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Published online by Cambridge University Press: 04 December 2020
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.
Professor of law, University of Chinese Academy of Social Sciences; director, Center for African Laws, China-Africa Institute.
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, S “International jurisdiction in claims sounding in money” (2006) 18 South African Mercantile Law Journal 45 at 45Google Scholar.
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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, W “A 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.
12 The Supreme People's Court of the PRC “Zuigao renmin fayuan guanyu yuyu mou shenqing chengren yu zhixing waiguo fayuan minshi panjue yi tiao de qingshi de fuhan” [The Supreme People's Court's reply to the enquiry on XX's application to recognize and enforce a foreign civil judgment] (23 February 2012) Minsi tazi No 3.
13 The Intermediate People's Court of Han Dan City, Hebei Province “Wang mou yu Yang mou lihun yitiao minshi caidingshu” [The ruling on the divorce between Wang and Yang] (2017) ji04 xiewai ren No 1.
14 See Wu, S “Zhongguo de hunhefa: Jianji Zhongguo faxi zai shijie de diwei” [Mixed laws in China: The status of the Chinese legal family in the world] (1993) 2 Zhengzhi yu Falü [Politics and Law] 36Google Scholar. For analysis of mixed law in South Africa, see Palmer, V Mixed Jurisdictions Worldwide: The Third Legal Family (2001, Cambridge University Press) at 7–10Google Scholar; Wille, G Principles of South African Law (5th ed, 1961, Juta & Co Ltd) at 31–49Google Scholar.
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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20 Eiselen “International jurisdiction”, above at note 2 at 46. See also Reiss v Insamcor, above at note 51 at 1037. Compare with Supercat Incorporated v Two Oceans Marine CC 2001 (4) SA 27 (C) at 30.
21 See Roodt, C “Recognition 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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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, G “The 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, S “The 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.
53 Purser v Sales, above at note 44, para 12.
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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.
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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.”
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68 Elbalti “Reciprocity and the recognition”, above at note 66 at 2–3.
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76 Civil Law of the PRC (adopted 15 March 2017), general provisions, art 10.
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78 He, Q “Guoji 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.
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