Views
American Society of International Law Newsletter and Commentaries on Private International Law
American Society of International Law Private International Law Interest Group is pleased to publish the newest Newsletter and Commentaries on Private International Law (Vol. 5, Issue 1) on PILIG webpage. The primary purpose of our Newsletter is to communicate global news on PIL. It attempts to transmit information on new developments on PIL rather than provide substantive analysis, in a non-exclusive manner, with a view of providing specific and concise information that our readers can use in their daily work. These updates on developments on PIL may include information on new laws, rules, and regulations; new judicial and arbitral decisions; new treaties and conventions; new scholarly work; new conferences; proposed new pieces of legislation; and the like.
This issue has three sections. Section one contains Highlights on cultural heritage protection and applicable law in the US and recognition and enforcement of foreign judgments in China. Section two reports on the recent developments on PIL in Africa, Asia, Europe, North America, Oceania, and South America. Section Three overviews global development.
China’s 2022 Landmark Judicial Policy Clears Final Hurdle for Enforcement of Foreign Judgments
Written by Dr Meng Yu and Dr Guodong Du, co-founders of China Justice Observer
Key takeaways:
- Despite the fact that the elaboration of a judicial interpretation appears to have been put on hold, China’s Supreme People’s Court has now resorted to conference summaries, which are not legally binding but have a practical impact, to express its views in recognition and enforcement of foreign judgments.
- As a landmark judicial policy issued by China’s Supreme People’s Court, the 2021 Conference Summary provides a detailed guideline for Chinese courts to review foreign judgment-related applications, including examination criteria, refusal grounds, and an ex ante internal approval mechanism.
- The 2021 Conference Summary enables an ever greater number of foreign judgments to be enforced in China, by making substantial improvements on both the issues of “threshold” and “criteria”. The threshold addresses whether foreign judgments from certain jurisdictions are enforceable, whereas the criteria deal with whether the specific judgment in an application before Chinese courts can be enforced.
- The 2021 Conference Summary significantly lowers the threshold by liberalizing the reciprocity test, while providing a much clearer standard for Chinese judges to examine applications for recognition and enforcement of foreign judgments.
- The existence of a “treaty or reciprocity” remains to be the threshold (precondition) for Chinese courts to review applications.
- In terms of reciprocity, new reciprocity tests are introduced to replace the previous de facto reciprocity test and presumptive reciprocity. The new reciprocity criteria include three tests, namely, de jure reciprocity, reciprocal understanding or consensus, and reciprocal commitment without exception, which also coincide with possible outreaches of legislative, judicial, and administrative branches. Chinese courts need to examine, on a case-by-case basis, the existence of reciprocity, on which the Supreme People’s Court has the final say.
China has published a landmark judicial policy on the enforcement of foreign judgments in 2022, embarking on a new era for judgment collection in China.
The judicial policy is the “Conference Summary of the Symposium on Foreign-related Commercial and Maritime Trials of Courts Nationwide” (hereinafter the “2021 Conference Summary”) issued by the China’s Supreme People’s Court (SPC) on 31 Dec. 2021. The 2021 Conference Summary makes it clear for the first time that applications for enforcing foreign judgments will be examined subject to a much more lenient standard.
Since 2015, the SPC has consistently disclosed in its policy that it wishes to be more open to applications for the recognition and enforcement of foreign judgments, and encourages local courts to take a more amicable approach to foreign judgments within the scope of established judicial practice.
Admittedly, the threshold for enforcing foreign judgments was set too high in judicial practice, and Chinese courts have never elaborated on how to enforce foreign judgments in a systematic manner. As a result, despite the SPC’s enthusiasm, it is still not appealing enough for more judgment creditors to apply for recognition and enforcement of foreign judgments with Chinese courts. However, this situation is now changed.
In January 2022, the SPC published the 2021 Conference Summary with regard to cross-border civil and commercial litigation, which addresses a number of core issues concerning the recognition and enforcement of foreign judgments in China. Just to be clear, in the Chinese legal system, the conference summary is not a legally binding normative document as the judicial interpretation, but only represents the consensus reached by Chinese judges nationwide, similar to the “prevailing opinion” (herrschende Meinung) in Germany, which will be followed by all judges in future trials. In other words, conference summaries serve as guidance for adjudication. On one hand, as a conference summary is not legally binding, the courts cannot invoke it as the legal basis in judgments, but on the other hand, the courts can make the reasoning on the application of law according to the conference summary in the “Court Opinion” part.
The 2021 Conference Summary makes substantial improvements in two aspects, i.e. the “threshold” and “criteria”.
