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Enforcing Commercial Judgments between China and South Africa in the Context of BRICS and BRI

Published online by Cambridge University Press:  04 December 2020

Weidong Zhu*
Affiliation:
University of Chinese Academy of Social Sciences

Abstract

The frequent business transactions between China and South Africa in the context of BRICS and the Belt and Road Initiative have resulted in many commercial disputes. The ultimate resolution of such disputes requires a feasible enforcement mechanism for commercial judgments, but some obstacles remain when enforcing commercial judgments from each side. Both countries have adopted different approaches and principles to ascertain the jurisdiction of the adjudicating court, the application of reciprocity and an understanding of public policy. This article examines these obstacles by comparing the two enforcement regimes, and explores ways to overcome these obstacles and to realize the free flow of commercial judgments between both sides.

Type
Research Article
Copyright
Copyright © SOAS University of London, 2020

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Footnotes

*

Professor of law, University of Chinese Academy of Social Sciences; director, Center for African Laws, China-Africa Institute.

References

1 On the Chinese mainland, there are no separate civil and commercial codes; accordingly, there is no division between civil and commercial judgments. Generally, they are just categorized as civil and commercial judgments. However, commercial judgments in practice refer to those to pay a fixed or fixable sum of money. In South Africa, commercial judgments usually refer to financial judgments. This article only deals with the recognition and enforcement regimes on the Chinese mainland, not including those in the Hong Kong Special Administrative Region, Macao Special Administrative Region or Taiwan, where different enforcement regimes apply.

2 Eiselen, SInternational jurisdiction in claims sounding in money” (2006) 18 South African Mercantile Law Journal 45 at 45Google Scholar.

3 Schulze, CPractical problems regarding the enforcement of foreign money judgments” (2005) 17 South African Mercantile Law Journal 125 at 125Google Scholar.

4 AB Edwards (updated by E Kahn) “Conflict of laws” in WA Joubert (ed) The Law of South Africa, vol 2, part 2 (2nd ed, 2003, LAWSA), 297 at 384–85.

5 As of November 2020, China had concluded 36 bilateral judicial assistance treaties (including with Ethiopia, Brazil, Algeria, Tunisia and Egypt), which make provision for the recognition and enforcement of foreign judgments. China signed the 2005 Hague Convention on the Choice of Court Agreements in September 2017; and China has been actively engaged in negotiating the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, the final draft of which was concluded at the 22nd diplomatic session of the Hague Conference on Private International Law on 2 July 2019 and is available at: <https://www.hcch.net/en/instruments/conventions/full-text/?cid=137> (last accessed 25 October 2020).

6 W Zhu “Jinzhuan guojia sifa hezuo xianzhuang wenti he qianjing” [Judicial cooperation among the BRICS countries: Present, problems and prospect] (2018) 5 Hebei Faxue [Hebei Law Science] 12.

7 X Sheng and M Zhang “Zhongguo dui Nanfei touzi chaoquo 250 yi meiyuan” [China's FDI to South Africa exceeds US$25 billion] (24 April 2018) Renmin Ribao (haiwai ban) [People's Daily (overseas edition)] at 3.

8 The data collected in this part is as of 4 November 2020.

9 The cases dealt with in China with a South African element refer to those in which at least one of the parties is from South Africa, the cause of the action occurs in South Africa, or the subject matter is located in South Africa.

10 For example, 11 judgments in each of 2014 and 2015, 10 in 2016, 11 in 2017 and 18 in 2018.

11 Zhu, WA brief analysis of the disputes arising from China-African civil and commercial transactions” (2012) 7/3 Journal of Cambridge Studies 74 at 76–79Google Scholar.

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15 For example, the Chinese legal system has more influences from Germany and Japan and shows more civil law features, while the South African legal system is more influenced by the UK and shows more common law features.

