This past June, the Intermediate People’s Court of Wuhan City recognized and enforced a commercial monetary judgment granted on the basis of default by the Superior Court of Los Angeles – a first for any U.S. judgment in the People’s Republic of China. (A Chinese language text of the original ruling, Li v Tao and Tong, which was only made publicly available in September of this year, can be found here.)
After almost six months since the decision was handed down, however, we have not seen an increase in similar judgments. This could be for several reasons, including:
Increasing Cooperation – On Both Sides
However, there does appear to be a genuine trend in China towards promoting global cooperation:
Will 2018 be the year that a PRC court recognizes a U.K. judgment for the first time? In 2015, the U.K. recognized a judgment issued by Qingdao Maritime Court in Spliethoff’s Bevrachtingskantoor Bv v. Bank of China Limited, opening up an opportunity for China to again apply principles of reciprocity in judgment recognition and enforcement. It could be just a matter of time.
Considerations When Dealing with Chinese Counterparties
Speculation aside, here are some of the things you may wish to consider when drafting contracts with Chinese counterparties, as these continue to be relevant today and for the foreseeable future:
Of course, when drafting any dispute resolution clause, there is no one-size-fits-all answer, and a holistic approach is required to make the best determination. While Li v Tao and Tong gives us hope of more options for Americans engaging with Chinese counterparties, special care must always be taken when handling multi-national parties – Chinese and otherwise.
Please don’t hesitate to get in touch if you have further questions. The team at Rooney Nimmo stands ready to help.
 Kolma v SUTEX Group, Case No. (2016) Su-01 Xie Wai Ren 2 Civil Judgment, Intermediate People’s Court, Nanjing City, Jiangsu Province China.
  EWHC 999 (Comm). Bank of China only requested the recognition of Chinese judgment but not enforcement.
Joan Hon – Partner New York – firstname.lastname@example.org