Recognition and Enforcement of Foreign Court Judgments in the People’s Republic of China

This newsletter aims to provide an overview of (1) the legal framework that governs recognition and enforcement of foreign court judgments in China, (2) the evolution of Chinese court practice on “reciprocity,” (3) specific insights on how German court judgments have been recognized in China (despite the absence of a formal China–Germany treaty), and (4) key procedural steps for enforcing foreign judgments in China. We also briefly touch on China’s cooperation with various EU Member States under existing bilateral treaties and the potential impact of the 2019 Hague Judgments Convention.

1. Introduction

As economic globalization intensifies, commercial interactions increasingly cross national borders, creating a growing demand for effective mechanisms to resolve disputes. When international transactions go awry, parties may secure judgments in one jurisdiction but need to enforce them in another. This is where the recognition and enforcement of foreign court judgments become crucial.

Within this context, the People’s Republic of China (“PRC” or “China”) has long been viewed as a challenging forum in which to enforce foreign court judgments. Historically, Chinese courts have shown caution due to a strict interpretation of the principle of “reciprocity,” meaning that applicants had to prove that the originating state’s courts had recognized a Chinese judgment in the past. However, significant shifts have occurred in recent years, illustrated by a progression from strict factual reciprocity to presumed or “legal reciprocity,” creating new opportunities for the enforcement of foreign judgments.

This newsletter aims to provide an overview of (1) the legal framework that governs recognition and enforcement of foreign court judgments in China, (2) the evolution of Chinese court practice on “reciprocity,” (3) specific insights on how German court judgments have been recognized in China (despite the absence of a formal China–Germany treaty), and (4) key procedural steps for enforcing foreign judgments in China. We also briefly touch on China’s cooperation with various EU Member States under existing bilateral treaties and the potential impact of the 2019 Hague Judgments Convention.

2. China’s Legal Framework for Recognizing Foreign Judgments

2.1. Bilateral Treaties and Reciprocity

Chinese courts derive their authority to recognize and enforce foreign judgments primarily from the Civil Procedure Law of the PRC, related judicial interpretations, and several bilateral treaties. Where China has concluded a treaty on judicial assistance in civil and commercial matters with another country, courts typically rely on the treaty’s provisions to determine whether and how to recognize and enforce judgments from that treaty partner.

However, China has signed only a limited number of such treaties. Within the European Union, for example, China has concluded bilateral judicial assistance treaties with countries including France, Italy, Bulgaria, Hungary, Lithuania, Cyprus, Greece, Poland, Spain, and Romania. Judgments from these jurisdictions often benefit from relatively clear procedures and more predictable outcomes, because the treaties specify conditions and grounds for recognition and enforcement.

For foreign jurisdictions that do not have such treaties with China, the courts traditionally rely on the principle of “reciprocity.” In prior years, this was interpreted narrowly as “strict reciprocity” or “factual reciprocity,” meaning that if the applicant could not show evidence that the courts in the foreign country had previously recognized and enforced a Chinese judgment, the Chinese court would likely reject the application. Over time, this approach generated an impasse for many parties seeking to enforce foreign judgments in China absent a treaty.

2.2. Strict Reciprocity: Historical Roots

In the mid-1990s, the Supreme People’s Court (“SPC”) made explicit that a lack of express treaty commitments or a known record of enforcement by foreign courts against Chinese defendants would preclude recognition in China. A well-known example is the 1995 “五味晃” case:

• The Japanese court had granted a judgment, and the successful litigant sought enforcement in Dalian, China.
• The SPC responded by indicating that no judicial cooperation treaty existed between China and Japan and that Japan had not enforced a Chinese judgment based on reciprocity.
• The Chinese court thus refused enforcement on the grounds of no established reciprocal relationship.

Such decisions created a high bar: either litigants had to show the existence of a bilateral treaty covering judgment enforcement or establish that Chinese judgments had already been enforced by the foreign jurisdiction in question. This approach made it extraordinarily difficult for the first applicant from a foreign jurisdiction.

2.3. The Shift Toward Presumed Reciprocity

Beginning around 2015, Chinese authorities began issuing new policy documents and opinions aiming to facilitate international judicial cooperation. Two influences strongly shaped this development:

1. Belt and Road Initiative (BRI): Announced in 2013, the BRI encouraged commercial and infrastructure projects across regions and required cross-border legal assurances. The SPC’s 2015 Opinions on Providing Judicial Services and Safeguards for the BRI explicitly recommended that Chinese courts take a more proactive stance in recognizing foreign judgments.
2. Increasing Global Litigation and Enforcement Demands: As China’s economy became more integrated into global trade, disputes multiplied, and courts received more foreign judgment recognition requests.