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21 See Roodt, CRecognition and enforcement of foreign judgments: Still a Hobson's choice among competing theories?” (2005) 38 Comparative and International Law Journal of Southern Africa 16 at 17–19Google Scholar; Oppong Private International Law, above at note 16 at 316–18. See also Laconian Maritime Enterprises Ltd v Agromar Lineas Ltd 1986 (3) SA 509 at 513–16.

22 L Middleditch “Enforcement of foreign commercial judgments”, above at note 19 at 439.

23 The text of the 1988 act is available at: <https://www.justice.gov.za/legislation/acts/1988-032.pdf> (last accessed 25 October 2020).

24 Edwards “Conflict of laws”, above at note 4 at 385.

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27 Barclays Bank of Swaziland v Koch 1997 BLR 1294 at 1297; Westdeutsche Landesbank Girozentrale (Landesbausparkasse) v Horsch 1993 (2) SA 342 (Nm) at 343–44.

28 Horsch, ibid.

29 2007 2 SA 283 (SCA).

30 According to article X of this convention: “Any judgment given by a court with jurisdiction in accordance with Article IX which is enforceable in the State of origin where it is no longer subject to ordinary forms of review, shall be recognized in any Contracting State, except: (a) where the judgment was obtained by fraud; or (b) where the defendant was not given reasonable notice and a fair opportunity to present his case.” The full text of the convention is available at: <https://treaties.un.org/doc/Publication/UNTS/Volume%20973/volume-973-I-14097-English.pdf> (last accessed 25 October 2020).

31 For example, the Civil Procedure Law of the PRC (as amended on 27 June 2017).

32 For example, the Judicial Interpretation of the Supreme People's Court Concerning the Application of the Civil Procedure Law of the PRC (Fashi (2015) no 5).

33 For example, the Enforcement of Foreign Civil Judgment Act 32 of 1988; the Protection of Businesses Act 99 of 1978.

34 See Forsyth Private International Law, above at note 26 at 15–19.

35 Findlay, GThe source of law” (1948) 65 South African Law Journal 497Google Scholar.

36 Judicial Interpretation, above at note 32, art 544.

37 The treaties are available (in Chinese) at: <http://treaty.mfa.gov.cn/Treaty/> (last accessed 25 October 2019). For example, the judicial assistance treaties between China and Singapore, Thailand and South Korea have no provisions regarding the recognition and enforcement of judgments.

38 Only a few judicial assistance treaties in civil or commercial matters between China and France, Spain, etc, have such provisions. For example, the Judicial Assistance Treaty between China and France in Civil and Commercial Matters, art 22(2) provides: “as for the questions concerning the natural person's status and capacity, the requesting court does not apply the law which should have been applied in accordance with the conflict rules of the requested state, unless the similar result is reached”.

39 Enforcement of Foreign Civil Judgments Act, 1988, arts 2 and 3.

40 See Forsyth Private International Law, above at note 26 at 408–11; Oppong Private International Law, above at note 16 at 375–76; Schulze, C On Jurisdiction and the Recognition and Enforcement of Foreign Money Judgments (1st ed, 2005, UNISA Press) at 2–27Google Scholar.

41 The amount was recently increased, such that, since 17 March 2014, these courts may accept disputes up to R400,000.

42 Schulze “Practical problems”, above at note 3 at 127.

43 Jones v Krok 1995 (1) SA 677 (AD) at 685. See also Forsyth Private International Law, above at note 26 at 391.

44 2001 (3) SA 445 (SCA) at 450.

45 Schulze “Practical problems”, above at note 3 at 126–27.

46 Government of the Republic of Zimbabwe v Fick [2013] ZACC 22, para 38.

47 Civil Procedure Law, chap 2 made provisions on jurisdiction by level and territorial jurisdiction.

48 Id, art 266.

49 For example, Judicial Assistance Treaty between China and Tunisia in Civil and Commercial Matters, art 23; Judicial Assistance Treaty between China and Egypt in Civil, Commercial and Criminal Matters, art 22; Judicial Assistance Treaty between China and Ethiopia in Civil and Commercial Matters, art 25.

