Recognition and enforcement of Chinese court judgments in the United States
Since China joined the WTO, the investment, trade and economic ties between China and the United States have become increasingly close. The civil and commercial disputes involving these two jurisdictions have shown an overall growth trend in recent years. At the same time, due to the escalating trade frictions between the two countries in recent years, as well as the US government’s all-round containment and suppression of China, these have brought more uncertainty to the recognition and enforcement of the judgments of our courts in the United States. Considering the cost and uncertainty of cross-border enforcement, many parties will assess the feasibility of the final effective enforcement of court judgments or arbitral awards before initiating litigation or arbitration.
The United States signed the Convention on the recognition and enforcement of foreign civil and commercial judgments (“the Hague enforcement Convention”), becoming the sixth country to sign the Hague enforcement convention after Uruguay, Ukraine, Costa Rica, Israel and Russia. The Hague implementation convention has not been ratified by the US Congress, and China has not yet formally acceded to the Convention. The recognition and enforcement of court judgments between China and the United States still need to go through the recognition and enforcement procedures of the judicial systems of both sides.
When the U.S. court judges whether a foreign judgment can be directly enforced in the United States, it will comprehensively consider the specific content, nature, specific proceedings of the judgment, as well as the legal system of the country where the judgment was made and review the case. Therefore, when applying for the execution of a domestic court judgment in the United States, it is necessary to make a detailed analysis of the specific evidence of the case, the fact finding, the nature of the case, the specific litigation procedures for making the judgment, and the legal system of China involved in the case, so as to avoid misunderstanding of the nature and process of the judgment by American judges.
I Legal basis
Generally speaking, the recognition and enforcement of foreign court judgments in other countries mainly rely on the following three legal bases: (1) bilateral or multilateral judicial assistance treaties signed by the two countries, (2) reciprocal relations between the two countries, or (3) domestic laws of the applicant country. At present, China has not signed a mutual legal assistance treaty with the United States to recognize and enforce court judgments, and the courts of China and the United States recognize each other’s court judgments according to the principle of reciprocity. Therefore, in practice, the domestic laws of the United States are mainly used as the basis for recognizing and implementing the judgments of Chinese courts.
At present, the application for recognition and enforcement of foreign court judgments in the United States is mainly based on the uniform foreign country money judgments Recognition Act (the “Uniform Law”) issued in 1962. According to the uniform law, if the judgment of a foreign court is final, inclusive, and enforceable under the foreign laws and involved in the granting of recovery of a sum of money, the state court signing the uniform law may recognize and enforce the judgment of a foreign court.
Taking California law as an example, when a foreign judgment meets the following two conditions, it can be recognized by the local court and enforced as a local judgment of the United States:
(1) The content of the judgment is to confirm or reject the obligation of money payment;
(2) According to the law of the country where the judgment is made, the judgment is final, conclusive, and enforceable.
According to the interpretation of the uniform law by the courts of various states in the United States, the courts often review the procedural legitimacy of foreign courts.
The court may refuse to recognize and enforce a foreign judgment under the following circumstances:
(1) The foreign courts have not formed a lack of impartial tribunal to try the case;
(2) The trial procedure in a foreign court is not a lack due process;
(3) Lack of personal jurisdiction and subject matter jurisdiction;
(4) The court obtained the judgment through fraud;
(5) The court fails to make effective service on the parties (improve notice of service);
(6) The court’s judgment violates the U.S. constitutional principles; as well as
(7) The execution of the foreign judgment is contrary to American public policy.
There are similar reasons for refusing recognition and enforcement in the Hague enforcement convention just signed by the United States, which is also related to the procedural legitimacy of the court in the country where the judgment is made. Article 7.1 of the Hague implementation convention clearly states that only in one of the following five cases can a court of a country refuse to recognize and enforce a judgment of a court of another country: (1) the court of the country where the judgment is made has not given sufficient notice to the defendant; (2) The plaintiff’s fraud in obtaining the judgment; (3) The pending judgment conflicts with the public policy of the state of enforcement; (4) There is a conflict between the pending judgment and the contract terms of the court of choice; Or (5) there is a conflict between the pending judgment and the previous judgment (between the same litigant subjects).
II case study
Whether a foreign judgment can be enforced in the United States should be assessed on a case by case basis, which needs to be based on the facts in dispute, service, the way the judgment is made, the specific wording and the situation of each judgment. Under certain circumstances, even if the above-mentioned denial exists, if the applicant can explain the reasonable reasons for recognition, the court has the right to decide to enforce the foreign judgment.