A turning point was the 2016 Kolmar case heard by the Nanjing Intermediate People’s Court. The court recognized and enforced a Singapore High Court judgment after finding that Singapore had previously recognized a Chinese judgment in 2014. Though the decision still hinged on strict reciprocity, it demonstrated flexibility and provided a new precedent for foreign litigants.

2.4. “Nanning Statement” and the Move to Legal Reciprocity

China then took a bold step at the 2017 China–ASEAN Justice Forum, issuing the “Nanning Statement,” which stated that if a foreign country has no known precedent of refusing recognition of Chinese judgments on reciprocity grounds, the Chinese court may presume reciprocity exists. This effectively shifted the burden of proof to the party opposing recognition to demonstrate the contrary.

Subsequently, the Shanghai Maritime Court recognized a UK court judgment in the SPAR Shipping case without requiring evidence of a prior UK recognition of a Chinese judgment. The presumption was that UK law in principle permitted enforcement of Chinese judgments; thus, Sino-UK reciprocity was deemed to exist.

2.5. Codification in the 2022 Conference Summary and Updated Civil Procedure Law

In 2022, the SPC convened a pivotal conference on foreign-related commercial and maritime trial work. The resulting conference summary affirmed the principle that “legal reciprocity” applies if the foreign jurisdiction’s laws do not explicitly exclude Chinese judgments or if there is a diplomatic or inter-governmental consensus reflecting mutual respect for each other’s judgments. At the same time, new Civil Procedure Law interpretations solidified this approach.

The highlights of these reforms include:

• Legal Reciprocity: If the foreign country’s statutes or relevant international agreements allow the enforcement of Chinese judgments, a Chinese court can presume reciprocity—absent explicit precedents to the contrary.
• Shifting the Burden: It is now the responsibility of the party opposing recognition to show that the foreign jurisdiction refuses to enforce Chinese judgments purely on reciprocity grounds.
• Public Policy Exception: Chinese courts maintain the right to refuse enforcement if the judgment violates fundamental principles of Chinese law or China’s public interest. However, courts have tended to define “public policy” narrowly, focusing on serious infringements.

Taken together, these developments make it easier for judgment creditors to secure recognition of foreign court judgments in China, even where no bilateral treaty exists.

3. Recognition and Enforcement of German Court Judgments: A Prime Example

3.1. Early Challenges and the 2003 Beijing No. 2 Intermediate People’s Court Decision

The Sino-German context exemplifies the shift in Chinese judicial thinking. China and Germany have not signed any treaty regarding mutual enforcement of civil or commercial judgments, nor do they share membership in a multilateral convention that specifically covers such judgments. Consequently, litigants initially faced the strict reciprocity test.

In 2003, the Beijing No. 2 Intermediate People’s Court refused to recognize a German court judgment, citing the absence of any precedent where German courts had enforced a Chinese judgment. This refusal reflected the strict approach that had pervaded Chinese jurisprudence for many years.

3.2. The 2006 Berlin High Court Recognition of a Chinese Judgment

Shortly thereafter, in 2006, the Berlin High Court (Kammergericht Berlin) recognized a Chinese court judgment. The German court highlighted that waiting indefinitely for the other side to act first would be counterproductive to international commerce. The Berlin High Court effectively created the very precedent required under China’s “strict reciprocity” logic, as it established that a German court had recognized a Chinese judgment.

Though Chinese courts did not immediately reciprocate, the Berlin High Court’s decision fostered optimism that reciprocity could develop between China and Germany. From a policy standpoint, it signaled to Chinese courts that Germany, as a mature rule-of-law jurisdiction, does not systematically obstruct the enforcement of foreign judgments, thus satisfying the spirit of reciprocity.

3.3. 2012 Wuhan Intermediate People’s Court Case

A breakthrough arrived in 2012, when the Wuhan Intermediate People’s Court recognized a German judgment in the Sascha Rudolf Seehaus case. The Chinese court explicitly referred to the 2006 Berlin High Court precedent as proof that Germany had enforced a Chinese judgment. Accordingly, reciprocity was deemed to exist, and recognition was granted.

What is particularly notable is that the Berlin High Court had remarked on how Chinese courts do not impose overly onerous requirements—beyond preventing violations of China’s fundamental legal principles and public interests—for recognizing foreign judgments. From the German perspective, this indicated an even lower threshold for reciprocity than might be required under German law, thereby reinforcing a sense of parity.

