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First Case of Reciprocal Commitment: China Requests Azerbaijan to Enforce its Judgment Based on Reciprocity
It has been a hot topic to explore the recognition and enforcement of judgments between China and other countries. The core issue of the topic is the role of reciprocity under Chinese law and practice concerning the recognition and enforcement of foreign judgments in China. Reciprocity was narrowly interpreted by Chinese courts in the past, blocking the circulation of lots of foreign judgments in China. Encouragingly, China’s Supreme People’s Court (SPC) is adopting new rules to interpret reciprocity, which is now far more favorable to establishing the reciprocal relationship between China and foreign countries. Then it is up to lower Chinese courts to follow up and the new reciprocity rules established by the SPC are tested in practice.
This piece of comment is written by Dr. Meng Yu, lecturer at China University of Political Science and Law, and co-founder of China Justice Observer.
In 2019, in the Zhou et al. v. Vusal case, China’s request to Azerbaijan for judgment recognition and enforcement was accompanied by its reciprocal commitment through a diplomatic note, marking the first time China made a reciprocal commitment to a foreign country regarding recognition and enforcement of foreign judgments.
Key takeaways:
- In the field of recognition and enforcement of foreign judgments (REFJ), the new reciprocity criteria in China include three tests, namely, de jure reciprocity, reciprocal understanding or consensus, and reciprocal commitment.
- In 2019, in the Zhou et al. v. Vusal case, China’s request to Azerbaijan for judgment recognition and enforcement was accompanied by its reciprocal commitment through a diplomatic note, marking the first time China made a reciprocal commitment to a foreign country regarding REFJ.
- A reciprocal commitment is essentially a unilateral promise that takes effect upon being made.
- Before making such a commitment, China’s Supreme People’s Court (SPC) examines and decides on the matter. This is logically consistent with the requirement from the Conference Summary that Chinese courts need to examine, on a case-by-case basis, the existence of reciprocity, on which the SPC has the final say.
Reciprocity is not new but reciprocal commitment is.
Readers familiar with the topic of recognition and enforcement of foreign judgments (REFJ) will undoubtedly be familiar with the concept of “reciprocity”. Although its manifestations and extent vary, the principle of reciprocity serves as the basis or precondition for REFJ in many countries, including China.
However, few countries have developed the concept of reciprocity as creatively as China, which has had at least five different standards for its determination—de facto reciprocity, presumptive reciprocity, de jure reciprocity, reciprocal understanding or consensus, and reciprocal commitment.
Among these, Reciprocal Commitment, as the most recently developed reciprocity criterion, often leaves people puzzled. What exactly is this unicorn-like criterion?
In 2019, in the case of Zhou et al. v. Vusal (hereinafter the “Vusal Case”), China requested Azerbaijan to recognize and enforce a judgment, making a commitment through diplomatic notes. This was the first reported case in which China made a reciprocal commitment to a foreign country regarding REFJ. This case will unveil to us the nature of Reciprocal Commitment.
I. What is “Reciprocal Commitment”?
Since the 2000s, reciprocity criteria have evolved significantly, reflecting China’s efforts to liberalize its REFJ rules.
Over a decade, the early, high-threshold reciprocity criterion—de facto reciprocity, was abandoned. One after another, more pragmatic and flexible criteria such as presumptive reciprocity and de jure reciprocity have emerged in the form of judicial policies, declarations, and memoranda. Following the release of the “Conference Summary of the Symposium on Foreign-related Commercial and Maritime Trials of Courts Nationwide” (hereinafter the “Conference Summary”) of the Supreme People’s Court (SPC), a new generation of more open reciprocity criteria[1] has been established.
The new reciprocity criteria include three tests, namely, de jure reciprocity, reciprocal understanding or consensus, and reciprocal commitment, which also coincide with possible outreaches of legislative, judicial, and administrative branches.
Related Posts:
- How Chinese Courts Determine Reciprocity in Foreign Judgment Enforcement – Breakthrough for Collecting Judgments in China Series (III)[2]
- China’s 2022 Landmark Judicial Policy Clears Final Hurdle for Enforcement of Foreign Judgments[3]
It then begs the question, what exactly is reciprocal commitment?
According to the Conference Summary, the test of reciprocal commitment means that when trying a case applying for recognition and enforcement of a foreign judgment or ruling, the people’s court may recognize the existence of reciprocity, if “the country where the judgment-making court is located has made reciprocal commitments to China through diplomatic channels or China has made reciprocal commitments to the country where the judgment-making court is located through diplomatic channels, and there is no evidence that the country where the judgment-making court is located has refused to recognize and enforce a Chinese judgment or ruling on the ground of lack of reciprocity”.
