Bases of the enforcement of foreign commercial judgments

The recognition and enforcement of foreign judgments are based on different theories and laws. It is very important to learn about such theories and laws in the country where the recognition and enforcement are sought, for “the bases on which foreign judgments are enforced influence the scope of judgments that can be enforced”, and “it can be argued that judgment enforcement regimes founded on comity or the need to facilitate international trade and commerce are more amenable to enforcing foreign judgments than regimes founded on reciprocity”.Footnote ¹⁶ On the other hand, a study of recognition and enforcement regimes, namely the legal bases for such recognition and enforcement, will help ensure the specific conditions and procedures for recognition and enforcement.

So far, Chinese courts have not explored the theories relating to recognition and enforcement in their judgments and most Chinese private international law scholars have only introduced or discussed recognition and enforcement theories in textbooks or articles. With regard to the reasons for the recognition and enforcement of foreign commercial judgments, there are two main opinions in China. According to one opinion, “the fundamental reason why a country recognizes and enforces the judgments from the other country is not based on the international comity, res judicata, or reciprocity, nor based on the respect for the vested right or obligation conferred upon by the foreign judgments or the recognition of the foreign lex specialis, but based on the need to transact with other countries”.Footnote ¹⁷ Meanwhile in light of the other opinion, the reason to recognize and enforce foreign judgments “is based on the principle of equality and mutual benefit”.Footnote ¹⁸ Obviously, the two opinions adopted the reasoned and pragmatic method for recognition and enforcement based on the reality of international society today. It is unfortunate, nevertheless, that such kinds of opinions are not accepted in China's legislation and practice. The principle of reciprocity remains important in China's recognition and enforcement legislation, which has caused much inconvenience and trouble in practice.

The theoretical basis for the recognition and enforcement of foreign judgments in South Africa is not entirely clear and settled.Footnote ¹⁹ As a Roman-Dutch law country and a former British colony, the doctrines of comity and obligation have always been very influential in South Africa's recognition and enforcement regimes, and “the reason for enforcing foreign judgments in South African law was first based on the notion of comity”.Footnote ²⁰ Additionally, the doctrines of vested rights and most significant relationship have also been invoked in the judgments delivered by South African courts.Footnote ²¹ Traces of the doctrine of reciprocity can still be found in South African cases and in the authoritative writings of Roman-Dutch law, whereas it is generally submitted that such a doctrine is not part of South African common law.Footnote ²² Recognition and enforcement are completely based on the reciprocity in the Reciprocal Enforcement of Civil Judgments Act 1966 of South Africa, but this act never came into force. The Enforcement of Foreign Civil Judgments Act of 1988 repealed the 1966 act and reciprocity was not to be found in the new act.Footnote ²³ Considering the fact that each of these doctrines has its own shortcomings, private international lawyers in South Africa advocated the adoption of pragmatism in recognizing and enforcing foreign judgments. For example, when deciding whether to recognize and enforce a foreign judgment, consideration should be given to the “enlightened social values and the facilitation of international relations”Footnote ²⁴ or “bringing a variety of policy concerns into balance to meet the contemporary needs”.Footnote ²⁵ Professor Forsyth, a prestigious South African private international law scholar, even deemed it unnecessary to consider the question separately, “for the reasons recognizing and enforcing foreign judgments are the same as those for applying foreign law generally”, “[i]ndeed, the application of foreign law is the application of a general abstract norm of the foreign system, while the enforcement of a foreign judgment is simply the application of an individual concrete norm (lex specialis) of that system. Why should there be different rationales for the two processes?”Footnote ²⁶ The pragmatic opinions of South African scholars have also been reflected in South African judgments, in which South African courts have emphasized the role of pragmatic bases in facilitating international trade and commerce.Footnote ²⁷ For example, in Westdeutsche v Horsch, the court said that “the exigencies of international trade and commerce require that final foreign judgments be recognized as far as is reasonably possible in our courts, and that effect be given thereto”.Footnote ²⁸ This line of reasoning was reconfirmed by the Supreme Court of Appeal of South Africa in Richman v Ben-Tovim.Footnote ²⁹

