocity. Therefore, China has adopted de jure reciprocity, which can significantly facilitate JRE in China compared with de facto reciprocity. However, three challenges remain.

First, de jure reciprocity, as articulated in the Minutes, does not yet reflect the active approach advocated in the Opinions on OBOR because the Minutes requires foreign law or courts to offer de jure reciprocity first before China reciprocates. It raises a question for countries like Japan whose courts have held that no reciprocity exists between China and Japan and thus have refused JRE. For China, a possible approach to establish de jure reciprocity with such countries is to conclude a mutually beneficial understanding or consensus.

Moreover, when an Intermediate People’s Court decides to recognize and enforce a foreign judgment based on reciprocity, it would submit its opinion to the High People’s Court in the same jurisdiction for review before making a ruling on the existence of reciprocity; if the High People’s Court agrees with the opinion, it would submit its opinion to the Supreme People’s Court for review. The Intermediate People’s Court can only make a ruling after the Supreme People’s Court provides a response. The reporting system is similar to the one used for the recognition and enforcement of arbitral awards under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter “the 1958 New York Convention”). The difference is that the arbitration reporting system is based on reports of instances, where recognition and enforcement of arbitral awards have been refused. Conversely, the JRE reporting system requires reports of instances where there has been recognition and enforcement of Chinese judgments by foreign courts. This demonstrates a cautious attitude taken by the Supreme People’s Court to ensure that a consistent approach to de jure reciprocity is adopted by lower courts. The JRE reporting system is opaque and likely time-consuming because Chinese law does not stipulate a time limit for the Supreme People’s Court to make a decision, and parties cannot make submissions in support of their positions in the reporting system.

Finally, de jure reciprocity may impact decisions on double jeopardy questions raised in cases like Zoneheath Associates Limited v. China Tianjin International Economic and Technical Co-operative Corporation. The plaintiff in the action won an English judgment against the defendants for breach of contract in China. The plaintiff further obtained a garnishee order (now called “a final third-party debt order” in the U.K.) in respect of the judgment debtor’s account with a bank in China. The bank had a branch in the U.K. and contended the order. One key reason that the Queen’s Bench discharged the garnishee order was that a real risk of double jeopardy existed for the bank because Chinese courts might not discharge the liability of the bank to the judgment debtor, and consequently, the bank would be required to pay the same sum twice. Under Société Eram Shipping Co Limited v. Hong Kong and Shanghai Banking Corporation Limited, now an English court would not make a final third party debt order if it considered the debt to be in China rather than England. However, an English court would still ask the same question—whether a bank is at risk of double jeopardy—if the answer is yes, even if the debt is regarded by the English court as situated in England, it would be inequitable to make the order. Would establishing de jure reciprocity between the U.K. and China resolve the real risk of double jeopardy for a bank that is subject to a final third-party debt order? De jure reciprocity can enable a Chinese court to recognize the relevant foreign judgment, and a bank can use the recognized judgment as a defense if the judgment debtor requires it to pay twice. However, the existence of de jure reciprocity is determined on a case-by-case basis in China, which creates uncertainty for JRE. More importantly, in Zoneheath Associates Limited, the Queen’s Bench held that a proper procedure for the judgment creditor is to bring an action in a competent Chinese court to recognize the English judgment rather than seeking a final third-party debt order in the U.K. It seems that the Queen’s Bench did not link the possibility of recognizing the English judgment in China with avoiding double jeopardy of the bank. Like Zoneheath Associates Limited, in Société Eram Shipping Co. Limited, both judgment creditors applied for a final third-party debt order against a foreign bank in London rather than seeking to recognize the judgments in China (and Hong Kong). For various reasons, commercial parties may prefer seeking final third-party debt orders against a bank in London instead of enforcing the judgment against the debtor in China. Only time will tell if de jure reciprocity can resolve the concern of double jeopardy in English courts.

B. Procedural Requirements

Breach of procedural requirements constitutes the second most common cause for the rejection of foreign judgments in the Chinese JRE process. This factor accounts for twenty percent of the total thirty-four cases. This is largely due to the judgment of creditors or their lawyers’ unfamiliarity with Chinese JRE law.

The Chinese court with jurisdiction to hear a JRE case is the intermediate court located in the place where a judgment debtor is domiciled. After the People’s Court accepts the application, if the judgment debtor has any objection to the jurisdiction, it shall raise the objection within fifteen days from the date of receiving of the copy of the application; if the judgment debtor has no domicile in China, it shall submit its jurisdiction objection within thirty days from the date of receipt of the copy of the application. The People’s Court shall examine and make a ruling on the jurisdiction objection raised by the judgment debtor. If a party is not satisfied with the ruling on the objection to jurisdiction, it may file an appeal.