Five cases of recognition and enforcement of Chinese court judgments by U.S. courts are as follows:
(1) On july21,2009, the Federal District Court of the Central District of California recognized and enforced the civil judgment (2001) e min Si Chu Zi No. 1 made by the high court of Hubei Province, China; On 29 March 2011, the federal court of Appeals for the Ninth Circuit upheld the decision of the district court;
(2) On december15,2009, the Missouri State Court recognized and implemented the judgment (2009) No. 5818 of Chaoyang District Court of Beijing;
(3) On may1,2015, the Northern District Court of Illinois recognized and implemented the (2012) zhuzhong famin szz No. 11 judgment of Zhuhai intermediate people’s court;
(4) On october27,2017, the Central District federal court of California recognized and implemented the judgment (2015) ymcz No. 02762 made by the people’s Court of Suzhou Industrial Park, Jiangsu Province; as well as
(5) On january6,2020, the queen County Court of New York State recognized and implemented the (2019) Yue 0402 min Chu No. 2381 judgment made by the people’s Court of Xiangzhou District, Zhuhai City, Guangdong Province.
When the content of recognition and enforcement of judgments of foreign courts only involves monetary payment, and does not violate the public policies and due process principles of the United States, the United States courts tend to respect the judgments of foreign courts and make judgments of recognition and enforcement of judgments of foreign courts.
III judicial suggestion
1. Confirm that the judgments of Chinese courts are valid, enforceable and have jurisdiction in the United States courts, etc According to the above legal basis and case study, at least four conditions must be met to apply for and enforce a Chinese court judgment in the United States:
(1) The requested state is a signatory state to the uniform law.
(2) The applied state court has jurisdiction: depending on the defendant’s actual place of residence and / or main property location, the plaintiff needs to submit an application to the court with jurisdiction.
(3) The judgment of the Chinese court is final, conclusive and enforceable: the defendant has not appealed to the Chinese court before the expiration of the appeal period, and the content of the judgment of the Chinese court is a monetary payment judgment with a certain amount, which can be considered as final, conclusive and enforceable.
(4) The judgment of the Chinese court is a money payment judgment: the judgment of the Chinese court requires the defendant to pay money to the plaintiff, which can be considered as a money payment judgment under the uniform law.
2. The following foreign judgments will not be recognized by the California courts under the ufmjra even if they involve the obligation of monetary payment:
(1) Tax judgment;
(2) Government fines or other penalties;
(3) Divorce, life support, or support and other judgments related to family relations (such judgments will be applicable to other relevant laws of the United States).
3. In addition, California courts shall not recognize foreign judgments that:
(1) According to the judgment of the U.S. court itself, it finds that the judicial system of the foreign country cannot ensure the fairness of the trial or that the trial procedure fails to meet the requirements of due process;
(2) The foreign court has no personal jurisdiction over the defendant;
(3) The foreign court has no jurisdiction over the subject matter of the action;
(4) The defendant fails to receive the procedural notice in time to ensure that he can fully reply;
(5) The judgment was obtained through fraud, and the losing party lost the full opportunity to state the case;
(6) The judgment or the cause of action or claim on which the judgment is based is contrary to the public policy of this state or the United States;
(7) The litigation procedure of a foreign court violates the agreement of the parties that the dispute should be settled by means other than litigation;
(8) In the cases that have jurisdiction only based on service, the foreign courts belong to the courts that are extremely inconvenient to hear the cases;
(9) The judgment was made in a court whose impartiality was seriously in doubt;
(10) The specific procedure for making a judgment is inconsistent with the requirements of due process.
4. Confirm whether the defendant has enforceable property in the United States
In the U.S. legal proceedings, the parties generally bear their own legal costs. Therefore, customers also need to consider the lawyer’s fees and investigation agency fees incurred in the application for recognition and enforcement. Based on our previous experience, it is recommended to investigate the defendant’s property in the United States before taking action, including bank accounts, real estate and movable property (such as cars). If there is considerable property available for enforcement, the plaintiff may consider applying for recognition and enforcement of the judgment of the Chinese court in the United States.
If the defendant’s property is distributed in more than one state, the plaintiff may consider applying for enforcement in the state with more property distribution or the state with a precedent for recognizing and enforcing the judgment of the Chinese court. If the defendant also has a large amount of property in other states, he can go to other states to apply for recognition and enforcement of the judgment of the applied state court according to the judgment issued by the applied state court.
Although with the formal signing of the Hague implementation Convention by the United States and recent U.S. court cases supporting that Chinese court judgments meet the requirements of due process, whether the cross-border implementation of Chinese court judgments in the United States can be successfully completed is still affected by many factors. Therefore, after obtaining the judgment of the Chinese court, the plaintiff should actively investigate the defendant’s property distribution in the United States so that it can apply to the U.S. court for recognition and enforcement as soon as possible; the political risks arising from trade frictions between China and the United States may also affect the attitude of the U.S. courts to recognize and implement the judgments of Chinese courts, and bring uncertainty to the cross-border enforcement of cases.
Therefore, when applying for the execution of a domestic court judgment in the United States, it is necessary to conduct a detailed analysis of the specific evidence, fact finding, nature of the case, specific litigation procedures for making the judgment, and the legal system of China involved in the case, so as to avoid misunderstanding of the nature and process of the judgment by American judges.