Improper service taints judgments in China

Improper serving of a foreign judicial document to a party domiciled in China – a signatory country of the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the Hague Service Convention) – may be challenged and lead to the judgment rendered thereafter being deemed non-recognisable and unenforceable by the Chinese courts. For a foreign party and its counsel dealing in cross-border civil and commercial litigations, certain pitfalls should be avoided.

 

Improper service

 

China explicitly opposes serving foreign judicial documents to a Chinese party by post, whether directly mailed by a foreign party or a foreign court. In most cross-border litigations, foreign judicial authorities must request China's Ministry of Justice (MOJ) to assist and serve such judicial documents to parties domiciled in China. Any such serving request and serving results (foreign service records) will be undertaken by the Supreme People's Court (SPC) system as part of the MOJ's assistance.

 

The foreign service records become the legal basis for proper serving when it comes to recognition and enforcement.

 

Presenting the foreign service records is a prerequisite before a foreign winning party can apply for recognition of a foreign judgment and enforcement of the losing party's assets in China. In the absence of this, which could mean the service is "improper", the foreign judgment could be subject to challenge by the losing party or scrutiny by the Chinese courts. As a result, the foreign judgment may not be recognised and enforced by a Chinese court.

 

Serving documents

 

Bilateral treaties of judicial assistance

According to article 11 of the Hague Service Convention, if the requesting signatory country also has a bilateral treaty of judicial assistance in civil matters with China, then the bilateral treaty prevails.

 

As at 11 June 2021 China has established bilateral treaties of judicial assistance in civil matters with 39 countries, including:

• France;
• Singapore;
• Russia; and
• South Korea.

The bilateral treaty may offer the foreign party more assistance than the Hague Service Convention.

 

The service methods provided in a bilateral treaty are similar to those in the Hague Service Convention; however, a bilateral treaty of judicial assistance also provides what the Chinese authority must do if the address provided by the service-requesting country is not fully correct. For example, as provided in China's bilateral treaties with France and Russia, if the Chinese recipient's address is incorrect, the Chinese courts will notify the foreign party and request further information, making the best effort to serve the judicial documents for a second time, rather than directly returning them.

 

Hague Service Convention and China's reservation 

In the absence of a bilateral treaty, the foreign requesting country should rely on the Hague Service Convention if it is a signatory country.

 

Service by post

China made an explicit reservation for service by post when it ratified the Hague Service Convention, which means it is improper to serve a Chinese party a foreign judicial document by post.

 

However, if the parties themselves agreed to be served by post in the contract, it poses the question of whether it would be deemed as "party autonomy" and, therefore, override China's reservation.

 

Two interesting cases present contradictory views. While the courts took a service agreement as valid and upheld that the service to a foreign jurisdiction was proper in one case; in the other case, China's MOJ officially stated that such a service agreement should be deemed as invalid if the service is to China.

 

In the first case, which involved serving a Chinese court's judicial documents to Japan(1) in 2019, the SPC held that, as the Japan-domiciled defendant had provided a Chinese court with his mailing address in Japan and had expressly consented to being served by post, the service was "proper" from the perspective of the Chinese courts, even though Japan opposed to service by post though its explicit reservation under the Hague Service Convention. The SPC reasoned that the Hague Service Convention is a private law convention in essence so its application can be excluded by party autonomy.

 

In the second case, where a US court mailed legal documents by post to the defendant domiciled in China with the defendant's prior consent, on 27 September 2020, the MOJ officially sent a letter to the US Department of Justice, calling it an improper service for the following reasons:

 

[1] China believes that the Hague Service Convention is compulsory. Both China and the U.S. are signatories to the Convention. If the U.S. serves on Chinese parties, it shall follow the provisions of the Convention.

[2] The Chinese side has made a reservation to the method of delivery in Article 10 of the Hague Service Convention. Therefore, the mail service by the member states to the Chinese party is inconsistent with this reservation and constitutes a procedural defect thus the relevant judgment will not be recognised by the Chinese courts.

 

As these cases demonstrate, under the current situation, certain inconsistencies remain and heightened caution should be applied.

 

Length of services

China designates the MOJ to receive the service request from foreign jurisdictions. According to the Implementing Measures for the Enforcement of the Hague Service Convention,(2) ideally the legal documents will be serviced to the relevant China-domiciled party within 23 days of the MOJ receiving the request. However, it takes longer in practice. The relevant provisions are as follows:

 

Art.1 After receiving a foreign request, the MOJ shall forward the document with the Chinese translation to the SPC within five days; those written in English or French, or those attached with an English or French translation, shall be transferred to the SPC within seven days. For documents that do not conform to the Convention, the MOJ will return or require the requesting party to supplement or amend the materials.

 

Art.2 The SPC shall transfer the document to the higher people's court concerned within five days; after receiving the document, the higher people's court concerned shall transfer it to the intermediate people's court concerned or the special people's court concerned within three days; the said intermediate people's court or special people's court shall then complete the service of the document within ten days, and deliver the proof of service to the Supreme People's Court as soon as possible, which shall then forward the said proof to the MOJ.

 

Service through diplomatic channels

 

Service through diplomatic channels is the last resort when there is no bilateral treaty of judicial assistance between China and the service-requesting country, and the latter is not a signatory to the Hague Service Convention. Service through this means can be time-consuming (in a recent case, the service from a Middle East jurisdiction to China took almost one year).

 

As provided in Several Issues Concerning the Mutual Entrustment between Chinese Courts and Foreign Courts on Service of Legal Documents through Diplomatic Channels,(3) the procedure for service through diplomatic channels is primarily based on the principle of reciprocity. In general, a foreign country's embassy in China will forward the home country's judicial document to its Chinese contact (the Consular Department of the Ministry of Foreign Affairs), through which the foreign judicial documents will be further passed on to the relevant Chinese higher people's court. The higher people's court will then designate an intermediate people's court to serve the document to the relevant China-domiciled party.

 

Endnotes 

(1) (2019) 最高法民终395号 (2019) Zui Gao Fa Min Zhong 395.

(2) 《关于执行海牙送达公约的实施办法》(司发通[1992]093号) (Si Fa Tong [1992] 093) issuing authority: SPC, Ministry of Foreign Affairs and MOJ, effective from 19 September 1992.

(3)《关于我国法院和外国法院通过外交途径相互委托送达法律文书若干问题的通知》(外发[1986]47号) (Wai Fa [1986] 47), issuing authority: SPC, Ministry of Foreign Affairs and MOJ, effective from 14 August 1986.

 

Jiaqing Wei, intern, assisted in the preparation of this article.