The threshold aspect refers to the first obstacle applicants will face when applying for recognition and enforcement of a foreign judgment in China, that is, whether foreign judgments from certain countries are enforceable. Countries reaching the threshold now include most of China’s major trading partners, which is huge progress compared with the prior 40 countries or so. If the country where the judgment is rendered reaches the threshold, criteria will then be used by the Chinese courts in reviewing whether the specific judgment in the application can be enforced in China. Now a clearer threshold and criteria enable applicants to have more reasonable expectations about the likelihood of a foreign judgment being enforced in China.
- Threshold: the threshold for enforcing judgments of most foreign countries in China has been significantly lowered.
The 2021 Conference Summary significantly lowers the threshold for the recognition and enforcement of foreign judgments in China, making a breakthrough in existing practice. According to the 2021 Conference Summary, the judgments of most of China’s major trading partners, including almost all common law countries as well as most civil law countries, can be enforceable in China.
Specifically, the 2021 Conference Summary states that the judgment can be enforced in China if the country where the judgment is rendered satisfies the one of the following circumstances:
(a) The country has concluded an international or bilateral treaty with China in respect of recognition and enforcement of foreign judgments.
Currently, 35 countries meet this requirement, including France, Italy, Spain, Belgium, Brazil, and Russia.
The List of China’s Bilateral Treaties on Judicial Assistance in Civil and Commercial Matters (Enforcement of Foreign Judgments Included) is available here. Authoritative texts in Chinese and other languages are now available.
(b) The foreign country has a de jure reciprocal relationship with China.
This means that where a civil or commercial judgment rendered by a Chinese court can be recognized and enforced by the court of the foreign country according to the law of the said country, a judgment of the said country may, under the same circumstances, be recognized and enforced by the Chinese court.
In accordance with the criteria of de jure reciprocity, the judgments of many countries can be included in the scope of enforceable foreign judgments in China. For common law countries, such as the United States, the United Kingdom, Canada, Australia, and New Zealand, their attitude towards applications for recognition and enforcement of foreign judgments is open, and in general, such applications meet this criterion. For civil law countries, such as Germany, Japan, and South Korea, many of them also adopt a similar attitude to the above-mentioned de jure reciprocity, so such applications also meet this criterion to a great extent.
It is noteworthy that in March 2022, Shanghai Maritime Court ruled to recognize and enforce an English judgment in Spar Shipping v Grand China Logistics (2018) Hu 72 Xie Wai Ren No.1, marking the first time that an English monetary judgment has been enforced in China based on reciprocity. This decision has previously been highlighted here. One key to ensuring the enforcement of English judgments is the reciprocal relationship between China and England (or the UK, if in a wider context), which, under the de jure reciprocity test (one of the new three tests), was confirmed in this case.
(c) The foreign country and China have promised each other reciprocity in diplomatic efforts or reached a consensus at the judicial level.
The SPC has been exploring cooperation in mutual recognition and enforcement of judgments with other countries in a lower-cost way in addition to signing treaties, such as a diplomatic commitment or a consensus reached by the judiciaries. This can achieve functions similar to that of treaties without being involved in the lengthy process of treaty negotiation, signing, and ratification.
China has started similar cooperation with Singapore. A good example of judicial outreach is the Memorandum of Guidance Between the Supreme People’s Court of the People’s Republic of China and the Supreme Court of Singapore on Recognition and Enforcement of Money Judgments In Commercial Cases (available here). It is thus fair to say that the 2021 Conference Summary has substantially lowered the threshold by liberalizing the reciprocity test.
- Criteria: Clearer standard for Chinese judges to examine each application for recognition and enforcement of foreign judgments
The 2021 Conference Summary makes it clear under what circumstances Chinese courts may refuse to recognize and enforce a foreign judgment and how the applicants may submit the applications, which undoubtedly enhances feasibility and predictability.
Pursuant to the 2021 Conference Summary, a foreign judgment can be recognized and enforced in China if there are no following circumstances where:
(a) the foreign judgment violates China’s public policy;
(b) the court rendering the judgment has no jurisdiction under Chinese law;
(c) the procedural rights of the Respondent are not fully guaranteed;
(d) the judgment is obtained by fraud;
(e) parallel proceedings exist, and
(f) punitive damages are involved (specifically, where the amount of damages award significantly exceeds the actual loss, a Chinese court may refuse to recognize and enforce the excess).
Compared with most countries with liberal rules in recognition and enforcement of foreign judgments, the above requirements of Chinese courts are not unusual. For example:
- The above items (1) (2) (3) and (5), are also requirements under the German Code of Civil Procedure (Zivilprozessordnung).
- Item (4) is consistent with the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters.
