Chinese court enforces US judgment

This is big news. Chinese civil procedure allows Chinese courts to enforce foreign judgments (provided they don’t offend public policy) in two circumstances: on the basis of a treaty or on the basis of reciprocity. There is no relevant treaty between China and the US, and China has never found reciprocity to exist. In a recent case from Wuhan (Liu Li v. Tao Li and Tong Wu, (2015) Yue Wuhan Zhong Min Shang Wai Chu Zi No.00026, Intermediate People’s Court of Wuhan City, Hubei Province, 30 June 2017), the court found reciprocity and duly enforced a money judgment from California—and a default judgment at that, where we might expect a court to be particularly reluctant to enforce. Here’s an account of the case in EnglishI don’t yet have a copy of the Chinese judgment here’s a copy of the Chinese court ruling (preceded by some commentary).

The reciprocity finding was based on the 2009 Robinson Helicopter case in California (see the discussion of it here). Although US courts (at least at the state level) have enforced a number of Chinese judgments over the years (see this recent blog post by Dan Harris at the China Law Blog talking about his own experience), the Robinson Helicopter case remains the most famous one, and the one cited by the court. (This is a bit ironic, because the particular facts of Robinson Helicopter make it a terrible case to use to show reciprocity: the judgment defendant had previously urged a US court to dismiss the case against it on forum non conveniens grounds, claiming that the Chinese legal system was just dandy. Therefore, it could hardly be heard to complain when it lost in China that the Chinese legal system was fundamentally flawed.)

It’s possible that some kind of instruction has come down from on high, telling Chinese courts to start being more sympathetic to those seeking to enforce foreign judgments. Earlier this year, I blogged about a case in which the Nanjing Intermediate People’s Court enforced a Singapore judgment—again, a default judgment, and again on the basis of reciprocity, not a treaty. Maybe something is changing.

One of the rare certainties about Chinese law used to be that a Chinese court would not enforce your US judgment (see again Dan Harris’s recent blog post on this). I think it’s probably going to continue to be rare, and very likely it won’t happen against defendants that have any kind of political clout at all. But it does raise interesting possibilities for all those folks out there who have been holding hitherto-useless US judgments against Chinese defendants—for example, the plaintiffs in the Chinese drywall litigation.

I last looked in detail at the question of enforcement of foreign judgments back in 2004; here’s what I found then. No US judgment of any kind—even those involving only changes in personal status and not money, such as divorce—had been recognized and enforced at that time.