50 Oppong Private International Law, above at note 16 at 323.

51 1983 (1) SA 1033 (W) at 1037, paras G–H.

52 Khanderia, SThe Hague Conference on Private International Law's proposed draft text on the recognition and enforcement of foreign judgments: Should South Africa endorse it?” (2019) 63/3 Journal of African Law 413 at 417CrossRefGoogle Scholar.

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54 Some leading authors in South Africa supported the position that mere presence may ground international competence. See Pollak, W The South African Law of Jurisdiction (1937, Hortors Ltd) at 219Google Scholar; Spiro, E Conflict of Laws (1973, Juta & Co) at 21–213Google Scholar. Meanwhile, other leading authors held the opposite position. See Forsyth Private International Law, above at note 26 at 401–02; Edwards “Conflict of laws”, above at note 4 at 387; Schulze On Jurisdiction, above at note 40 at 22.

55 According to an observation made by Professor Schulze, only in two cases did the court hold that either physical presence of the defendant, or his domicile or residence, within the area of jurisdiction of the foreign court, constituted international competency of the foreign court. In all the other cases, only the defendant's domicile or his residence within the foreign court's jurisdiction was regarded as sufficient to found the foreign court's international jurisdiction. See C Schulze “International jurisdiction in claims sounding in money: Is Richman v Ben Tovim the last word?” (2008) 20 South African Mercantile Law Journal 61 at 67.

56 Richman v Ben Tovim, above at note 29, para 9.

57 Schulze “International jurisdiction”, above note 55 at 61; Oppong, RMere presence and international competence in private international law” (2007) 3 Journal of Private International Law 321CrossRefGoogle Scholar; Neels, JPreliminary remarks on the Draft Model Law on the Recognition and Enforcement of Judgments in the Commonwealth” (2017) 5 Journal of South African Law (TSAR) 1 at 6Google Scholar.

58 Khanderia “The Hague Conference”, above note 52 at 419.

59 Case CCT 101/12 [2013] ZACC 22 at 53 per Mogoeng CJ.

60 Khanderia “The Hague Conference”, above note 52 at 419. See also Supercat v Two Oceans, above at note 20 at 30B. In this case, the defendant's domicile or residence, but not his presence per se, within the jurisdiction of the foreign court at the commencement of the proceedings was required to establish the international competency of the foreign court.

61 Forsyth Private International Law, above at note 26 at 393.

62 Id at 404–07; Schulze On Jurisdiction, above note 40 at 18–26.

63 Forsyth, id at 403–04; see also Schulze, id at 22–23.

64 Neels “Preliminary remarks”, above note 57 at 6.

65 Civil Procedure Law, art 281 reads: “If a legally effective judgment or order made by a foreign court requires recognition and enforcement in a people's court of the People's Republic of China, the party concerned may directly apply for recognition and enforcement to the intermediate people's court of the People's Republic of China which has jurisdiction. The foreign court may also, in accordance with the provisions of the international treaties concluded or acceded to by that foreign country and the People's Republic of China or with the principle of reciprocity, request recognition and enforcement by a people's court.”

66 Elbalti, BReciprocity and the recognition and enforcement of foreign judgments: A lot of bark but not much bite” (2017) 13/1 Journal of Private International Law 184 at 204–05Google Scholar.

67 W Zhu “Shilun woguo chengren yu zhixing waiguo panjue de fanxiang huwei goujian” [On the construction of reverse reciprocity in the recognition and enforcement of foreign judgments in China] (2017) 4 Hebei Faxue 16 at 22.