For a while, reciprocal commitment was like a mysterious unicorn—because there were almost no cases or reports mentioning it. In contrast, the other two reciprocity tests have well-known instances, including the SPAR case, which involved the de jure reciprocity, where an English judgment was recognized and enforced in China for the first time[4]; the China-Singapore MOG, which demonstrated reciprocal understanding[5]; and the Nanning Statement, which involved reciprocal consensus[6].
One year after the Conference Summary, the first public document on reciprocal commitment finally appeared. This is the Vusal case, which was introduced as a typical case of reciprocal commitment in “Understanding and Application of the Conference Summary” authored by the SPC’s Fourth Civil Division, published in June 2023.
II. The Case of Vusal: First Case of Reciprocal Commitment
In July 2018, Yiwu Primary People’s Court, Zhejiang (the “Yiwu Court”), issued a first-instance civil judgment (2018) Zhe 0782 Min Chu No. 8836, in the case of a sales contract dispute between Zhou et al. and the defendant Vusal (a national of Azerbaijan). The judgment ordered the defendant Vusal to pay the plaintiffs Zhou et al. for the goods. The defendant Vusal failed to appear in the court after being duly summoned, and did not appeal during the appeal period. The judgment became effective in August of the same year.
After the judgment took effect, Vusal refused to satisfy the judgment, and the plaintiff applied to the court for enforcement of the judgment. The Yiwu Court filed the case for enforcement but did not find any of Vusal’s enforceable asset in China.
In October 2019, the Yiwu Court reported to the SPC to request the competent court of the Republic of Azerbaijan to recognize and enforce the judgment.
Upon review, SPC decided to submit the judicial assistance request to Azerbaijan, and to make a reciprocal commitment.
Finally, when making a judicial assistance request, the Chinese Embassy in Azerbaijan made a commitment to Azerbaijan in a diplomatic note that “it will provide equal assistance to Azerbaijan under similar circumstances in accordance with the law”.
III. Comments
This case marks the first time that China has proactively made a reciprocal commitment to a foreign country regarding REFJ. It is still unclear whether Azerbaijan has acted on China’s judicial assistance request for REFJ. There is also no available report or discussion on how Azerbaijan views the reciprocal commitment made by China through diplomatic notes.
One thing is certain: combined with the Vusal case, the meaning and application of reciprocal commitment have become clearer.
First, a reciprocal commitment is essentially a unilateral promise that takes effect upon being made. This “unilateral” commitment can be made by a foreign country (the future country where the judgment-making court is located) to China (the future requested country), or by China to the foreign country, as exemplified by China’s commitment to Azerbaijan in the Vusal case.
Second, a reciprocal commitment can be regarded as a presumption of the existence of reciprocity. Since the commitment is unilateral and differs from the bilateral reciprocity understanding or consensus, the making of such a commitment does not automatically prove the existence of reciprocity. Instead, reciprocity is presumed unless there is evidence to the contrary (i.e., the other country has previously refused to recognize and enforce a Chinese judgment on the grounds that a reciprocal relationship does not exist).
Third, reciprocal commitments are made through diplomatic channels, as in the Vusal case where the Chinese Embassy in Azerbaijan made the commitment through a diplomatic note. Before making such a commitment, the SPC examines and decides on the matter. This is logically consistent with the requirement from the Conference Summary that Chinese courts need to examine, on a case-by-case basis, the existence of reciprocity, on which the SPC has the final say.
[1] https://conflictoflaws.net/2022/chinas-2022-landmark-judicial-policy-clears-final-hurdle-for-enforcement-of-foreign-judgments/
[2] https://www.chinajusticeobserver.com/a/breakthrough-for-collecting-judgments-in-china-series-3
[3] https://conflictoflaws.net/2022/chinas-2022-landmark-judicial-policy-clears-final-hurdle-for-enforcement-of-foreign-judgments/
[4] https://www.chinajusticeobserver.com/a/chinese-court-recognizes-english-commercial-judgment-for-the-first-time
[5] https://www.chinajusticeobserver.com/p/memorandum-of-guidance-between-china-supremecourt-and-singapore-supremecourt-on-recognition-and-enforcement-of-money-judgments
[6] https://www.chinajusticeobserver.com/p/nanning-statement-of-the-2nd-china-asean-justice-forum
The Indian Satellite Saga and Retaliation: Recognizing the Supreme Court of India’s Judgment Abroad?