3.4. Developments Post-2015

In 2015, the Dalian Intermediate People’s Court ruled in favor of recognizing the effect of a settlement agreement formed during litigation in a German court, further underscoring that Chinese courts were willing to accord a German judgment or court-facilitated resolution the same treatment they extend to countries with formal judicial assistance treaties.

Most recently, in 2023, the Beijing No. 1 Intermediate People’s Court recognized a German insolvency judgment (rendered by the Aachen Local Court), officially accepting the German insolvency administrator’s legal standing and authority within China. This was the first time a Chinese court used “legal reciprocity” to recognize a foreign insolvency proceeding, illustrating the deepening Sino-German judicial cooperation.

From these cases, it is evident that Germany stands as a prominent example of how reciprocity, once established, can be nurtured and expanded. Despite the absence of a treaty, judicial practice has evolved to the point where Sino-German recognition of court judgments is relatively robust.

4. Key Procedural Steps Under Chinese Law

Whether recognition is founded on a bilateral treaty or grounded in the evolving reciprocity doctrine, foreign judgment creditors should carefully observe certain procedural requirements when seeking enforcement in China.

4.1. Time Limits

Under the PRC Civil Procedure Law, an applicant has two years from the date the foreign judgment becomes enforceable (or from the final date of performance specified in the judgment) to file an enforcement application in China. Failure to meet this limitation can result in a court rejecting the application on procedural grounds.

4.2. Competent Court

Enforcement proceedings must generally be brought in an Intermediate People’s Court—the second tier of the Chinese court hierarchy—rather than in a Primary People’s Court. Jurisdiction is determined by either:

• The place where the defendant is domiciled or habitually resides, or
• The place where the defendant’s assets are located.

It is sometimes advisable for judgment creditors to conduct asset searches in China to identify the most appropriate court to approach.

4.3. Required Key Documentation

Applicants must submit:

1. A notarized and authenticated copy of the foreign judgment.
2. Proof that the judgment is final and enforceable under the law of its origin (e.g., a certificate from the foreign court).
3. A Chinese translation of all relevant documents.

In addition, because most foreign applicants do not maintain in-house legal teams in China, they typically appoint Chinese counsels to represent them. A Certificate of Incorporation / Business License, Power of Attorney (POA) and Certificate of the Identification of the Legal Representative (COI) must also be properly notarized and authenticated or, if applicable, apostilled.

It is also worth noting that in November 2023, the Apostille Convention (formally known as the Convention Abolishing the Requirement of Legalization for Foreign Public Documents) entered into force in China. This development eases the process of using foreign documents in Chinese courts for signatory states. Documents that receive an apostille no longer need consular authentication to be recognized in China. However, applicants should note that the apostille does not eliminate the need for notarization in the original country. It merely replaces the step of having the notarial certificate authenticated by the Chinese embassy or consulate (and if the foreign judgment is made by a non-signatory state, consulate authentication is still required).

4.4. Grounds for Refusal

Even when reciprocity is presumed or a bilateral treaty exists, Chinese courts retain discretion to refuse recognition on certain grounds, including:

• Violation of fundamental legal principles: If the foreign judgment is contrary to the PRC Constitution, laws, or fundamental public policy.
• Lack of finality: Judgments that are not conclusive or remain subject to appeal.
• Improper jurisdiction: If the foreign court did not have lawful jurisdiction under Chinese conflict-of-laws rules.
• Procedural defects: For instance, if a defendant was not duly summoned or was denied a proper opportunity to be heard.

In practice, Chinese courts increasingly apply these exceptions narrowly.

4.5. Challenging the Decision

Parties may challenge a recognition decision (whether granted or denied) by filing a request for reconsideration with the next higher court within ten days from receiving the ruling. Although reversals are not particularly common, it remains an available remedy.

5. Cooperation with Other EU Member States

While the Sino-German story is illustrative, China also maintains judicial assistance treaties with a number of other EU Member States, including France, Italy, Bulgaria, Hungary, Lithuania, Cyprus, Greece, Poland, Spain, and Romania. These treaties typically streamline the recognition process by providing that civil and commercial judgments become enforceable in the other contracting state, subject to limited exceptions. For instance:

• Jurisdictional Challenge: Each treaty may specify that enforcement can be refused if the original court lacked jurisdiction recognized by the enforcing state.
• Public Policy: As elsewhere, a host state will not enforce a foreign judgment if doing so violates its fundamental principles or core national interests.
• Finality Requirement: Non-final or provisional judgments are generally excluded.
• No Substantive Review: The enforcing court typically may not re-examine the merits; its role is limited to a procedural and public-policy check.