68 Elbalti “Reciprocity and the recognition”, above at note 66 at 2–3.

69 X Xie “Tiaoyue yu huhui guanxi queshi de Zhongguo panjue de yuwai zhixing” [Overseas enforcement of Chinese judgments in the absence of a treaty and of reciprocity] (2010) 4 Huanqiu Falü Pinglun [Global Law Review] 152; T Du “Huhui yuanze yu waiguo fayuan panjue de chengren yu zhixing” [The principle of reciprocity and the recognition and enforcement of foreign judgments] (2007) 1 Huanqiu Falü Pinglun 110; W Xu “Wo guo chengren yu zhixing waiguo fayuan panjue zhidu de goujian lujing: Jianlun wo guo rending huhui guanxi taidu de zhuanbian” [The construction of the recognition and enforcement regime of foreign judgments in China: Also on the shift of attitude towards reciprocity in China] (2018) 2 Fashang yanjiu [Studies in Law and Business] 171; He, QThe recognition and enforcement of foreign judgments between the United States and China: A study of Sanlian v Robinson” (2014) 7 Tsinghua China Law Review 23Google Scholar.

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71 Forsyth Private International law, above at note 26 at 393–411.

72 Martinek, MThe principle of reciprocity in the recognition and enforcement of foreign judgments: History, presence and no future” (2017) 36 Journal of South African Law (TSAR) 36 at 53Google Scholar.

73 Richardson v Mellish [1824–34] All ER Rep 258 at 266.

74 General Principle of the Civil Law of the PRC of 1986 (as amended on 27 August 2009), art 7.

75 Id, arts 7 and 150; Law of the Application of Law of the Foreign-Related Civil Relationship of the PRC (adopted 28 October 2010), art 5.

76 Civil Law of the PRC (adopted 15 March 2017), general provisions, art 10.

77 Y Ma “Waiguo fayuan panjue chengren he zhixing zhong de gonggong zhixu” [Public policy exception in the recognition and enforcement of foreign judgments] (2010) 5 Zheng fa Luntan [Forum on Politics and Law] 66; Xiao Guoji Sifa, above at note 17 at 135.

78 He, QGuoji shangshi zhongcai sifa shencha zhong de gonggong zhengce” [Public policy in the judicial review of international commercial arbitration] (2014) 7 Zhongguo Shehui KexueGoogle Scholar [Social Sciences in China] 143 at 158.

79 Memorandum of Guidance between the Supreme People's Court of the PRC and the Supreme Court of Singapore on Recognition and Enforcement of Money Judgments in Commercial Cases, art 8.

80 M Hu “Shenji chengfaxing peichang de waiguo panjue de chengren yu zhixing” [The recognition and enforcement of foreign punitive judgments] (2009) 2 Zhejiang Gongshang Daxue Xuebao [Journal of Zhejiang Industry and Commerce University] 20 at 23.

81 Forsyth Private International Law, above at note 26 at 432.

82 Oppong Private International Law, above at note 16 at 341.

83 Barkhuizen v Napier [2007] ZACC 5; 2007 (5) SA 323 (CC); 2007 (7) BCLR 691 (CC), paras 28–29; Zimbabwe v Fick, above at note 59, para 39.

84 Neels, JExternal public policy: The incidental question properly so-called and the recognition of foreign divorce orders” (2010) 4 Journal of South African Law (TSAR) 671 at 677Google Scholar.

85 Forsyth Private International Law, above at note 26 at 430–34.

86 Id at 434.

87 Id at 436.

88 Neels “External public policy”, above note 84 at 671. See also Neels, JThe positive role of public policy in private international law and the recognition of foreign Muslim marriages” (2012) 28 African Journal on Human Rights 219Google Scholar.

89 Oppong Private International Law, above at note 16 at 288–89.

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94 Id at 13.

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98 Neels “Preliminary remarks” above at note 57 at 7–8.

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103 Id at 44–46.

104 The text of the convention is available at: <http://www.oas.org/juridico/english/treaties/b-50.html> (last accessed 25 October 2020).

105 The text of the convention is available at: <https://www.hcch.net/en/instruments/conventions/full-text/?cid=137> (last accessed 25 October 2020).

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110 Id at 432.

111 Schulze “The 2005 Hague Convention”, above at note 108 at 149.

112 Neels “Preliminary remarks” above at note 57 at 7.

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