DetailsRecently, Wuhan intermediate people's court (¡°Wuhan Court¡±) made a verdict recognizing and enforcing an American judgment. This is the first time a Chinese court has recognized and enforced an American Commercial judgment.
The applicant LIU Li and the respondent TAO Li entered into a Share Transfer Agreement on September 22, 2013, in which both parties agreed that TAO Li would transfer her 50% equity interests in JIA JIA Management INC (whose domicile is at the State of California, United States) to LIU Li in consideration of 150,000 USD. After LIU LI paid 125,000 USD to TAO Li, TAO Li absconded with the money. LIU Li filed a law suit (the ¡°Case¡±) against TAO Li and her husband TONG Wu to the Superior Court of California, County of Los Angeles (¡°LA Court¡±). The case number was EC062608. The service by public notice was employed in the case, and all relevant summons and notices were published on San Gabriel Valley Tribune. On July 24, 2015, Judge William D. Stewart of LA Court made a default judgment, ruling TAO li and TONG Wu were jointly and severally bound to pay back 125,000 USD, interests, and other fees related to the Case to LIU Li (¡°LA Judgment¡±).
After the LA Judgment was legally effective, the applicant LIU Li applied to the Wuhan Court for the recognition and enforcement of it.
According to Article 281 and Article 282 of Chinese Civil Procedure Law, a legally effective foreign judgment could be recognized by a Chinese court, if it is in accordance with the international treaty or with the principle of reciprocity, and it does not contradict the basic principles of the laws of China, nor does it violate state sovereignty, security and social and public interest of China. And a party may directly apply for the recognition and enforcement to the intermediate people¡¯s court which has jurisdiction over the case.
According to Wuhan Court, although there is no international treaty formed between China and the United States, American court has ever recognized and enforced a judgment ruled by a Chinese court. The LA judgment does not contradict the basic principles of the laws of China, and it does not violate state sovereignty, security and social and public interest of China, thus in accordance with the principle of reciprocity, Wuhan Court recognized the American judgment.
Since the litigation is a manifestation of judicial sovereignty of a country, the recognition of a foreign judgment is, to some extent, a release of judicial sovereignty, courts always hold a cautious attitude towards the recognition of a foreign judgment. In the case abovementioned, Wuhan court recognized and enforced the LA judgment; this is undoubtedly a big progress in international judicial assistance, it can not only better protect litigant¡¯s legitimate interests and rights, but can promote the judicial cooperation between China and United States.