If a foreign judgment creditor’s application for JRE does not meet the conditions for filing a case, the People’s Court will rule not to accept the application. If the application has already been accepted, the court will reject the application. If the parties are not satisfied, they may file an appeal. After the People’s Court has ruled not to accept the application or has rejected the application, if the applicant applies again and the conditions for acceptance are met, the People’s Court shall accept the application.

Article 250 of the CPL and Article 547 of the Judicial Interpretations of CPL impose a two-year time limit on the submission of an application for recognition and enforcement of foreign judgments. This time limit shall be calculated from the last day of the period specified in a foreign judgment for a judgment debtor to fulfill the judgment. If the foreign judgment allows the judgment debtor to fulfill the judgment in stages, the time limit shall be calculated from the last day of the period specified for each stage of performance. If no period of performance is specified in the foreign judgment, the time limit shall be calculated from the date when the legal document takes effect. The time limit can be suspended or recalculated. For example, according to Article 547 of the Judicial Interpretations of the CPL, where a concerned party only applies for recognition of a legally binding foreign judgment and does not apply for enforcement at the same time, the two-year time limit shall be recalculated from the date when the ruling rendered by the People’s Court on the recognition application comes into effect.

C. Finality

Three out of thirty-four JRE failed cases (eight percent) are due to foreign judgments’ lack of finality. A foreign judgment recognizable and enforceable in China must have taken legal effect and been enforceable according to the laws of the state of origin. Although a judgment pending appeal may be considered final in some common law countries, these judgments are not considered legally effective in Chinese JRE proceedings. Article 4(4) of the Judgments Convention allows the requested court to postpone or refuse JRE in two situations: the judgment is the subject of review in the State of origin or the time limit for seeking ordinary review has not expired. The Garcimartin/Saumier Report for the Judgments Convention explains that “ordinary review” includes any review that satisfies three requirements:

(i) may result in change to the judgment; (ii) is part of the normal course of an action and therefore a step any party must reasonably expect; and (iii) under the law of the State of origin, can only happen before the expiry of a period of time, which typically runs from either the date of the judgment or the date of notification of the judgment to the judgment debtor.

Although the concept of “ordinary review” is also used in the 2005 Choice of Court Convention, it seems to have a smaller scope as the Hartley/Dogauchi Report indicates that “it covers all ordinary forms of appeal,” which does not explicitly include retrials.

Under Chinese law, there are two types of reviews: appeal and retrial (the procedure for trial supervision). Undoubtably, the appellate procedure falls into the category of ordinary review. Whether retrial should be considered as a type of ordinary review depends on whether it would satisfy the above three requirements under the Garcimartin/Saumier Report.

The procedure for trial supervision allows a court that renders a judgment or a higher court to reopen a legal effective judgment and retry the case. If a retrial court finds the original judgment erroneous in fact-finding, it may reverse, revoke, or modify the original judgment according to Article 215 of the 2024 CPL. If the original judgment is unclear in its fact-finding, the retrial court may either issue a ruling to revoke the original judgment and remand the case to the court rendering the original judgment for retrial or reverse the original judgment after ascertaining facts for itself. Therefore, the first requirement to the concept of ordinary review is satisfied.

Whether retrial would meet the second requirement—being a normal course of action—is arguable. Retrial might be considered as a normal course of action because various means exist to commence a retrial. A retrial may be commenced by a court, a party to the judgment, or a prosecutor (“procuratorate” in China). A court can initiate a retrial sua sponte without a party’s motion, when the judicial committee of that court discovers an error in a final judgment rendered by the court and deems a retrial necessary. A prosecutor can lodge a protest to a competent court for retrial, or a party to a judgment can petition to a competent court for retrial if the original judgment falls within one of the circumstances outlined in Article 211 of the CPL. However, a counterargument may be that, statistically, only a small percentage of judgments are revised or revoked due to retrial; therefore, retrial, unlike appeal, is not a normal course of action and cannot be reasonably expected by a party.

Retrial does not fulfill the third requirement because no statute of limitations exists for a court to initiate a retrial sua sponte; neither for a procuratorate to lodge a protest against an effective judgment. The unlimited time period for a court or a procuratorate to trigger the retrial procedure makes the Chinese procedure for trial supervision not an ordinary review.

More importantly, both Article 4 of the Judgments Convention and Article 42 of the Minutes apply the law of the state of origin to determine whether a foreign judgment is legally effective or enforceable. This approach may help resolve a long-lasting concern in China that a requested foreign court may doubt the legal effects and enforceability of Chinese judgments due to the Chinese procedure for trial supervision. Early in 1996, the Hong Kong Court in Chiyu Banking Corporation Limited v. Chan Tin Kwun applied the Hong Kong law to determine whether a Mainland judgment is legally effective and enforceable. Considering the Mainland judgment which was legally effective and enforceable under Mainland law but might be altered by the judgment rendering court in the proceeding for trial supervision, the Hong Kong Court held that the judgment was not final under the Hong Kong law because the court which rendered it maintains the power to revise it. Nevertheless, in order to ultimately avoid that the finality of Mainland Chinese judgments are challenged due to the procedure for trial supervision, the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region provides that Mainland judgments rendered by a second-instance court and those rendered by a first-instance court to which no appeal has been raised during the statute of limitation for appeal should be considered legally effective. Namely, although Mainland judgments are subject to the procedure for trial supervision, the requested Hong Kong court must apply Mainland law to determine their legal effect.

