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CHINA LEGAL SCIENCE 2019年第6期| 中国与南非商事判决承认与执行制度的比较与融合
日期:20-03-28 来源:CHINA LEGAL SCIENCE 2019年第6期 作者:zzs

THE RECOGNITION AND ENFORCEMENT OF COMMERCIAL JUDGMENTS BETWEEN CHINA AND SOUTH AFRICA: COMPARISON AND CONVERGENCE


Zhu Weidong


TABLE OF CONTENTS


I. INTRODUCTION

II. THE NECESSITY FOR THE RECOGNITION AND ENFORCEMENT OF THE                            COMMERCIAL JUDGMENTS BETWEEN CHINA AND SOUTH AFRICA

III. THE COMPARISON OF THE RECOGNITION AND ENFORCEMENT OF COMMERCIAL        JUDGMENTS BETWEEN CHINA AND SOUTH AFRICA


A. The Basis of the Recognition and Enforcement of Foreign Commercial Judgments

B. The Conditions for the Recognition and Enforcement of Foreign Commercial                Judgments


IV. THE OBSTACLES FOR THE RECOGNITION AND ENFORCEMENT OF COMMERCIAL           JUDGMENTS BETWEEN CHINA AND SOUTH AFRICA


A. The Ascertainment of Jurisdiction

B. The Employment of the Reciprocity

C. The Understanding of the Public Policy


V. THE CONVERGENCE OF THE RECOGNITION AND ENFORCEMENT REGIMES                    BETWEEN CHINA AND SOUTH AFRICA


A. The Harmonization of Domestic Laws

B. The Conclusion of the Bilateral Treaty

C. The Accession to the Multilateral Convention


VI. CONCLUSION



The frequent business transactions between China and South Africa have resulted in large quantities of civil and commercial disputes, the ultimate resolution of which requires a feasible recognition and enforcement mechanism of the judgments from each other’s court. It can be seen from the comparison of their recognition and enforcement systems that there are still some obstacles in the recognition and enforcement of judgment from each side. To overcome such obstacles, the convergence of the recognition and enforcement systems between both sides is unavoidable. Both sides may create a favorable environment for the judgments’ recognition and enforcement by harmonizing their domestic laws, concluding bilateral judicial assistance treaties in civil and commercial matters, as well as acceding to the multilateral treaties on recognition and enforcement, taking into account of their current development in such an area. Currently, it will be preferred to make institutional arrangement for the recognition and enforcement of judgments between China and South Africa by concluding bilateral judicial assistance treaties in civil and commercial matters.



I. INTRODUCTION


The recognition and enforcement of commercial judgments between different countries are of great significance for the maintenance of normal international commercial transactions. If the judgments cannot be circulated freely, the judgment creditor’s rights and interests will be prejudiced, which will in turn have negative impact on the free movement of goods, capital, service and people. Therefore, the international society pays great attention to the recognition and enforcement of foreign commercial judgments and has made such great efforts as concluding multilateral and bilateral treaties and improving domestic laws to guarantee the free circulation of commercial judgments. Considering the reality of today’s world, it will be more practical to negotiate and conclude bilateral judicial assistance treaties with other countries. So far, China has concluded many such treaties with other countries. Also, China has been actively participating in the negotiation of the multilateral conventions on recognition and enforcement and has shown more cooperation in signing such conventions. With the development of the Belt and Road Initiative, China attaches great importance to the protection of the Chinese investors’ overseas rights and interests, and has taken great efforts in realizing the recognition and enforcement of judgments between China and the other countries. As far as South Africa is concerned, there is no bilateral judicial assistance treaty for civil and commercial matters with China, nor is there any cooperation between both sides in recognition and enforcement of commercial judgments. Due to the practical need of the civil and commercial transactions between China and South Africa, it is necessary for the recognition and enforcement of the commercial judgments between both sides. This paper will first compare the recognition and enforcement systems of the commercial judgments between both sides, then the paper will examine the advantages and disadvantages of such systems, and finally, the paper will put forward some suggestions to converge such systems to assure the smooth circulation of the commercial judgments between both sides.



II. THE NECESSITY FOR THE RECOGNITION AND ENFORCEMENT OF THE COMMERCIAL JUDGMENTS BETWEEN CHINA AND SOUTH AFRICA


The frequent cross-border business transactions create the potentiality of the mutual recognition and enforcement of commercial judgments between different countries. Since the establishment of the diplomatic relationship between China and South Africa in 1998, the business relationship between both sides has been on the steady increase. According to the statistics from China’s Customs, the trade volume between both sides reached over 43.5 billion USD in 2018, which made South Africa the largest trading partner of China in Africa in nine consecutive years and made China the largest trading partner of South Africa in 10 consecutive years. And by the end of 2017, China’s FDI stock to South Africa has exceeded 25 billion USD, making South Africa the largest investment destination of China in Africa.

A large number of civil and commercial disputes arising from the frequent business transactions made it practically necessary for the mutual recognition and enforcement of commercial judgments between both sides. The author has searched 70 civil and commercial judgments involving South African elements made by the Chinese courts since 2003 from a Chinese search engine for the legal information, with the keyword ‘the Republic of South Africa’. In terms of the annual distribution of such judgments, the number of such judgments increased year by year. For example, in 2003 the Chinese courts only made two judgments involving South African element, while since 2013, the annual number of such judgments has reached over 10. As regards the geographical distribution of such judgments, the disputes were mainly from Shanghai, Guangdong Province, Fujian Province and Zhejiang Province, and the courts in these four areas have made 53 judgments with South African element. As for the causes of such judgments, the top three causes such judgments covered were contract, negotiorum gestio, unjust enrichment; marriage and family, inheritance; as well as the commercial disputes concerning company, stock, insurance and instruments, and the number of the disputes arising from the top three causes were 47. On the other hand, the number of the disputes involving the Chinese element was also very high. The author has searched 294 disputes with the keyword ‘Chinese’ and 415 disputes with the keyword ‘China’ from the website of the Southern African Legal Information Institute. As can be seen that the number of the disputes involving the Chinese element in South African courts was very surprising, despite some inaccuracy in the result. According to a survey that the author did several years ago, the Chinese-related disputes in the South African courts were mainly arising from contract, letter of credit and letter of guarantee, maritime matters, as well as intellectual property infringement.

