There are two routes by which a Chinese court may recognize and enforce a foreign court judgment. The court may consider the existence of bilateral treaties between China and the relevant foreign jurisdiction.  In the absence of a treaty providing for mutual recognition of civil judgments, the existence of a reciprocal relationship is a prerequisite for the recognition and enforcement of foreign judgments in China.

There are no laws or regulations in China specifically addressing the recognition and enforcement of foreign judgments. The legal basis for reciprocity exists mainly in the PRC Civil Procedure Law (the “CPL"), as amended in 2021 and the Supreme People’s Court, Interpretation on the Application of the (the “CPL Interpretation"). An application for the recognition and enforcement of a foreign court judgment by a Chinese court based on the existence of a reciprocal relationship requires all of the following conditions to be met.

There are three types of reciprocity: (1) de facto reciprocity, which requires actual precedents demonstrating that the foreign country has recognized and enforced Chinese judgments in the past; [1] (2) de jure reciprocity, which examines the possibility of recognition and enforcement in a foreign country according to the laws of that country; [2] and (3) constructive reciprocity, which presumes the existence of reciprocity between the two countries as long as the enforcing country has no precedents against the recognition and enforcement of the other country’s judgment.

De facto reciprocity has the most stringent criteria, and the strict application of de facto reciprocity in the Chinese judicial practice has led to a so-called prisoner’s dilemma in the recognition and enforcement of judgments.[3] The application of de facto reciprocity principle is also influenced by international relations and the actual practice of cross-border judicial collaboration between China and the country of the foreign judgment.

Under Article 281 of the CPL and article 542 of the CPL Interpretation, reciprocity is a prerequisite for the recognition and enforcement of foreign judgments (except for divorce judgments) in the absence of a treaty. In 1994, an intermediate court in Dalian (Liaoning Province) rendered a final judgment, which for the first time explicitly required proof of de facto reciprocity, i.e. proof that the foreign court that rendered the judgment had at least recognized and enforced the Chinese court’s judgment. This judgment made clear that if this was not the case, a reciprocal relationship did not exist.[4]

The Chinese courts have previously refused to enforce judgments from South Korea,[5] Australia,[6] the U.K.,[7] Chad,[8] Malaysia,[9] and the U.S.,[10] for lack of a reciprocal relationship; on the other hand, they have granted enforcement of judgments from Germany,[11] Singapore,[12] and the U.S.[13] on grounds of de facto reciprocity.

The criteria for determining reciprocity in China have gradually shifted from de facto reciprocity to constructive reciprocity, thus making the recognition and enforcement of foreign judgments in China more likely.[14]

Foreign judgments must be final and conclusive to be recognized and enforced. Under Article 289 of the CPL, the judgment must be final as to its effects, that is, the enforcee did not appeal within the time limit allowed for appeal to the original judgment.

Although the CPL does not explicitly set out the jurisdiction requirement, Article 12(2) of the Supreme People’s Court, Provisions on Issues Concerning the Procedures for Chinese Citizens Applying for Recognition of Divorce Judgments Rendered by Foreign Courts requires a foreign court to have jurisdiction over the dispute. In practice, the jurisdiction of the adjudicating court is taken as one of the conditions for review for the enforcement application.[15]

Lack of due process is one of the main defenses for refusal of recognition and enforcement. Article 541 of the CPL Interpretation specifies the due process requirement in the recognition and enforcement of foreign judgments, where a default judgment may be found to have lacked due process if the enforcee was not properly served in the foreign proceeding. This requirement is also universally set out in all mutual legal assistance treaties signed by China. In Chinese judicial practice, Chinese law is preferred over the law of the country where the judgment was rendered when determining whether due process is met.

That said, a default judgment may be recognized and enforced in China, provided that the applicant submits documents showing that the enforcee was properly served or that the judgment itself expressly illustrates facts of effective service. For example, default judgments in Singapore[16] and the U.S.[17] were recognized and enforced by Chinese courts.

A close reading of Article 531 of the CPL Interpretation and relevant cases indicate that Chinese courts may refuse to recognize and enforce foreign court judgments where a conflicting Chinese court judgment exists and is on the same claims between the same parties.[18]

The concept of public policy in Chinese law includes state sovereignty, national security, fundamental legal principles and the public interest of society. Very few petitions to enforce foreign judgments have been dismissed based on public policy grounds. For instance, a Chinese court recognized a foreign court’s decision on the dissolution of a marriage, but refused to recognize the court’s decision on the division of marital property and child support, on the ground of public policy.[19]

Due to the relatively strict standard of de facto reciprocity, the number of foreign judgments recognized and enforced in China is small, reaching on average only five cases annually. We study publicly available judgments from 2018 to June 2022 and found that the vast majority of these are foreign divorce judgments with a small proportion being judgments on monetary payments.

