30 October 2018
On 31 August 2018, the Supreme People’s Court of the People’s Republic of China and the Supreme Court of Singapore signed a Memorandum of Guidance on Recognition and Enforcement of Money Judgments in Commercial Cases (“MOG”). Although it has no binding legal effect, the MOG provides guidance for parties seeking to enforce foreign money judgments in Singapore and the PRC.
Money judgments in commercial cases
The MOG is concerned only with judgments requiring a natural or legal person to pay a fixed or ascertainable sum of money to another natural or legal person in commercial cases. The MOG is relevant to both international (involving foreign elements) and non-international (no foreign elements involved) commercial cases of which recognition and enforcement is sought in the other party’s courts.
Currently, there is no treaty in place pursuant to which either party’s judgments may be recognised and enforced by the other party’s courts. A Singapore court judgment may be recognised and enforced in the PRC courts on the basis of reciprocity according to the Civil Procedure Law of the People’s Republic of China upon a claimant’s application, while a PRC court judgment may be enforced in the Singapore courts by a claim made at common law.
Enforcing a Singapore court judgment in the PRC
Pursuant to the MOG, a Singapore court judgment sought to be recognised and enforced in the PRC must be a final and conclusive judgment.
A Singapore court judgment may be challenged in PRC courts on limited grounds. Those grounds include and are not limited to:
- the judgment is contrary to basic principles of the law of the PRC or will prejudice its sovereignty, security or public interests;
- the judgment was obtained by fraud;
- the litigant had not been given proper notice of the judicial proceedings or had not been given a reasonable opportunity to defend the case;
- the judicial body is constituted by persons with personal interests in the outcome of the case;
- the litigant without capacity for action has not been properly represented;
- the litigation between the same litigants and on the same subject is pending in the PRC courts, or the PRC courts have rendered or made a final and conclusive judgment, or have recognised or enforced a final and conclusive judgment rendered by a third state or an arbitration award.
In enforcing a Singapore court judgment, the PRC courts will not review the merits of the judgment. Further, the Singapore court judgment may not be challenged on the grounds that it contains an error of fact or law.
Enforcing a PRC court judgment in Singapore
Pursuant to the MOG, a PRC court judgment sought to be enforced in Singapore must be final and conclusive.
A PRC court judgment may be challenged in Singapore courts on limited grounds. Those grounds include and are not limited to:
- the judgment was obtained by fraud;
- the judgment is contrary to Singapore public policy;
- the proceedings were conducted in a manner which the Singapore court regards as contrary to the principles of natural justice, e.g. the litigant had not been given notice or the judicial body is constituted by persons with personal interests in the outcome of the case.
In enforcing a PRC court judgment, the Singapore courts will not review the merits of the judgment. Further, the PRC court judgment may not be challenged on the grounds that it contains an error of fact or law.
In addition to promoting mutual understanding of the laws and judicial processes between the Singapore courts and PRC courts, the MOG should enhance business confidence in both countries. In particular, the MOG will be relevant to businesses entering into commercial arrangements with entities which have assets in Singapore and/or the PRC, as it promotes understanding of the applicable principles and procedures concerning the recognition and enforcement of judgments in the respective jurisdictions. This could boost the attractiveness of the Singapore courts, in particular the Singapore International Commercial Court, as a forum for resolving commercial disputes.