South Africa is among the first group of African countries that have signed the Belt and Road Cooperation Memorandum, and China has expressed its support for South Africa to become the model country that effectively combines the Belt and Road Initiative with its national development program. In such a context, the business transactions between both sides will become more frequent, and accordingly the civil and commercial disputes will increase greatly. As the final stage of the civil and commercial dispute resolution, the recognition and enforcement of judgment will determine whether the rights and interests of the judgment creditor can be realized or not. The time, money and efforts that the judgment creditor devoted to the litigation will be in vain unless the judgment from such a litigation is recognized and enforced, which will obstruct the cross-border flow of the people, capital, service and goods and will subsequently affect the realization of the five goals of the Belt and Road Initiative, namely, the unimpeded trade, integrated finance, coordination of policies, connectivity of the infrastructure and the people to people exchange. In fact, the Chinese courts have ever dealt with the application for the recognition and enforcement of the divorce judgments from the South Gauteng High Court and from a magistrate court in Western Cape, respectively. For the former application, the Chinese court denied its recognition on the ground that the divorce litigation of the same parties was still pending in the Chinese court; while for the latter application, the Chinese court recognized it in its ruling pursuant to the judicial interpretation on the recognition and enforcement of foreign divorce judgments issued by the Supreme People’s Court in China. It is foreseeable that the recognition and enforcement of the commercial judgments between both sides will also definitely arise taking into account the quantities of commercial disputes between both sides now. Thus, it is very necessary to learn about the recognition and enforcement systems of each side and to make relevant arrangements for the recognition and enforcement of the commercial judgments between both sides in advance based on the comparative studies.


III. THE COMPARISON OF THE RECOGNITION AND ENFORCEMENT OF COMMERCIAL JUDGMENTS BETWEEN CHINA AND SOUTH AFRICA


Traditionally, the comparative law plays a very important role in the development of private international law. The similarities and differences of the foreign-related legal systems in different countries may be generalized through the comparative studies. By seeking common ground while accepting the existing differences, the harmonization of the different foreign-related legal systems may be attained by way of bilateral or multilateral arrangements. Despite the long distance between China and South Africa, both of their legal systems have been influenced by the outside legal systems and as a result they are both ‘mixed’ in nature. The mixed nature is more obvious in the private international law. As the branch of law that regulates the foreign-related civil and commercial relationship, both the private international laws in China and in South Africa have drawn many experiences and practices from other countries, which led to many similarities in their recognition and enforcement regimes of foreign commercial judgments. While the degree of the influences from the other countries are quite different, so there are still some differences in their recognition and enforcement regimes of foreign commercial judgments.


A. The Basis of the Recognition and Enforcement of Foreign Commercial Judgments


The recognition and enforcement of foreign commercial judgments are based on different theories and laws. It is very important to learn about such theories and laws in the country where the recognition and enforcement are sought, for ‘the bases on which foreign judgments are enforced influence the scope of judgments that can be enforced’, and ‘it can be argued that judgment enforcement regimes founded on comity or the need to facilitate international trade and commerce are more amenable to enforcing foreign judgments than regimes founded on reciprocity’. On the other hand, the understanding of the recognition and enforcement regimes, namely the legal base for such recognition and enforcement, will help make sure the specific conditions and procedures for the recognition and enforcement.

So far as the theoretical basis for the recognition and enforcement were concerned, the Chinese courts have never explored the theories relating to the recognition and enforcement in their judgments and most of the Chinese private international law scholars have only introduced or discussed the recognition and enforcement theories in their textbooks or articles. With regard to the reasons for the recognition and enforcement of foreign commercial judgments, there are two main opinions in China. According to one opinion, ‘the fundamental reason why a country recognizes and enforces the judgments from the other country is not based on the international comity, res judicata, or reciprocity, nor based on the respect for the vested right or obligation conferred upon by the foreign judgments or the recognition of the foreign lex specialis, but based on the need to transact with other countries’; While in light of the other opinion, the reason why one country recognizes and enforces the judgments from the other country ‘is based on the principle of equality and mutual benefit’. Obviously, the two opinions adopted the reasoned and pragmatic method for the recognition and enforcement of foreign commercial judgments, while considering the reality of the current international society. It is unfortunate, nevertheless, that such kinds of opinions are not accepted in China’s legislation and practice. The principle of reciprocity remains an important principle in China’s recognition and enforcement regime and practice, which has caused much inconvenience and trouble in practice.

The theoretical basis for the recognition and enforcement of foreign judgments in South Africa is not entirely clear and settled. As a Roman-Dutch law country and the former colony of the UK, the doctrines of comity and obligation have ever been very influential in South Africa’s recognition and enforcement regimes. Additionally, the doctrines of vested rights and most significant relationship have also been invoked in the judgments delivered by the South African courts. The tracks of the doctrine of reciprocity can still be found in South African cases and in the authoritative writings of the Roman-Dutch law, whereas, it is generally submitted that such a doctrine is not part of the South African common law. The recognition and enforcement of foreign judgments are completely based on the reciprocity in the Reciprocal Enforcement of Civil Judgments Act of 1966 of South Africa (hereinafter referred to as the Act of 1966), but this act has never come into effect. The Enforcement of Foreign Civil Judgments Act of 1988 repealed the Act of 1966 and the reciprocity was found nowhere in the new act. Considering the fact that each of the above-mentioned doctrines has its own shortcomings, the private international lawyers in South Africa advocated the adoption of pragmatism in recognizing and enforcing foreign judgments. For example, when deciding whether to recognize and enforce the foreign judgment, consideration should be taken into the ‘enlightened social values and the facilitation of international relations’, or ‘bringing a variety of policy concerns into balance to meet the contemporary needs’. Professor C. F. Forsyth, a prestigious scholar on South African private international law, even deemed it unnecessary to consider the question separately, ‘for the reasons recognizing and enforcing foreign judgments are the same as those for applying foreign law generally’, ‘Indeed, the application of foreign law is the application of a general abstract norm of the foreign system, while the enforcement of a foreign judgment is simply the application of an individual concrete norm (lex specialis) of that system. Why should there be different rationales for the two processes?’ The pragmatic opinions of South African scholars have also been reflected in the South African judgments, in which the South African courts emphasized the role of pragmatic bases in facilitating international trade and commerce.