The legal bases upon which the recognition and enforcement of foreign judgments are founded are manifestly different between China, with a more civil law background, and South Africa, with a more common law background. In China, recognition and enforcement regimes are included in the multilateral conventions to which China has acceded (such as the International Convention on the Civil Liability for Oil Pollution Damage of 1969),Footnote ³⁰ the bilateral judicial assistance treaties in civil or commercial matters that China has concluded with other countries, relevant legislation in China,Footnote ³¹ as well as judicial interpretations issued by the Supreme People's Court of China which can in fact serve the role of legislation and are binding on courts in China at different levels.Footnote ³² The Supreme People's Court has also released some guiding cases in its gazettes involving private international law issues, including those concerning the recognition and enforcement of foreign judgments. However, these guiding cases only provide guidance for the lower courts in adjudicating similar cases and they cannot serve as binding case law. Comparative law and the writings of legal scholars cannot of course constitute sources of private international law in China either. Meanwhile in South Africa, the recognition and enforcement regimes are composed not only of statutory laws,Footnote ³³ decided cases and writings of Roman-Dutch lawyers, but also Roman law and customary laws.Footnote ³⁴ Comparative law as well as the writings of some modern private international law scholars are also important persuasive sources of South African private international law.Footnote ³⁵ It is quite common for South African courts to invoke foreign legislation and case law, especially from the UK or the US, in deciding private international law cases, and South African judges often quote the writings of some important private international scholars, such as Professor Forsyth, in their judgments.

Conditions for enforcing foreign commercial judgments

Under article 281 of the Civil Procedure Law of the People's Republic of China (Civil Procedure Law) and article 544 of the Judicial Interpretation of the Supreme People's Court Concerning the Application of the Civil Procedure Law, Chinese courts will only recognize and enforce judgments emanating from the following two groups of countries: countries that have concluded bilateral judicial assistance treaties with China or have acceded to a multilateral convention on recognition and enforcement to which China is also a party; and countries that have a reciprocal treaty with China regarding the recognition and enforcement of judgments. In the case of an application to enforce a judgment that is not from one of these two groups of countries, the Chinese court accepting the application will simply make a ruling to dismiss it.Footnote ³⁶ So far, China has concluded 36 effective bilateral judicial assistance treaties with other countries, most of which have provisions regarding recognition and enforcement.Footnote ³⁷ In accordance with the provisions of these treaties and article 282 of the Civil Procedure Law, a foreign judgment will not be recognized and enforced unless: it is rendered by a competent court in the foreign country; it is final and conclusive; the proceedings in the foreign court are fair and lawful; there is no inconsistency with other judgments concerning the same subject matter with the same parties; the rendering court applied the lex causae [law applicable to the case] determined by reference to the conflict rules in the country where the recognition and enforcement are being sought;Footnote ³⁸ and the recognition and enforcement will not contravene public policy in China.

There are two kinds of recognition and enforcement regimes in South Africa: the common law regime and the statutory regime. The statutory regime is regulated by the Enforcement of Foreign Civil Judgments Act 32 of 1988. This act empowers the minister of justice to have a judgment given in a designated country registered under the act.Footnote ³⁹ Foreign judgments have the same effect as judgments given by South African courts and, after registration, can be enforced in the same way that South African judgments are enforced. The act does not require reciprocity for the recognition and enforcement of foreign judgments.Footnote ⁴⁰ However, under the act only magistrates’ courts in South Africa are mandated to register foreign judgments and such courts can only accept cases up to R100,000.Footnote ⁴¹ So far, only Namibia has been designated under the act, so recognition and enforcement through registration under this act are quite limited in practice.Footnote ⁴²

As result, foreign judgments are currently mainly recognized and enforced under the common law regime in South Africa. In the case of Jones v Krok Corbett CJ set out the conditions that need to be fulfilled before a judgment will be recognized and enforced by South African courts:Footnote ⁴³ the court that pronounced the judgment must have had jurisdiction to entertain the case according to the principles recognized by South African law with reference to the jurisdiction of foreign courts (this is sometimes referred to as “international jurisdiction or competence”); the foreign judgment is final and conclusive in its effect and has not become superannuated; recognition and enforcement of the judgment by South African courts should not be contrary to public policy; the foreign judgment was not obtained by fraudulent means; the judgment does not involve the enforcement of a penal or revenue law of the foreign state; and the enforcement of the foreign judgment is not precluded by the provisions of the Protection of Businesses Act 99 of 1978, as amended. This formulation of the requirements for enforcement was cited with approval by the Supreme Court of Appeal of South Africa in Purser v Sales,Footnote ⁴⁴ and also by different divisions of the High Court of South Africa.Footnote ⁴⁵ In a recent case in 2013,Footnote ⁴⁶ the Constitutional Court of South Africa reaffirmed the principles of South African common law on enforcement developed in Jones v Krok and reiterated in Purser v Sales.

