China and HCCH Judgments Convention in 2019

Sat, 27 Jul 2019 Insights

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On 2 July 2019, the delegates of the 22nd Diplomatic Session of the HCCH signed the Final Act of, and thus adopted, the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.  (“HCCH Judgments Convention”)

China participated in the drafting of the HCCH Judgments Convention and dispatched a delegation with the largest number of delegates (21 members). The delegation of China is comprised of personnel from the Supreme People's Court (SPC), the Ministry of Foreign Affairs, the Ministry of Commerce, the State Administration for Market Regulation, the National Copyright Administration, the National Intellectual Property Administration the Department of Justice of Hong Kong Special Administrative Region (SAR) and the Legal Affairs Bureau of Macao SAR, as well as Chinese scholars and lawyers.

At present, China has participated in drafting the HCCH Judgments Convention, but has not yet signed it. China signed the Hague Convention on Choice of Court Agreements in 2017. In terms of procedure, after China has signed such conventions, they shall then be submitted by the State Council to the Standing Committee of the National People's Congress for decision on ratification. The President of the People's Republic of China shall ratify them pursuant to the decision of the Standing Committee of the National People's Congress.  

The reason why China is now actively participating in the drafting and signing of these conventions is that China aims at promoting the Belt and Road Initiative (BRI) and is trying to establish a mechanism for international civil and commercial dispute resolution under the BRI. Recognition and enforcement of judgments is an important part of such mechanism. However, it is difficult and costly for China and the countries along the Belt and Road to promote bilateral or multilateral dispute resolution mechanisms. Therefore, China hopes to join these conventions so as to realize China's relevant needs under the BRI.

According to our understanding, China's position is reflected in a few parts of the HCCH Judgments Convention. For example, in the Preamble, expressions like "facilitate rule-based multilateral trade and investment", "the creation of a uniform set of core rules", and "the global circulation of foreign judgments", are all suggested by China. In addition, China's position can also be seen in the following aspects: antitrust, intellectual property and other matters covered in the Article 2 “Exclusions from Scope”; the provision relating to “person acting for the State” in the Article 19 “Declarations with respect to judgments pertaining to a State provisions on person acting for that State” .

Since China has not yet ratified these two conventions mentioned above, according to the PRC Civil Procedure Law (CPL) , there are currently only two legal bases for the recognition and enforcement of foreign judgments by Chinese courts: the first is bilateral judicial assistance treaties signed by China and other countries, and the second is the principle of reciprocity.

Among China's major trading partners, countries including France, Italy, Spain, Russia and Vietnam have concluded such bilateral treaties with China. As for those without bilateral treaties at hand, there are countries (U.S., Germany, Singapore and South Korea) whose judgments have already been recognized in China based on reciprocity, and countries (Australia, Canada, and perhaps U.K. (to be confirmed)) that have recognized Chinese judgments and are waiting for China to confirm the reciprocity in future cases. At present, only the recognition and enforcement of Japanese judgments remains still unclear in China. Therefore, even though China has not yet signed and ratified the HCCH Judgments Convention, there are no substantial obstacles for China to recognize and enforce judgments emanating from most of its major trading partners.

In addition, the SPC is drafting the judicial interpretation on recognition and enforcement of judgments, which was initially expected to be promulgated in the first half of 2019 but has not yet been issued till now. We speculate that with the adoption of the final Act of the HCCH Judgments Convention, the draft of which China is involved, it is possible for China to join the Convention without promulgating the judicial interpretation. Or, even if the SPC still promulgates the judicial interpretation as planned, the judicial interpretation will follow a large quantity of expressions in HCCH Judgments Convention and stipulate how to confirm the reciprocity between China and the countries that have not yet acceded to the HCCH Judgments Convention and have not concluded relevant bilateral treaties with China.

We are looking forward to China's early signature and ratification of the HCCH Judgments Convention.

 

If you would like to discuss with us about the post, or share your views and suggestions, please contact Ms. Meng Yu (meng.yu@chinajusticeobserver.com).

Contributors: Guodong Du 杜国栋 , Meng Yu 余萌

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