Property Preservation Available During a Judicial Review M88 Malaysia an Application for Recognition and Enforcement M88 Malaysia a Foreign Judgment

Recently, the Beijing No. 4 Intermediate People’s Court (the “Beijing Court”) rendered a ruling to recognize and enforce a Paris Court Ruling (the “Case”). This was with respect to an application for recognition and enforcement M88 Malaysia an order (“ordnance” in French) M88 Malaysia the Commercial Court M88 Malaysia Paris (the “Paris Court”) dated June 3, 2015, approving and rendering enforceable a settlement agreement involving an amount M88 Malaysia more than USD 46 million (such order, the “Paris Court Ruling”).

It is noteworthy that during the judicial review M88 Malaysia the Paris Court Ruling, the Beijing Court rendered a civil ruling on August 10, 2017, approving the application filed by a claimant for property preservation and seizing, attaching and freezing the relevant property and the other interests M88 Malaysia Mr. W, the respondent (the “Respondent”), up to the amount requested by the claimant.

To our knowledge, this Case may be the first case in which an application for property preservation is approved by a PRC court during the judicial review M88 Malaysia an application for recognition and enforcement M88 Malaysia a general foreign commercial judgment. This has significance for the handling M88 Malaysia similar judicial assistance cases.

I. Mutual recognition and enforcement M88 Malaysia judicial judgments under the Belt and Road Initiative

With the implementation M88 Malaysia the Belt and Road Initiative, cooperation between countries covered under the Belt and Road Initiative has increased. In the judicial field, the PRC Supreme Court has also issued a number M88 Malaysia policies to facilitate the implementation M88 Malaysia the Belt and Road Initiative. According to Article 6 M88 Malaysia the Opinions M88 Malaysia the Supreme People’s Court on the Provision M88 Malaysia Judicial Services and Protection by People’s Courts for the Belt and Road Initiative, Chinese courts shall, in strict accordance with the international treaties concluded between, or jointly acceded to, by China and the other countries covered under the initiative, actively handle the requests for judicial assistance such as recognition and enforcement M88 Malaysia foreign court judgments and provide efficient and convenient judicial remedies for Chinese and foreign parties to protect their legitimate rights and interests. In addition, in the Nanning Statement M88 Malaysia the Second China-ASEAN Justice Forum dated June 8, 2017 and other relevant documents, the PRC Supreme Court has repeatedly reiterated the need to promote the mutual recognition and enforcement M88 Malaysia civil and commercial judgments M88 Malaysia relevant countries in order to provide judicial protection for cross-border transactions and investments.

In this context, PRC courts at all levels, including the PRC Supreme Court, have adopted a policy M88 Malaysia actively recognizing and enforcing foreign court judgments in judicial practice so as to facilitate the implementation M88 Malaysia the Belt and Road Initiative. For example, in a case involving an application by Kolmar Group AG for recognition and enforcement M88 Malaysia a civil judgment made by the Singapore High Court, the PRC Supreme Court mentioned that the recognition and enforcement M88 Malaysia the foreign court judgment involved in the case would effectively promote judicial cooperation in the field M88 Malaysia recognition and the enforcement M88 Malaysia civil and commercial judgments among the countries covered under the Belt and Road Initiative.

Although the issue M88 Malaysia recognition and the enforcement M88 Malaysia foreign civil and commercial judgments has become increasingly important in China, the procedures and review standards for the recognition and the enforcement M88 Malaysia foreign judgments in judicial practice need to be developed. Similarly, Chinese courts lack authoritative guidance as to the applicable procedures for handling the applications for property preservation in such cases.

II. Difficulties in applying for property preservation during a judicial review M88 Malaysia an application for recognition and enforcement M88 Malaysia a foreign judgment

Firstly, the relevant treaty may have no specific provisions on this issue. In accordance with Article 282 M88 Malaysia the Civil Procedure Law M88 Malaysia the People’s Republic M88 Malaysia China (the “PRC Civil Procedure Law”), the recognition and enforcement M88 Malaysia foreign court judgments shall be conducted in accordance with the international treaties concluded or acceded to by China, or in accordance with the principle M88 Malaysia reciprocity. Taking this Case as an example, as it involves the recognition and enforcement M88 Malaysia a ruling made by a French court and the Agreement on Judicial Assistance in Civil and Commercial Matters between the People’s Republic M88 Malaysia China and the French Republic (the “Sino-French Assistance Agreement”), the request for judicial assistance in this Case shall be reviewed mainly in accordance with the Sino-French Assistance Agreement. However, the Sino-French Assistance Agreement has no specific provisions as to the conditions M88 Malaysia applicable procedures for property preservation. Therefore, the judge cannot directly rule on our application for property preservation in accordance with the Sino-French Assistance Agreement.