Similarly, the China-Singapore Memo provides that the legal effect of a Chinese judgment in the JRE proceedings in Singapore should be determined according to Chinese law. Singaporean courts should decide whether a Chinese judgment is legally effective based on a certificate about the legal effect of the judgment issued by the Chinese court of origin. This also aims to avoid the legal effect of Chinese judgments be challenged in the JRE proceedings in Singapore due to the Chinese procedure for trial supervision.

Therefore, China would welcome the approach adopted by the Judgments Convention that is to apply the law of the state of origin rather than the law of the requested state to determine whether a foreign judgment is legally effective or enforceable in the state of origin.

D. Scope of Judgments

The Minutes and the JRE provisions in the 2024 CPL do not provide that they only apply to monetary judgments. Therefore, they can be applied to non-monetary judgments. Judgments, rulings, and other legal documents made by foreign courts concerning a substantive issue in civil and commercial cases, as well as legal documents concerning compensation for civil damages in criminal cases, fall within the scope of JRE in China. Interim and preservation rulings, such as foreign anti-suit injunctions rendered in standards essential patents cases heard overseas, and other procedural decisions are also not recognizable and enforceable. Similar to the Choice of Court Convention and the Judgments Convention, the 2024 CPL and the Minutes apply to monetary and non-monetary judgments.

Like the Choice of Court Convention and the Judgments Convention, the Minutes provides that judgment recognition and enforcement under reciprocity do not apply to public law judgments relating to fines, revenue, customs, the validity of entries in public registers, activities of armed forces, law enforcement activities, and sovereign debt restructuring through unilateral state measures. Neither the Minutes nor the Conventions applies to punitive damages. However, interests and fines imposed by a court of origin on a judgment debtor for the delay in fulfilling a judgment are not considered punitive and can be recognized and enforced under the Minutes.

The foreign-judgment provisions of the Minutes explicitly exclude insolvency, intellectual property, and competition cases (i.e., unfair competition and anti-monopoly). However, the 2024 CPL does not impose these restrictions. The 2024 CPL, as a statute with higher hierarchy, should prevail over the Minutes in cases of inconsistency. This is also consistent with judicial practice. For example, insolvency judgments issued in France, Italy, Germany, and Singapore, have been recognized by Chinese courts: two cases according to judicial assistance bilateral treaties and three under the principle of reciprocity. Another example is the Beijing Forth Intermediate People’s Court recognized a trademark judgment rendered by a court in South Korea. Compared with the Judgments Convention and the Choice of Court Convention, the 2024 CPL and the Minutes have a broader scope, which will be analyzed from two aspects below.

1. Civil Cases

Privacy, defamation, the status and legal capacity of natural persons, and family law issues concerning matrimonial property, wills, maintenance obligations, and succession are excluded from the Judgments Convention and the Choice of Court Convention. The 2024 CPL and the foreign-judgment provisions of the Minutes are also silent regarding their application to these civil cases.

Judgments concerning the status and legal capacity of natural persons may involve divorce and adoption. Family law issues are often dealt with by JRE legal instruments separate from those for general civil and commercial issues. For example, in the Chinese interregional judgment recognition and enforcement regime, the Mainland China-Hong Kong Judgment Arrangement does not apply to judgments concerning family law issues. That said, it should be noted that the Chinese legal system does not clearly distinguish civil law from commercial law. For example, personal data protection is distinguished from privacy protection, and both are regulated under the Chinese Civil Code, albeit a contract to process data between a personal data holder and a processor being a commercial contract. The Mainland China-Hong Kong Judgment Arrangement applies to the invasion of privacy and defamation. The 2024 CPL also applies to all civil and commercial cases. Therefore, it remains to be seen whether Chinese courts would allow foreign judgments on privacy, defamation, personal data protection as well as family law issues to benefit from the recent developments of the de jure reciprocity principle for foreign judgments.

2. Maritime Cases

The Judgments Convention and the Choice of Court Convention similarly exclude the carriage of passengers and goods, transboundary maritime pollution, marine pollution in areas beyond national jurisdiction, and ship-source marine pollution. The 2024 CPL and the Minutes do not explicitly exclude these judgments.