For example, under the Sino-French treaty, civil and commercial judgments that have become final and conclusive in one jurisdiction will ordinarily be recognized by the other. Similar provisions appear in other Sino-EU Member State treaties, creating a relatively coherent environment for judgments within certain contractual or tortious contexts.

6. The 2019 Hague Judgments Convention

Beyond bilateral treaties, the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (“Hague Judgments Convention”) could significantly reshape international enforcement. The Convention aims to establish a uniform global framework for cross-border enforcement of judgments in civil and commercial matters, excluding specific categories like family law, succession, and certain intellectual property disputes.

• Coverage: The Convention applies to any final civil or commercial judgment.
• Exclusions: It explicitly excludes certain areas closely tied to national public policy or specialized regimes (e.g., defamation, privacy, matrimonial property, arbitration, insolvency).
• Relationship to Bilateral Treaties: Where a bilateral or regional agreement provides more favorable terms for recognition and enforcement, those instruments typically take precedence.

The European Union has shown strong support for harmonizing cross-border judgment enforcement, having signed parallel conventions such as the 2005 Hague Convention on Choice of Court Agreements. While China participated in the negotiations of the 2019 Hague Judgments Convention and may consider joining it, formal accession requires a domestic legislative process and broader political commitment. If and when China accedes, it will likely further facilitate the cross-border movement of judgments, including with EU Member States.

7. Conclusion and Practical Takeaways

China’s posture toward recognizing and enforcing foreign court judgments has evolved markedly over the past two decades. What began as a rigid insistence on strict, factual reciprocity has softened into a presumption of reciprocity, with Chinese courts increasingly taking a “legal reciprocity” approach unless there is clear evidence that the foreign jurisdiction categorically refuses Chinese judgments. This shift reflects wider policy objectives, such as promoting the Belt and Road Initiative, as well as China’s aspiration to facilitate international commerce and investment.

Germany’s Experience

The Sino-German experience is particularly revealing. Without any formal bilateral judgment enforcement treaty, the two countries built reciprocity through concrete judicial practices:

• Germany’s Berlin High Court recognized a Chinese judgment in 2006, breaking the deadlock.
• Chinese courts (notably in Wuhan, Dalian, and Beijing) later reciprocated, enforcing various German civil, commercial, and even insolvency judgments.

Over time, these mutual acts of enforcement have created a “practical reciprocity,” rendering recognition and enforcement more straightforward for future Sino-German disputes.

Other EU Member States

For countries that have concluded judicial assistance treaties with China—such as France, Italy, and several others—recognition and enforcement of judgments often follows a clearer, treaty-defined path. As China continues to sign additional treaties or explore multilateral instruments like the 2019 Hague Judgments Convention (though not effective in China yet), enforcement prospects are expected to become increasingly predictable and streamlined.

Practical Tips for Foreign Judgment Creditors

1. Identify the Enforceable Judgment: Ensure the foreign judgment is final, conclusive, and within the scope of civil or commercial matters under Chinese law.
2. Check for Any Treaty: If there is a bilateral treaty between China and the judgment-issuing country, review the treaty’s provisions and enforcement procedures.
3. Establish Reciprocity: If no treaty applies, gather evidence of the foreign jurisdiction’s recognition of Chinese judgments (if any), or highlight that the jurisdiction’s laws permit enforcement of Chinese judgments.
4. Prepare Documents Thoroughly: Collect notarized and authenticated copies of the judgment, certified translations, and any evidence proving the judgment’s finality.
5. Mind the Two-Year Limit: File the application with the competent Intermediate People’s Court within two years from when the judgment is enforceable under the foreign court’s law.
6. Identify Assets: Locate the defendant’s assets within China to ensure the enforcement process can lead to actual recovery.
7. Public Policy: Anticipate potential public policy or jurisdictional objections and be ready to address them.
8. Appeal Process: Note that any unfavorable decision can be challenged within ten days of receiving the ruling by filing for reconsideration with the next higher court.

Overall, the trend points toward a more open and internationally aligned stance by Chinese courts in enforcing foreign judgments. Although there remain instances of local variations and the occasional invocation of public policy, the growing body of favorable precedents—particularly in Sino-German cases—demonstrates that China has already come a long way from its once inflexible “strict reciprocity” approach. Continued policy guidance from the Supreme People’s Court, combined with China’s engagement in multilateral frameworks, suggests that recognition and enforcement of foreign judgments will only gain further acceptance within China’s rapidly maturing judicial system.