The case of Oceanside Development Group Limited is not only the second Singapore judgment recognized by a Chinese court, but also marks the first time that a Singapore judgment has been recognized in China since the signing of China-Singapore Memorandum of Guidance on Recognition and Enforcement of Money Judgments (Memorandum of Guidance).
On 2nd Aug. 2019, the Wenzhou Intermediate People’s Court ("Wenzhou Court") in Zhejiang Province, China rendered a civil ruling “(2017) Zhe 03 Xie Wai Ren No. 7” ((2017)浙03协外认7号) on the case of Oceanside Development Group Ltd. v. Chen Tongkao & Chen Xiudan (hereinafter referred to as the "Wenzhou Case") , recognizing the judgment (Case No. S139/2012) of the High Court of the Republic of Singapore ("Singapore Court") on 15 Feb. 2013.
We obtained this information from the homepage of "Wanbang Law" on WeChat, China’s most widely used mobile social media, and found the full text of the ruling of Wenzhou Court on China Judgment Online (For the full text of the ruling, click here).
I. The implication of Wenzhou Case
On 9 Dec. 2016, the Nanjing Intermediate People’s Court in Jiangsu Province, China, made a ruling “(2016) Su 01 Xie Wai Ren No. 3” ((2016)苏01协外认3号), recognizing a civil judgment (No. 013) made by the High Court of Singapore on 22nd Oct. 2015. This was the first time that a Chinese court had recognized a Singapore judgment. In this case, the Chinese court held that since the Singapore court had recognized a Chinese judgment previously, the Chinese court could therefore recognize and enforce the qualified civil judgment of the Singapore court according to the principle of reciprocity.
On 31st Aug. 2018, the heads of the highest courts in China and Singapore signed the Memorandum of Guidance. MOG specifies how the court decisions of China and Singapore will be recognized and enforced in the other country, and states that ‘this memorandum has no binding legal effect’.
On 2nd Aug. 2019, the judgment of the said Wenzhou Case was made. This is not only the second time for a Chinese court to recognize a Singapore judgment, but also the first time for the Chinese court to do so after the signing of MOG.
It is worth noting that the applicant of Wenzhou Case submitted his application before the signing of MOG, and the Wenzhou Court ruled one year after the signing of MOG. However, MOG was not mentioned in the ruling of Wenzhou Case. We speculate that the Wenzhou Court probably made the ruling under the guidance of MOG, but due to MOG’s non-binding effect, it cannot be invoked in the ruling.
II. Brief introduction of Wenzhou Case
The applicant, Oceanside Development Group Limited, is a company registered in BVI. In Feb. 2012, due to an equity transfer dispute, it sued Chen Tongkao (陈通考) and Chen Xiudan (陈秀丹), two Chinese citizens, in a Singapore court (Case No. S139/2012).
The Singapore court issued a subpoena to the respondents, informing them that the court hearing date was 1st Feb. 2013. On the day of the hearing, the applicant appeared in court while the respondents were absent. The Singapore Court agreed that the respondents could continue to reply, on the condition that they provide a bank guarantee of 2.5 million GBP or make a payment of the equal amount to the Singapore Court before 4 p.m. on 15th Feb. 2013.
On 15 Feb. 2013, the respondents failed to perform the above obligations. The Singapore Court rendered a judgment on the same day, ordering the respondents to pay the applicant 2.5 million GBP, interest accrued thereon and court costs.
Thereafter, the applicant applied to the Wenzhou Court for recognition of the Singapore judgment, but not for enforcement. The Wenzhou Court accepted the application on 23rd Mar. 2017, and made a ruling on 2nd Aug. 2019, recognizing the Singapore judgment.
The respondents answered to the Wenzhou Court that the Singapore Court’s request for guarantee violated the principle of equal litigation rights in China’s Civil Procedure Law (CPL) and thus violated China’s public interest. However, the Wenzhou Court held that such practice was in line with the Singapore law and did not violate China’s public interest.
In addition, the Wenzhou Court held that the Singapore judgment had been partially enforced in Singapore, which could prove that the judgment had taken effect there. This means that in the future, we can use this method to prove to the Chinese court that a foreign judgment has come into force.
III. Our comments
As we have said before, China has opened the door to the recognition and enforcement of foreign judgments for many of its major trading partners. Another Singapore judgment being enforced is a good example. Now, we’re looking forward to opening this door wider with more cases.
An analysis is also available on Asia Business Law Institute.
Cover Photo by Lily Banse(https://unsplash.com/@lvnatikk) on Unsplash
Contributors: Meng Yu 余萌