Firstly, disputes arising from the carriage of passengers by water may involve the following four scenarios: (1) property loss, (2) personal injury, (3) actions brought by a passenger (i.e., consumer), or (4) actions brought by a commercial party against another commercial party. Although the Maritime Affairs Section of the Minutes only applies to the carriage of goods by water and property losses from the carriage of passengers, the foreign-judgment provisions of the Minutes should apply to judgments arising out of the four scenarios. This is because carriage of passengers by water is excluded from the scope of the Judgments Convention to avoid conflicts with relevant international instruments, which are not ratified by China. Therefore, conflicts with other international instruments would unlikely justify the exclusion of the carriage of passengers by water from the Minutes.

Secondly, China ratified the 1992 International Convention on Civil Liability for Oil Pollution Damage (hereinafter “the Convention on Oil Pollution”), which contains provisions on JRE. No record shows that China has ever recognized or rejected the recognition and enforcement of foreign judgments under the Convention on Oil Pollution. Neither the Chinese law implementing the Convention on Oil Pollution, contains provisions on JRE. Including judgments on ship-sourced pollution under the 2024 CPL may provide an alternative mechanism to recognize and enforce judgments covered by the Convention on Oil Pollution. This is because the two defenses (i.e., fraud and undue procedure) against recognition and enforcement of foreign judgments in the Convention on Oil Pollution are like those under Article 300 of the 2024 CPL. Moreover, the exclusive jurisdiction provision under the Convention (i.e., the coastal state where the damage occurs) should prevail against any conflicting Chinese law, because in China, conventions ratified by China should prevail over conflicting domestic laws in civil or commercial cases. This will exclude other additional defenses against foreign judgments permitted under the 2024 CPL but not allowed under the Convention. Nevertheless, other formality requirements under the 2024 CPL and the Minutes should be applied to recognize and enforce judgments covered by the Convention on Oil Pollution. Notably, unlike the Convention on Oil Pollution, the 2024 CPL and the Minutes do not limit foreign judgments to ship-sourced oil pollution damages. Therefore, the 2024 CPL and the Minutes may provide a better alternative to deter marine pollution and facilitate marine environmental protection compared to the Convention on Oil Pollution as well as the two HCCH Conventions.

III. Defenses against JRE

Important differences exist between the defenses against JRE available under Chinese law and the two HCCH Conventions. Although the Minutes and the 2024 CPL does not explicitly indicate, there should be no review of the merits of foreign judgments in the Chinese JRE proceedings; exceptions, however, may apply when a defense of fraud or the public policy exception is raised. Other defenses against JRE include the lack of jurisdiction of the court of origin, due process violation, and the fact that a Chinese court has made a judgment on the same dispute or has recognized a third-country judgment or an arbitral award on the same dispute. Table Two presents the statistics of cases failing defenses against JRE. Cases may involve more than one defense. For example, the two cases in the category of public policy exceptions also belong to the category of due process because they are cases where the service of process conducted by the court of origin was considered violating the China-Uzbekistan Judicial Assistance Treaty. There are only seven unsuccessful cases due to defenses against JRE. The small number largely results from the fact that, before 2022, the requirement of de facto reciprocity blocked the majority of JRE cases, so that there was no need for Chinese courts to consider defenses against JRE. This situation will change with China shifting to de jure reciprocity, and future JRE proceedings in China will increasingly involve defenses against JRE. This section anticipates questions relating to these defenses before they surface in an actual dispute, hoping to provide clear anticipations for foreign courts and parties regarding JRE in China.

Table Two: Cases failing defenses against JRE

A. Court of Origin Lack of Jurisdiction

A generally accepted rule for a requested court to refuse JRE is that the subject matter of the foreign judgment falls in its exclusive jurisdiction. According to the 2024 CPL, Chinese courts can exercise exclusive jurisdiction on actions instituted for the performance of contracts in China for Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures, or Chinese-foreign cooperative exploration and development of the natural resources shall fall under the exclusive jurisdiction of Chinese courts. The 2024 CPL also adds two circumstances of exclusive jurisdiction: (1) litigation due to the establishment, dissolution and liquidation of legal persons or non-incorporated organizations established within China, and (2) the validity of resolutions made by such organs as well as litigation for the validity of intellectual property rights granted within China. Besides violating the exclusive jurisdiction of Chinese courts, another jurisdiction defense is that the foreign judgment-rendering court has no jurisdiction under its law, or even if it has jurisdiction under its law, it has no proper connection with the case according to Chinese law; or it violates the exclusive choice of court agreement concluded by the parties. Notably, an important breakthrough made by the 2024 CPL is that parties are allowed to select Chinese courts that have no connection with a dispute.

B. Undue Process of Law

Undue process of law at the court of origin refers to circumstances where the respondent has not been lawfully summoned, or even though being lawfully summoned he or she has not been given a reasonable opportunity to present the case and exchange arguments, or the parties without litigation capacity have not been properly represented.