- Item (6) reflects the legal cultural tradition on the issue of compensation in China.
In addition, the 2021 Conference Summary also specifies what kind of application documents should be submitted to the court, what the application should contain, and how parties can apply to the Chinese court for interim measures when applying for enforcing foreign judgments.
In short, a gradual relaxation of Chinese courts’ attitude can be seen towards applications for recognition and enforcement of foreign judgments since 2018. Recently the 2021 Conference Summary has finally made a substantial leap forward.
We hope to see such breakthroughs in rules be witnessed and developed by one case after another in the near future.
For a more detailed interpretation, together with the original Chinese version of the 2021 Conference Summary and its English translation, please read ‘Breakthrough for Collecting Judgments in China Series’ (available here).
For the PDF version of ‘Breakthrough for Collecting Judgments in China Series’, please click here.
Giustizia consensuale (Consensual Justice): Report on the Journal’s Inaugural Conference
This report was kindly prepared by Federica Simonelli, a research fellow funded by the P.O.N. UNI4Justice project at the University of Trento, Italy, and a member of the editorial staff of Giustizia consensuale (Consensual Justice).
On 10 June 2022, the University of Trento, Faculty of Law celebrated the first anniversary of the launch of Giustizia consensuale, founded and edited by Professor Silvana Dalla Bontà and Professor Paola Lucarelli.
In recent years, the debate surrounding consensual justice and party autonomy has received increasing attention in the national and international arenas and has raised a broad array of questions. What is the very meaning of consensual justice? Is the idea of consensual justice feasible? What is its role in a globalized world increasingly characterized by cross-border disputes? The rationale behind Giustizia consensuale lies in the pressing need to observe this phenomenon from different perspectives.
For those who did not have the opportunity to attend this informative event, this report offers a succinct overview of the topics and ideas exchanged during this well-attended, hybrid conference.
First session
Opening the symposium with an incisive preamble, Professor Silvana Dalla Bontà (University of Trento, Italy), editor-in-chief of Giustizia consensuale and chair of the first session, provided a context for the reasoning behind this new editorial project and some of the research areas it intends to focus on. Notably, with the aim of meeting the needs of an increasingly complicated and multi-faceted society, Giustizia consensuale endeavours to investigate the meaning of consensual justice, its relationship with judicial justice, and the potential for integrating, rather than contrasting, these two forms of justice.
Professor Dalla Bontà’s introductory remarks were followed by Professor Paola Lucarelli (University of Florence, Italy), co-editor of the Giustizia consensuale, on the topic of Mediating conflict: a generous push towards change, strongly reaffirming the importance of promoting and strengthening consensual justice instruments, not only to reduce the judicial backlog but also to empower the parties to self-tailor the solution of their conflict, by fostering responsibility, self-determination, awareness, and trust.
Professor Francesco Paolo Luiso (University of Pisa, Italy – Academician of the Order of Lincei) then proceeded to effectively illustrate the essential role played by lawyers in changing the traditional paradigm of dispute resolution which sees court adjudication as the main (if not, the sole) way of settling disputes. Conversely, the judicial function is a precious resource, and its use must be limited to instances where the exercise of the judge’s adjudicatory powers is strictly necessary, thus directing all other disputes toward amicable, out-of-court dispute resolution mechanisms. Hence, lawyers are in the privileged position of presenting clients with a broad array of avenues to resolve disputes and guiding them to the choice of the most appropriate dispute resolution instrument.
Professor Antonio Briguglio (University of Rome Tor Vergata, Italy) then continued with an interesting focus on the relationship between conciliation and arbitration within the overall ADR system. After examining when and how conciliation is attempted during the course of the arbitral proceedings, he shed light on the interesting, and often unknown to the public, ‘conciliatory’ dynamics which often occur amongst members of arbitral tribunals in issuing the arbitration award. In an attempt to find common ground between different viewpoints, conciliatory and communicative skills of arbitrators play a decisive role, in particular in international commercial arbitrations on transnational litigation.
Procedure, Party agreement, and Contract was the focus of a very thorough presentation by Professor Neil Andrews (University of Cambridge, UK) who underlined that consensual justice is a highly stimulating and significant meeting point between substance and procedure, as well as being an important perspective within technical procedural law. He stated that there are three points of interaction between agreement and procedure. Firstly, the parties are free to agree to self-impose preliminary ‘negotiation agreements’ and/or mediation agreements. Secondly, the parties can take a further step to specify or modify the elements of the relevant formal process, albeit court proceedings or arbitration. Thirdly, parties can dispose of or narrow the dispute through a settlement.
