Recognition and Enforcement of Foreign Court Judgments in China: A Complete Guide

The growing interconnectedness of international relations has brought about a significant increase in cross-border civil and commercial transactions and investments, leading in turn to a rise in transnational litigation. Where a judgment debtor's assets are located across multiple jurisdictions, a foreign court judgment must be recognized and enforced in the country where the assets are situated.

Under the principle of judicial sovereignty in international law, a judgment rendered by a court of one country generally has res judicata effect and enforceability only within the territory of that country. For such a judgment to take legal effect in another country, it must undergo that other country's recognition and enforcement process. This article provides a systematic guide for foreign businesses and individuals on applying for the recognition and enforcement of foreign court judgments in China.

1. What Constitutes a "Foreign Court Judgment"

1.1 Scope of "Foreign Court"

The term "foreign court" is not limited to judicial institutions bearing the name "court" and should be interpreted broadly. In certain countries, administrative authorities may also exercise jurisdiction over civil and commercial matters — for example, the House of Lords and the Judicial Committee of the Privy Council in the United Kingdom, as well as notary offices in Poland and certain other countries that have jurisdiction over small-value property disputes and disputes concerning the validity of wills and estate protection. Under judicial assistance treaties entered into between China and certain other countries, the scope of recognition and enforcement extends to judgments rendered by foreign "courts or other competent authorities." The determination of whether an institution qualifies as a "court" shall be based on the law of the country where that institution is located.

1.2 Scope of "Judgment"

• The judgment must be in a civil or commercial matter: Criminal judgments and administrative law judgments are penal in nature and carry a strong public law character; with limited exceptions, countries generally refuse to recognize and enforce them. However, the civil compensation portion of a criminal judgment附带 civil judgment may be the subject of an application for recognition and enforcement.
• The judgment must address substantive issues and must be legally effective: The legal effect of the judgment is to be assessed under the law of the country where the judgment was rendered. A judgment that is subject to appeal or is pending appeal does not qualify as a legally effective judgment.
• The form of the instrument is not limited to "judgments" or "rulings": Under Article 298 of the Civil Procedure Law of the People's Republic of China, the objects of recognition and enforcement are "legally effective judgments and rulings rendered by foreign courts." In practice, the scope may also include decisions, orders, and other legal instruments, but does not include preservative rulings or other procedural instruments.

2. Materials Required for an Application

An applicant seeking recognition and enforcement of a foreign court judgment before a Chinese court shall submit the following materials:

1. Application: The application shall state the basic information of the applicant and the respondent, the name of the foreign court and basic information of the judgment instrument, the specific claims and grounds, the respondent's asset status and the location of assets, and the status of enforcement of the judgment outside the territory of the rendering country.
2. The original judgment or a certified true copy thereof.
3. Documentation proving that the judgment has become legally effective.
4. Special materials for default judgments: If the judgment was rendered by default, documentation proving that the foreign court duly summoned the defaulting party shall also be provided.
5. Chinese translation: The judgment and other documents submitted shall be accompanied by a Chinese translation bearing the seal of the translation agency.
6. Notarization, legalization, or apostille: Documents formed outside the territory of China shall also undergo notarization and legalization procedures, or be accompanied by an apostille (where the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents applies).

3. Legal Basis for Review

Under Article 299 of the Civil Procedure Law of the People's Republic of China, people's courts conduct their review in accordance with international treaties concluded or acceded to by China, or based on the principle of reciprocity.

(1) Treaty-Based Approach

To date, China has not acceded to any international convention specifically dedicated to the recognition and enforcement of judgments. (The Convention on Choice of Court Agreements, signed by China in September 2017, has yet to be ratified by the National People's Congress; the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, for which China participated in the negotiations and signed the final text on July 3, 2019, has likewise not yet been formally concluded.) Accordingly, bilateral judicial assistance treaties containing provisions on the recognition and enforcement of civil and commercial judgments serve as the primary treaty basis.

