Based on an article written by Rooney Nimmo Partner Sean Hogle
Seventy-nine years ago this month, the US District Court for China was abolished by Congress after being in existence since 1906. Established by virtue of treaties between the US and China and various acts of Congress, the court had civil and criminal jurisdiction over US citizens living in China and, later, in the Philippines, Guam, and other US “possessions.” Appeals went to the Ninth Circuit US Court of Appeals in San Francisco.
The court held sessions in Shanghai, Canton, Tientsin, and Hankow on a rotating basis. US citizens charged with crimes in China could only be tried by this court. Chinese citizens suing US citizens civilly could only bring suit in this court. Because the court was not located on US soil, the US Constitution did not apply, and so, for example, no jury trial or due process rights existed. Prisoners would wait months for a trial.
The federal statute establishing the court required that the court apply the laws of the United States, and “where deficient in the provisions necessary to give jurisdiction or to furnish suitable remedies, the common law, and the law as established by the decisions of the courts of the United States ….” This led the court to apply pre-independence US colonial common law, the District of Columbia municipal code, the laws of the then-territory of Alaska, and, concerning real property disputes, the laws of China.
The last judge to preside in the court was the former Attorney General of New Mexico.
Four years ago this month, the Intermediate People’s Court of Wuhan City recognized and enforced a commercial monetary judgment granted based on default by the Superior Court of Los Angeles – a first for any US judgment in the People’s Republic of China.
Despite the heightened China-US frictions under the Trump administration, recent court decisions in China suggest an increase in deference and reciprocity between Chinese and US courts. Parties who have prevailed in the US courts in cases involving Chinese defendants may be able to enforce those judgments in China.
Chinese legal requirements to enforce foreign judgments
China’s legal system is based primarily on civil law, unlike the United States’ common law model. This means that, in China, the judgment of one court is not typically binding on other courts (including its lower courts). However, prior judgments serve as an essential reference for future judgments in similar matters, and courts try to avoid inconsistent judgments on the same or similar matters.
While China’s economic development is shifting from capital imports to capital exports, and there has been an increasing number of disputes arising from international trade and investment, Chinese courts are becoming more open to recognizing and enforcing foreign judgments. For the United States or other countries that have not entered into any relevant bilateral treaty with China or participated in any international convention, Chinese courts have nonetheless been willing to recognize a reciprocal relationship.
There is reason to believe that the trend of Chinese courts recognizing and enforcing US judgments based on reciprocity will continue. This is good news for US companies in commercial disputes against defendants with China assets.
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