Case of the Day: WooshinmtCo v. Fu Sheng Optoelectronics

I have a guest post today from Ivy Chen (陈盛兰), a law student the Peking University School of Transnational Law, on a recent decision of the Supreme People’s Court of China. Welcome, Ivy! I don’t claim to be able to evaluate this decision. It would be interesting to get a real comparative view of this.

The case of the day is WooshinmtCo, Ltd. v. Fu Sheng Optoelectronics (Jiangsu), Ltd., a retrial case from the Supreme People’s Court of China. WooshinmtCo, a South Korean company, applied to the Supreme People’s Court of China for retrial of a judgment on contract disputes between itself and Fu Sheng Optoelectronics, a Chinese company, issued by the High People’s Court of Jiangsu Province. This case does not address the process of the recognition and enforcement of foreign judgment in China. Instead, it sheds light on the possibility of using unrecognized foreign judgment as evidence in Chinese court proceedings.

The Applicant claimed that the trial court of the second instance, that is, the High People’s Court of Jiangsu Province, has adopted a judgment issued by a South Korean court without going through the procedure for the recognition and enforcement of a foreign judgment in deciding the case, which was a substantial procedural mistake. In specific, the Applicant based its allegation on three points: First, since no bilateral treaties on reciprocal judgment recognition and enforcement existed between China and South Korea, the judgment issued by the South Korean court has no probative value. Second, the South Korean court failed to do a substantial review of the contentious agreement, negating the ability for the court’s judgment to be used as direct evidence in deciding the nature and effect of the agreement. Lastly, since Fu Sheng has concealed its litigation in South Korea, the judgment of a South Korean court should not be admitted as new evidence.

As to the first problem, the Supreme People’s Court found that the second instance court has not made the judgment based on the South Korean judgment; instead, the second instance has comprehensively considered all the evidence. Therefore, there was no violation of procedural rules and the second instance has never started the procedure of the recognition of foreign judgment. Since there was no detailed analysis in the Court’s judgment on the comprehensiveness of the second instance’s deliberation, I have no idea how exactly the second instance court evaluated the Korean Court’s judgment along with other evidence. Second, the Supreme Court found that the judgment of the South Korean court, which was submitted to the second instance court, was issued after the trial of this case in the first instance court. Based on this timing, the Court found that admission of the South Korean judgment was consistent with article 41 of “Some Provisions of the Supreme People’s Court on Evidence in Civil Procedures,” which stipulates that “the evidences newly found after the first instances hearing is finished” constitutes “new evidences of the second instance hearing”. Based on the above two points, the Court found that WooshinmtCo failed to establish its allegations. The Court did not mention the lack of substantial review issue in its judgment.

Although the recognition and enforcement of foreign judgment in China in the absence of bilateral treaties is extremely difficult, if not impossible, foreign judgment can still be used strategically as evidence in a Chinese court proceeding. In the usage of foreign judgment, parties should be conscious of China’s civil procedure rules and regulations. For example, according to Article 11 of “Some Provisions of the Supreme People’s Court on Evidence in Civil Procedures,” the foreign judgment, as an evidence formed outside the territory of China, shall go through the certification of the notarization organ of its own country and be authenticated by the embassy of China in that country, or fulfill the certification formalities as provided in the relevant treaties concluded between China and that country.

One response to “Case of the Day: WooshinmtCo v. Fu Sheng Optoelectronics”

  1. Ivy, thanks for this post! I think it raises an interesting issue. Of course a foreign judgment will have no preclusive effect unless it is recognized—that’s what recognition is for. But can it have some evidentiary effect even if it is not preclusive, if it is not recognized? I haven’t studied this, but the Restatement view seems to be that at common law recognition is necessary if a party “seeks to rely on prior determination of an issue of fact or law.” Restatement (Third) of the Foreign Relations Law of the United States § 481 cmt. b (1987).

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