Recognition and Enforcement of Overseas Court Decisions in China

1.1 Basic provisions

Article 299 of the Civil Procedure Law of the People’s Republic of China (“PRC”) provides that a foreign court decision may be recognized and enforced in China if the following conditions are met:

a)The foreign court decision is final and legally effective;

b)Recognition is based on an international treaty to which China and the original jurisdiction are parties, or on the principle of reciprocity; and

c)The decision shall not violate China’s fundamental legal principles, sovereignty, security, or public interests.

1.2 The statute of limitation

The SPC has provided that the applications for recognizing a foreign court’s decision must be filed within two years after the foreign court issued its final decision. However, such statute of limitations is subject to renewal, so long as the petitioner has tried to seek enforcement of the foreign court decision in China (see below the court’s rules in a case recognizing a Thai court decision).

1.3 The bilateral treaties

China recognizes foreign court decisions through bilateral or multilateral treaties. The Appendix to this essay lists the jurisdictions that have reached treaties with China to mutually recognize court decisions.

China has not reached similar treaties with the U.S. or Thailand. However, as you will read below, there are Chinese courts recognizing the decisions by the courts of these two countries.

1.4 The reciprocity doctrine

In 2021, the PRC Supreme People’s Court (“SPC”) announced binding judicial guidance regarding the application of the reciprocity doctrine. Accordingly, if the following tests are found to be true, Chinese courts may apply the doctrine of reciprocity:

a)PRC court’s decisions have been recognized and enforced by the foreign court; and

b)the jurisdiction where the foreign court is located has made reciprocity commitments to China through diplomatic channels, or China has made reciprocity commitments to the country through diplomatic channels, and there is no evidence to prove that the country where the court is located has refused to recognize and enforce the Chinese civil judgment on the ground that there is no reciprocity.

Additionally, at the China-ASEAN Justice Forum held in Nanning City of China in 2017, the representatives of courts from various countries reached a “Nanning Declaration”, which supported a presumption of reciprocity:

“In countries that have not yet concluded international treaties of recognizing and enforcing foreign civil and commercial judgments, if there is no precedent for refusing to recognize and enforce civil commercial judgments on the grounds of reciprocity … , it can be presumed that there is a reciprocal relationship between each other.”

The jurisdictions that attended the Nanning Declaration are:

▪ Afghanistan

▪ Bangladesh

▪ Cambodia

▪ Indonesia

▪ Laos

▪ Malaysia

▪ Myanmar

▪ Nepal

▪ Pakistan

▪ The Philippines

▪ Singapore

▪ Sri Lanka

▪ Thailand

▪ Vietnam

2.1 The case where a U.S. Federal Court decision was recognized

In 2017, the Wuhan Intermediate People’s Court issued a decision recognizing a court decision made by a federal court of the United States based on the doctrine of reciprocity [(2015) Er Wu Han Zhong Min Shang Wai Chu Zi No. 00026]. In the case, in order to prove the application of the reciprocity doctrine, the applicant submitted a judgment by m a Federal District Court in California (Case No. EC062608), which recognizes and enforces the Chinese court's judgment ((2001) Er Min Si Chu Zi No. 1). Therefore, the Wuhan court concluded that there is a reciprocal relationship of mutual recognition and enforcement of civil decisions between China and the United States.

2.2 Cases refused

On the other hand, Chinese courts have refused to recognize the U.S. court decisions in cases where:

a)The U.S. court decision was appealed and not finalized  [(2017)Su 02 Xie Wai Ren No. 1-2].

b)The U.S. court decision imposed punitive damages (contrary to Chinese public policy) [(2019) Yue 01 Xie Wai Ren No. 3].

3.1 Case summary

In 2023, Nanning Intermediate People's Court of Railway Transport recognized a civil judgment made by a Thai court[(2023) Gui 71 Xie Wai Ren No. 1]. In this case, a Chinese company reached a contract with a Thai airline company, in which the parties agreed that the Thai court should have exclusive jurisdiction over any dispute. When the dispute occurred, the Chinese court filed a civil complaint in Thailand. The Thai court ruled in favor of the Chinese company (ordering the airline company to compensate the Chinese company). Afterward, the Chinese company sought enforcement of the Thai court decision in China. The Chinese company first chose to file a new lawsuit with the Nanning Intermediate People’s Court in 2021. However, the court dismissed the case, citing Thai exclusive jurisdiction. Later, the Chinese company directly applied to enforce the Thai court’s decision with another Chinese court (the Nanning Railway Transport Intermediate Court ). This time, such court recognized the Thai court’s decision and ruled to enforce the Thai court’s decision.

3.2 The doctrine of reciprocity applies to the recognition of Thai courts’ decisions

The Thai courts’ decision met all conditions for enforcement in China.

a)China and Thailand are both signatories to the Nanning Declaration, which can be regarded as a presumption of reciprocity between China and Thailand;

b)The Thai court had proper jurisdiction (per contract terms);

c)The defendant was duly notified and given a fair defense;

d)The judgment did not violate Chinese public policy;

e)No evidence suggests Thailand has refused Chinese decisions on reciprocity grounds.

3.3. Statute limitation can be renewed after filing a lawsuit

In the Nanning case regarding the Thai court’s decision, the Nanning Railway Transport Intermediate Court ruled that because the petitioner (i.e. the Chinese court in the case) had filed a lawsuit for the same matter with the Nanning Intermediate People’s Court in 2021, the term Statute of Limitations shall be renewed.

The recognition and enforcement of foreign decisions in China remain a nuanced and evolving area of law. Having said that, judicial practice demonstrates that Chinese courts have a growing willingness to enforce foreign decisions—particularly where reciprocity can be established, as seen in both U.S. and Thai cases.

Appendix

The jurisdictions where China has reached bilateral treaties to recognize civil court decisions.

▪ Algeria

▪ Argentina

▪ Belarus

▪ Bosnia and Herzegovina

▪ Brazil

▪ Cuba

▪ Cyprus

▪ Egypt

▪ Ethiopia

▪ France

▪ Hungary

▪ Iran

▪ Italy

▪ Kazakhstan

▪ Kuwait

▪ Kyrgyzstan 

▪ Laos

▪ Lithuania

▪ Morocco

▪ Mongolia

▪ North Korea

▪ Peru

▪ Poland

▪ Romania

▪ Russia

▪ Spain

▪ Tajikistan

▪ Tunisia

▪ Turkey

▪ Ukraine

▪ United Arab Emirates

▪ Uzbekistan

▪ Vietnam

▪ Greece