[Interview] In Two Courts: Advice on Getting a Foreign Judgment Recognised

The modern economy depends on the free movement of people, goods and services. These cross-border commercial dealings also result in a concomitant rise in cross-border disputes, either between parties of different nationalities or places of incorporation or between parties of the same nationality but whose assets are in a place other than their home country. Many of these disputes will continue to be resolved through international court litigation.

The Asian Business Law Institute (ABLI) spoke to Mr Albert Dinelli, an Australian and English barrister, who maintains chambers in Singapore with Twenty Essex and has extensive experience helping parties with recognition and enforcement of foreign judgments in third countries. Mr Dinelli acted for the plaintiff in Liu v Ma (2017) 55 VR 104, the first known case where a Chinese commercial judgment was successfully recognised and enforced by the Australian courts.

Tell us about your experience handling cases of recognition and enforcement of foreign judgments to the audience in Asia?   

In my practice, I am often asked to advise, and act in relation to, transnational disputes. One very important component of that is advising on the recognition and enforcement of foreign judgments, both before such judgments are given and, once given, on their recognition and enforcement in third countries. At least in my experience, those judgments have, for the most part, been English, U.S. and Canadian judgments. But, increasingly, one sees a significant increase in judgments from Asian countries, especially China, for which enforcement is sought. This is a reflection not only of the increasing populations of countries in the region, the commercial ties between companies and the citizens of these countries, and the movement of their people (of course before the temporary brake on movement put on by Covid-19), but it also reflects an increased acceptance by Australian, English and other courts to the recognition of such judgments.

The superior courts of a number of jurisdictions are gazetted under the Foreign Judgments Act 1991 (Cth). Judgments rendered by those courts can be registered in Australia, providing an easier route for their recognition and enforcement. Judgments from the other jurisdictions will have to go through recognition and enforcement at common law. You were counsel for Liu v Ma (2017) 55 VR 104, the first time a Chinese commercial judgment has been recognised in Australia. Talk us through that case.

I acted for the plaintiff in Liu v Ma (2017) 55 VR 104, which was, indeed, as far as I am aware, the first case where a Chinese commercial judgment has been recognised by the Australian courts. More recently, the New South Wales Supreme Court did so in Bao v Qu (No 2) [2020] NSWSC 588.

In Liu, Mr Liu had obtained a judgment in the People’s Court of Jiangsu Nantong Chongchuan District for an amount of RMB¥3,938,698 (approximately S$780,000). That court not being specified in the Foreign Judgments Act 1991 (Cth), the common law rules applied. There was no issue that the judgment was final and conclusive, there was an identity of parties and the judgment was for a fixed sum.  What was in issue was whether the Chinese court had “international jurisdiction” that was recognised under Australian conflict of laws. To that end, Mr Liu relied on the fact that the defendants were Chinese citizens and that they had substantial activities or affairs in China. That was enough for the Australian court to accept that the defendants were subjects of the foreign country in which the judgment had been obtained.

Liu v Ma has been discussed in a number of papers on private international law, including ABLI’s latest publication Asian Principles for the Recognition and Enforcement of Foreign Judgments. As counsel, what do see the significance of this case?

First, both Liu and Bao mentioned above might be relied on to demonstrate that Australian courts have recognised Chinese judgments. But there are also broader principles, applicable to other Asian countries, that can be discerned from such cases.

In particular, Liu may be interesting not only because it is the first Chinese commercial judgment recognised and enforced in Australia, but also that the court’s decision accepted, despite its critics, the fact that a defendant is the subject of the foreign country in which the judgment was obtained is enough to found recognition and enforcement of the judgment. In so doing, the Supreme Court of Victoria relied on dicta dating from Emanuel v Symon [1908] 1 KB 302 where Buckley LJ had observed that, of the five grounds upon which an English court would find international jurisdiction, and thereby enforce a foreign judgment, one was “where the defendant is a subject of the foreign country in which the judgment has been obtained”. The Supreme Court of Victoria recognised that this principle had also been applied in other Australian cases, such as Federal Finance and Mortgage Ltd v Winternitz (unreported, Supreme Court of NSW, 9 November 1989) and Independent Trustee Services Lt v Morris (2010) 79 NSWLR 425.