Article 543 of the Judicial Interpretations of CPL states that the party applying for JRE should provide evidence that a foreign judgment creditor has been lawfully summoned if the judgment is a default judgment. Article 46.1 of the Minutes expands Article 543 to all foreign judgments. Documents that should be served to a defendant include not only those to initiate a lawsuit but also the judgement. The recognition and enforcement of a French judgment was rejected in China because the judgment was not served on the defendant, which precluded its right to appeal. Another example involved two Uzbekistan judgments that were not entitled to be recognized and enforced in China on public policy grounds because the service of process was inconsistent with the China-Uzbekistan Judicial Assistance Treaty and infringed on China’s judicial sovereignty. In contrast, the jurisprudence on arbitral award enforcement under the 1958 New York Convention shows that violating mandatory Chinese laws, such as those concerned with foreign exchange controls and import and export regulations, does not necessarily lead to the application of the public policy exception. This is because service of process is related to a defendant’s fundamental right to due process and embodies the public policy, while violations of foreign exchange controls and import and export regulations do not.

Unlawful summons is also included in Article 7.1(a) of the Judgments Convention and Article 9(c) of the Choice of Court Convention. No reasonable opportunity to present the defendant’s case or improper representation when the defendant is with limited litigation capacity should be considered as being covered either by provisions for public policy exception or fraud under the two Conventions. The Minutes and the 2024 CPL differ from the two Conventions at an important aspect: “summon” is used by the Minutes and the 2024 CPL while “notification” is contained in the Conventions. “Summon” is a judicial act and is equivalent to service. In contrast, notification may be conducted by private parties. Secondly, the Minutes and the 2024 CPL do not indicate which state’s law—the state of origin or the requested state—should apply to “summon.” In practice, Chinese courts would likely apply Chinese law rather than the law of the state of origin to assess the validity of the summon. Unlike the Minutes, the Judgments Convention clearly provides: (i) improper notice giving the defendant insufficient time to arrange for its defense according to the law of the state of origin, and (ii) notification in a manner incompatible with the requested state’s fundamental principles concerning service. For example, in Rockefeller Tech. Invs. (Asia) VII v. Changzhou SinoType Tech. Co., Ltd., the plaintiff transmitted judicial documents commencing a proceeding in California state court to the defendant in China by Federal Express. China made a reservation opposing postal service under the Hague Service Convention. The Chinese CPL requires that a court must conduct service and prohibits foreign courts or lawyers from conducting service in China without approval by the relevant authorities. The California Supreme Court concluded that the transmission of judicial documents by Federal Express was valid because the parties agreed to the mailing of judicial documents and replaced service by notice. The Californian judgment is likely not recognizable and enforceable under the Minutes, because the service of process in the court of origin did not comply with China’s reservation under the Hague Service Convention and JRE would breach China’s public policy. Even if China became a member to the Judgments Convention, the same result would follow as the Chinese requested court will likely hold that the defendant in the case was notified in a manner incompatible with fundamental principles of Chinese law concerning the service of documents.

C. Fraud

Foreign judgments tainted by fraud must not be recognized and enforced under the Minutes, the 2024 CPL, and the two HCCH Conventions. Fraud is also a defense against JRE in the judgment arrangements concluded between Mainland China and Hong Kong, and in the Singapore-China Memo. Two issues related to fraud remain unclear in Chinese law.

First, the Choice of Court Convention limits fraud to procedural issues while the Judgments Convention does not. Chinese law considers procedural fraud as a ground to refuse JRE. For example, two forged Italian judgments were refused to be recognized in China on grounds of fraud. Substantive fraud is included in Chinese JRE law.

Second, in many common law countries fraud can be divided into two types: extrinsic fraud, which refers to fraud discovered after the foreign judgment was entered, and intrinsic fraud, which is based on evidence raised, considered, or determined in the court of origin, but has not been adequately dealt with by that court. Neither the two Conventions nor the Minutes specifies whether fraud should be limited to extrinsic fraud. Fraud is often raised in Chinese proceedings for trial supervision. Article 211 of the CPL shows that both extrinsic and intrinsic fraud is considered eligible grounds for a retrial. Extrinsic fraud can be found in Article 200(1), allowing new evidence sufficient to reverse the original judgment. Article 200(3) includes intrinsic fraud, which relates to forged evidence. Including both extrinsic and intrinsic fraud in retrial does not necessarily mean China would consider both in JRE proceedings. Intrinsic fraud originates from English authority, which distinguishes domestic and foreign judgments. JRE of a domestic judgement is subject to extrinsic fraud, while JRE of a foreign judgement is subject to both intrinsic and extrinsic fraud in the U.K., meaning that domestic U.K. judgments are subject to less scrutiny than foreign judgments. In China, the law for retrial only applies to domestic judgments. It is unlikely that China would apply more scrutiny to domestic judgments than foreign judgments. Therefore, although the law for retrial does not applies to foreign judgments, it may encourage Chinese courts to consider both types of fraud in the JRE proceedings.

