First Thai Monetary Judgment Enforced in China, Highlighting Presumptive Reciprocity in China-ASEAN Region

This put up is kindly supplied by Dr. Meng Yu, lecturer at China College of Political Science and Legislation, and co-founder of China Justice Observer.

Key Takeaways:

In June 2024, the China-ASEAN Free Commerce Space Nanning Worldwide Business Tribunal below the Nanning Railway Transportation Intermediate Courtroom in Guangxi dominated to acknowledge and implement a Thai financial judgment (Guangxi Nanning China Journey Service, Ltd. v. Orient Thai Airways Co., Ltd. (2023) Gui 71 Xie Wai Ren No. 1).
Other than being the primary case of imposing Thai financial judgments in China, additionally it is the primary publicly reported case confirming a reciprocal relationship primarily based on “presumptive reciprocity”.
The Chinese language courtroom’s affirmation that “presumptive reciprocity”, as outlined within the Nanning Assertion, is a type of mutual consensus between China and ASEAN nations helps to advertise the circulation of judgments inside the China-ASEAN area.

On 18 June 2024, the China-ASEAN Free Commerce Space Nanning Worldwide Business Tribunal below the Nanning Railway Transportation Intermediate Courtroom, Guangxi (hereafter the “Nanning Courtroom”), dominated to acknowledge and implement a Thai financial judgment.

This case marks the primary time {that a} Chinese language courtroom has acknowledged and enforced a Thai financial judgment. It is usually the primary publicly reported case to substantiate a reciprocal relationship primarily based on “presumptive reciprocity”. The “presumptive reciprocity” take a look at, outlined within the Nanning Assertion of the 2nd China-ASEAN Justice Discussion board in 2017, has now been confirmed by the Nanning Courtroom as a type of reciprocal consensus [1] between China and ASEAN nations. This explains using the time period “presumptive reciprocity consensus” within the Chinese language information report (cf. Guangxi Excessive Folks’s Courtroom’s information).

Though the complete textual content of the judgment has not but been made publicly accessible, the Chinese language information report and associated courtroom bulletins present worthwhile particulars in regards to the case. This case marks the most recent utility of the brand new reciprocity requirement by Chinese language courts and actively promotes the circulation of judgments inside the China-ASEAN area.

I. Case background

In July 2015, Guangxi Nanning China Journey Service Co., Ltd. (“Nanning China Journey”), a Chinese language firm, and Orient Thai Airways Co., Ltd. (“Orient Thai Airways”), a Thai firm, entered into an airline ticket gross sales contract primarily based on their long-term cooperation in constitution flights. The contract was signed in Nanning and stipulated that disputes can be settled by the courtroom the place the Orient Thai Airways was positioned. Subsequently, disputes arose between the events, and Nanning China Journey filed a lawsuit towards Orient Thai Airways within the Central Mental Property and Worldwide Commerce Courtroom of Thailand (“Thai Courtroom”).

On 16 September 2019, the Thai Courtroom issued a civil judgment No. GorKor 166/2562 (the “Thai Judgment”), ordering Orient Thai Airways to pay CNY 18,002,676 (approx. USD 2,476,330) plus curiosity to Nanning China Journey.

In February 2023, with a view to implement the rights confirmed by the Thai Judgment, and contemplating that Orient Thai Airways has a number of branches in China that will have executable property, Nanning China Journey utilized to the Nanning Courtroom for recognition and enforcement of the Thai Judgment.

On 18 June 2024, the Nanning Courtroom rendered the civil ruling (2023) Gui 71 Xie Wai Ren No. 1 to acknowledge and implement the Thai Judgment.

II. Courtroom’s views

Though China and Thailand have signed the “Treaty on Judicial Help in Civil and Business Issues and on Cooperation in Arbitration”, the treaty doesn’t comprise provisions on judgment recognition and enforcement. Within the absence of a treaty, as that is the case with Thailand, recognition and enforcement could be pursued on the idea of the precept of reciprocity (New Artwork. 299 of the PRC Civil Process Legislation [former article 288 of the 2021 Amendment of the PRC Civil Procedure Law]).[2]

Figuring out whether or not reciprocity exists between China and Thailand is, due to this fact, a vital first step.

As Choose Huayan Wang of the Nanning Courtroom defined, “We (the courtroom) examined two points: the time restrict of the applying for recognition and enforcement, and the existence of reciprocity. The important thing to this case is the willpower of reciprocal consensus, within the absence of de jure reciprocity and de facto reciprocity”.

In doing so, the Nanning Courtroom referred to the presumptive reciprocity take a look at proposed within the Nanning Assertion as a type of reciprocal consensus, and in the end decided that reciprocity existed between China and Thailand.

III. Feedback

1. “Presumptive reciprocity” on this case

Apparently, the Nanning Assertion was adopted in Nanning in June 2017, and 7 years later, in a putting coincidence, an area intermediate courtroom in the identical metropolis confirmed the reciprocity between China and Thailand, counting on presumptive reciprocity proposed the Nanning Assertion.

Merely put, the so-called “presumptive reciprocity” signifies that, except confirmed in any other case, reciprocity is presumed to exist between the requested State and the State of origin, to the extent permitted by home legislation of the requested State.[3] Right here, “confirmed in any other case” refers to any current case the place the judgments from the requested State have been refused enforcement within the State of origin on the bottom of the dearth of reciprocity. Since no such instances have been discovered by the Nanning Courtroom, reciprocity is presumed to exist between Thailand and China.

