Key takeaways:
- In November 2023, the High Court of New Zealand granted a summary judgment to enforce two Chinese court judgments, one of which was a Chinese mediation judgment (Tian v Xu [2023] NZHC 3259).
- The New Zealand Court held that a civil settlement statement bears the hallmarks of a “consent judgment” because it records a voluntary settlement and becomes enforceable under Chinese law once served on the parties.
- This decision follows precedents in Canada (Wei v Li 2019 BCCA 114) and Australia (Bank of China Limited v Chen [2022] NSWSC 749), reinforcing the growing acceptance of Chinese mediation judgments as “foreign judgments” in common law countries.
On 17 Nov. 2023, the High Court of New Zealand (hereinafter the “New Zealand Court”) granted a summary judgment to enforce two Chinese court judgments, one of which was a Chinese mediation judgment, in Tian v Xu [2023] NZHC 3259.[i] The two PRC judgments were made by the Lubei District Primary People’s Court of Tangshan City, Hebei Province (hereinafter the “Lubei Court”).
This is the first reported case of a New Zealand court recognizing and enforcing a Chinese mediation judgment, also known as a civil settlement statement, or the “Civil Mediation Settlement Agreement Confirmation” as addressed in this case. This is the fourth reported enforcement of a Chinese monetary judgment in New Zealand, according to the CJO database.
Related Posts:
- Series: New Zealand-China Judgments Recognition and Enforcement
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- Again! New Zealand Court Enforces Chinese Judgment
I. Case Background
The dispute arose from two loan contracts between the Plaintiff, Mr. Yang Tian (“Mr. Tian”), and the Defendant, Mr. Chen Xu (“Mr. Xu”). From 2015 to 2019, Mr. Tian provided two loans, one to Mr. Xu and the other to Mr. Xu's business associate Nan Zhang. The loan to Mr. Zhang was guaranteed by Mr. Xu.
In July 2021, Mr. Tian sued Mr. Xu in the Lubei Court to recover the amount outstanding on the Xu loans (the Xu proceeding). On 30 Aug. 2021, Mr. Tian and Mr. Xu attended a judicial mediation conducted by the Lubei Court. The parties agreed on the terms of settlement, which were recorded in a document translated as the “Civil Mediation Settlement Agreement Confirmation” (hereinafter the “Confirmation”), issued by the Lubei Court on the same day.
In September 2021, Mr. Tian commenced a separate proceeding against Mr Zhang and Mr. Xu in the Lubei Court, seeking recovery of the outstanding balance on the Zhang loan (the Zhang proceeding). On 18 May 2022, the Lubei Court issued a civil judgment (hereinafter the “Judgment”) document requiring Mr. Zhang to repay the loan of RMB 650,000 to Mr. Tian, together with interest, and recording that Mr. Xu was jointly and severally liable for the debt.
In 2023, Mr. Tian sought to enforce the Confirmation and the Judgment against Mr. Xu in New Zealand. On 26 May 2023, Mr. Tian obtained freezing orders over Mr. Xu’s assets on a without notice basis.[ii]
On 17 Nov. 2023, the New Zealand Court ruled in Mr. Tian's favor.
II. Court Views
The application for summary judgment to enforce the two PRC court judgments (the Confirmation and the Judgment) was sought in New Zealand under the common law.
To start with, the legal test for recognition and enforcement of an unregistered foreign judgment, under common law, comprises three prerequisites: (a) the foreign court must have had jurisdiction to give judgment; (b) the judgment must be for a definite sum of money; and (c) the judgment must be final and conclusive. The judgment creditor bears the burden of establishing such prerequisites (at [15]-[16]).
If this test is met, recognition may be denied, where: (a) the judgment was obtained by fraud; (b) enforcement of the judgment would be contrary to public policy; or (c) the proceedings in which the judgment was obtained were contrary to natural justice. A foreign judgment is not otherwise impeachable on its merits for error of fact or law. Such burden lies on the party seeking to impeach the judgment (judgment debtor) (at [17]-[18]).
To impeach the PRC court judgments, Mr. Xu, the judgment debtor, filed a notice of opposition and affidavit opposing recognition of the judgments on the grounds that the PRC courts that issued the judgments are not courts of judicature; the judgments are not final and conclusive; and the proceedings involved breaches of natural justice.
With detailed analysis, the New Zealand Court rejected all of Mr. Xu’s claims for lack of particularized or sufficient evidence. Among others, the Court treated the Confirmation as equivalent to a consent judgment: it recorded a voluntary settlement, was issued and served by the court, and carried the same enforceability as a judgment under Chinese law.
III. Comments
“Hooray!” cheer the judgment creditors who wish to have enforced in New Zealand the PRC civil settlement statements, or “Civil Mediation Settlement Agreement Confirmation” as addressed in this case.
It is always encouraging to see how Chinese legal institutions are gradually understood in common law jurisdictions. Back in 2016, it was not so promising, as in Shi Wen Yue v Shi Minjiu & Anor [2016] SGHC 137, the Singapore High Court refused to grant summary judgment to enforce a Chinese civil settlement statement, citing uncertainty about the nature of such settlement statements. Nevertheless, positive views from other common law jurisdictions have emerged since 2019. In Canada, the Court of Appeal for British Columbia upheld the trial ruling to enforce a Chinese civil settlement statement (Wei v. Li 2019 BCCA 114), referred to such a document as the ‘Civil Mediation Paper’, and took it as an equivalent of a Chinese judgment. In 2022, the New South Wales Supreme Court of Australia ruled to recognize two Chinese civil settlement statements (Bank of China Limited v Chen [2022] NSWSC 749), confirming its status as ‘foreign judgments’ under Australian law.
This time, the New Zealand Court followed its Canadian and Australian counterparts on the nature of the civil settlement statement, affirming its enforceability as a court judgment.
The consent judgment seems to be a proper analogy. As the New Zealand Court pointed out, the civil settlement statement bears the hallmarks of a consent judgment and became enforceable as a judgment after it was served on the parties. Such court reasoning aligns perfectly with the Chinese legal framework, under which civil settlement statements are made by Chinese courts upon the settlement arrangement reached by the parties and confirmed by the courts, and do enjoy the same enforceability as court judgments once served on the parties.
One lesson learnt on the translation point, perhaps it is better for litigants to use the "Mediation Judgment", rather than names such as “civil settlement statements” or “civil mediation paper”.
Related Posts:
- The First Time Australia Recognizes Chinese Civil Settlement Statements (Bank of China Limited v Chen [2022] NSWSC 749)
- Canadian Court Enforces Chinese Civil Settlement Statement/Mediation Judgment in 2019 (Wei v. Li 2019 BCCA 114)
- Chinese Civil Settlement Statements: Enforceable in Singapore? (Shi Wen Yue v Shi Minjiu & Anor [2016] SGHC 137)
[i] China Justice Observer (CJO) thanks Mr. Thomas Westaway, Special Counsel at Wynn Williams, for sharing a copy of this judgment with us. We also thank Mr. Westaway for alerting us to the development in New Zealand, including Guangzhou Dongjiang Petroleum Science & Technology Development Co Ltd v Kang [2020] NZHC 3068, and Royal v Zheng [2025] NZHC 1395.
[ii] Tian v Xu [2023] NZHC 1261.
Photo by Sulthan Auliya on Unsplash
Contributors: Meng Yu 余萌