From this analysis, there are obviously some great differences between China and South Africa in the bases upon which recognition and enforcement are founded. For example, under Chinese law, foreign judgments can only be recognized and enforced on the basis of international treaties or reciprocity, while such bases are not given much weight in South Africa. Instead, the domestic law regime and pragmatism are given more weight in South Africa in considering whether to recognize and enforce a foreign judgment. The different bases upon which the foreign judgment is recognized and enforced in China and South Africa resulted in a more or less conservative and rigid recognition and enforcement regime in China, with a rather more flexible and pragmatic regime in South Africa. There do not seem to be as many differences in the specific conditions for recognition and enforcement in the two countries. For example, for a foreign judgment to be recognized and enforced in either country, the court of the state of origin must have jurisdiction over the dispute, the foreign proceedings must be fair, and the foreign judgment must be final and conclusive and not incompatible with public policy in the requested state. However, further examination of these conditions shows that the ascertainment of jurisdiction, the employment of the reciprocity principle and the understanding of public policy are quite different in the two countries, which will constitute significant obstacles for the enforcement of commercial judgments between the jurisdictions.

Ascertainment of jurisdiction

There are no uniform statutory provisions for determining whether a foreign court has jurisdiction over a dispute in deciding recognition and enforcement in China. If the foreign judgment creditor bases his application for recognition and enforcement on the bilateral judicial assistance treaty concluded between China and the foreign state, then whether or not the foreign court has jurisdiction over the dispute should be determined in accordance with that treaty by reference to the principle of the prevailing application of international treaties embedded in article 260 of the Civil Procedure Law. In the event that the foreign judgment creditor based his application for recognition and enforcement on the principle of reciprocity, or if there were no stipulations regarding the ascertainment of jurisdiction in the bilateral judicial assistance treaty, whether or not the foreign court has jurisdiction should be determined in accordance with the provisions on the Chinese courts’ own jurisdiction in the Civil Procedure Law by reference to the principle that the lex fori [law of the forum] governs the procedure embedded in article 259 of the same law.Footnote ⁴⁷

The bilateral judicial assistance treaties concluded between China and other countries also include no uniform provisions regarding the ascertainment of the jurisdiction of foreign courts. Generally, there are three standards to decide the jurisdiction of foreign courts under these bilateral treaties. The first is that the internal laws in the requested state should determine whether or not the court in the requesting state has jurisdiction. For example, the bilateral judicial assistance treaties between China and France, Poland, Mongolia and Romania all adopt such a standard. Secondly, the internal laws in the requested state should determine whether or not the court in the requested state has exclusive jurisdiction; if it does, then the foreign court that made the judgment has no jurisdiction over the dispute. For example, the bilateral judicial assistance treaties between China and Russia and Tajikistan adopt such a standard. Thirdly, the provisions on jurisdiction in the treaty itself should determine whether or not the foreign court has jurisdiction; the judicial assistance treaties between China and Cyprus, Egypt, Italy, Spain, Tunisia and Ethiopia all adopt such a standard.

Therefore, in determining whether or not the foreign court has jurisdiction, the Chinese court will look to only two standards, no matter whether the enforcement is sought in China on the basis of treaty or reciprocity. One is the standard established in domestic law and the other in the treaty. As for the domestic law standard, chapter 2 and article 265 in chapter 24 of the Civil Procedure Law have clear stipulations. Under these stipulations, the Chinese court has very broad jurisdictional grounds to exercise jurisdiction over commercial disputes, including the domicile and habitual residence of the defendant, the place where the contract is celebrated or performed, the place of the subject matter of the contract, the place where the property is attached, the place where the instruments are honoured, the place where the agency is located, and the defendant's submission to the court's jurisdiction. Chinese courts also have exclusive jurisdiction over disputes arising from the performance of contracts for a Sino-foreign joint venture, a Sino-foreign cooperative enterprise, and Sino-foreign cooperative exploration and development of natural resources in China.Footnote ⁴⁸ The jurisdictional bases in the bilateral judicial assistance treaties between China and other countries are relatively limited compared with those in the Civil Procedure Law; they include the domicile or the habitual residence of the defendant, the seat of the agency, the place of the contract's execution or performance, the place of the subject matter of the contract, the place of the immovable property and the defendant's submission to the court's jurisdiction.Footnote ⁴⁹

