On 31 August 2018, the Supreme People’s Court of the People’s Republic of China (“PRC”) and the Supreme Court of Singapore entered into a Memorandum of Guidance on the Recognition and Enforcement of Money Judgments in Commercial Cases (“MOG”). Endorsed by the Chief Justices from both countries, the MOG is a strong statement of intent and sets out the detailed procedures for how court judgments from each country may be recognised and enforced in the other country.

We summarise below the salient features of the MOG and our key takeaways.

Types of enforceable judgments

  • Money judgments refer to judgments requiring a natural or legal person to pay a fixed or ascertainable sum and include judgments on costs.
  • Commercial cases include not only international cases involving a foreign element, but also non-international cases where recognition and/or enforcement is sought in the other party’s courts.
  • Judgments related to the direct or indirect enforcement of any foreign penal, revenue or public law will not be recognised or enforced.
  • In addition, Singapore court judgments (“SC judgments”) relating to intellectual property rights, unfair competition and/or monopoly cases will also not be recognised or enforced by the PRC courts.

Finality and conclusiveness of judgments

  • Judgments that sought to be recognised and enforced must be final and conclusive.
    • Where the finality and conclusiveness of an SC judgment is being challenged, the PRC courts will determine this in accordance with Chinese law.
    • Taking a less interventionist approach, the Singapore courts have likewise left the determination of whether a Chinese court judgment (“CC judgment”) is final and conclusive to be decided under Chinese law, not Singapore law.

Challenging an SC judgment

  • An SC judgment may be challenged in the PRC courts on the following (non-exhaustive) grounds:
    1. The judgment is contrary to the basic principles of PRC law or will prejudice its sovereignty, security or public interests;
    2. The judgment was obtained by fraud;
    3. The litigant has not been given proper notice of the proceedings or a reasonable opportunity to defend the case;
    4. The judicial body consists of persons with personal interests in the outcome of the case;
    5. The litigant without capacity for action has not been properly represented;
    6. The litigation between the same litigants and on the same subject is pending in the PRC courts, or the PRC courts have rendered a final and conclusive judgment, or recognised or enforced a final and conclusive judgment or arbitration award by a third state.

Challenging an CC judgment

  • An CC judgment may be challenged in the Singapore courts on the following (non-exhaustive) grounds:
    1. The judgment was obtained by fraud;
    2. The judgment is contrary to Singapore public policy;
    3. The proceedings were conducted in a manner regarded by the Singapore courts as contrary to the principles of natural justice, such as:
      1. The litigant was not given notice of the proceedings or had not been given a reasonable opportunity to be heard;
      2. The judicial body consists of persons with personal interests in the outcome of the case.

Judgments not challengeable on merits or error of fact or law

  • Neither the PRC courts nor the Singapore courts will review the merits of the other court’s judgments, and neither SC judgments nor CC judgments may be challenged on an error of fact or law.

Applying to recognise and enforce an SC judgment

  • The claimant in an SC judgment must submit an application to the PRC’s intermediate people’s court (i) in the place where the litigant subject to execution has its domicile or (ii) where its property is located.
  • An application for the recognition and enforcement of an SC judgment shall be heard in accordance with PRC domestic law.
  • An SC judgment that has been recognised by a PRC court entitles the litigant to apply for compulsory enforcement.

Applying to recognise and enforce an CC judgment

  • A judgment creditor must commence an action by filing a writ of summons in the competent Singapore court, providing a concise statement of the nature of the claim, the claim amount and attaching a certified copy of the judgment.
  • The remedies of (i) judgment in default (if a debtor fails to respond to a claim) or (ii) summary judgment (where there are no triable issues and/or defences to the foreign judgment) are available to assist the judgment creditor in obtaining a swift resolution to its enforcement claim.
  • A successful claim by the judgment creditor will have the equivalent effect of a Singapore court judgment.

Key takeaways

  • The MOG is a positive step taken by both nations to enhance the recognition and enforceability of court judgments in each other’s jurisdictions.
  • Both Singapore and the PRC are key players in the economic development of Asia so this MOG provides an added assurance to investors and businesses that their financial interests will be properly safeguarded in the event of a dispute.
  • The MOG is particularly timely given the growth of PRC-centric investments in the light of the Belt and Road initiative.
  • The MOG extends to judgments issued by the Singapore International Commercial Court (“SICC”). This means that non-Singaporean entities that refer their disputes to the SICC can look to enforce their SICC judgments against Chinese entities using the procedure outlined in the MOG.
  • The obvious weakness of the MOG is that it has no binding legal effect. Until such time that the two nations enter into a treaty or legislation on this matter, the MOG will function as a strong statement of intent leading to greater recognition and enforcement of court judgments from both countries.