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In a 15 year products liability dispute (Hubei Gezhouba Sanlian Industrial Co. Ltd.  vs. Robinson Helicopter Company Inc.), the Central District of California found that the plaintiffs were entitled to the issuance of a domestic (U.S.) judgment in the amount of the PRC judgment with interest. This judgment was originally made in the PRC and recognized in the U.S. marking a landmark in recognition of judgments from China abroad. The case stemmed from a helicopter accident (March of 1994) which was the result of production defects of that particular type of helicopter (R-44).

With respect to foreign money judgments, the general principles of comity and recognition of foreign awards have been codified in the U.S. as the Uniform Foreign Money Judgments Recognition Act (“UFM-JRA”), which has been adopted by the majority of U.S. states. "Foreign money judgments" under the UFM-JRA refers to any judgment granting or denying recovery of a sum of money rendered in a jurisdiction outside the U.S. and its territories.  In states adopting the UFM-JRA, such as in California and codified in the California Code of Civil Procedure, a foreign judgment is subject to a limited scope inquiry prior to a determination as to whether it is entitled to be recognized. A defendant challenging recognition of a foreign judgment may not retry issues of liability or damages, but rather is limited to due process-type defenses enumerated in the statute.
 

Legal Requirements Under UFM-JRA
 

A. Mandatory Conditions

Other than a final, conclusive foreign judgment, the three mandatory requirements for recognition of a foreign judgment are all due process-type considerations:
(1) the foreign court must have rendered its judgment under a system that provides impartial tribunals or procedures compatible with the requirements of due process; (
(2) the foreign court must have had personal jurisdiction over the defendant; and
(3) the foreign court must have had subject matter jurisdiction over the controversy.
 

B. Discretionary Conditions
The discretionary factors a court may consider include:
(1) The Defendant Received Sufficient Notice of the Proceedings
(2) The Judgment Was Not Obtained by Fraud
(3) The Judgment Is Not Repugnant to the Enforcing Court’s Public Policy
(4) The Judgment Is Not in Conflict with Another Final and Conclusive Judgment
(5) The Judgment Is Not Inconsistent with an ADR Agreement Between the Parties
(6) Where Jurisdiction Is Based on Personal Service Alone, the Foreign Tribunal Was Not a Seriously Inconvenient Forum
(7) Does the Foreign Court Reciprocally Recognize Judgments From the U.S.?
 

In the Sanlian case, the district court found that service was proper, the PRC judgment was final, conclusive, and enforceable under the laws of the PRC and involved the recovery of a sum of money. As California's UFM-JRA applied and no exceptions to recognition were presented, the plaintiffs were entitled to a domestic judgment.

Because the principles governing recognition of foreign judgments in the U.S. are relatively uniform without regard to the nation where the judgment originated, however, one can look to authority under the UFM-JRA pertaining to recognition of judgments entered in any country for guidance of equal weight in assessing whether a judgment from China will be granted recognition and enforcement under any given set of facts.

While cases under the UFM-JRA abound, cases specifically addressing recognition of foreign judgments entered in China are still relatively few. Based on developments in the legal system in China, and especially in the People’s Republic of China, over the past two decades, it is increasingly likely that a U.S. court evaluating whether to recognize a judgment entered in China would conclude that the system of justice in China comports with traditional western notions of due process, and thus that element would likely not to be a bar to recognition in a U.S. court. If the Chinese judgment otherwise meets the due-process type requirements of the UFM-JRA, there is nothing unique about judgments from China that should interfere with their recognition and enforcement in any U.S. court under the same analysis as a judgment entered in England or Canada, as demonstrated in the Sanlian case.

Three conditions are required by the Arrangement, as stated in Articles 1 and 3,  in regards to the Jurisdiction Agreement among the parties:

 

1. Formality Requirement: the Jurisdiction Agreement must be in writing.
2. Time Requirement: the Jurisdiction Agreement  refers to that reached after the effective date of the Arrangement. That is to say, if a jurisdiction agreement is reached before the effective date of the Arrangement, then, even if the designated court has made a judgment, such judgment can not be recognized and enforced as per provided in the Arrangement.
3. Content Requirement: the Jurisdiction Agreement must designate sole jurisdiction of the court either in Mainland or in Hong Kong. In other words, if it is agreed by the parties that the jurisdiction of the court is non-exclusive, then the judgment,  although there is a Jurisdiction Agreement,  cannot be recognized and enforced based on the Arrangement.

After August 1st, 2008, parties that anticipate utilizing the provisions of the Arrangement to obtain recognition and to enforce judgments in both Mainland China and HKSAR may introduce a specific “Exclusive Jurisdiction” clause in their contracts, which provides that all the disputes arising from the contract should be submitted to the sole jurisdiction of Mainland or Hong Kong courts. Parties that prefer not to utilize the Arrangement and ensure that a judgment will not be enforced in Mainland China or HKSAR may introduce a “Non-exclusive Jurisdiction” clause, providing “non-exclusive jurisdiction” to the Mainland China or HK courts.


 

浅析《关于内地与香港特别行政区法院相互认可和执行当事人协议管辖的民商事案件判决的安排》中对"管辖协议"的要求

作者：徐晓丹，金杜律师事务所 诉讼仲裁组 国际诉讼部

2006年7月14日，最高人民法院和香港特别行政区政府签署了《关于内地与香港特别行政区法院相互认可和执行当事人协议管辖的民商事案件判决的安排》（下称“《安排》”）。根据最高人民法院发布的公告，该《安排》将于2008年8月1日起生效。

《安排》第一条及第三条对当事人之间的管辖协议提出了三个要求：

一、形式要求：该管辖协议必须是书面的。

    二、时间要求：该管辖协议必须是在《安排》生效之后达成的。也就是说，如果书面管辖协议是在《安排》生效之前达成的，即使法院也作出了相应的判决，该判决也不能适用《安排》得到认可和执行。

三、内容要求：该管辖协议必须约定内地或香港的法院对相关争议具有唯一的管辖权。也就是说，如果当事人所约定的法院拥有的仅是非排他性管辖权，则即使存在书面管辖协议，相关判决也不能适用《安排》得到认可和执行。

在2008年8月1日以后，如果某些当事人希望相关判决能够适用《安排》，即能够得到内地与香港的相互认可和执行，则其可以在合同中加入“专属管辖权”条款，约定由内地或香港的法院对该合同项下的争议拥有唯一的管辖权。另一方面，如果某些当事人希望排除《安排》的适用，即令相关判决不能得到内地与香港的相互认可和执行，则其可以在合同中引入“非排他性管辖权”条款，仅赋予内地或香港的法院以“非排他性管辖权”。