In South Africa, the concept of “international jurisdiction or international competence” is adopted in deciding the foreign court's jurisdiction, namely, the court of the requesting state must have international jurisdiction over the dispute for its judgment to be enforced in South Africa. International jurisdiction has a special meaning in South African law. It does not only mean that the foreign court must have jurisdiction over the dispute in terms of its own law, nor does it mean that the foreign court must have had jurisdiction according to the South African law relating to jurisdiction; whether or not the foreign court is internationally competent must be decided according to the principles recognized by South African law with reference to the jurisdiction of the foreign court.Footnote ⁵⁰ As Djikhorst J put it plainly in Reiss Engineering Co Ltd v Insamcor (Pty) Ltd, “the fact that a foreign court (English court) may have had jurisdiction in terms of its own law does not entitle its judgment to be recognized and enforced in South Africa. It must have had jurisdiction according to the principles recognized by our law with reference to the jurisdiction of the foreign court”.Footnote ⁵¹

South Africa's judiciary has, however, been adopting a narrow set of precepts to establish the eligibility of a foreign judgment for recognition or enforcement in its territory.Footnote ⁵² The South African Supreme Court of Appeal enunciated the principles in determining the jurisdiction of the foreign court in Purser v Sales. According to the judgment delivered by Mpati AJA, “the principles recognized by our law with reference to the jurisdiction of foreign courts for the enforcement of judgments sounding in money are: 1. at the time of the commencement of the proceedings the defendant (appellant in this case) must have been domiciled or resident within the states in which the foreign court exercised jurisdiction; or 2. the defendant must have submitted to the jurisdiction of the foreign court”.Footnote ⁵³ Additionally, before the case of Richman v Ben Tovim, there seems to have been no uniform opinion among South African scholarsFootnote ⁵⁴ and judiciariesFootnote ⁵⁵ as to whether or not the “mere presence” of the defendant at the time the proceedings commenced may constitute an international jurisdictional ground. In Richman v Ben Tovim, the South African Supreme Court of Appeal per Zulman JA held that the defendant's mere physical presence within the area of jurisdiction of the foreign court at the time the legal proceedings commenced sufficed to satisfy the requirement of the foreign court's international jurisdiction, in applying a “common sense” and “realistic approach” and having regard to the need “to cater for itinerant international businessmen” and “the exigencies of international trade and commerce”.Footnote ⁵⁶ The extension of the international jurisdictional ground to include “mere presence” in this judgment has been fiercely criticized by some academic writers,Footnote ⁵⁷ due to “its arbitrary nature and the potential to leave a judgment unenforceable and ineffective if the defendant escaped the jurisdiction without any assets to freeze or confiscate”.Footnote ⁵⁸ Fortunately, the South African Constitutional Court in the subsequent case of Government of the Republic of Zimbabwe v Fick Footnote ⁵⁹ referred exclusively to the grounds stipulated in Purser v Sales when ascertaining the jurisdiction of the foreign court, giving no consideration to “mere presence”.Footnote ⁶⁰

In practice, South African courts tend simply to announce whether a particular foreign court was or was not competent, without extracting the basis of that competence from the facts of the case, which tends to leave the law somewhat confused.Footnote ⁶¹ The analysis above clarified the factors that are accepted as international jurisdictional grounds in South African common law. Some other grounds are sometimes considered insufficient to establish international competence under South African common law, for example, the defendant's nationality of the state of the foreign court at the time the action commenced, the attachment of the defendant's property by the foreign court to found its own jurisdiction, the cause of action arising within the foreign court's jurisdiction, and the choice of a domicillium citandi et executandi [nominated address for service] within the area of jurisdiction of a particular court.Footnote ⁶² Besides the mere physical presence mentioned above, there are still controversies in South Africa among academic writers, and divergences in practice, about whether domicile may be accepted as a basis of international competence. For example, Professor Forsyth considered that South African courts should not accept that domicile per se grounds international competence, since “the rules relating to the acquisition and loss of domicile are technical and artificial”, and could not establish a substantial relationship between the defendant and the court;Footnote ⁶³ while Professor Neels noted that “domicile represents an important link between an individual or a juristic person and a particular country in the common law systems”, so it could be accepted as a ground for international jurisdiction.Footnote ⁶⁴ Such controversies and divergences may cause uncertainty in determining the foreign court's international jurisdiction when deciding whether its judgment may be enforced in a South African court.