The legal bases upon which the recognition and enforcement of foreign judgments are founded are manifestly different between China that is with a more civil law background and South Africa that is with a more common law background. In China, the recognition and enforcement regimes are included in the multilateral conventions that China has acceded to such as the International Convention on the Civil Liability for Oil Pollution Damage of 1969, the bilateral judicial assistance treaties in civil and commercial matters that China has concluded with other countries, the relevant legislation in China, as well as the judicial interpretations issued by the Supreme People’s Court of China. The Supreme People’s Court has also released some guiding cases involving private international law issues including the recognition and enforcement in its Gazette, however, those guiding cases only provide guidance for the lower courts in adjudicating the similar cases and they cannot serve as the binding case law. The comparative law and the writings of the legal scholars, of course, cannot constitute the sources of private international law in China in any way, either. While in South Africa, the recognition and enforcement regimes are composed not only of the statutory laws, the case law, the writings of the Roman-Dutch lawyers, but also of the Roman law, customary law, etc. And the comparative law as well as the writings of some modern private international law scholars are also important persuasive sources of South African private international law. It is quite common that the foreign legislation and case law especially those from the UK or the US are invoked by the South African courts in deciding the private international law cases, and the writings of some important private international lawyers such as those of Professor C. F. Forsyth are often quoted by the South African judges in their judgments. Professor Forsyth once described the situation vividly as follows: ‘Let us be frank: legal academics do not write for the money; they write in order that they may be read. And they wish to be read so that they may, directly or indirectly, influence the development of the law. Writers about South African law are fortunate in this regard, for they are read and are frequently relied upon by the judges, and so, if they write sufficiently persuasively, may directly influence the law.’


B. The Conditions for the Recognition and Enforcement of Foreign Commercial Judgments


Under article 281 of the Civil Procedure Law of the People’s Republic of China and article 544 of the Judicial Interpretation of the Supreme People’s Court concerning the Application of the Civil Procedure Law of the People’s Republic of China, the Chinese courts will only recognize and enforce the judgments emanating from the following two groups of countries: the countries that have concluded bilateral treaties on recognition and enforcement with China or have acceded to the multilateral convention on recognition and enforcement of which China is also a member; and the countries that have reciprocal relation with China in the recognition and enforcement. As for the application to recognize and enforce the judgments not from the two above groups of countries, the Chinese court accepting the application will simply make a ruling to dismiss it. So far, China has concluded 36 effective bilateral judicial assistance treaties in civil and commercial matters with other countries, most of which have made stipulations on the recognition and enforcement of judgments. In accordance with the provisions of these treaties and article 282 of the Civil Procedure Law of the People’s Republic of China, foreign commercial judgments will not be recognized and enforced unless: it is rendered by a competent court in the foreign country; it is final and conclusive; the proceedings in the foreign court is fair and lawful; there is no inconsistency with other judgments over the same subject matter with the same parties; the rendering court applied the lex causae determined by reference to the conflict rules in the country where the recognition and enforcement is being sought; and the recognition and enforcement will not contravene the public policy in China.

There are two recognition and enforcement regimes in South Africa, i.e., the common regime and the statutory regime. The statutory regime is regulated by the Enforcement of Foreign Civil Judgments Act 32 of 1988. This Act empowers the Minister of Justice to have the judgment given in designated countries registered under this Act. The foreign judgments have the same effect as the judgments given by the South African courts and can be enforced in the same way that the South African judgments are enforced after registration. This Act does not require reciprocity and provides very favorable conditions for the recognition and enforcement of foreign judgments. But in light of the Act only the magistrates’ courts in South Africa are mandated to register the foreign judgments and such courts can only accept cases up to 100,000 rand. Besides, there is only one country, namely, Namibia, is designated in the Act, therefore, the recognition and enforcement through registration in this Act are quite limited in practice. As a result, at present in South Africa, the foreign judgments are mainly recognized and enforced under the common law regime. Corbertt CJ set out the conditions that need to be fulfilled in then Appellate Division case of Jones v. Krok before a judgment will be recognized and enforced by South African courts: the court that pronounced the judgment had international jurisdiction over the dispute; the judgment is final and conclusive in its effect; the recognition and enforcement would not be contrary to the public policy in South Africa; the foreign judgment was not obtained by fraud; the judgment does not involve the enforcement of a penal or revenue law of the foreign state; and the enforcement of the foreign judgment is not precluded by the provisions of the Protection of Businesses Act 99 of 1978. Professor Forsyth summarized the following four conditions for the recognition and enforcement of a foreign judgment under the modern Roman-Dutch common Law: Firstly, the foreign court had international jurisdiction (or competence) to decide the case; Secondly, the foreign judgment was final and conclusive and has not become superannuated; Thirdly, the recognition and enforcement of the judgment must not be against public policy; And fourthly, that the judgment does not fall foul of section 1 of the Protection of Businesses Act of 1978.

