Improve the rules of recognition and enforcement of judgments of foreign courts
The Supreme Court of San Mateo County, California, made a civil judgment in the case of Los Angeles, Huang, Li, and TA Company’s dispute over damages to shareholders’ interests, and ordered Li and TA Company to compensate Los Angeles and Huang for their losses. Li appealed against the judgment. Because Li and TA failed to fulfill their judgment obligations, the United States court decided to auction Li’s house in the United States to pay off the debt. During the trial of the case by the United States Court of Appeal, Los Angeles and Mr. Huang applied to the Wuxi Intermediate People’s Court for recognition and enforcement of the civil judgment of the United States High Court of San Mateo County, California.
Wuxi Intermediate People’s Court held that according to the provisions of the Civil Procedure Law, the civil judgments of foreign courts applying to the people’s court for recognition and enforcement must have legal effect, that is, the civil judgments of foreign courts should be final and conclusive. Civil judgments of foreign courts pending or in the process of appeal are not final and definitive. Although the civil judgment of the United States court involved in the case has come into effect according to the laws of the United States and has entered into the enforcement procedure, the application of Los Angeles and Mr. Huang has been rejected because it is not final and certain in the process of appeal. Wuxi Intermediate People’s Court stressed that after the civil judgment of the United States court is final and certain, Los Angeles and Mr. Huang can apply to the people’s court for recognition and enforcement again.
In order to obtain recognition and enforcement of the judgment of a foreign court, the rights determined by it must have considerable stability and cannot be changed without legal procedures. Due to the differences in legal systems, the legislation and judicial practice of various countries have different understandings and requirements for finality. In some countries, the judgment of the court will come into force as soon as it is made and can be enforced, and even the appeal will not affect the effectiveness of the judgment. If the people’s court recognizes and implements the judgment of a foreign court that is being appealed, and the judgment is subsequently revised or overturned, it will not only damage the judicial authority of the people’s court, but also be detrimental to the protection of the legitimate rights and interests of the parties. In this case, the people’s court correctly interpreted the law and made it clear that the judgment of the foreign court on appeal or in the process of appeal is not final and cannot be recognized and enforced. The verdict of this case was adopted by the Supreme People’s Court in the Minutes of the Symposium on Foreign-related Commercial.