This analysis reveals that there are some similar grounds in determining a foreign court's jurisdiction in China and South Africa. For example, in both countries, the defendant's residence and the defendant's submission to the foreign court's jurisdiction can be accepted as international jurisdictional grounds. On the other hand, there are also manifest differences, for example, the place where the contract is executed or performed, the place where the subject matter of the contract is located and the place where the property is attached may be the jurisdictional factor to determine the foreign court's jurisdiction in China, but none of these constitutes a ground of international jurisdiction in South Africa. While in South Africa the defendant's physical presence within the foreign court's jurisdiction at the time the action commenced may establish the foreign court's international jurisdiction, that is definitely not so in China. Such differences in determining the foreign court's jurisdiction in practice will obviously constitute obstacles for the enforcement of commercial judgments between both countries. For example, if a Chinese court assumes jurisdiction on the basis of the place of the contract's performance within its jurisdiction and the judgment creditor then seeks to enforce the judgment in South Africa, the South African court will refuse to enforce it on the ground that the Chinese court has no international jurisdiction. Similarly, if a judgment creditor seeks to enforce in China a judgment given by a South African court that assumes its jurisdiction on the basis of the defendant's physical presence within its jurisdiction, the Chinese court will most likely refuse to enforce it due to the fact that the South African court has no jurisdiction over the defendant under Chinese law.

Employment of reciprocity

It is a statutory requirement that a foreign judgment must be recognized and enforced on the basis of reciprocity in China in the absence of the treaty regime. Despite the express stipulation of the reciprocity requirement in the Civil Procedure Law, this law does not make detailed provision for how the principle of reciprocity should be applied.Footnote ⁶⁵ In judicial practice, Chinese courts take a very conservative approach to decide whether or not reciprocity exists between China and the requesting state, namely the de facto reciprocity approach. According to this approach, only when there is judicial precedent in the foreign state that has recognized and enforced the Chinese judgments, will the Chinese court recognize and enforce the judgment from the foreign state. This quite restrictive interpretation has made “the recognition of foreign judgments in China almost impossible.”Footnote ⁶⁶ So far, Chinese courts have denied the enforcement of commercial judgments from the UK, South Korea, Germany, the US and Chad, due to the want of reciprocity between both jurisdictions.Footnote ⁶⁷ Considering the fact that, until now, there is no case precedent in South Africa enforcing Chinese commercial judgments, the reciprocity requirement will be a potential obstacle for commercial judgments from South Africa to be enforced in China.

The restrictive approach towards the principle of reciprocity will easily lead to retaliation from other states, which will prejudice the judgment creditor's rights and the free circulation of civil and commercial judgments worldwide. More and more countries have therefore repealed the requirement of reciprocity. Even in those countries that maintained such a requirement, many restrictions were imposed on it, or they adopted a favourable interpretation towards it, or they have never used such a requirement although it is expressly stipulated.Footnote ⁶⁸ Chinese scholars have long realized the dilemma faced by Chinese courts in adopting the restrictive requirement of reciprocity, so they advocated the adoption of the more flexible approach of presumptive reciprocity or reverse reciprocity.Footnote ⁶⁹ With the development of the BRI, it is increasingly important that the enforcement of commercial judgments between China and the other countries along the Belt and Road be enhanced, and the attitude of Chinese courts towards the requirement of reciprocity has somewhat changed. On 16 June 2015, the Supreme People's Court of China released Several Opinions of the Supreme People's Court (SPC) Concerning Judicial Services and Safeguards Provided by the People's Courts for the Belt and Road Construction (Several Opinions of the SPC). Article 6 of the Several Opinions of the SPC calls for judicial assistance between China and the countries along the Belt and Road to be enhanced; Chinese courts may first provide judicial assistance to parties from the countries along the Belt and Road to facilitate the establishment of reciprocity in the absence of a judicial assistance treaty, provided that there is an intention to carry out judicial cooperation between both sides and the requesting state promises to reciprocate to China in the future. This means that no judicial precedent giving effect to a Chinese judgment in the foreign state is required under the Several Opinions of the SPC. The SPC is also considering drafting a judicial interpretation on recognition and enforcement to make uniform and comprehensive provisions for such an issue in China and a liberal approach to the principle of reciprocity is expected to be adopted.