As of 2024, China has concluded bilateral civil (or commercial) judicial assistance treaties (including civil and criminal judicial assistance treaties) with 40 countries, of which 38 have entered into force. Among the treaties in force, 35 contain provisions on the recognition and enforcement of civil and commercial judgments. The majority of foreign court judgments that have been successfully recognized and enforced by Chinese courts were obtained pursuant to such bilateral treaties.

Illustrative Case: In a sale of goods dispute between Ningbo Company Y and a Polish company F, the Polish court rendered a judgment in 2009. Company F applied to a Chinese court for recognition and enforcement. The Chinese court reviewed the application pursuant to the Agreement between the People's Republic of China and the Republic of Poland on Civil and Criminal Judicial Assistance and the Civil Procedure Law of China, determined that Company F's application had not exceeded the statutory time limit, and ruled to recognize and enforce the judgment.

(2) The Principle of Reciprocity

Where no treaty relationship exists with the country of the rendering court, Chinese courts may conduct their review based on the principle of reciprocity. Four forms of reciprocity have emerged in judicial practice:

a. Legal Reciprocity: This involves assessing, based on the law of the rendering country, the likelihood that a Chinese court judgment would be recognized and enforced in that country. The existence of a factual precedent is not required. Under the "substantially equivalent conditions" doctrine, a reciprocal relationship may be established if the material conditions prescribed by the laws of both countries are substantially the same.

b. Factual Reciprocity: A reciprocal relationship is established on the basis of an existing precedent in the judicial practice of both countries where a judgment of the other country's court has been recognized and enforced.

Illustrative Case: In a loan dispute between a Korean resident, Yoon, and a Korean resident, Choi, the Korean district court rendered a judgment in favor of Choi, who then applied to a Chinese court for recognition and enforcement. The Chinese court found that the Seoul District Court in Korea had previously recognized a judgment rendered by the Weifang Intermediate People's Court in Shandong Province, and on that basis, recognized and enforced the Korean judgment pursuant to the principle of reciprocity.

c. Reciprocal Commitment: Where a foreign court requests China to recognize and enforce a judgment of that country and there is no relevant bilateral judicial assistance treaty between the two countries, that country may make a reciprocal commitment through a diplomatic note. A reciprocal commitment is a unilateral undertaking that becomes effective upon being made.

Illustrative Case: China and Azerbaijan had not concluded any bilateral treaty on mutual recognition and enforcement of civil and commercial judgments. In 2019, the Chinese Embassy in Azerbaijan, by way of a diplomatic note, made a commitment to Azerbaijan that "under similar circumstances, equal assistance will be provided to Azerbaijan in accordance with law." This marked the first instance of China proactively making a reciprocal commitment to another country with respect to the recognition and enforcement of civil and commercial judgments.

d. Presumptive Reciprocity (Reciprocity Consensus): In 2015, the Supreme People's Court issued the Several Opinions on Providing Judicial Services and Safeguards for the Construction of the "Belt and Road," which put forward the "granting favor first" approach, whereby for countries participating in the Belt and Road Initiative, judicial assistance may be extended to litigants from such countries on a preferential basis, taking into account factors such as international judicial cooperation and exchange. In 2017, the Second China-ASEAN Chief Justices Forum adopted the Nanning Statement, reaching a consensus on "presumptive reciprocity" as advocated by China.

On August 31, 2018, the Supreme People's Court of China and the Supreme Court of Singapore signed the Memorandum of Guidance on the Recognition and Enforcement of Monetary Judgments in Commercial Cases, providing judicial guidance for litigants from both countries seeking recognition and enforcement of civil and commercial judgments in each other's courts and enhancing the predictability of recognition and enforcement outcomes.

Illustrative Case: In a loan contract dispute between Zhao and Ye, the High Court of Singapore issued an order in June 2023 requiring Ye to repay the loan. Zhao applied to a Chinese court for recognition and enforcement. The Chinese court, relying on the Memorandum of Guidance between China and Singapore, determined that a reciprocity consensus had been reached on the recognition and enforcement of monetary judgments in commercial cases, and ruled to recognize and enforce the Singapore court's order.