Introduction
As one of the most complex and fiercely contested recent investment disputes, the Indian Satellite Saga originated from India’s annulment of an agreement for leasing S-band electromagnetic spectrum on two satellites (Satellite Agreement) to Devas Multimedia Private Ltd. (Devas). The Saga involved multiple international arbitrations and domestic litigations. In 2022, the Supreme Court of India made a judgment (SCI Judgment) to wind up Devas. Devas and its foreign investors allege the SCI Judgment is a retaliatory measure against them for enforcing arbitration awards.
News
U.S. District Court’s Order in the Venezuelan Deportees Case Was Not Extraterritorial
The following post was kindly provided by Hannah Buxbaum, Vice President for International Affairs, Professor of Law and John E. Schiller Chair, Indiana University, and is cross-posted on tlblog.org
As was widely reported yesterday, the Trump administration permitted two planes carrying Venezuelan deportees to continue on their way to El Salvador after receiving a judicial order to turn the flights back to the United States. A story in Axios quotes an administration official who explains that they were not in fact “actively defying” the judge—the order just came too late, since the planes were already out of U.S. airspace. This seems to be an extraterritoriality argument, suggesting that the judge lacks authority to order an action to take place outside U.S. borders.
The administration has this completely wrong. The judge is ordering the administration to take action inside the United States—that is, to instruct the planes to turn around. That instruction will in turn cause something to happen elsewhere (the pilots will change course), but that doesn’t make the order impermissibly extraterritorial. This is exactly the same the basis on which courts in garden-variety civil disputes order parties subject to their jurisdiction to procure evidence or turn over assets that are located abroad. Moreover, since the planes were reportedly over international waters at the time the order was entered, compliance would not have required any actions by a foreign actor or within the territory of another state—in other words, it wouldn’t have created a conflict of laws.
Now that the deportees are already in El Salvador, that picture is more complicated, since local authorities there might refuse to take action. Even the existence of such a conflict, though, doesn’t mean that Judge Boasberg’s order exceeds his authority. It remains to be seen whether any of the other justifications the White House offered up for ignoring that order are any more compelling, but the argument that it didn’t apply once the planes had left the United States is certainly not.
For further leading expert input on extraterritoriality see one of our previous posts here.
Reminder: Quo Vadis Preferential Law Approach? A Survey on the Interpretation of Article 6(2) Rome I Regulation Across EU Member States
Benedikt Schmitz (University of Groningen) has kindly shared the following reminder of his Call for Participants with us.
The project concerns the interpretation of Article 6 (2) Rome I Regulation in the EU Member States and is very limited in nature. Time commitments are therefore very limited. Click here for more information.
We are still looking for scholars from Croatia, Czechia, Estonia, Finland, France, Ireland, Italy, Luxemburg, Malta, Romania, and Slovenia. Danish scholars may also participate on the basis of Article 5(2) Rome Convention. Read more
Migrant Workers and Social Security Rights across Borders: a Right or a Privilege?
You are invited to the third meeting of Migration Talks organized by the Jean Monnet Chair in Legal Aspects of Migration Management in the European Union and in Türkiye.
Speaker: Prof. Dr. Laura Carballo Piñeiro, Chair of Private International Law, Dean, Faculty of International Relations, University of Vigo
Title: Migrant Workers and Social Security Rights across Borders: a Right or a Privilege?
Date and Time: Wednesday, March 19, 2024, 10.30 a.m. -11.30 a.m. (CET)
Location: via Zoom (The link shall be provided upon request: migration@bilkent.edu.tr)
Abstract
Access to social security is a human right that only a quarter of the world population enjoy. Such an access is particularly challenging for workers who cross national borders, as they may not get access to a national scheme, get access only in a limited way compared to other national or resident workers in the country, be obliged to contribute to more than one system, or not benefit from a system to which had previously contributed due to relocation to their home country or a third country. State coordination in these matters is thus of the essence, in particular to ensure that contributions are only paid to one system at a time, aggregation and maintenance of acquired rights for those workers that are in the course of acquisition, and portability of benefits. Even in a coordinated scenario, legal divergence across countries might further complicate access to benefits. For example, the funding of a benefit by taxes and not contributions might automatically exclude posted workers from their enjoyment. The EU Social Security Coordination Regulation will be used in the presentation to address these principles, the challenges faced by States and social partners in their enforcement, and tools developed to address them. Outside this privileged area, coordination relies on a complex, but insufficient network of treaties which very much focus on the role of receiving countries. As the movement of workers increases, more attention should be paid to the role of sending States by researching the interplay between social protection and migrant studies.
