In the absence of a bilateral judicial assistance treaty, whether the court judgments in one country could be recognized and enforced in another country depends on the existence of basis for reciprocity between these two countries, i.e. the application of Principle of Reciprocity. The Principle of Reciprocity means a country recognizes and enforces judgments made in other countries on equivalent conditions. In the current practice of private international law, most countries recognize and enforce foreign court judgments to a certain degree, and various theories regarding the Principle of Reciprocity have been brought forward, such as the theory of international comity, vested right, special law, debt, extension of the legal effect, etc. The Principle of Reciprocity emphasizes that states shall treat each other equally based on the principle of reciprocity and joint development, otherwise they may be retaliated by the counterparty. In China’s judicial practice, the application of the Principle of Reciprocity achieved a milestone along with the construction of B&R Initiative, and is expected to be more widely applied.
On December 9, 2016, the Nanjing Intermediate People’s Court of Jiangsu Province (the “Nanjing Court”) rendered the civil ruling for the Case (2016) Su 01 Xie Wai Ren No. 3 (the “Nanjing Case”), in which Kolmar Group AG applied for recognition and enforcement of a civil judgment made by the High Court of Singapore. This was the first case of Chinese court recognizing and enforcing foreign court judgments based on the Principle of Reciprocity. In this civil ruling for the Nanjing Case, the Nanjing Court stated that, “the High Court of Singapore made the SGHC16 judgment which agreed to recognize and enforce the court judgment of the Suzhou Intermediate People’s Court of Jiangsu Province (the “Suzhou Court”); although Singapore and China have not concluded or jointly acceded to any international treaty with regard to mutual recognition and enforcement of effective court judgments, in view of the precedent of Singapore court’s recognizing and enforcing the civil judgment of the Suzhou Court, Chinese courts may recognize and enforce the civil judgments rendered by Singapore courts which satisfy relevant conditions based on the Principle of Reciprocity.”
The above Nanjing Case was listed in the Second Batch of Typical Cases related to the Construction of B&R Initiative issued by the Supreme Court on May 15, 2017. The Supreme Court commented that, “as provided in Article 282 of the Civil Procedure Law, the basis for recognition and enforcement of foreign court judgments shall be international treaties or the Principle of Reciprocity. Since less than one third of B&R Initiative countries have reached bilateral judicial assistance treaties with China, determining whether there exists reciprocal relationship between two countries becomes crucial in the decision of whether the commercial judgments rendered in the B&R Initiative countries could be recognized and enforced in China. This case, according to the precedent of Singapore court’s recognition and enforcement of the Chinese court’s judgment, found for the first time that China and Singapore have reciprocal relationship, and therefore recognized and enforced the commercial judgment of Singapore court based on the Principle of Reciprocity, which not only marked a milestone for mutual recognition and enforcement of commercial judgments rendered by both Chinese and Singapore courts, but also will strongly promote the judicial cooperation in the field of recognition and enforcement of civil and commercial judgments among the B&R Initiative countries.”
On June 30, 2017, the Wuhan Intermediate People’s Court of Hubei Province (the “Wuhan Court”) rendered the civil ruling for the Case (2015) E Wu Han Zhong Min Shang Wai Chu Zi No. 00026 (the “Wuhan Case”), which is widely regarded as the first Chinese court case recognizing and enforcing the commercial judgment of a U.S. court, and may be of great significance. The Wuhan Court ruled that, “pursuant to the report in (published in the “China Legal Journal”, January 2010) submitted by the applicant, the civil judgment rendered by the Hubei Higher People’s Court (the “Hubei Higher Court”) on product tort dispute case of Hubei Gezhouba Sanlian Industrial Co., Ltd. and Hubei Pinghu Tourist Boat Co., Ltd. v. US Robinson Helicopter Co., Ltd. had been recognized and enforced by the U.S. court. Since the U.S. and China have not concluded or jointly acceded to any international treaty on mutual recognition and enforcement of civil judgments, whether the applicant’s claim should be upheld shall be scrutinized in accordance with the Principle of Reciprocity. Upon examination, the evidence submitted by the applicant proved that the U.S. created the precedent of recognizing and enforcing the civil judgment rendered by the Chinese court. Therefore, we can determine that there exists reciprocal relationship between the two countries on mutual recognition and enforcement of civil judgments. ”
In addition to Singapore and the U.S., the High Court of Berlin in Germany recognized a civil judgment of Wuxi Intermediate People’s Court of Jiangsu Province of China in 2006. On October 6, 2015, the Tel Aviv Court of Israel made the verdict recognizing and enforcing a civil judgment rendered by Nantong Intermediate People’s Court of Jiangsu Province of China. It is noteworthy whether Chinese courts will recognize and enforce foreign court judgments based on the Principle of Reciprocity on a continuous basis.