The first session concluded with an insightful presentation from Professor Domenico Dalfino (University of Bari Aldo Moro, Italy) who explored the long-debated issue of which party bears the burden of initiating the mandatory mediation in proceedings opposing a payment order. While expressing his criticism towards mandatory mediation, he maintained that voluntariness is the very essence of mediation and the promise of its success.
Second session
The event continued with a second session chaired by Professor Paola Lucarelli. From the perspective of the Brazilian legal system, Professor Teresa Arruda Alvim (Pontifical Catholic University of São Paulo, Brazil) began the session by illustrating that in the last few decades, ADR has afforded parties the possibility to self-tailor a solution to their conflict while significantly diminishing the case overload of the judiciary. Nevertheless, the obstacles to the growth of ADR are multiple, ranging from the lack of preparation of mediators to the traditional adversarial approach of attorneys. She concluded by stating that legal systems must invest, on the one hand, in training highly qualified mediators while on the other, providing new educational paths for attorneys to acquire new negotiation and mediation skills.
The session proceeded to address Online Dispute Resolution (ODR), examining the strengths and weaknesses of using new technologies to solve disputes. Professor Silvia Barona Vilar (University of Valencia, Spain) highlighted the positive and negative aspects of the increasing use of ODR in our digital and algorithmic society. While ODR devices are considered as ensuring access to justice and favouring social peace and citizens’ satisfaction, there are also complex issues around the use of Artificial Intelligence and algorithms such as their accountability, accurate assessment, and transparency.
The relationship between the use of technology and access to justice was explored in depth by Professor Amy J. Schmitz (The Ohio State University, USA), who based her presentation on a thorough empirical study of ODR as a means to advance access to justice for poor or vulnerable individuals who would otherwise be unable to have their ‘day in court.’
Potential applications of new technologies used in resolving disputes were then examined by Professor Colin Rule (Stanford Law School, USA), who highlighted that ODR, originally created to help e-commerce companies build trust with their users, is now being integrated into the courts to expand access to justice and reduce costs. While admitting there are many questions that still need to be answered, Rule predicted that ODR will play a major role in the justice systems of the future through the expansion of Artificial Intelligence and machine learning.
Showing a more critical approach Professor Maria Rosaria Ferrarese (National School of Administration, Italy) shed light on the threat posed by the use of digital technologies in resolving disputes, after having edited the Italian version of a book by Antoine Garapon and Jean Lassègue – Justice digital. Révolution graphique et rupture anthropologique (Digital Justice. Graphic Revolution and Anthropologic Disruption). While acknowledging that Artificial Intelligence and algorithms can deliver a fast and cheap justice, she underlines that justice is not only about settling a case in a rapid and inexpensive way but also about reinforcing values of a given society and ensuring a creative application of the law.
News
German Federal Supreme Court refers questions to the CJEU relating to the concept of “habitual residence” under Art. 8 (a), (b) of the Rome III Regulation
In its decision of 20 December 2023 (Case No. XII ZB 117/23), the German Federal Supreme Court has referred three questions to the CJEU relating to the interpretation of Art. 8 (a), (b) of the Rome III Regulation. The following is a convenience translation of the German press release:
Facts of the Case:
The spouses, German nationals, married in 1989. Initially, they lived together in Berlin since 2006. In June 2017 , the couple deregistered their domicile from the German population register (Melderegister) and moved to Stockholm, where the husband was employed at the German embassy. They nonetheless maintained their rented apartment in Berlin so that they could return as soon as the husband’s posting in Sweden was completed. However, when in September 2019 the husband was once again transferred to the embassy in Russia, the parties changed their place of residence from Stockholm straight to Moscow, where the couple lived in a flat on the embassy compound. Both spouses hold diplomatic passports.
Opinion of Advocate General Szpunar of 11 January 2024 on the Scope of the Service Regulation in respect to service of process on a domestic subsidiary of a foreign defendant in cartel damages proceedings, C-632/22 – AB Volvo
This case, C-632/22 – AB Volvo ./. Transsaqui SL, arises from a reference for a preliminary ruling of the Supreme Court of Spain (Tribunal Supremo). The core question is whether a claimant may serve process on a domestic subsidiary of a defendant in another Member State. In principle, the answer is simply no (absent special arrangements), because the subsidiary is a self-standing legal entity. If it is the foreign mother company that is the defendant, process must be served on her.
Supreme Court of Canada to Hear Jurisdiction Appeal
The Supreme Court of Canada has granted leave to appeal in Sinclair v Venezia Turismo. In light of the test for obtaining leave and the relatively low number of cases in which leave is granted, this offers at least some suggestion that the top court is interested in considering the legal issues raised in the case.