Given the economic links between Australia and China and that an increasing number of Chinese citizens and companies own assets in Australia, it is likely that there will be more cases relying on the broad interpretation of “international jurisdiction” and it is, indeed, likely that there will be an increasing number of Chinese judgments recognised, relying on Liu and other cases.

What are some of the difficulties you have encountered in acting for recognition and enforcement cases? What do you think is useful information to have in hand?

Often, where recognition and enforcement is sought of a foreign judgment it is necessary to navigate the foreign judicial system to understand if the relevant criteria for recognition and enforcement have been satisfied. This is further complicated by the fact that the judgment is often in a foreign language. To that end, it is useful to have some background knowledge of that system.

In terms of preparation for such an application, it is necessary to obtain a certified translation, as well as a notarised copy of the original judgment. Given the judge’s likely unfamiliarity with the foreign system and its language, ensuring that the foreign judgment and any relevant documents are appropriately translated and identified as copies of the original will be such as to assist the judge’s understanding of the issues of which he or she is seized.

There was great excitement when the Hague Judgements Convention was concluded last year. Do you feel the Hague Judgments Convention (and the Choice-of-Court Agreements Convention) will be as successful as hoped in improving the portability of judgments across borders?

The success of the Hague Conventions is likely to be something that needs to be measured in terms of decades, rather than in the immediate future. The 2005 Hague Choice-of-Court Agreements Convention now has 32 contracting parties, including the EU and mainly European countries. In Asia, Singapore ratified the Convention in 2015 and China became a signatory in 2017. The success of the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters is much more modest, it only having been signed by Ukraine and Uruguay. While further ratification of these instruments will improve the portability of judgments, it is likely that the road will be a very long one.

In general, why do you think it is important to enhance mutual recognition and enforcement of judgments between jurisdictions?

Of course, the increasing recognition and enforcement of judgments between jurisdictions is a positive for international commercial transactions. The movement of judgments, like the movement of goods, increases business between nations. But, that said, there needs to be appropriate defences to recognition and enforcement in circumstances where the recognising court has concerns about the procedures of the court seised. The uniformity which would result by broader application of the Hague Conventions would be a positive step forward, but the slow, incremental development of the law in this area, evidenced by the recent cases in Australia which have applied the more than a century old dicta in Emanuel v Symon [1908] 1 KB 302 is another example of how that can occur.

More developed jurisdictions such as Australia are likely to be exporters of judgments involving international parties. Jurisdictions where international commercial courts have been set up, such as Singapore, will also want to improve the enforceability of their judgments aboard to make those courts more attractive. On the other hand, importers of judgments may have less motivation to improve their law for fear of losing judicial sovereignty or perceived unfair treatment. What do you say to that?

This area of the law has always had a political overlay, which is seen in the desire of some countries to apply narrower rules to the enforcement of foreign judgments than others. As international commerce expands, as it will, after what is hopefully only a “hiccup” in the form of Covid-19, one imagines that countries generally will see the benefit in further recognition and enforcement of foreign judgments. But the recognition and enforcement of foreign judgments must be appropriately managed by the recognising country having defences available to it to ensure that the recognition and enforcement does not cut across important matters of public policy, including most importantly any defence about a failure of that foreign court to accord procedural fairness.

Given the likely rise in cross-border litigation thanks to economic integration and unfortunately due to the pandemic’s financial fallout, what advice would you give to younger lawyers who may see an increase in instructions for either applying for or resisting the recognition and enforcement of foreign judgments?

It is very important for any young lawyer to be alive to the importance of the rules regarding recognition and enforcement of judgments. This is so not only because one’s client may come for advice on the enforcement of a foreign judgment in the lawyer’s jurisdiction, but, importantly, one might be asked for advice about what the client should do when sued in a foreign country. The rules regarding jurisdiction and enforcement might affect whether the client decides to defend that proceeding on the merits in that foreign court. Needless to say, the consequences of that decision can be very significant.

On 3 September, ABLI released the Asian Principles for the Recognition and Enforcement of Foreign Judgments (Asian Principles), a set of 13 overarching principles based on the commonalities and divergence of the rules on foreign judgments recognition and enforcement in all ten ASEAN member states and their major trading partners such as Australia, China, India, Japan and South Korea. The Asian Principles touches on aspects such as the court’s international jurisdiction, judgment finality, reciprocity, due process and public policy, and also includes practical guides for courts and discussions on the Hague Conventions.

The Asian Principles is available in ebook form here.

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