In the morning, we received an email from the lawyer of a US client with whom we ever have some email communications on a similar case of recognition and enforcement before:
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Dear China Business Lawyer Team,
I hope all is well with you.
The purpose of my email is to discuss a feasibility for collecting a judgment in China. In this regard, I would like to introduce my colleagues A and B to you. We recently won a litigation against a Chinese entity in a US Federal court, and A was in charge of this case. The entity is based in Shenzhen China and has little asset in the US. The judgment is worth multi-million US dollars.
In this regard, we wonder how likely we can collect the judgment in China and if you help.
Regards,
X
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And we confirmed with them on the basic feasibility of such type of recognition and enforcement case of US judgment in mainland China.
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Dear X,
Happy new spring.
Hi, A. Hi, B. Nice to meet you.
Regarding the collection case in Shenzhen, obviously it's another recognition and enforcement case of US judgment in mainland China. As we mentioned before, we think mainland Chinese court system and USA court system had created the tradition of recognizing the judgments of each other, and there were quite some existing cases in recent years, which could satisfy the core requirement of Chinese court system which is called "Substantial reciprocity". And we think your case is a commercial case, of course.
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And below is the background knowledge:
Background knowledge one: Latest development on Mutual Recognition and Enforcement of Court Judgments between mainland China and USA in June 21, 2024
There are certain complexities and challenges between China and the United States in recognizing and enforcing each other's court judgments, for example, there is no specialized convention on mutual recognition and enforcement of judicial judgments between the two countries, but in certain specific circumstances, the courts of both countries may recognize and enforce each other's judgments. We are now organizing and summarizing important information on this issue as below:
1. In 2009, as the first case in which the United States recognized a Chinese court judgment, the Southern District Court of Indiana in the United States proposed a typical method for US courts to enforce Chinese court judgments. This case was a request by Hubei Gezhouba Sanlian Industrial Co., Ltd. to enforce a judgment against Robinson Helicopter Co., Ltd. in the United States;
2. In cases where Chinese courts have already been recognized and enforced, relevant US courts have indicated that they can enforce judgments of Chinese courts if they meet the substantive and procedural requirements of relevant laws. These relevant legal basis can be the Uniform Recognition of Foreign Currency Judgments Act implemented in the state;
3. The Uniform Recognition of Foreign Currency Judgments Act has not been in effect in all states of the United States. As of now, 12 states in the United States have not yet passed the Uniform Foreign Currency Judgments Recognition Act (UFCMJRA);
These states include: Alabama, Alaska, Arkansas, Georgia, Massachusetts, Mississippi, New York, Oklahoma, West Virginia, Wisconsin, Wyoming, Puerto Rico - although Puerto Rico is not a single state. But it is a US territory, and the relevant laws also apply. These states and regions have not yet passed the UFCMJRA, but may have adopted the previous Uniform Foreign Money Judgments Recognition Act (UFMJRA) or have their own legal framework to handle the recognition and enforcement of foreign currency judgments.
4. On June 30, 2017, the Intermediate People's Court of Wuhan City, Hubei Province ("Wuhan Intermediate Court") made a ruling recognizing and enforcing a commercial judgment made by the Los Angeles County High Court in California, United States ("this case"). This case is considered the first case of Chinese courts recognizing and enforcing commercial judgments of US courts.
5. According to incomplete statistics, till June 21, 2024, there are currently 7 cases of recognition and enforcement of Chinese court judgments by the United States, and 4 cases of recognition and enforcement of US court judgments by China.
Background knowledge two: What paperwork materials are required to apply for recognition and enforcement of foreign court judgments in mainland China?
The applicant shall submit a written application stating the detailed information and legal basis for the recognition and enforcement of foreign judgments, and prepare the following three types of documents with the application: the original judgment or a certified copy of the judgment (providing the original judgment of the foreign court or its legally authenticated copy); A document proving that the judgment has taken legal effect (such as a final judgment certificate, which confirms that the judgment is a final judgment that cannot be appealed and has legal enforceability. In some cases, it may also be necessary to provide legal opinions from relevant lawyers in the country where the judgment was made); Proof of legal summons for absent judgments in foreign courts (if the judgment is made in the absence of one party, documents proving that the foreign court has lawfully and reasonably summoned the absent party must be provided). According to the Chinese Civil Procedure Law, the above-mentioned documents must be accompanied by a Chinese translation that has been translated by a formal translation agency and stamped with a seal. Meanwhile, if the foreign documents submitted by the applicant are formed outside of China, they shall go through notarization and authentication procedures, or fulfill the certification procedures stipulated in the relevant international treaties between the People's Republic of China and the host country. In judicial practice, if the relevant documents do not meet the above requirements, it may result in the application being rejected by a ruling.