A court in Qingdao, China, ruled in March 2019 to recognize and enforce a South Korean judgment, which is the first time that a Chinese court has recognized and enforced a South Korean monetary judgment.
중국 청도 법원은 2019 년 3 월 중국 법원이 한국의 통화 판단을 인정하고 시행 한 최초의 판결 인 한국 판결을 인정하고 집행하겠다고 판결했다.
It not only indicates that the situation of mutual recognition and enforcement of judgments between China and South Korea has begun to take shape, but also proves the CJO's long-held view that China's Supreme People's Court (SPC) has been playing an active role in recognizing and enforcing foreign judgments.
We would like to thank our friend, Béligh Elbalti, who also noticed the case immediately and provided us with valuable information. He is an academic from Osaka University, Japan, and has also long been concerned about the recognition and enforcement of foreign judgments in China.
On 25 March 2019, Qingdao Intermediate People's Court (Qingdao Court) issued the civil ruling "(2018) Lu 02 Xie Wai Ren No.6" ((2018)鲁02协外认6号), recognizing and enforcing a judgment of South Korea's Suwon District Court (South Korean Court).
Three days after Qingdao Court made the ruling, the SPC's newspaper "People's Court Daily" (人民法院报) published an article entitled "Qingdao Intermediate People's Court Recognizes and Enforces a South Korean Commercial Judgment for the First Time" (青岛中院首次承认和执行韩国法院商事判决) on 28 March 2019, introducing the basic information of the case.
Additionally, on the same day, "Beijing Youth Daily" (北京青年报) also reported the case and interviewed Judge Wang Xiaoqiong (Director of Qingdao Court's 4th Civil Division). Wang expressed that the Seoul District Court of South Korea had recognized a judgment of Weifang Intermediate People's Court (Weifang Court) in Shandong Province in 1999. Therefore, Qingdao Court recognized and enforced the judgment of South Korean court this time based on the principle of reciprocity, which can continue to maintain the reciprocal relationship between China and South Korea, and would promote the recognition and enforcement of judgments between the two countries. She also said that this will be conducive to boosting economic and trade exchanges between China and South Korea and to strengthening the protection of foreign investors.
2. Case Summary
On 6 November 2009, Yin, a Korean, borrowed 80 million South Korean wons from Cui, causing a dispute between them. Cui sued in South Korean Court in 2017. On 20 July 2017, South Korean Court made a judgment, ordering Yin to pay Cui KRW 80 million and the interest arising therefrom. Since Yin has long resided in Chengyang District, Qingdao City, Shandong Province, China, and Yin's main property is in China, Cui applied to Qingdao Court for recognition and enforcement of the judgment made by South Korean Court.
Qingdao Court held that:
(1) Yin's habitual residence falls under the jurisdiction of Qingdao Court, so the court has jurisdiction over the case.
(2) China and South Korea have not concluded an international treaty on recognition and enforcement of court judgments, so Qingdao Court cannot review the application for recognition and enforcement of a South Korean judgment under the treaty. According to the PRC Civil Procedure Law (CPL), in this case, Chinese courts should first review the application on the basis of whether there exists the principle of reciprocity between China and South Korea.
(3) A South Korean court has once recognized and enforced a judgment made by the Weifang Court of China, so there is a reciprocal relationship between China and South Korea. Chinese courts can recognize and enforce the civil judgments of South Korean courts which conform to conditions prescribed by law.
(4) According to the specific circumstances of the case, Qingdao Court recognizes the judgment of South Korean Court, which does not violate the basic principles of Chinese laws, national sovereignty, security, and social public interests.
Accordingly, Qingdao Court ruled to recognize and enforce the judgment of the South Korean Court.
We have repeatedly stated in previous CJO posts that the SPC has been doing its best to recognize and enforce foreign judgments. The case of Qingdao Court once again proves our point of view.
It is worth noting that although the South Korean court recognized a Chinese judgment in 1999, Chinese courts had twice refused to recognize South Korean judgments on the grounds that there was no reciprocal relationship between China and South Korea before Qingdao Court made the aforementioned ruling. To be more specific, in 2011, in the ruling "(2011) Shen Zhong Fa Min Yi Chu Zi No.45" ((2011)深中法民一初字第45号) of the case of SPRING COMM's application for recognition of a South Korean civil judgment, Shenzhen Intermediate People's Court of Guangdong Province held that China and South Korea had not established a reciprocal relationship, and accordingly it refused to recognize the South Korean judgment. In 2015, in the ruling "(2015) Shen Zhong Min Te Zi No.2" ((2015)沈中民四特字第2号) of the case of Zhang Xiaoxi's application for recognition and enforcement of a South Korean judgment, Shenyang Intermediate People's Court of Liaoning Province also refused to recognize the South Korean judgment for the same reason.
This time Qingdao Court changed the attitude other Chinese local courts usually have towards South Korean judgments, which is probably influenced by the SPC. The fact that the SPC's newspaper quickly reported the case further proves that the SPC is likely to be involved in the case.
Considering that Chinese courts have already recognized American judgments twice, we believe that the recognition of foreign judgments by Chinese local courts should no longer be an isolated example. We assume that the SPC has probably asked all local courts to spare no efforts to recognize and enforce foreign judgments. Moreover, once local courts have accepted the cases, they are likely to report to the SPC (especially its 4th Civil Division) so that the SPC can prevent local courts from making rulings inconsistent with its attitude.
Besides, according to our understanding of the relationship between Chinese courts and the media, only when Chinese courts expect to express their specific attitudes to the outside world can the media interview court staff and obtain detailed information. Therefore, "Beijing Youth Daily" reported the case of Qingdao Court in detail, probably for the reason that the SPC wanted the outside world to know about its efforts in the recognition and enforcement of foreign judgments.
Based on all the information, we believe that cases involving the recognition and enforcement of foreign judgments in Chinese courts are receiving special attention from the SPC. This is good news for the parties who need the recognition and enforcement of foreign judgments in China.
Contributors: Guodong Du 杜国栋 , Meng Yu 余萌