D. Competing Judgments

A foreign judgment will not be recognized and enforced in China if a Chinese court has made a judgment on the same dispute, or a Chinese court has recognized a third-state judgment on the same dispute. Moreover, according to Article 302, if a foreign judgment is on the same dispute as a case that is under trial at a people’s court, the people’s court can suspend the trial. If the foreign judgment is not recognizable and enforceable, the people’s court should resume the trial. Otherwise, the people’s court should dismiss the trial.

E. Public Policy Exception

In China, the public policy exception allows not to recognize and enforce foreign judgments that violates the fundamental principles of Chinese laws or national sovereignty, security, and social and public interests. Article 7.1(c) of the Judgments Convention and Article 9(e) of the Choice of Court Convention also provide for public policy exception as a defense against JRE. But given that both Conventions contain the word “manifestly,” which does not exist in Chinese law, the Conventions contain a higher threshold.

An issue that requires special attention is the interplay between data security and the public policy exception. Complying with Chinese law to transfer data across the border has been frequently raised as a defense against the taking of evidence from China in transnational litigation. This defense is often unsuccessful in the court of origin. For example, in Cadence Design Systems, Inc., v Syntronic AB, et al., the U.S. District Court for the Northern District of California rejected the defendant’s argument for refusing to send computers that stored personal information to the U.S. because the data subject had not consented to the transfer under China’s Personal Information Protection Law (PIPL). The Court ruled in favor of the plaintiff partly because the U.S. court’s discovery order was considered to have created a cognizable legal duty within Article 13 of PIPL (“statutory duties and responsibilities or statutory obligations”). Whether a Chinese court or government data regulator would agree that a U.S. court’s discovery order could create statutory duties or obligations on a Chinese data handler under the PIPL is questionable. To the extent that data are transferred overseas in breach of Chinese law, there may be public policy concerns due to threats to China’s national security. An unsettled question is: if a U.S. judgment is decided on data transferred from China in breach of Chinese law, would a Chinese court refuse JRE based on the public policy exception? The answer is unclear—not every illegal cross-border data transfer would harm China’s national security. Only when the breach of Chinese law leads to violations against fundamental principles of Chinese laws, national sovereignty, security, and social and public interests would the relevant foreign judgment not be recognized and enforced in China. This is consistent with the Judgments Convention, and its official explanatory report provides: “[t]he public policy defense of sub-paragraph (c) should be triggered only where such a mandatory rule reflects a fundamental value, the violation of which would be manifest if enforcement of the foreign judgment was permitted.” Chinese courts should consider the high bar typically required for the public policy exception to apply when assessing how significant the data are involved and whether JRE would bring an intolerable result in China.

Besides data security, another critical issue is whether judgment debtors in China may invoke the Chinese Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures (hereinafter “Counteracting Rules”) to refuse JRE. The Counteracting Rules were formulated following the China National Security Law to address the impact of the unjustified extra-territorial application of foreign legislation and other measures on China. Article 9 of the Counteracting Rules provides that “where a foreign judgment or ruling, made in accordance with the foreign legislation within the scope of the blocking order, causes losses to a citizen, legal person or other organization of China, who may, in accordance with the law, institute legal proceedings in a Chinese court, and claim for compensation by the person who benefits from the said judgment or ruling.”

Notably, in 2021 when defending the recognition and enforcement of an arbitration award, a Chinese enterprise invoked the Counteracting Rules, arguing that its business is to provide liquefied gas pipeline service which can directly impact Chinese society and people’s livelihood. The award was issued by the Singapore International Arbitration Center and the presiding arbitrator was from Essex Court Chambers which was sanctioned by the Chinese government. Therefore, it was submitted that the recognition and enforcement of the award in China would violate the Counteracting Rules and China’s public policy. This argument was rejected by the Shanghai Financial Court, which held that the applicant did not prove that the arbitration award was made according to foreign laws or measures which were covered by any blocking orders in China according to the Counter Measures. Furthermore, the Court held that China’s sanction was on Essex Court Chambers rather than the presiding arbitrator in this case. Therefore, if a foreign judgment is made according to a foreign law or measure which is within the scope of the blocking order issued under the Counteracting Rules, the relevant foreign judgment will not be recognized and enforced in China. Otherwise, JRE should be allowed.

IV. Conclusion and Prospects

Chinese JRE law has made laudable development. Whether they would be a substitute for the Choice of Court Convention and the Judgments Convention or serve as a preliminary step to the eventual ratification of the Conventions can be analyzed from two aspects. First, the largest benefit that the two Conventions would bring to China is to help Chinese judgments be recognized and enforced in foreign countries. Nevertheless, even without ratifying the Conventions, Chinese judgments can be recognized and enforced in major common law countries. China has concluded bilateral JRE agreements with many civil law countries, and it will continue doing so. Moreover, China has used soft-law memos or announcements to enhance JRE with other countries.