From the above comparisons of the bases and conditions for the recognition and enforcement of foreign judgments between China and South Africa, obviously there are some great differences in the bases upon which the recognition and enforcement are founded between China and South Africa. E.g., under the Chinese law, the foreign judgments can only be recognized and enforced on the bases of international treaties or reciprocity, while such bases are not given much weight in South Africa. Instead, the domestic law regime and the pragmatism are given more weight in South Africa in considering whether to recognize and enforce a foreign judgment. The different bases upon which the foreign judgment is recognized and enforced in China and South Africa resulted in the more or less conservative and rigid recognition and enforcement regime in China, while the more or less flexible and pragmatic regime in South Africa. As for the specific conditions for the recognition and enforcement in the two countries, there does not seem to be so much difference. For example, for a foreign judgment to be recognized and enforced in either of the country, the foreign rendering court must have jurisdiction over the dispute, the foreign procedure is fair, the foreign judgment is final and conclusive and is not incompatible with the public policy in the requested state, etc. But a further examination of these conditions shows that the provisions and understandings of jurisdiction, public policy are quite different in the two countries which will constitute obstacles for the recognition and enforcement of commercial judgments between both sides.


IV. THE OBSTACLES FOR THE RECOGNITION AND ENFORCEMENT OF COMMERCIAL JUDGMENTS BETWEEN CHINA AND SOUTH AFRICA


As can be seen from the above analysis that China and South Africa adopt different attitudes towards the principle of reciprocity in the recognition and enforcement of foreign judgments and they also have different provisions and understandings in the ascertainment of jurisdiction and the application of public policy which could become the stumbling blocks for the mutual recognition and enforcement of commercial judgments between both sides. This part will give a detailed examination of the influence that the differences in these areas may exert on the mutual recognition and enforcement of commercial judgments between China and South Africa in order to put forward some pertinent suggestions.


A. The Ascertainment of Jurisdiction


There are no express statutory provisions on how to determine whether the foreign court has jurisdiction over the dispute in the course of the recognition and enforcement in China. If the foreign judgment creditor bases his application for the recognition and enforcement on the bilateral judicial assistance treaty concluded between China and the foreign state, then whether the foreign court that made the judgment had jurisdiction over the dispute or not should be determined in accordance with such a treaty by reference to the principle of the prevailing application of international treaty embedded in article 260 of the Civil Procedure Law of the People’s Republic of China. In case that the foreign judgment creditor based his application for the recognition and enforcement on the principle of reciprocity, or in case that there were no stipulations on the ascertainment of jurisdiction in the bilateral judicial assistance treaty, whether the foreign court has jurisdiction over the dispute or not should be determined in accordance with the provisions on the Chinese courts’ jurisdiction in the Civil Procedure Law of the People’s Republic of China by reference to the principle that the lex fori governs the procedure embedded in article 259 of the same law.

There are no uniform stipulations on the ascertainment of foreign courts’ jurisdiction in the bilateral judicial assistance treaties concluded between China and other countries. Generally, there are three standards to decide the foreign courts’ jurisdiction under these bilateral treaties: Firstly, whether the court in the requesting state has jurisdiction or not over the dispute should be determined by the internal laws in the requested state. For example, the bilateral judicial assistance treaties in civil and commercial matters between China and France, Poland, Mongolia, Romania all adopt such a standard. Secondly, the question whether the court in the requested state has exclusive jurisdiction or not over the dispute should first be determined by the internal laws in the requested state, if yes, then the foreign court that made the judgment has no jurisdiction over the dispute. For example, the bilateral judicial assistance treaties between China and Russia, Tajikistan adopt such a standard. And thirdly, whether the foreign court has jurisdiction or not should be determined in terms of the provisions on jurisdiction in the treaty itself, and the judicial assistance treaties between China and Cyprus, Egypt, Italy, Spain, Tunisia, Ethiopia all adopt such a standard.

Therefore, in determining whether the foreign court has jurisdiction over the dispute or not, the Chinese court will look to only two standards, no matter whether the recognition and enforcement is sought in China on the base of treaty or reciprocity. One is the standard established in the domestic law and the other in the treaty. As for the domestic law standard, chapter 2 and article 265 in chapter 24 of the Civil Procedure Law of the People’s Republic of China make clear stipulations. Under these stipulations, the Chinese court has very broad jurisdictional grounds to exercise jurisdiction over the commercial disputes, which include the domicile and habitual residence of the defendant, the place where the contract is celebrated or performed, the place of the subject matter of the contract, the place where the property is attached, the place where the instruments are honored, the place where the agency locates, the defendant’s submission to the court’s jurisdiction, etc. For the disputes concerning the immovable property, the court within whose jurisdiction the immovable property locates has exclusive jurisdiction over such a dispute. The Chinese courts also have exclusive jurisdiction over the disputes arising from the performance of the contract for Sino-foreign joint venture, contract for Sino-foreign cooperative enterprise and contract for Sino-foreign cooperative exploration and development of natural resources in China. The jurisdictional bases in the bilateral judicial assistance treaties between China and other countries are relatively limited compared with those in the Chinese civil procedure law, and they include the domicile or the habitual residence of the defendant, the seat of the agency, the place where the contract is executed or performed, the place of the subject matter of the contract, the place where the immovable property locates and the defendant’s submission to the court’s jurisdiction, etc.