Of these cases, some judgments from the U.S., South Korea and Singapore have been recognized and enforced in China based on de facto reciprocity. Most recently, in March 2022, a Chinese court recognized and enforced a U.K. court judgment for the first time without finding de facto reciprocity, but instead based on constructive reciprocity, signaling an increasingly open and accommodating attitude of the Chinese judiciary toward the enforcement of foreign judgments.[20]

Only one judgment (originating from Samoa) was not recognized and enforced by the Chinese court based solely on the ground that there was no reciprocity; where Chinese courts dismissed the applications, this was mainly based on the lack of a certain component of reciprocity, such as the lack of finality of the judgments or the existence of a conflicting proceeding. There does not appear to have been a decided case where enforcement was refused based on public policy.

The dilemma in judicial practice and the Belt and Road Initiative have raised the need for a change in Chinese courts’ attitude towards approaching reciprocity. The Supreme People’s Court (SPC) has reflected China’s increasingly open attitude towards mutual legal assistance in recent years by issuing a series of documents and lowering the threshold for reciprocity.

In October 2017, the SPC issued the draft Provisions on Several Issues Concerning the Recognition and Enforcement of Foreign Court Judgments on Civil and Commercial Matters (Draft for Comments) 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), which comprehensively provides for a system of recognition and enforcement of foreign court judgments in civil and commercial matters, and expands the scope of criteria to find for reciprocity where de jure reciprocity may exist or a consensus on international judicial collaboration may have been reached.

In January 2022, the SPC released the Minutes of the National Symposium on Foreign-related Commercial and Maritime Trial Work of Courts (the Minutes),[21] providing a firm legal basis to move from de facto to de jure reciprocity. Article 44 of the Minutes provides that a court must examine on a case-by-case basis and may find reciprocity under one of the following scenarios:

The SPC has expanded the scope of finding reciprocity and has taken a stand to actively promote cross-border judicial collaboration.

In Choi Jong Won v. In Ji Yeong,[22] the Chinese court did not require the applicant to show precedents of recognition and enforcement of Chinese court judgments by Korean courts, but rather took the initiative to identify reciprocal relations between China and Korea. Similarly, in Oceanside Development Group Limited v. Chen Tongkao and Chen Xiudan,[23] the Chinese court did not require the Singapore courts to show recognition and enforcement of the Chinese court judgment; instead, and the Chinese court gave only a general statement that “in accordance with Article 282 of the Civil Procedure Law, the Chinese court may review in accordance with the principle of reciprocity."

These two cases indicate a proactive review of reciprocity by the Chinese courts and a lower burden of proof being imposed upon applicants.

The scope of application of the principle of reciprocity has become more precise and limited (see Article 33 of the Minutes). First, the finding of reciprocity may only be reviewed by a court in the absence of an international treaty or where it is not provided for in a treaty. Second, the types of judgments to which reciprocity does not apply has been expanded from only divorce judgments to include judgments on bankruptcy, intellectual property, unfair competition and antitrust disputes, with strong territorialism and special characteristics.

This reflects a gradual convergence with the international standard of recognizing and enforcing foreign judgments and helps form a system balancing state interests and the legitimate rights of litigants.

More countries have taken the initiative in recognizing and enforcing Chinese judgments. For instance, while a Chinese court had already refused to recognize and enforce a German judgment in 2003,[24] the German courts recognized and enforced the judgment of a Chinese court judgment for the first time in 2006,[25] reasoning that “reciprocity may never happen if both countries wait for the other to take the first step forward; in order to promote the practice in enforcing the other court’s enforcement, one should consider the possibility of such judicial practice in following up [the court who first enforces], and given the current development in international economy and commerce, it is possible for China to follow up with [German court’s enforcement of Chinese judgment]".

Singapore first recognized a Chinese court judgment in 2014;[26] a Dutch court first recognized and enforced a Chinese court decision in 2015.[27]

After a Chinese court had already refused to recognize and enforce a U.K. court judgment in 2004 on the grounds that there was no reciprocity, a U.K. court recognized and enforced a Chinese court judgment in 2015,[28] laying the foundation for “reciprocity" by way of recognition, in 2022, of the first U.K. judgment in China. In all of these cases, the foreign courts took the first step to recognize and enforce Chinese court judgments, absent of de facto reciprocity, which laid a foundation for recognition and enforcement by the Chinese courts.

Differences in judicial systems can be an obstacle to enforcing foreign judgments. Thus, it is crucial to have an open and collaborative international judicial assistance system. In recent years, there has been a trend of gradual liberalization in the mutual recognition and enforcement of judgments in various countries, and the desire for cross-border collaboration among countries’ courts has become stronger.

The judicial practice in recognizing and enforcing foreign judgments by Chinese courts in recent years shows that China has changed its traditional practice of strict reciprocity of facts and is gradually establishing a more open and liberal system[29]. This is also evidenced in Chinese courts’ more flexible approach to examining the criteria for reciprocity. With the implementation of the Belt and Road Strategy, the requirements for reciprocity between China and the Belt and Road countries may be loosened in the near future.[30] An increase in the enforcement of foreign judgments by the Chinese courts can be expected over coming years, based on reciprocity as well as on treaty-based grounds.

* The article was first published on China Law & Practice, www.chinalawandpractice.com, with modifications.