Of course, if a Chinese commercial judgment is to be recognized and enforced in South Africa, the reciprocity requirement will not be problematic, because “the doctrine of reciprocity has limited practical relevance in South African recognition and enforcement law”.Footnote ⁷⁰ Indeed, neither the Enforcement of Foreign Civil Judgment Act 32 of 1988 nor the common law regime in South Africa requires reciprocity from the foreign state,Footnote ⁷¹ which has the inherent potential to make worldwide judgments readily enforceable in South Africa.Footnote ⁷² Thus, in such a situation, a Chinese judgment will very likely be given effect and a reciprocal relationship may be established accordingly if the application for enforcement is first made by the Chinese judgment creditor to the South African court. However, a Chinese court will probably deny the enforcement of a South African commercial judgment, because of the lack of a judicial assistance treaty and reciprocity between both jurisdictions.

Understanding of public policy

It is a well-established ground to deny the recognition and enforcement of a foreign judgment on the basis of a public policy exception. Almost every country has its unique answer to the question of what public policy is. The uncertainty of public policy will result in the unforeseen state of the recognition and enforcement of foreign judgments. Burrough J described the uncertain nature of public policy vividly as follows: “[p]ublic policy is a very unruly horse, and when you get astride, you never know where it will carry you”.Footnote ⁷³ Naturally, the public policy exception will constitute another potential obstacle in the course of recognition and enforcement.

Public policy has various expressions in Chinese law, such as “social moral”,Footnote ⁷⁴ “social public interest”Footnote ⁷⁵ and “public order and good customs”.Footnote ⁷⁶ Article 282 of the Civil Procedure Law adopts another expression of public policy in relation to the recognition and enforcement of foreign judgments, namely, “the fundamental principles of law or state sovereignty, security, social public interests”. However, Chinese laws do not give an express indication of the specific meaning of public policy. According to some Chinese scholars, Chinese courts may refuse to recognize and enforce a foreign judgment if: it is contrary to the principles or spirit of constitutional law in China; it damages ethnic harmony and national unity; it infringes China's treaty obligations or internationally recognized principles of equity and justice; or it harms China's sovereignty or security.Footnote ⁷⁷ Other Chinese scholars also regard the mandatory rules relating to the protection of labour, food and public security, environmental security, foreign exchange control and anti-trust or anti-dumping, as expressions of public policy in China.Footnote ⁷⁸ Furthermore, foreign revenue, penal judgmentsFootnote ⁷⁹ or foreign judgments for excessive or exorbitant punitive damagesFootnote ⁸⁰ will not be enforced in China, because of the public policy exception. In practice, Chinese courts generally adopt a restrictive interpretation towards public policy and will not rashly deny recognition and enforcement on the ground of the public policy exception.

In South Africa, “public policy is a slippery concept, difficult to pin down”.Footnote ⁸¹ Therefore, “whether a foreign judgment is contrary to public policy depends largely on the facts of each case”.Footnote ⁸² Generally, the Constitution of South Africa is an embodiment of South African public policy;Footnote ⁸³ the “non-justifiable violation of a fundamental right in the South African Constitution”, especially one contained in chapter two of the Constitution (the Bill of Rights), “would automatically infringe public policy in the private international law sphere”.Footnote ⁸⁴ Professor Forsyth summarized the situations in which a foreign judgment might be denied recognition and enforcement on the basis of the public policy exception under South African common law as the following: “that the foreign judgment is rendered contrary to natural justice; that the foreign judgment is obtained by fraudulent means; that the foreign judgment violates the fundamental policy of South African law; or that the foreign judgment is a penal or revenue one”.Footnote ⁸⁵ In addition, the then mandatory provisions in the Protection of Businesses Act No 99 of 1978 of South Africa have been seen as “statutory expressions of public policy”, which include those prohibiting the recognition and enforcement of the foreign judgment for punitive or multiple damages, especially those made by certain US courts with regard to anti-trust matters.Footnote ⁸⁶ In particular, section 1 of this act was so widely worded that it would affect the enforcement of every foreign commercial judgment. Fortunately, South African courts have consistently adopted a restrictive approach to the interpretation of this act and “there is in fact no recorded instance in which the Act has been successfully invoked as a defense to enforcement”.Footnote ⁸⁷

