On 31 August 2018, the Supreme Court of Singapore and the Supreme People’s Court of the People’s Republic of China (PRC) signed a memorandum of guidance (MOG) on the recognition and enforcement of money judgments in commercial cases.
The salient features of the MOG include:
- A final and conclusive money judgment of the courts of Singapore or the courts of the PRC may be enforced in the PRC Court and the Singapore Court, respectively. Whether or not a Singapore judgment or a PRC judgment is final and conclusive shall be determined in accordance with PRC law.
- A Singapore judgment or PRC judgment subject to or under appeal is not considered final and conclusive.
- A Singapore judgment or PRC judgment that indirectly enforces any foreign penal, revenue or public law will not be enforced.
- Singapore judgments related to intellectual property rights cases, and unfair competition cases will not be enforced by the PRC Court. The Singapore Court will not review the merits of a PRC judgment that is enforceable. Likewise, the PRC Court will not review the merits of a Singapore judgment that is enforceable.
- A Singapore judgment can only be challenged in the PRC Court on limited (but not exhaustive) grounds, such as where there was breach of natural justice or fraud in obtaining the judgment, or where the judgment is contrary to the principles of PRC law, or will prejudice the sovereignty, security or public interests of the PRC.
- A Singapore judgment may not be challenged on the grounds that it contains an error of fact.
- A PRC judgment may be challenged in Singapore Court on limited grounds including (but not limited to) the judgment was obtained by fraud, or is contrary to Singapore public policy, or the proceedings giving rise to the judgment were conducted in a manner which a Singapore court would regard as being contrary to natural justice.
- A PRC judgment may not be challenged on the grounds that it contains an error of fact or law.
Although the MOG has no binding legal effect in that it does not constitute a treaty or legislation and is not binding on Singapore judges or PRC judges, nonetheless, it is envisaged that Singapore judges and PRC judges will be guided by the terms of the MOG when dealing the recognition and enforcement of money judgments in commercial cases in their respective courts.
The MOG is yet another initiative by the Singapore Court and PRC Court to further improve the cooperation which already exists between them by promoting a mutual understanding of the respective laws and judicial processes of Singapore and the PRC.
Singapore and PRC businesses dealing with each other can expect more certainty when it is necessary to enforce money judgments in Singapore or the PRC. Since the Singapore International Commercial Court (SICC), being a division of the High Court of Singapore, is also a party to the MOG, non-Singaporean parties who have commercial dealings with PRC parties or parties with assets in the PRC, can choose to have their disputes resolved by the SICC and seek enforcement of a SICC money judgment in the PRC in accordance with the MOG. Having such an option might prove increasingly important given the growing prominence of the Belt and Road Initiative.
Reed Smith LLP is licensed to operate as a foreign law practice in Singapore under the name and style, Reed Smith Pte Ltd (hereafter collectively, “Reed Smith”). Where advice on Singapore law is required, we will refer the matter to and work with Reed Smith’s Formal Law Alliance partner in Singapore, Resource Law LLC, where necessary.