Second, another benefit that the Conventions may create for China is to make JRE in China more predictable so that Chinese business environment may be more creditable for foreign business than not ratifying the Conventions. However, this benefit should be realistically assessed. On one hand, JRE provisions in the Minutes and the 2024 CPL are not significantly diverse from those contained in the Choice of Court Convention and the Judgments Convention; by which China has demonstrated to the world its commitments to JRE. The 2024 CPL and the Minutes have already helped to enhance the predictability of JRE in China. On the other hand, ratifying the two Conventions would require China to bear an international obligation to JRE, which will come with a cost that is to restrict China’s discretionary power to retaliate against some foreign countries and to control its economy in the complex geopolitical tensions. On August 5, 2022, China suspended the US-China Judicial Assistance Agreement in response to U.S. House of Representatives Speaker Nancy Pelosi’s trip to Taiwan. If used as a countermeasure, suspending judicial assistance for civil or commercial matters may have a broader impact than suspending judicial assistance for criminal matters because the former involves a greater number of cases with higher value. The Judgments Convention provides only two scenarios for a member state to opt out vis-à-vis another member state, which does not exist in the Choice of Court Convention. A state can notify the depositary that its adherence shall not have the effect of establishing treaty relations with another member state at the moment it ratifies, accepts, approves or accedes to the Judgments Convention. Alternatively, an existing member state has twelve months from the moment that the depositary notifies it that a new state has ratified, accepted, approved, or acceded to the Convention to notify the depository that the Convention does not apply between the two states. If a notification is made, the Judgments Convention will not take effect between the two states. The Judgments Convention does not allow an existing member state to opt out of treaty relations vis-à-vis another member state at any later point.

Combining these factors, China may sign the HCCH Conventions to show a good posture to the global community; however, ratifying both or one of Conventions may take a long time and require a firm political will. If the political will exists, the recent development of Chinese JRE law will become a preliminary step to the eventual ratification of the Conventions; otherwise, they will indeed become a substitute for the Conventions in China.

Annex One

Thirty-Seven Totally Unsuccessful JRE Cases up to August 28, 2023

Two Withdrawal Cases:

1. Senah, Inc. v. AVIC Forstar S&T Co., Ltd., (2017) Shan 01 Min Te 059 ((2017)陕01民特059号)

2. Liu Chongliang v. Webwave Electric Manufacturing Co. Ltd. (Kenya) et al., (2018) Zhe 02 Xie Wai Ren No. 01 ((2018)浙02协外认1号)

Table Three: Cases Failing Requirements for JRE

Requirements for JRE

Lack of Reciprocity

• Bauer Douglas Hermansson [transliteration] v. Long Xia, (2009) Chang Zhong Min Ta Zi No. 0104 ((2009) 长中民他字第0104号)
• Lin Hong v. Wang Lei, (2010) Zhe Hang Min Que Zi No. 4 ((2010浙杭民确字第4号)
• Herbert Truhe et al. v. Jianxi Province Lidu Fireworks Co. Ltd. , (2016) Gan 01 Min Chu No. 354 ((2016) 贛01民初354号)
• DNT France Power Engine Co Ltd v. Zheng Xiyong, (2006) Min Si Ta Zi No. 45 ((2006)民四他字第45号) (Response of China’s Supreme People’s Court, Mar. 1, 2007)
• Minsk Automatic Line Production Co. v. China National Machine Tool Sales and Technical Service Co. [2003] 民四他字第4号 (Response of China’s Supreme People’s Court, Mar. 10, 2003)
• Dong Bin v. Fu Juhui, (2014) Tan Zhong Min San Chu Zi No. 181 ((2014)潭中民三初字第181号)
• (2003) Er Zhong Min Chu Zi No. 00002 ((2003)二中民初字第00002号)
• S.L.Jonas Ltd.v. Yang Ping, (2017) Min 01 Xie Wai Ren No. 4 ((2017)闽01协外认4号)
• Gomi Akira v. Dalian Fari Seafood Ltd. , (1995) Min Ta Zi No. 17 ((1995) 民他字第17号) (Response of China’s Supreme People’s Court, June 26, 1995)
• See X v. Y law firm, (2011) Xu Min Er (Shang) Chu Zi No. S1752 ((2011)徐民二(商)初字第S1752号)
• Kan Wen Beng v. Zhou Lichai, (2014) Ning Min Yan Zi No. 13 ((2014) 宁民认第13号)
• Li Qiang v. Ding Fengjing, (2018) Lu 14 Xie Wai Ren No. 1 ((2018)鲁14协外认1号)
• Spring Comm Corporation v. Piao Zonggen, (2011) Shen Zhong Fa Min Yi Chu Zi No. 45 ((2011)深中法民一初字第45号)
• Zhang Xiaoxi v. Gui Yunfeng, (2015) Shen Zhong Min Si Te Zi No. 2 ((2015)沈中民四特字第2号)
• Russia National Symphony Orchestra, Art Mont Company v. Beijing International Music Festival Society, (2014) Er Zhong Min Te Zi No. 928 ((2004)二中民特字第928号)