Secondly, the relevant law has no specific provisions on this issue either. Part IV (Special Provisions on Foreign-related Civil Procedures) M88 Malaysia the PRC Civil Procedure Law (including Chapter 27 (Judicial Assistance)) has no specific provisions on whether property preservation can be conducted during the judicial review M88 Malaysia an application for recognition and enforcement M88 Malaysia a foreign judgment.

Thirdly, there has been no judicial precedent. No judicial precedent in which property preservation was granted during the judicial review M88 Malaysia an application for recognition and enforcement M88 Malaysia a foreign judgment could be found through public channels.

III. Main arguments made in this Case to seek the approval M88 Malaysia property preservation from the Beijing Court

After filing the application for property preservation, we communicated with the judge M88 Malaysia the Beijing Court and put forward the following main arguments:

1. Based on Article 4 M88 Malaysia the Sino-French Assistance Agreement, the Sino-French Assistance Agreement clearly provides that except for the matters stipulated in the Sino-French Assistance Agreement, the parties to the Sino-French Assistance Agreement shall apply their own laws to the provision M88 Malaysia judicial assistance within their own territories, and this argument was made to procure the judge to focus on the relevant legal provisions M88 Malaysia China.

2. There is a clear legal basis under the PRC law for our application for property preservation. This Case is a foreign-related civil action, and Part IV M88 Malaysia the PRC Civil Procedure Law shall apply to this Case, Article 259 M88 Malaysia which clearly provides that “this Part shall apply to foreign-related civil actions conducted within the territory M88 Malaysia the People’s Republic M88 Malaysia China. Matters not covered in this Part shall be subject to the other relevant provisions M88 Malaysia this Law”. Since Part IV M88 Malaysia the PRC Civil Procedure Law has no provisions on property preservation during the recognition and enforcement M88 Malaysia foreign judgments, Article 100 and other relevant provisions M88 Malaysia the PRC Civil Procedure Law shall be applicable to such property preservation.

3. The PRC Civil Procedure Law does not prohibit property preservation during the recognition and enforcement M88 Malaysia foreign judgments.

4. The claimant has lawfully provided sufficient security for property preservation and its application for property preservation conforms to the applicable law, and the acts M88 Malaysia the Respondent such as transferring the shares held by him have demonstrated the urgency and necessity M88 Malaysia property preservation.

The Beijing Court accepted our arguments and approved our application for property preservation. There is no doubt that the understanding and application M88 Malaysia relevant laws by the Beijing Court are rational, and it not only implements the opinions M88 Malaysia the PRC Supreme Court on providing judicial services and protection for the Belt and Road Initiative, but also demonstrates that the rule M88 Malaysia law is improving in China.

IV. Conclusion

With the development M88 Malaysia the Belt and Road Initiative, it has become increasingly important to further improve the mechanism for the recognition and enforcement M88 Malaysia foreign civil and commercial judgments in China. During the judicial review stage M88 Malaysia applications for recognition and enforcement M88 Malaysia foreign court judgments, applications for property preservation could be reasonable and necessary for the actual enforcement M88 Malaysia the judgments and protection M88 Malaysia the legitimate rights and interests M88 Malaysia the Chinese and foreign parties concerned. However, in past judicial practice, due to the relatively small number M88 Malaysia similar cases, local Chinese courts lack experience in conducting property preservation during their judicial review M88 Malaysia applications for the recognition and the enforcement M88 Malaysia foreign judgments, thereby giving rise to inconsistent court practices in different regions.

The ruling made by the Beijing Court in this Case to approve the application for property preservation is undoubtedly M88 Malaysia great significance, providing other courts with some kind M88 Malaysia reference for handling similar cases.