Attempts to enforce in New Zealand a $23 million judgment of a China court has New Zealand courts in a bind. Can it be considered a court judgment fit for enforcement when in China there is limited reverence for legal principles; judges are ‘guided’ by political directives.
Deming Shi has assets in New Zealand but lives in the People’s Republic of China. He is defending in New Zealand courts attempts to enforce a $23 million court judgment issued by the Higher People’s Court of Hebei Province. The Hebei court held him liable on his guarantee of debts owed a China state-owned enterprise by coal supplier Qinhuangdao Boen Trading Co Ltd. Boen Trading sourced coal for China’s state-owned electricity company. Because off-shore coal suppliers require payment up-front, state authorities provided Boen Trading with a revolving cash ‘float;’ working capital for Boen Trading which was treated as pre-payments against future deliveries. When state authorities switched coal supplier, return of $23 million pre-payments was demanded. Claiming Mr Shi’s companies in China had no assets, state authorities sued to enforce the Hebei court judgment against Mr Shi in New Zealand.
China has no reciprocal treaty with New Zealand for enforcement of each country’s court judgments. For enforcement in New Zealand, rulings by a court in China must first be ‘recognised.’ Litigants need to prove judgment of the court in China is ‘final and conclusive’ and is a judgment issued by a ‘court.’ Courts in England have refused enforcement of foreign judgments from countries where judges lack impartiality and independence and where court decisions simply implement centralised state policy. A court is not a judicial body when it just implements political decisions.
The High Court in Auckland refused fast-track summary judgment for enforcement of the $23 million Hebei court judgment. Detailed evidence on the status of courts in China is first required, Associate judge Sussock ruled.
Clive Ansley, a Canadian lawyer who speaks and reads Chinese and has significant experience of Chinese civil, criminal and maritime law told the High Court it was his experience that judges in China ‘hear’ cases, but do not decide them. A judicial committee within each court system influences the outcome of those cases having political or economic consequences. Any issue which may involve the reputation of the ruling Communist Party or result in public disenchantment with government policies will get special attention.
Hebei Huaneng Industrial Development Ltd v. Shi – High Court (8.10.21)
21.167