Scope of Judgments

• Anqi Wang v Fang Zheng (2019) Yue 01 Xie Wai Ren 3 Hao ((2019)粤01协外认3号)
• Yeqing Xia v Fang Zheng (2019) Yue 01 Xie Wai Ren 22 Hao ((2019)粤01协外认22号)
• Hui Jiang, Jun Huang, et al. v Fang Zeng (2018) Yue 01 Xie Wai Ren No. 21, No. 26, No. 27, No. 28, No. 32, (2019) Yue 01 Xie Wai Ren 58 Hao (((2018)粤01协外认21, 26, 27, 28, 32号,((2019)粤01协外认58号))

Finality

• Wuxi Luoshe Printing & Dyeing Co. Ltd. v. Anshan Li et al. (2017) Su 02 Xie Wai Ren No. 1-2 ((2017)苏02协外认1号之二)
• Schneider Electric Industries SAS v. Wenzhou Feilong Electric Appliances Co., Ltd., (2005) Wen Min San Chu Zi No. 155 ((2005)温民三初字第155号)
• Hukla-Werke GmbH Matratzen- und Polstermoebel v., Beijing Fukela Furniture Selling Co., Ltd., (2010) Min Si Ta Zi No. 81 ((2010)民四他字第81号)(Response of China’s Supreme People’s Court, Dec. 23, 2010)

Procedural requirements

Chinese requested court has no jurisdiction

• Matthew Yangli v. Lei Fukang, (2016) Yu 15 Xie Wai Ren No. 3 ((2016)豫15协外认3号)
• KRNC v. CHOO KYU SHIK (2021) Liao 02 Xie Wai Ren No. 6 ((2021)辽02协外认6号)
• KRNC v. CHOO KYU SHIK (2021) Liao 02 Xie Wai Ren No. 7 ((2021)辽02协外认7号)
• KRNC v. CHOO KYU SHIK (2021) Liao 02 Xie Wai Ren No. 8 ((2021)辽02协外认8号)

No or Incorrect Chinese translation

• Chen Shijun (or Middle East Formwork Scaffold Company) v. China Metallurgical Chenggong Construction Co. Ltd. (2018) Chuan 01 Xie Wai Ren No.3 ((2018)川01协外认3号)

No original or certified copy of the foreign judgment

• Tan Junping et al v. Liu Zuosheng et al., (2020) Xiang 10 Xie Wai Ren No.1 ((2020湘10协外认1号)

Chinese JRE statute of limitations has passed

• Jin Zhimei v. Piao Yujing, (2020) Liao 01 Xie Wai Ren No.7 ((2020)辽01协外认7号))

Table Four: Cases Failing Defenses Against JRE

Defenses Against JRE

Court of origin lack of jurisdiction

0

Undue process

• LaSARLK.C.C v. Chenzhou Hualu Digital Technology Co., Ltd., (2016) Xiang 10 Xie Wai Ren No. 1 ((2016)湘10协外认1号)

Fraud

• Artoni auto s.r.l v. Lin Xi, (2013) Zhe Hang Min Que Zi No. 5 ((2013)浙杭民确字第5号)
• Li Yili v. Lin Xi, (2013) Zhe Hang Min Que Zi No. 3 ((2013)浙杭民确字第3号)
• Li Yili v. Dong Lizhen, (2013) Zhe Li Min Que Zi No. 1 (2014)浙丽民确字第1号) / (2018) Zhe 11 Min Zai No. 10 ((2018)浙11民再10号)

A Chinese court has made a judgment on the same dispute or has recognized a third-country judgment on the same dispute, or lis alibi pendens

• Americhip, Inc. v. Dean et al. (2018) Yue 03 Min Chu No. 420 ((2018)粤03民初420号)

Public policy exceptions

• Choryanaslxizmat Co., Ltd. v. Huoerguosi Haihong Trade Co.,Ltd., (2011) Min Si Ta Zi No. 18 ((2011)民四他字第18号) (Response of China’s Supreme People’s Court, Aug. 16, 2011)
• Uzprommashimpeks Co. v. Wenzhou Jinshi Entertainment Apparatus Manufacturing Co., Ltd, (2014) Min Si Ta Zi No. 9 ((2014) 民四他字第9号) (Response of China’s Supreme People’s Court, Mar. 6, 2014)