With a foreign-related judgment accepted and recognised by a court in mainland China, the next step for the applicant would be to apply for its enforcement, provided all conditions are met
As mentioned in the first part of this series, foreign-related civil and commercial judgments may be recognised and enforced in mainland China upon the basis of either bilateral judicial assistance treaties or court-determined reciprocal relationship between China and the relevant foreign jurisdiction. The recognition and enforcement are principally subject to China’s Civil Procedure Law and its judicial interpretations.
The second part of the series focused on the methods available to foreign courts to apply for recognition and enforcement from a Chinese court. This final chapter concentrates on the enforcement procedures of foreign-related judgments within mainland China.
APPLICATION FOR ENFORCEMENT
According to article 16 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Enforcement Work of the People’s Courts (for Trial Implementation) (2020 Amendment), an enforcement case accepted by a people’s court shall meet the following conditions:
- The legal instrument to be enforced upon application, or to be transferred for enforcement, has taken effect;
- The enforcement applicant is the right holder, the successor or the person succeeding to the rights determined in the effective legal instrument;
- The legal instrument to be enforced upon application contains the content of performance, as well as specific subject matter of enforcement and the judgment debtor;
- The obligor fails to perform its/his/her obligation within the time limit determined in the effective legal instrument; and
- The case is under the jurisdiction of the people’s court, which enforces the instrument upon application.
Where the application meets the above-mentioned conditions, the people’s court shall register the case within seven days, or render a ruling not to accept the case within seven days if the application fails to meet any of the conditions.
JURISDICTION FOR ENFORCEMENT
According to article 231 of the Civil Procedure Law, legally effective civil judgments and orders, as well as the property part of criminal judgments and orders, shall be executed by the people’s court of first instance, or the people’s court at the same level where the property to be executed is located.
Accordingly, enforcement courts are optional in applying for enforcement of recognised foreign judgments in China. The execution court may be either the people’s court making the recognition ruling, or the people’s court at the same level where the property subjected to execution is located.
The people’s courts can attach, seize or freeze all transferrable properties subjected to execution. In particular, such properties include:
- Income, bank deposits, cash, financial products and securities;
- Land use rights, houses and other immovables;
- Movables such as instruments for transportation, machinery and equipment, products and raw materials; and
- Creditors’ rights, equity, investment rights, fund shares, beneficial rights of trust, intellectual property rights and other property rights.
Properties prohibited from execution as stipulated by laws, regulations and judicial interpretations shall not be executed.
RECOGNITION AND ENFORCEMENT
Recognition and enforcement of foreign judgments is the general term for a series of legal procedures that force the debtors to fulfil the obligations under the judgments by taking enforcement measures of Chinese enforcement agencies, in order to realise the creditors’ civil rights confirmed by foreign judgments. The procedure of recognition and enforcement of foreign judgments is divided into “recognition” and “enforcement”.
Recognition and enforcement are two concepts closely related but significantly different. Recognition is the premise of enforcement, while enforcement is the goal of recognition. Recognition means that a foreign judgment has been examined by a Chinese judicial authority and recognised as having the same legal effect as a Chinese judgment. Enforcement refers to a foreign judgment’s validity having been recognised by a ruling of a people’s court, which can be used as the basis for enforcement in order to enforce in accordance with the Civil Procedure Law.
By: Zhang Yang and Liu Fang, Tiantai Law Firm
By: Zhang Yang and Liu Fang, Tiantai Law Firm
With the expansion of the Belt and Road Initiative, the establishment of the China International Commercial Court and the continual innovation of foreign-related judicial measures, the number of foreign-related civil cases accepted by people’s courts has been increasing. Research shows that in the typical cases of recognition and enforcement of foreign court judgments by Chinese courts in the past four years, most courts upheld the applications and relevant judgments made by foreign courts were recognised and enforced. It can be seen that the people’s courts recognise and enforce the judgments of foreign courts at a significantly high rate.
In addition, in recent years, Chinese courts have adopted the modern, information-based and integrative detection and control system with other advanced technical means to monitor the status of the property of a party against whom execution is sought. If there is no available property for execution, compulsory measures may be imposed such as restraining high-value consumption or barring the party from leaving China.
These measures likewise have positive effects on the enforcement of foreign court judgments, demonstrating Chinese courts as fair, efficient and authoritative judicial bodies on the international stage, and providing a solid judicial guarantee for the creation of a creditable and trustworthy international business environment.
For example, during the enforcement procedure of the RMB30 million (USD4.3 million) case of Gao Xingda, heard by Shanghai No.1 Intermediate People’s Court in 2019, the court froze the 39.83% equity of Shanghai Hongqiao Datong Yang Commercial Building held by He Jianhua, the judgment debtor, which opened up positive possibilities for settlement of the transnational dispute, protected the legal rights of the creditor, and secured praise from the foreign party.
Zhang Yang is a senior partner at Tiantai Law Firm. He can be contacted at +86 189 1081 2187 or by email at firstname.lastname@example.org
Liu Fang is a senior partner at Tiantai Law Firm. She can be contacted at +86 135 5263 7055 or by email at email@example.com
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