The following is a guest post by Ted Folkman, the force behind the Letters Blogatory blog, of which I am a long-time fan. Letters Blogatory has a very tight (and for me, very interesting focus). It “covers international judicial assistance in civil and commercial cases,” which means the following:

  • Service of process abroad, including service under the Hague Service Convention
  • Obtaining evidence abroad for use in the United States, including proceedings under the Hague Evidence Convention
  • Obtaining evidence in the United States for use abroad, including proceedings under the judicial assistance statute
  • Recognition and enforcement of foreign judgments
  • Recognition and enforcement of international arbitral awards, including awards under the New York Convention
  • Authentication of foreign public documents, including use of the Hague Apostille Convention

I find Ted’s blog extremely interesting because it deals essentially with what it really takes to get the job done in international litigation. Ted and I communicate from time to time on the issues above as they relate to China and I thought it would be good to have him write a guest post relating to China. So here goes.

Thanks to Dan for the invitation to post on China Law Blog. Discussions about judicial assistance in China usually focus on the US litigant’s perspective. Often the gist of the discussion is that it’s really hard to get judicial assistance in China. Sometimes it’s conceded that it’s not as hard as it used to be. In this post, I want to look back at 2011 from the perspective of a Chinese litigant. How easy or hard is it to get judicial assistance in the United States? What are some difficulties that Chinese firms have encountered in the US in 2011 that have judicial assistance or private international law implications?

Everyone knows that US judgments are not readily enforceable in China, but the converse is not true, as Hubei Gezhouba Sanlian Indus. Co. v. Robinson Helicopter Co., 425 Fed. Appx. 580 (9th Cir. 2011) shows. Hubei first sued Robinson in Los Angeles, but Robinson, perhaps planning a “boomerang litigation” and thinking that a US court would never enforce a Chinese judgment, successfully sought dismissal on forum non conveniens grounds. But the Chinese court entered a default judgment against Robinson. Robinson appealed, arguing, among other things, that the judgment should not be recognized because China does not recognize US judgments.

The court gave that argument short shrift. Reciprocity or lack of reciprocity simply is not one of the grounds on which a court may refuse recognition or enforcement under the Uniform Foreign Money Judgment Recognition Act or similar statutes. It’s noteworthy that neither Robinson nor the court took the view that there were any systematic problems with the Chinese judiciary that precluded recognition of a Chinese judgment. There is a growing recognition in the US of the increasing maturity of the Chinese judiciary. And it’s interesting that neither Robinson nor the US court raised the issues of lack of finality that have caused courts in the Hong Kong SAR to question whether mainland Chinese judgments are entitled to recognition and enforcement.

What about efforts by Chinese firms to resist US pretrial discovery in the United States? The record in 2011 is mixed. Chinese banks in particular had a mixed record in relying on China’s banking secrecy laws to resist efforts to obtain the bank records of depositors who were defendants in US lawsuits, even if the records were located in China rather than in the US. Two internet trademark infringement cases, Tiffany (NJ) LLC v. Qi, 276 F.R.D. 143 (S.D.N.Y. 2011) and Gucci America, Inc. v. Li (S.D.N.Y. 2011), come to opposite conclusions on this point. More troubling, both cases also suggest — wrongly, I think, in light of US law limitations on the reach of injunctions — that Chinese banks may be bound by US asset freeze injunctions in such cases, even where they are not named as defendants.

Of course, there were a bunch of other judicial assistance cases involving Chinese parties in 2011 and you can find many of them at Letters Blogatory’s China page. As time goes on, there is little question that the volume of these cases will grow. From the American perspective, we can only hope that the US’s liberal attitude towards enforcement of judgments, including Chinese judgments, will encourage reciprocity in China.

CHINA LAW BLOG NOTES: My law firm recently took a Chinese judgment and secured its enforcement in the United States, with pretty much no hassle. I have to remain somewhat mum on this because we intend to use that judgment to seize the assets of a Chinese company, but I have always been of the (minority?) view that it really just isn’t that tough to get Chinese judgments enforced in the United States, even though the opposite is pretty much impossible.  I have been involved in about a dozen cases involving the enforcement of foreign judgments in the United States — on both sides of the issue — and of those cases, the foreign judgment was enforced every single time.  In maybe five of those occasions, the foreign judgment came from Russia. If the US courts will enforce Russian judgments, I just don’t see why they won’t enforce Chinese judgments as well.

For more on the enforcement of China/US judgments, check out the following: