A court in Inner Mongolia, China, rendered a ruling on 18 December 2018, recognizing and enforcing the judgment of a Russian court. We have noticed that the amount of application fee charged by the Chinese court in this case is different from that of similar cases in the past. At the end of this post, we will introduce how Chinese courts calculate and collect application fee in cases of recognition and enforcement of foreign judgments and arbitral awards.
Суд во Внутренней Монголии, Китай, вынес решение от 18 декабря 2018 года о признании и приведении в исполнение решения российского суда. Мы заметили, что сумма пошлины за подачу заявления, взимаемая китайским судом в этом случае, отличается от таковой в прошлом. В конце этого поста мы расскажем, как китайские суды рассчитывают и собирают плату за подачу заявления в случаях признания и исполнения иностранных судебных решений и арбитражных решений.
On 18 December 2018, the Chifeng Intermediate People's Court of Inner Mongolia (the “Chifeng Court”) issued a civil ruling “ Nei 04 Xie Wai Ren No. 1” ( 内04协外认1号), recognizing and enforcing the judgment (No. A51-17242/2016) of the Arbitration Court of Primorsky Krai of Russian Federation (the “Russian Court”, in Russian: Арбитражный суд Приморского края).
The Chifeng Court’s recognition of the Russian judgment is made in accordance with the “Treaty between the People's Republic of China and the Russian Federation on Civil and Criminal Judicial Assistance” (中华人民共和国和俄罗斯联邦关于民事和刑事司法协助的条约) (in Russian: Договор между Российской Федерацией и Китайской Народной Республикой о правовой помощи по гражданским и уголовным делам). The Treaty entered into force on 14 November 1993.
In accordance with Article 20 of the Treaty, “the recognition and enforcement of a court decision may be refused in one of the following cases:
1) if, in accordance with the legislation of the Contracting Party where the decision was made, this decision has not entered into force or is not enforceable;
2) if, in accordance with the legislation of the Contracting Party to which the application for recognition and enforcement of the decision is made, the case falls within the exclusive jurisdiction of the courts of the requested Contracting Party;
3) if, in accordance with the legislation of the Contracting Party where the decision was made, the summon has not been duly served on the absent Party or, if under some incapacity, the Party was not duly presented;
4) if the court of the requested Contracting Party has already made a decision on the same legal dispute between the same Parties, or such case has been pending, or a third country’s decision on the case has already been recognized;
5) if the recognition and enforcement of a court decision may damage the sovereignty, security or public order of the requested Contracting Party.”
2. Case Summary
After the signing of the sales contract on 30 March 2016 between the Haweisitetayimu Co., Ltd. (the "Russian Company") registered in Vladivostok, Russian Federation, and the Inner Mongolia Daqiaofang Food Co., Ltd. (the "Chinese Company") registered in Chifeng City, Inner Mongolia, the two parties disputed over the contract. The Russian Company filed a lawsuit in a Russian court, but the Chinese Company did not appear in court.
On 25 March 2017, the Russian Court rendered a judgment (No. A51-17247/2016), requiring the Chinese Company to pay the Russian Company RUB20,203,930.36.
On 24 January 2018, the Chifeng Court accepted the application of the Russian Company for recognizing the Russian judgment against the Chinese Company.
The Chifeng Court found that although the Chinese Company claimed that it had not received the relevant documents served by the Russian Court, it confirmed that the address to which the Russian Court served was a valid address and that it had received a lawyer’s letter mailed by the Russian Court at that address. Therefore, the Chifeng Court refused to accept the Chinese Company’s claim that it had not received relevant documents from the Russian Court.
The Chifeng Court held that the recognition and enforcement of the Russian judgment do not violate China's sovereignty, security or public order and meets the conditions for recognition and enforcement of foreign court judgments stipulated by the Chinese law. Therefore, the Chifeng Court ruled to recognize and enforce the Russian judgment and ordered the respondent to pay an application fee of RMB25,411.
As mentioned in our previous posts, service is the review focus of Chinese courts when trying cases of recognition and enforcement of foreign judgments. In the case of this post, the respondent also invoked the service issue as the main defense. The Chifeng Court presumed that other services by the Russian Court had been successful on the grounds that the Russian Court had successfully served once, and accordingly considered that there was no reason for refusing to recognize and enforce the Russian judgment on the grounds of service.
It is worth noting that the application fee for the case mentioned in this post is RMB25,411. However, in other cases of recognition and enforcement of foreign judgments that we have observed before, the application fee charged by Chinese courts is usually several hundred yuan, regardless of the claimed amount. We speculate that, in general, Chinese courts calculate the application fee for cases of recognition and enforcement of foreign judgments by referring to those enforcement cases with no claimed amounts involved, i.e., a flat litigation fee is charged for each case. By contrast, the application fee of the case mentioned in this post is calculated by referring to those cases with claimed amounts involved, i.e., the litigation fee is charged based on the claimed amount. It thus can be seen that the court fee standards for recognition and enforcement of foreign judgments are not unified in local courts at present.
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Lin Haibin also contributes to the post.