Public policy in each country reflects its own traditional moral ideas, customs and basic principles of law, which are prominent in the matters of marriage, family and status. With regard to commercial matters, due to the assimilation of commercial usage and commercial laws, public policy shows greater similarity and plays a less important role. For example, polygamous marriage and same-sex marriage are recognized in South Africa,Footnote ⁸⁸ but in China only monogamous marriage is recognized, which indicates the irreconcilability of public policy between both jurisdictions in respect of marriage and family. On the other hand, there are obviously many similarities in public policy in respect of the enforcement of commercial judgments. For example, neither jurisdiction will enforce a foreign judgment rendered against natural justice, foreign revenue or penal judgments, or foreign punitive judgments for excessive or exorbitant damages. It is therefore argued that, in terms of public policy, the main obstacle for enforcing commercial judgments between both jurisdictions may be the differences in their mandatory rules. Courts in both countries adopt a restrictive approach towards mandatory rules in judicial practice and the scope and contents of these mandatory rules are clearly drafted in both jurisdictions. This will prevent and limit the situations in which a commercial judgment is denied enforcement in the other jurisdiction due to a violation of the other's different mandatory rules.

Harmonization of domestic laws

Harmonization, as distinct from unification in the strict sense, can be loosely defined as “making the regulatory requirements or governmental policies of different jurisdictions identical or at least more similar” and in its most common modern form harmonization brings about a convergence or co-ordination of different legal provisions or systems by eliminating the major differences between them.Footnote ⁹⁴ According to Professor Rosett, there are two drivers for harmonization: shared commercial culture; and shared legal literature and education.Footnote ⁹⁵ As another professor pointed out, the fact that Latin America's core legal systems are encoded in only two (similar) languages with a common or similar institutional legal heritage is an advantage for the convergence of laws in Latin America.Footnote ⁹⁶ Even in jurisdictions with completely different legal cultures and languages, the legal systems may achieve convergence to some level. For example, as a civil law country, in its new Criminal Procedure Code, Italy has incorporated some basic features of the adversarial system on which the US and other common law criminal justice systems are based.Footnote ⁹⁷ The common need for the promotion of business relationships and the common background of a mixed jurisdiction in China and South Africa make it favourable for the convergence of the enforcement regimes of commercial judgments between both jurisdictions, despite their different languages. For example, considering the critical significance of the recognition and enforcement of the judgments of the courts of South African trading partners and legislation in the BRICS partners, it has been proposed that the place of performance (especially the place of characteristic performance) should be accepted as a ground for international jurisdiction on the recognition and enforcement of foreign judgments.Footnote ⁹⁸ Lastly, as a branch of law devoted to foreign-related civil and commercial dispute resolution, it is easier for the private international law of one country to draw some experiences or inspirations from other countries. Indeed, the development of private international laws in China and South Africa has benefited greatly from the private international law systems in the UK, the US, etc, which is advantageous for both sides reducing their differences in reforming and improving their recognition and enforcement regimes ultimately to achieve convergence.

