The Case of Huizhi Liu is the third Chinese judgment recognized in the U.S. and the first in New York.
Correction: 19 April 2020
An earlier version of this post said that the case of Huizhi Liu is the (potentially) third Chinese judgment recognized in the US. That’s not correct. According to the updated version (2020) of the List of China’s Cases on Recognition of Foreign Judgments, Glob. Material Techs., Inc. v. Dazheng Metal Fibre Co., No. 12 CV 1851 (N.D. Ill. May. 1, 2015) is the known second Chinese judgment recognized in the US, which renders the case of Qinrong Qiu and the case of Huizhi Liu, respectively, the third and the (potentially) fourth. More info about the case of Glob. Material Techs., Inc. is added at the very end of the post. We apologize for the error.
Update: 10 August 2022
An earlier correction dated 19 April 2020 said that the case of Huizhi Liu is the (potentially) fourth Chinese judgment recognized in the US. That’s not correct. According to the updated version (2021) of the List of China's Cases on Recognition of Foreign Judgments, KIC Suzhou Automotive Products Ltd. et al. v. Xia Xuguo, 2009 WL 10687812 (S.D. Ind. 2009) is the known first Chinese judgment recognized in the US, which renders the case of Huizhi Liu the (potentially) fifth. A brief history of Chinese judgments successfully recognized and enforced by US courts is added at the very end of the post.
On 6 Jan. 2020, New York Supreme Court, Queens County, rendered a ruling in Huizhi Liu vs Guoqing Guan & Xidong Fang, recognizing a judgment made by Xiangzhou Primary People’s Court of Zhuhai Municipality, China. The case is now going to the Appellate Division for review.
(CJO Note: We would like to thank our reader Ms. Renee M Wong, who provided us with valuable information. Ms. Wong is an of counsel attorney with the law firm of Goldberger & Dubin, P.C. in New York, and represented the plaintiff, Ms. Huizhi Liu, in this very case.)
It marks the third time for the U.S court to recognize a Chinese judgment. Prior to this, two Chinese judgments were recognized respectively in the U.S. in 2009, and in 2016 (see below).
In the case, plaintiff Huizhi Liu sought enforcement of a foreign monetary judgment in the amount of CNY 17.6 million, exclusive of interest and legal fees, that was obtained in China.
On 14 May 2018, the plaintiff commenced an action sounding in breach of contract and unjust enrichment against defendants in the New York Supreme Court, Queens County (hereinafter “the Queens County Court”).
On 4 Jan. 2019, the Honorable Leonard Livote of the Court granted a conditional dismissal upon the ground of forum non conveniens, only if the defendants consented to the People's Republic of China and accepted service action brought on the same causes of action.
On 31 Jan. 2019, the parties subsequently executed a stipulation, wherein defendants consented to the jurisdiction of the People's Republic of China as the forum designated by the plaintiff.
Consequently, the plaintiff brought a lawsuit against defendants before Xiangzhou Primary People’s Court of Zhuhai Municipality, Guangdong Province, China (hereinafter the “Chinese court”).
On 24 July 2019, the Chinese court granted judgment on default in favor of the plaintiff and against defendants, in the amount of RMB 17.6 million, with interest from 9 November 2017 to the date of payment at a monthly interest rate of 23. The Chinese judgment also provided that, if not satisfied within 10 days of service upon defendants’ any interest owed will be doubled, and that defendants shall pay RMB 159,800 in legal fees to the plaintiff.
The Queens County Court indicated, first of all, that “plaintiff's submissions demonstrate that the Chinese legal system comports with the due process requirements and the public policy of New York”.
Secondly, the Queens County Court pointed out that defendants, in the action before the Honorable Leonard Livote, argued that the interest of substantial justice would be best served by adjudication of the matter in the People's Republic of China, and they may not now cry foul.
Thirdly, the Queens County Court held that defendants were given ample notice and opportunity to be heard in the People's Republic of China, yet made the tactical decision to sit on their hands and allow a default judgment to be entered, even after the parties executed a stipulation consenting to the jurisdiction of the People's Republic of China.
Pursuant to the New York Civil Practice Law and Rules (CPLR) 5304 (b) (2), “[a] foreign country judgment need not be recognized if the defendant in the proceedings in the foreign court did not receive notice of the proceedings in sufficient time to enable him to defend.”
The Queens County Court held that “defendants' argument that non-recognition of the Chinese judgment is warranted under this discretionary ground is also unavailing. The evidence demonstrates that the Civil Procedure Law of the People's Republic of China was satisfied and that defendants were or should have been aware of the pending litigation in China”.
Therefore, the Queens County Court granted the plaintiff’s motion to enforce the Chinese judgment.
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Below is a brief history of Chinese judgments successfully recognized and enforced by US courts
- On 6 Jan. 2020, in Huizhi Liu v. Guoqing Guan & Xidong Fang (713741/2019), the New York Supreme Court Queens County recognized and enforced a judgment rendered by the Xiangzhou Primary People’s Court of Zhuhai Municipality, Guangdong Province, China.
- On 27 July 2017, in Qinrong Qiu v. Hongying Zhang et al(2:2017cv05446), the US District Court for the Central District of California recognized and enforced a judgment rendered by the Suzhou Industrial Park People's Court of Suzhou Municipality, Jiangsu Province, China.
- On 1 May 2015, in Glob. Material Techs., Inc. v. Dazheng Metal Fibre Co., No. 12 CV 1851 (N.D. Ill. May. 1, 2015), the US District Court for the Northern District of Illinois recognized and enforced a judgment rendered by Zhuhai Intermediate People's Court, Guangdong Province, China.
- On 21 July 2009, in Hubei Gezhouba Sanlian Indus. Co. v. Robinson Helicopter Co., No. 2:06-CV-01798-FMCSSX, 2009 WL 2190187 (C.D. Cal. July 22, 2009), aff’d, 425 F. App’x 580 (9th Cir. 2011), the US District Court for the Central District of California recognized and enforced a judgment rendered by the High People’s Court of Hubei Province, China.
- On 3 June 2009, in KIC Suzhou Automotive Products Ltd. et al. v. Xia Xuguo, 2009 WL 10687812 (S.D. Ind. 2009), the US District Court for the Southern District of Indiana, Indianapolis Division recognized and enforced a Chinese judgment.
The full text of the judgment is available here. An analysis is also available at Asia Business Law Institute.
Photo by jonathan riley(https://unsplash.com/@jonathan_christian_photography) on Unsplash
Contributors: Meng Yu 余萌
