While there is no formal reciprocal arrangement between China and Australia to recognize and enforce the court judgments of one another’s courts, Chinese court judgments may be enforced in Australia pursuant to common law.
The NSW Supreme Court has enforced the first Chinese court judgment in New South Wales in Bao v Qu; Tian (No 2) [2020] NSWSC 588 (Bao) in May 2020.
Registration and enforcement pursuant to the Foreign Judgments Act 1991
The Australian Foreign Judgments Act 1991 provides a regime for the registration and enforcement in Australia of court judgments obtained in another country where there is reciprocal arrangement between Australia and the other country.
The regime currently applies to 24 countries but the regime does not apply to China.
Enforcement Pursuant to Common Law
If an entity seeks to enforce a Chinese court judgment in Australia, it is necessary to do so pursuant to common law.
To have a foreign judgment enforced in Australia under the common law, four requirements must be met:
- the foreign court must have exercised proper jurisdiction;
- the judgment must be final (with no appeals available);
- the parties to the judgment of the foreign court and to the enforcement proceedings must be identical; and
- the judgment must be for a fixed sum.
The onus rests on the party seeking the enforcement of the foreign judgment to establish that these four principles have been satisfied.
Implications of the Bao Decision
Before the Bao decision, there have only been two other cases where an Australian court has enforced a Chinese judgment. Both Chinese judgments were enforced in the Victorian Supreme Court: Liu v Ma & anor [2017] VSC 810, and Suzhou Haishun Investment Management Co Ltd v Zhao & Ors [2019] VSC 110.
The Bao case is the first Chinese court judgment enforced in courts of New South Wales.
Chinese courts generally enforce foreign judgments either through a bilateral treaty or ‘reciprocity’. In the absence of a bilateral treaty, Chinese courts will generally enforce foreign court judgments if foreign courts have a track record of enforcing Chinese judgments. Chinese courts have recently enforced US court judgments and a Singapore court judgment on this basis.
Given the Bao decision, we can expect that Australian courts enforcing Chinese judgments will encourage Chinese courts to enforce more Australian court judgments.
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