In the above Nanjing Case and Wuhan Case, the Chinese courts applied the Principle of Reciprocity based on the prerequisites that the courts of Singapore and U.S. recognized and enforced the Chinese court judgments in the first place. We observe that, (1) the Principle of Reciprocity in the Nanjing Case and Wuhan Case is applied on a passive basis. In other words, in the absence of any precedent rulings made by one country which recognized and enforced the Chinese court’s judgments, the Chinese court will not recognize and enforce the court judgment in that country. For instance, in the Reply of the Supreme Court on Whether Chinese People’s Court Shall Recognize and Enforce the Court Judgment of Japan Involving the Content of Creditors’ Rights and Debts ( Min Ta Zi No. 17), the Supreme Court clarified that “China and Japan have not concluded or acceded to any international treaty with regard to mutual recognition and enforcement of court judgments or rulings, and there exists no reciprocal relationship either.” Accordingly, the Japanese applicant’s claim for recognizing and enforcing the judgment of the Japanese court was denied. Till now, China and Japan still refuse to recognize and enforce each other’s court judgments; and (2) In Chinese judicial practice, the criteria for how to determine whether the Principle of Reciprocity shall be applied is still unclear. For example, it is uncertain whether the PRC court which applies the Principle of Reciprocity must be seated at the same territory as the PRC court whose judgment was recognized and enforced by the foreign country. In the Nanjing Case, the Nanjing Court recognized and enforced the judgment of the Singapore court because the Singapore court recognized and enforced the judgment of Suzhou Court; both Nanjing Court and Suzhou Court are located in Jiangsu Province, PRC and are both intermediate courts. In the Wuhan Case, the Wuhan Court recognized and enforced the judgment of the U.S. court because the U.S. court recognized and enforced the judgment of Hubei Higher Court; both Wuhan Court and Hubei Higher Court are located in Hubei Province, PRC. Therefore, it is noteworthy whether there will be any breakthrough in such territory restriction in recognition and enforcement based on the Principle of Reciprocity.
More importantly, along with China’s open-up policy and the further development of the B&R Initiative, the passive application of the Principle of Reciprocity may be changed. It is stated in the (Fa Fa  No.9, hereinafter, “Circular No.9”) that, “if the countries along the B&R Initiative have not yet concluded any treaties on mutual judicial assistance with China, Chinese court may, in accordance with the international judicial cooperation and communication intent as well as the commitments made by the other countries to provide judicial reciprocity to China, consider providing judicial assistance to the parties in other countries in advance, actively promote the formation of reciprocal relations and actively promote and gradually expand the scope of international judicial assistance.” Furthermore, the concluded on June 8, 2017 reached the following consensus on the communication and cooperation among the courts in China, the ASEAN countries and the South Asian countries, “For the countries that have not yet entered into any international treaty on recognizing and enforcing foreign court judgments, during their judicial proceedings of recognizing and enforcing civil and commercial judgments of the other country, they may presume the existence of reciprocal relationship with such country, provided that there is no precedent ruling in such country which refused to recognize and enforce the civil and commercial judgments rendered in its own country on the basis of reciprocity, to the extent permitted by its domestic law.” With the increased number of international disputes related to the B&R Initiative, the trend of possible proactive application of the Principle of Reciprocity also deserves our close attention.