It’s, nonetheless, nonetheless unclear how Thai courts would react to the “first transfer” from Chinese language courts: will they comply with swimsuit or not? On condition that it’s unlikely, if not unattainable, to have any overseas judgment acknowledged and enforced in Thailand, as mentioned in an put up supplied by Asian Enterprise Legislation Institute (ABLI), ought to a Thai courtroom refuse to acknowledge and implement a Chinese language judgment on the bottom of lack of reciprocity in the future, the presumed reciprocity may need to be reviewed, and even revoked. By then, will there be some other manner out? Extra points should be clarified and settled in future instances.

2. Wider Implication: reciprocal understanding or consensus in China-ASEAN area

What’s extra noteworthy is that the reciprocity consensus utilized by Nanning courtroom is taken into account to be a subcategory of “reciprocal understanding or consensus”, which is without doubt one of the three new reciprocity exams along with de jure reciprocity and reciprocal dedication.

Chart – Reciprocity exams in China

In comparison with the opposite two present reciprocity exams—de jure reciprocity and reciprocal dedication—reciprocal understanding or consensus is a extra simply ignored take a look at, as a result of it’s neither as well-known as de jure reciprocity nor as novel because the reciprocal dedication (cf. different associated posts together with: (i) De jure reciprocity – The First Time China Acknowledges English Judgment, Implementing 2022 Judicial Coverage in Full; (ii) Reciprocal dedication – First Case of Reciprocal Dedication: China Requests Azerbaijan to Implement its Judgment Primarily based on Reciprocity; (iii) How Chinese language Courts Decide Reciprocity in Overseas Judgment Enforcement – Breakthrough for Amassing Judgments in China Sequence (III); (iv) China’s 2022 Landmark Judicial Coverage Clears Closing Hurdle for Enforcement of Overseas Judgments.)

Though the presumptive reciprocity proposed within the Nanning Assertion is taken into account the perfect instance of reciprocal consensus, from the time the Nanning Assertion was adopted in 2017 till June 2024, the “presumptive reciprocity” remained largely theoretical. Previous to this case, there have been no publicly reported instances indicating whether or not, and in that case, how, Chinese language courts utilized “presumptive reciprocity” when coping with instances involving the popularity and enforcement of judgments from ASEAN nations.

This case modified this example.

The “presumptive reciprocity” outlined within the Nanning Assertion, as a type of reciprocal consensus between China and ASEAN nations, has been confirmed by the Chinese language courtroom on this case. Because of this for the ten ASEAN nations, other than Laos and Vietnam, which have already got relevant bilateral treaties with China, the remaining eight nations—Brunei Darussalam, Burma, Cambodia, Indonesia, Malaysia, the Philippines, Singapore, and Thailand—can have their civil and industrial judgments acknowledged and enforced in China primarily based on the presumptive reciprocity.

As well as, for financial judgments from Singapore, there’s additionally the China-Singapore Memorandum of Steering (MOG), which could be thought of one other instance of “reciprocal understanding or consensus”. This MOG serves as a sensible guideline for Chinese language courts on tips on how to acknowledge and implement Singaporean financial judgments. (Cf. different associated posts together with: (i) Sequence – Singapore-China Judgments Recognition and Enforcement; (ii) Chinese language Courtroom Acknowledges Singaporean Judgment Once more: No Bilateral Treaty However Solely Memorandum?).

—————————————

[1] For the reason that 2000s, the requirements to determine reciprocity have advanced considerably, reflecting China’s efforts to liberalize its guidelines on the popularity and enforcement of overseas judgments. The 2021 “Convention Abstract of the Symposium on Overseas-related Business and Maritime Trials of Courts Nationwide” issued by China’s Supreme Folks’s Courtroom introduces new requirements for figuring out reciprocity that exchange the earlier de facto reciprocity take a look at. The brand new reciprocity requirements embody de jure reciprocity, reciprocal understanding or consensus, and reciprocal dedication. These requirements coincide with potential outreaches of legislative, judicial, and administrative branches.

[2] Artwork. 299: “After analyzing an utility or request for recognition and enforcement of a legally efficient judgment or ruling of a overseas courtroom in accordance with a global treaty concluded or acceded to by the Folks’s Republic of China or below the precept of reciprocity, a individuals’s courtroom shall render a ruling to recognise the authorized drive of the judgment or ruling and situation an order for enforcement, as wanted, to implement the judgment or ruling in accordance with the related provisions of this Legislation, if   the individuals’s courtroom deems that the judgment or ruling neither violates the essential rules of the legal guidelines of the Folks’s Republic of China nor damages the sovereignty, safety, and public curiosity of the State” (emphasis added).

[3] Under is the unique assertion from the Nanning Assertion:“If two nations haven’t been certain by any worldwide treaty on mutual recognition and enforcement of overseas civil or industrial judgments, each nations might, topic to their home legal guidelines, presume the existence of their reciprocal relationship, in the case of the judicial process of recognizing or imposing such judgments made by courts of the opposite nation, supplied that the courts of the opposite nation had not refused to acknowledge or implement such judgments on the bottom of lack of reciprocity.”(emphasis added)