In South Africa, the concept of ‘international jurisdiction or international competence’ is adopted in deciding the foreign court’s jurisdiction, i.e., the court of the requesting state must have international jurisdiction over the dispute and then its judgment may be recognized and enforced in South Africa. International jurisdiction has a special meaning in South African law. It does not mean only that the foreign court must have jurisdiction over the dispute in terms of its own law; nor does it mean that the foreign court must have had jurisdiction according to the South African law relating to jurisdiction. Whether the foreign court is internationally competent or not must be decided according to the principles recognized by South African law with reference to the jurisdiction of the foreign court. Just as Djikhorst J put plainly in Reiss Engineering Co. Ltd v. Isamcor (Pty) Ltd, ‘the fact that a foreign court (English court) may have had jurisdiction in terms of its own law does not entitle its judgment to be recognized and enforced in South Africa. It must have had jurisdiction according to the principles recognized by our law with reference to the jurisdiction of the foreign court.’ In other words, whether the foreign court has international jurisdiction or not must be determined according to the jurisdictional grounds sufficient to establish the international jurisdiction under South African private international law. Currently a foreign court will generally have international jurisdiction under South African private international law if at least one of the following requirements is met: the defendant was resident or physically present within the foreign court’s at the time of the commencement of the action in the foreign court; the defendant has submitted to the foreign court’s jurisdiction by conduct or by agreement; for the dispute involving the immovable property, the immovable property situates within the area of the foreign court’s jurisdiction. Until now, there is no case law definitely in support of domicile as an international jurisdictional ground and there is no consensus among the South African private international law scholars over the issue. Professor Forsyth, however, considered that South African courts should not accept that domicile per se grounds international competence, since ‘the rules relating to the acquisition and loss of domicile are technical and artificial’, and could not establish a substantial relationship between the defendant and the court for the court to give an effective judgment against the defendant. And also, the foreign court has no international competence where the cause of action arose within the foreign court’s jurisdiction, e.g., the contract was executed or performed, or the breach of the contract occurred, within the jurisdiction of the foreign court.

The above analysis reveals that there are some similar grounds in determining the foreign court’s jurisdiction in China and South Africa, e.g., the residence of the defendant, the defendant’s submission to the foreign court’s jurisdiction, lex situs, etc. On the other hand, there are also manifest differences, e.g., the domicile of the defendant, the place where the contract is executed or performed, the place where the subject matter of the contract locates, the place where the property is attached may be employed as the jurisdictional factor to determine the foreign court’s jurisdiction in China, but none of them constitutes the ground of international jurisdiction in South Africa. While in South Africa the defendant’s physical presence within the foreign court’s jurisdiction when the action starts is a well-established ground of international jurisdiction, but it is not in China. Such differences in determining the foreign court’s jurisdiction in practice will definitely constitute obstacles for the mutual recognition and enforcement of commercial judgments between both sides. For example, if a Chinese court assumes jurisdiction on the basis of the place of the contract’s performance within its jurisdiction and then the judgment creditor seeks to recognize and enforce the judgment in South Africa, the South African court will deny the recognition and enforcement on the ground that the Chinese court has no international jurisdiction according to the recognized principles of the South African law with reference to the jurisdiction of the foreign court. Similarly, if a judgment creditor seeks to recognize and enforce a judgment given by a South African court which assumed its jurisdiction on the basis of the defendant’s physical presence within its jurisdiction in China, the Chinese court will likely refuse to recognize and enforce such a judgment with the reason the South African court has no jurisdiction over the defendant.


B. The Employment of the Reciprocity


The requirement of reciprocity must be met for the recognition and enforcement of the civil and commercial judgments other than the divorce decree unless there is a judicial assistance treaty which provides the recognition and enforcement between China and the requesting state. As a statutory requirement, a foreign judgment must be recognized and enforced on the basis of reciprocity in China in the absence of the treaty regime. Otherwise, the foreign judgment creditor will have to re-litigate in the Chinese courts. Despite the express stipulation of the reciprocity requirement in the Civil Procedure Law of the People’s Republic of China, this law does not make detailed provisions on how the principle of reciprocity should be employed. In judicial practice, the Chinese courts took a very conservative approach to decide whether the reciprocity existed or not between China and the requesting state, namely, the de facto reciprocity approach. According to this approach, only when there is judicial precedent in the foreign state that recognized and enforced the Chinese judgments, then the Chinese court will recognize and enforce the judgment from the foreign state. ‘This quite restrictive interpretation has made the recognition of foreign judgments in China almost impossible.’ So far, the Chinese courts have denied recognition and enforcement of the commercial judgments from the UK, South Korea, Germany, the US, Chad, for want of reciprocity between both sides according to the data the author has collected. Considering the fact that there is no case precedent in South Africa recognizing and enforcing the Chinese commercial judgments, the reciprocity requirement will be a potential obstacle for the commercial judgment from South Africa to be recognized and enforced in China.

The restrictive approach towards the principle of reciprocity will easily incur the retaliation from the other states, which will prejudice the judgment creditor’s rights and the free circulation of the civil and commercial judgments worldwide. More and more countries nowadays hence repealed the requirement of reciprocity. Even in the countries that maintained such a requirement, many restrictions were imposed on such a requirement, or a favorable interpretation towards such a requirement was adopted, or such a requirement has never been used although it is expressly stipulated. The Chinese scholars have long realized the dilemma the Chinese courts came across in the employment of the requirement of reciprocity, so they advocated the adoption of the more flexible approach of presumptive reciprocity or reverse reciprocity instead of the restrictive approach of de facto reciprocity. It is increasingly important to enhance the recognition and enforcement of the commercial judgments between China and the other countries along the Belt and Road with the development of the Belt and Road Initiative and the Chinese courts’ attitude towards the requirement of reciprocity have shown somewhat shift. On June 16, 2015, the Supreme People’s Court of China released the Several Opinions of the Supreme People’s Court concerning Judicial Services and Safeguards Provided by the People’s Courts for the Belt and Road Construction (hereinafter referred to as the Several Opinions of the SPC). Article 6 of the Several Opinions of the SPC calls for the enhancement of the judicial assistance between China and the countries along the Belt and Road and the Chinese courts may first provide judicial assistance for the parties from the countries along the Belt and Road to facilitate the establishment of the reciprocity between sides in the absence of judicial assistance treaty, provided that there is intention to carry out judicial cooperation between both sides and the requesting state promises to give reciprocity to the Chinese parties in future. This is a big step compared with the de facto reciprocity approach and no judicial precedent giving effect to the Chinese judgment in the foreign state is required in terms of the Several Opinions of the SPC. The Nanning Statement published on June 8, 2017, at the second China-ASEAN Justice Forum made it clear that the presumptive reciprocity may be employed in the mutual recognition and enforcement of judgments between China and ASEAN countries, i.e., in the absence of the judicial assistance treaty, the reciprocity is presumed between the requested state and the rendering state even if there is no judicial precedent of reciprocity in the latter state unless the contrary is proved. Following the international trend, the approach in the Nanning Statement will facilitate the mutual recognition and enforcement of commercial judgments. But this Statement has a very limited scope, only applicable among China and the ASEAN countries. The Supreme People’s Court is also considering drafting a judicial interpretation on recognition and enforcement to make a uniform and comprehensive provision for such an issue in China and a liberal approach to the principle of reciprocity is expected to be adopted.

