The Supreme Court of Singapore and the Supreme People’s Court (SPC) of the People’s Republic of China recently signed a Memorandum of Guidance (MOG), under which money judgments heard and obtained in Singapore could be brought before Chinese courts to be recognized and enforced, and vice versa. This reciprocal enforcement arrangement aims to facilitate and promote mutual understanding of the laws and judicial processes between the Supreme Court of Singapore and the SPC, with a view towards smoothening the process and providing guidance for litigants on the applicable laws and regulations that govern the enforcement of foreign judgments in Singapore and China.
The MOG marks a significant step in the development of reciprocal enforcement arrangements between Singapore and China. No such arrangement existed prior to this between the two countries, and although there is precedent for the recognition and enforcement of a Singapore court judgment in Chinese courts and vice versa, the MOG provides useful clarity in this area.
The practical implication of the MOG is that Singapore companies and individuals with dealings in China now have more enforcement options. For instance, a Singapore party dealing with a Chinese party with substantial assets in China is no longer limited to choosing Chinese law and jurisdiction to ensure efficient enforcement of a money judgment in China. The Singapore party can now have its case heard in Singapore courts and subsequently proceed to Chinese courts for recognition and enforcement. Singapore companies, especially those in joint-venture arrangements with Chinese parties, may wish to revisit their agreements to take this into account.
Further, as the MOG also applies to judgments rendered by the Singapore International Commercial Court (SICC), non-Singaporean parties may also potentially benefit from these reciprocal arrangements. Non-Singaporean parties who wish to enforce against Chinese companies may institute legal proceedings in the SICC and enforce the SICC’s judgment in Chinese courts. This will dispel any perception that China is a safe haven from recognition and enforcement of foreign judgments, given that foreign parties now have a wider range of recovery strategies against Chinese parties and assets.