The South African Law Commission made a proposal in 2003 in the hope of drafting consolidated legislation pertaining to international cooperation in civil matters, which mainly dealt with the recognition and enforcement of foreign judgments. The issues considered by the commission included: whether the Enforcement of Foreign Civil Judgments Act 32 of 1988 should be extended to the High Court in order to facilitate the registration of foreign money judgments in excess of R100,000; whether the consolidated act should be based on reciprocity; if not, what criteria should be used to determine to which foreign countries the consolidated act should apply or, alternatively, whether South Africa should recognize and enforce foreign civil judgments emanating from all foreign countries; and whether the Protection of Businesses Act 99 of 1978 posed an unjustifiable obstacle to international cooperation in civil matters.Footnote ⁹⁹ As noted above, the Supreme People's Court of China is now also considering promulgating a judicial interpretation on the recognition and enforcement of foreign judgments to provide clear and uniform guidance for Chinese courts. The new judicial interpretation will doubtlessly deal with the principle of reciprocity, the scope of punitive judgment, the grounds to deny recognition and enforcement, and the determination of the foreign jurisdiction. In the course of the legislative reform, if the legislators, judiciaries and scholars from China and South Africa carry out extensive exchange and cooperation, this will contribute to the convergence of the recognition and enforcement regimes between both jurisdictions.

Accession to the multilateral convention

Negotiating a single international instrument on recognition and enforcement has proven to be extremely complicated, but a multilateral instrument has the advantage of realizing a wider circulation of judgments.Footnote ¹⁰³ Some regional or international organizations have made great efforts to realize wider circulation of judgments. For example, some members of the Arab League adopted the Convention on the Enforcement of Judgments and Arbitral Awards of 1952 and the Riyadh Convention on Judicial Cooperation Between the States of the Arab League of 1983. In 1995, the courts of the member states of the Arab Gulf Cooperation Council issued the Protocol on the Enforcement of Judgments, Letters of Rogatory and Judicial Notices, which also set out the recognition and enforcement of judgments and arbitral awards between member states. Since its establishment, the European Community (later the European Union) has successively adopted the Brussels Convention in 1968, the Lugano Convention in 1988 and Brussels Regulation I in 2001, which laid a solid legal framework for the recognition and enforcement of judgments between member states. The Organization of American States produced the Inter-American Convention on Jurisdiction in the International Sphere for the Extraterritorial Validity of Foreign Judgments in 1984.Footnote ¹⁰⁴ If the rendering court's jurisdiction satisfies the requirements under this convention, its judgments will have extraterritorial validity and may be recognized and enforced in other member states. As an international inter-governmental organization devoted to the codification of conflict of laws issues, the Hague Conference on Private International Law (HCCH) has long been concentrating on recognition and enforcement issues. Since 1954, the HCCH has adopted Convention of 1 March 1954 on Civil Procedure, the Convention of 1 February 1971 on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (Recognition and Enforcement Convention)Footnote ¹⁰⁵ and the Convention of 30 June 2005 on Choice of Court Agreements (Choice of Court Convention).Footnote ¹⁰⁶ Following approval by the European Union on 11 June 2015, the Choice of Court Convention came into force as of 1 October 2015. After several years’ hard negotiation, on 2 July 2019 the 22nd diplomatic session of the HCCH concluded the Recognition and Enforcement Convention, which is the latest effort in this area. The newly adopted convention aims to provide a set of uniform rules for the worldwide circulation of foreign civil or commercial judgments.

It is still not realistic for China and South Africa to negotiate a regional convention on recognition and enforcement. China and South Africa, together with other African countries, may therefore accede to the Choice of Court Convention or the newly adopted Recognition and Enforcement Convention, to promote the wider circulation of judgments. China signed the Choice of Court Convention on 12 September 2017, and many scholars in China have advocated that China join these two important Hague conventions so that judgments between China and its trading partners along the Belt and Road may circulate freely. So far, African countries’ participation in the HCCH is not as high. Considering the increasing economic transactions between the African continent and other countries outside the continent, an African private international lawyer has appealed for wider cooperation between African countries and the HCCH in order to provide a favourable multilateral legal framework for cross-border civil and commercial transactions.Footnote ¹⁰⁷ As for South Africa in particular, it has been submitted that it should become a contracting party to the Choice of Court ConventionFootnote ¹⁰⁸ or the Recognition and Enforcement Convention,Footnote ¹⁰⁹ which will “bring the country's legal system into line with internationally accepted standards on the subject”,Footnote ¹¹⁰ “facilitate the free flow of judgments and create a measure of predictability of litigation outcomes which, in turn, lowers the risk of cross-border commerce”,Footnote ¹¹¹ and eventually “boost investors’ confidence, which may, in due course, lead to the creation of jobs and the alleviation of poverty in the country”.Footnote ¹¹²