Of course, if the Chinese commercial judgment is first to be recognized and enforced in South Africa, the requirement of reciprocity will not be problematic, because ‘the doctrine of reciprocity has limited practical relevance in South African recognition and enforcement law’. Indeed, neither the Enforcement of Foreign Civil Judgment Act 32 of 1988 nor the common law regime in South Africa requires reciprocity from the foreign state. Thus in such a situation the Chinese judgment will very likely be given effect and the reciprocal relationship may be established accordingly. But if the South African commercial judgment is first to be recognized and enforced in the Chinese courts, the Chinese courts will likely refuse its recognition and enforcement for the lack of judicial assistance treaty and reciprocity between both sides, which will in turn lead to the dead end of the recognition and enforcement between both sides.


C. The Understanding of the Public Policy
     
It is a well-established ground to deny recognition and enforcement of a foreign judgment on the basis of public policy exception. Almost every country has its unique answer to the question that what the public policy is. The uncertainty of public policy will result in the unforeseen state of the recognition and enforcement of foreign judgments: when the judgment creditor applies to recognize and enforce a foreign judgment in the court of another country, it is hard for him to predict whether the requesting court will deny the recognition and enforcement or not out of the public policy exception. Burrough J. described the uncertain nature of public policy vividly as follows: ‘Public policy is a very unruly horse, and when you get astride, you never know where it will carry you.’ Naturally, the public policy exception will constitute another potential obstacle in the course of recognition and enforcement.

The public policy in the Chinese laws has various expressions such as; ‘social moral’, ‘social public interest’, ‘public order and good customs’. Article 282 of the Civil Procedure Law of the People’s Republic of China adopts another expression in relation to the recognition and enforcement of foreign judgments, namely, ‘the fundamental principles of law or state sovereignty, security, social public interests’. However, the Chinese laws do not give an express indication of the specific meanings of the public policy, which will bring about the flexibility in its interpretation and use. In the opinions of some Chinese private international law scholars, the Chinese courts may refuse to recognize and enforce the foreign judgment provided: that it is contrary to the principles or spirit of the constitutional law in China; that it damages the ethnic harmony and national unity; that it infringes the treaty obligation China undertakes or the internationally recognized principles of equity and justice; or that it harms China’s sovereignty or security. The other Chinese scholars regard such mandatory rules in the Chinese private international law as those relating to the protection of the labors, food and public security, environmental security, foreign exchange control, anti-trust or anti-dumping, also expressions of public policy in China, which may be used as grounds for the denial of recognition and enforcement of foreign judgments, based on their analysis of the relationship between the public policy and the mandatory rules. Furthermore, the foreign revenue, penal judgments or the foreign judgments for punitive damages which are so excessive or exorbitant will not be recognized and enforced in China due to the public policy exception. In practice, the Chinese courts generally adopt a restrictive interpretation towards the public policy and will not rashly rule against the recognition and enforcement of the foreign judgments on the ground of the public policy exception.

In South Africa, ‘public policy is a slippery concept, difficult to pin down.’ ‘Therefore whether a foreign judgment is contrary to public policy depends largely on the facts of each case.’ Professor Forsyth summarized the situations in which the foreign judgment might be refused recognition and enforcement on the basis of public policy exception under South African common law as the following: that the foreign judgment is rendered contrary to natural justice; that the foreign judgment is obtained by fraudulent means; that the foreign judgment violates the fundamental policy of South African law; or that the foreign judgment is a penal or revenue one. In addition, then mandatory provisions in the Protection of Businesses Act No 99 of 1978 of South Africa are seen as ‘statutory expressions of public policy’, the violation of which will result in the foreign judgment’s not being recognized and enforced in South Africa. The mandatory rules in this Act include those prohibiting the recognition and enforcement of the foreign judgment for punitive or multiple damages, especially the judgments made by certain American courts in regard to anti-trust matters. Particularly, section 1 of this Act provides that, except with the permission of South African Minister of Trade and Industry, no foreign judgment in connection with any proceedings and arising from an act or transaction that took place at any time and that is connected with the mining, production, importation, exportation, refinement, possession, use or sale of or ownership of any matter or material of whatever nature whether within, outside, into or from South Africa, many be enforced in South Africa. This stipulation was so widely worded that it would affect the enforcement of every foreign commercial judgment. Fortunately, the South African courts have consistently adopted a restrictive approach to the interpretation of this Act and ‘there is in fact no recorded instance in which the Act has been successfully invoked as a defense to enforcement’.

The public policy in each country reflects its own traditional moral ideas, customs and the basic principles of law, which is prominent in the matters of marriage, family and status. As regards the commercial matters, due to the assimilation of the commercial usages and commercial laws, the public policy shows greater similarity and plays a less important role. For example, the polygamous marriage and the same-sex marriage are recognized in South Africa, but in China only the monogamous marriage is recognized, which indicates the irreconcilability of the public policy between both sides in marriage and family. While for the public policy in the recognition and enforcement of the commercial judgments between both sides, there are obvious many resemblances, for example, neither of them recognizes and enforces the foreign judgments rendered against natural justice, nor do they recognize and enforce the foreign revenue, penal judgments or the foreign punitive judgments for excessive or exorbitant damages. It is therefore argued that in terms of the public policy, the main obstacle for the mutual recognition and enforcement of the commercial judgments between both sides may be the different mandatory rules in either country, the violation of which will prevent the commercial judgments from either side being recognized and enforced. Whereas, the courts from both sides adopt the restrictive approach towards the mandatory rules in judicial practice and the scope and contents of these mandatory rules are clearly drafted at both sides, which will prevent and reduce the situation in which the commercial judgment from either side is not given effect due to the violation of the different mandatory rules of the other side.