4. Grounds for Refusal of Recognition and Enforcement

Under Chinese law and judicial practice, a Chinese court will refuse to recognize and enforce a foreign court judgment where any of the following circumstances exists:

1. The court of the rendering country lacked jurisdiction over the case: i.e., the foreign court had no jurisdiction over the case under its own law; or although it had jurisdiction, there was no appropriate connection between the court and the dispute; or the judgment violates the exclusive jurisdiction provisions of China's Civil Procedure Law; or the judgment contravenes the parties' exclusive choice of court agreement. Furthermore, where a foreign court has rendered a default judgment and the Chinese court, upon review, finds that a valid arbitration agreement existed between the disputing parties and that the defaulting party did not expressly waive the arbitration agreement, recognition and enforcement shall also be refused.
2. The respondent was not duly summoned, or although duly summoned, was not afforded a reasonable opportunity to present its case or to be heard, or a party lacking litigation capacity was not properly represented.

Illustrative Case: In a contract dispute between a Russian company C and a Chinese company J, a Russian district court rendered a judgment in the absence of company J. The Chinese court, upon review, determined that under the Treaty between the People's Republic of China and the Russian Federation on Civil and Criminal Judicial Assistance, the interval between the issuance of the service request and the hearing date was less than six months in each instance, failing to satisfy the requirements of Article 15(2) of the Hague Service Convention and constituting a failure to duly summon company J. Recognition and enforcement were accordingly refused.

3. The judgment was obtained by fraud: A judgment procured through improper and unlawful means does not merit legal protection.
4. A Chinese court has already rendered a judgment on the same dispute, or has already recognized and enforced a judgment rendered by a court of a third country, or an arbitral award, on the same dispute.
5. Recognition and enforcement of the judgment would contravene the public interest of China: This includes violation of fundamental principles of Chinese law, infringement of China's national sovereignty, endangerment of public security, and violation of good morals.
6. The foreign court's judgment awards damages that manifestly exceed the actual loss: The portion constituting punitive damages shall not be recognized and enforced. Punitive damages are widely applied in tort law, contract law, maritime law, and other areas in common law jurisdictions, with amounts often being multiples of compensatory damages to serve a punitive function. Under Chinese law, civil and commercial damages are compensatory in nature: victims are prohibited from profiting from the injurious act, and compensation is limited to the scope of actual loss. Accordingly, Chinese courts may partially recognize and enforce a foreign court judgment while refusing to recognize and enforce the punitive damages component.

5. Key Procedural Points

5.1 Competent Court

An application for recognition and enforcement of a foreign court judgment may be filed with the intermediate people's court at the place of the respondent's domicile, the place where the respondent's assets are located, or the place of the applicant's domicile.

5.2 Service and Response

The application shall be served on the respondent. The respondent shall submit its observations within 15 days from receipt of the copy of the application; if the respondent has no domicile in China, the time limit shall be 30 days. The respondent may raise a jurisdictional objection, and if dissatisfied with the ruling on the jurisdictional objection, may file an appeal.

5.3 Asset Preservation

After the court has accepted an application for recognition and enforcement of a foreign court judgment, the applicant may apply for asset preservation, provided that security is furnished and relevant asset leads are provided.

5.4 Effectiveness of the Ruling and Remedies

The ruling rendered by the Chinese court takes legal effect upon service. A party dissatisfied with the ruling may, within 10 days from the date of service of the ruling, apply to the next higher-level people's court for review.

6. Conclusion

The recognition and enforcement of foreign court judgments is a vital component of international judicial assistance and is of great significance in enhancing the international mobility of court judgments, promoting judicial exchange and cooperation among countries, and facilitating the resolution of cross-border civil and commercial disputes. Foreign businesses and individuals contemplating an application to a Chinese court for recognition and enforcement of a foreign judgment are advised to assess in advance whether an applicable bilateral treaty or reciprocal relationship exists, whether the judgment satisfies the conditions for recognition and enforcement under Chinese law, and to engage Chinese counsel with relevant experience in this area to provide professional assistance and maximize the likelihood of success.

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This article is general information only, not legal advice for your matter. For professional assistance, consult a PRC-licensed lawyer at Zhang&Partners.