CHINA Trends and Developments Contributed by: Yaxing Zhang, Bing San, Lubin Qiang and Jiahui Zhu, Han Kun Law Offices
The Rise of Reciprocity-Based Recognition of Foreign Judgments: From Principle to Practice Legal framework: treaty and reciprocity-based recognition In accordance with the Civil Procedure Law of the People’s Republic of China (the “PRC Civil Procedure Law”) and its interpretation, foreign civil or commer - cial judgments may be recognised and enforced in China through two primary legal avenues: (i) pursu - ant to international treaties or bilateral agreements to which China is a party, or (ii) based on the principle of reciprocity. These mechanisms operate under the overarching limitation that recognition must not con - travene the fundamental interests of China, including its sovereignty, national security and public policy. Historically, the absence of a binding treaty has often posed practical difficulties for litigants seeking to enforce foreign judgments in China. In response, the Chinese judiciary has progressively refined and expanded the application of the reciprocity princi - ple in cross-border enforcement cases. A significant milestone was the promulgation of the Minutes of the National Symposium on the Foreign-Related Com - mercial and Maritime Trial Work of Courts (the “Judi - cial Minutes”) by the Supreme People’s Court in 2022. Defining reciprocity: judicial minutes Article 44 of the Judicial Minutes provides critical guidance for courts in determining whether a recipro - cal relationship exists between China and the foreign jurisdiction whose judgment is sought for recognition. The provision delineates three categories of reciproc - ity: • de jure reciprocity – the foreign country’s laws permit the recognition and enforcement of Chinese civil or commercial judgments, even if there is no prior record of such enforcement; • consensus-based reciprocity – a mutual under - standing or consensus has been established between China and the foreign jurisdiction explic - itly acknowledging reciprocity; and • presumed or diplomatically promised reciprocity – through diplomatic exchanges, either China or the foreign jurisdiction has issued a formal promise of reciprocity. This presumption stands unless the for - eign jurisdiction has previously refused the recogni -
tion of a Chinese judgment on the grounds that no reciprocal relationship exists. Under the Judicial Minutes, the flexible and prag - matic approach significantly departs from earlier rigid interpretations that required prior actual enforcement cases as a prerequisite for establishing reciprocity. Guiding Case No 235: a turning point in judicial practice In 2024, the Supreme People’s Court formally released Guiding Case No 235 , which has since become emblematic of China’s forward-looking stance on reci - procity. This case involved an attempt by S Shipping Co to enforce multiple English judgments against MH Logistics Group for breaches of charterparty guaran - tees. The Shanghai Maritime Court, in a 2022 order, ruled that the absence of an international treaty or past recognition history between the UK and China did not preclude enforcement. Instead, the court articulated a broader and more principled interpretation of reciprocity, holding that: (i) Chinese courts may presume reciprocity exists if the laws of the foreign jurisdiction allow, in principle, the recognition of Chinese judgments; and (ii) there is no recorded precedent of the foreign jurisdiction denying enforcement of a Chinese judgment on grounds of non-reciprocity. This decision enables creditors from jurisdictions with compatible recognition frameworks – even without enforcement precedents – to pursue enforcement in China, marking a decisive break from the restrictive “factual reciprocity” requirement that had previously governed judicial discretion. This has alleviated a longstanding deadlock in international civil judgment recognition. Following the issuance of Guiding Case No 235 , Chi- nese courts have continued to apply such principles. On 16 January 2023, in Case (2022) Jing 01 Po Shen No 786 , the Beijing First Intermediate People’s Court recognised and enforced a bankruptcy ruling issued by the Aachen Local Court in Germany. This case rein - forced a broader judicial commitment to the principle of de jure reciprocity and its application in the absence of binding treaties.
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