V. THE CONVERGENCE OF THE RECOGNITION AND ENFORCEMENT REGIMES BETWEEN CHINA AND SOUTH AFRICA


The effective recognition and enforcement regime of foreign commercial judgments can bring the practical benefits to the individuals and it is needed to facilitate the cross-border commercial transactions. But due to the different recognition and enforcement regimes in different countries, it is still a utopianism for a foreign commercial judgment to move freely worldwide. The international society has made great efforts in facilitating the free movement of the judgment, such as the making of international conventions, negotiating and concluding bilateral judicial assistance treaties with other countries. These efforts aim to get rid of the differences of various recognition and enforcement regimes among countries so as to realize the convergence of these regimes and to clear ways for the smooth recognition and enforcement of foreign judgments. Just as a writer observed, ‘the process of convergence between two legal systems is undoubtedly stimulated by the fact that these systems have the same types of problems to confront everywhere.’

The same problem of the recognition and enforcement of commercial judgments in the other’s courts between China and South Africa due to the close business relationship between each other give an impetus for the convergence of the recognition and enforcement regimes between both sides. Convergence means integration, harmonization and differences reduction while the convergence of the legal systems means their cross reference so as to realize the unification and harmonization of different legal systems. It is generally submitted that the unification and harmonization of the laws of different countries means replacing, to respective degrees, the existing national laws with common rules. In practice, the legal unification and harmonization are usually achieved by the ways of treaty, uniform law, model law, international commercial customs, harmonization of domestic laws, restatement of law, etc. The convergence of the recognition and enforcement regimes between China and South Africa may be achieved through the harmonization of domestic laws, the conclusion of bilateral treaty and the accession to the multilateral conventions, taking into account the current situation between both sides.


A. The Harmonization of Domestic Laws


Harmonization, as distinct from the unification in the strict sense, can be loosely defined as ‘making the regulatory requirements or governmental policies of different jurisdictions identical or at least more similar’ and in its most common modern form harmonization brings about convergence or co-ordination of different legal provisions or systems by eliminating the major differences between them. According to Professor Arthur Rosett, there are two engines driving harmonization, e.g., shared commercial culture and shared legal literature and legal education. Just as another professor pointed out, the fact that Latin America’s core legal systems are encoded in only two (similar) languages with a common or similar institutional legal heritage is an advantage for the convergence of laws in Latin America. Even in the jurisdictions with completely different legal culture and languages, the legal systems may achieve convergence to some level. For example, as a civil law country, Italy has incorporated some basic features of the adversarial system on which the US and other common law criminal justice system are based on its new Criminal Procedure Code. The common need for the promotion of business relationship and the common background of the mixed jurisdiction in China and South Africa make it favorable for the convergence of the recognition and enforcement regimes of the commercial judgments between both sides, despite their different languages. And as a branch of law that is devoted to the foreign-related civil and commercial dispute resolution, it is easier for the private international law of one country to draw some experiences or inspirations from other countries. Indeed, the private international laws in China and South Africa have benefited a lot from the private international law systems in the UK, the US, etc., in their development, which is advantageous for both sides to reduce their differences in reforming and improving their recognition and enforcement regimes to achieve the convergence in the end.

South African Law Commission made a proposal in 2003 in the hope of drafting consolidated legislation pertaining to international cooperation in civil matters which mainly dealt with the recognition and enforcement of foreign judgments. The issues under consideration by the South African Law Commission include whether the Enforcement of Foreign Civil Judgments Act 32 of 1988 should be extended to the High Court in order to facilitate the registration of foreign money judgments in excess of 100,000 rand; whether the consolidated Act should be based on reciprocity; if not, what criteria should be used to determine which foreign countries the consolidated Act should apply to, or alternatively, whether South Africa should recognize and enforce foreign civil judgments emanating from all foreign countries; whether the Protection of Businesses Act 99 of 1978 poses an unjustifiable obstacle to international cooperation in civil matters, etc. The Supreme People’s Court of China is now also considering promulgating a judicial interpretation on the recognition and enforcement of foreign judgments to provide clear and uniform guidance for the recognition and enforcement of foreign judgments in China. The new judicial interpretation will doubtlessly deal with the principle of reciprocity, the scope of punitive judgment, the grounds denying the recognition and enforcement, and the review of the foreign jurisdiction. In the course of the legislation reform, if the legislators, judiciaries and scholars from China and South Africa carry out extensive exchange and cooperation, it will contribute to the closer harmonization of the recognition and enforcement regimes between both sides and accordingly reduce the potential obstacles for the mutual recognition and enforcement of commercial judgments.


B. The Conclusion of the Bilateral Treaty


At present, in terms of the recognition and enforcement, most of the countries are still in the Hobson’s ‘natural state’ for the lack of effective, worldwide recognition and enforcement regime. In such a state, it is difficult for the countries to cooperate in this area which often results in the ‘prisoner’s dilemma’. The harmonization of the domestic laws may mitigate such a dilemma to some degree, but in the long run, the best way may be to conclude relevant bilateral or multilateral treaties through negotiation to provide an institutional base for bilateral or multilateral cooperation to ensure the free circulation of foreign judgments in a more certain way and within a wider scope.

Negotiating a bilateral treaty may be significantly less complicated than negotiating a single multilateral one, as the participants’ need only adhere to the wills and interests of two parties. So most countries prefer to conclude a bilateral treaty on recognition and enforcement with other countries instead of negotiating a multilateral one. So far, China only concluded bilateral judicial assistance treaties in civil and commercial matters with Morocco, Algeria, Tunisia, Egypt and Ethiopia in Africa. All the treaties have provisions on the recognition and enforcement of foreign judgments. As far as geographical distribution of the treaties, it is clear that all the African countries that have concluded such treaties with China are situated in Northern Africa and Eastern Africa. The current situation of the treaties between China and African countries may be generally described as asymmetry in structure and imbalance in weighty. Asymmetry in structure means that China only concluded bilateral treaties with countries from Northern and Eastern Africa, but has never concluded such treaties with countries from Western, Southern and Central Africa; and imbalance in weighty means that the other African countries that have strong business relationship with China such as South Africa, Nigeria, Kenya, Democratic Republic of Congo, have not concluded such treaties with China. As a result, it is very necessary for China to conclude such a treaty with South Africa which can to some extent achieve the symmetry in structure and balance in weighty. Moreover, if China concludes such a treaty with South Africa, it will be much easier for China to conclude such treaties with the other Southern African countries such as Botswana, Namibia, Zimbabwe, etc., whose legal systems are based on the legal systems in South Africa.

For the future China-South Africa bilateral judicial assistance treaty in civil and commercial matters, the provisions on the recognition and enforcement may be made by reference to those stipulated in the bilateral treaties between China and Egypt, Tunisia and Ethiopia, which have specific provisions on determination of the foreign jurisdiction in the recognition and enforcement part. Thus, neither the jurisdictional rules of the rendering country nor those of the requesting country is applied when deciding whether the foreign court has jurisdiction or not. It is the jurisdictional rules specifically stipulated in the treaty that determines it. Such an arrangement is manifestly useful for mutual recognition and enforcement where the jurisdictional rules in two countries are quite different. It is necessary for China and South Africa to choose such an arrangement when negotiating their bilateral treaty considering the differences in their jurisdictional rules. And also, the public policy in each country may be clearly listed in the future bilateral treaty between China and South Africa in order to reduce the uncertainty that the public policy exception brings to the recognition and enforcement which will better guarantee the party’s lawful expectations.


C. The Accession to the Multilateral Convention


Negotiating a single international instrument on the recognition and enforcement has proven to be extremely complicated but a multilateral instrument has the advantage of realizing a wider circulation of judgments. Some regional or international organizations have made great efforts in realizing the wider circulation of judgments. For example, some members of the Arab League adopted the Convention on the Enforcement of Judgments and Arbitral Awards of 1952 and the Riyadh Convention on Judicial Cooperation between States of Arab League of 1983, respectively, both of which provided the conditions for the recognition and enforcement of judgments and arbitral awards between member states; In 1995, the courts of the member states of the Arab Gulf Cooperation Council issued the Protocol on the Enforcement of Judgments, Letters of Rogatory and Judicial Notices, which also set out the recognition and enforcement of judgments and arbitral awards between member states. Since its establishment, the European Community (later the European Union) has successively adopted the Brussels Convention in 1968, the Lugano Convention in 1988 and Brussels Regulation I in 2001, which laid solid legal framework for the recognition and enforcement of judgments between member states. The Organization of America States produced the Inter-American Convention on Jurisdiction in International Sphere for the Extraterritorial Validity of Foreign Judgments in 1984, in light of which if the rendering court’s jurisdiction satisfies the requirements of jurisdiction in international sphere provided in this Convention; its judgments will have extraterritorial validity and may be recognized and enforced in other member states. As an international inter-governmental organization that devoted to the codification of conflict of laws issues, the Hague Conference on Private International Law has been concentrating on the recognition and enforcement issues for a very long time. Since 1954, the Hague Conference on Private International Law has adopted the Convention of 1 March 1954 on Civil Procedure, Convention of 1 February 1971 on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters and Convention of 30 June on Choice of Court Agreements. After several years’ hard negotiation, the 22nd Diplomatic Session of the Hague Conference on Private International Law on July 2, 2019 passed the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, which is the latest effort in this area. The newly adopted Convention aims to provide a set of uniform rules for the worldwide circulation of foreign civil or commercial judgments.

As far as China and South Africa are concerned, it is still not realistic for both sides to negotiate a regional convention on the recognition and enforcement. So China, South Africa, together with other African countries, may accede to the Hague Convention on Choice of Courts Agreements or the newly adopted the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, to promote the wider circulation of judgments. So far, the number of African countries’ participation in the Hague Conference on Private International Law is not so high. Considering the increasing economic transactions between the African continent and the other countries outside the continent, an African private international lawyer has made an appeal for a wider cooperation between African countries and Hague Conference on Private International Law in order to provide a favorable multilateral legal framework for the cross-border civil and commercial transactions, of which the recognition and enforcement regime is a constituent part.


VI. CONCLUSION


As the final stage of the foreign-related civil and commercial dispute resolution, the recognition and enforcement of foreign judgments is of great significance for the parties involved and for the smooth cross-border movement of people, goods, service and capital. The large sum of cross-border civil and commercial disputes arising from the frequent business relationship between China and South Africa requires a feasible recognition and enforcement regime between both sides. There are still some obstacles for the mutual recognition and enforcement of commercial judgments between both sides based on the analysis of the existing recognition and enforcement regimes of foreign judgments. Both sides should work together to clear such obstacles. The harmonization of domestic laws may to some extent mitigate such a situation, but it is a very difficult and lengthy process in practice, if not impossible. Of course, if the Enforcement of Foreign Civil Judgments Act 32 of 1988 is extended to the High Courts in South Africa through reform and China is designated as a beneficiary country of the Act, it will provide a very simple registration for the recognition and enforcement of Chinese judgments in South Africa. However, since the South African Law Commission put forward the reform proposal in 2003, it has not taken any further follow-ups. Comparatively speaking, it will be optimal for China and South Africa to negotiate a bilateral judicial assistance treaty in civil and commercial matters or just to accede to the existing multilateral conventions on recognition and enforcement.


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