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Washington State Recognizes Chinese Judgment for the First Time


 

Key takeaways:

  • In 2021, the Superior Court of Washington for King County ruled to recognize a judgment of a Beijing local court,(Yun Zhang v. Rainbow USA Investments LLC, Zhiwen Yang et al., Case No. 20-2-14429-1 SEA).
  • This case marks the first time for a Washington state court, and the sixth time for a US court, to recognize and enforce Chinese monetary judgments.
  • In the past five years, the enforcement success rate of US judgments in China has also increased significantly. It is believed that the mutual recognition and enforcement of the judgments between China and the US have become a new normal.

CJO Note: We would like to thank our reader Mr. Angus Ni, who provided us with valuable information. Mr. Ni is a litigation attorney at the law firm AFN Law PLLC, and represented the judgment creditor in this very case.

On 22 Dec. 2021, the Superior Court of Washington for King County (the “King County Superior Court”) recognized a Chinese judgment in the case Yun Zhang v. Rainbow USA Investments LLC, Zhiwen Yang et al. (Case No. 20-2-14429-1 SEA). The Chinese judgment, numbered (2016) Jing 0106 Min Chu No. 7011 ((2016)京0106民初7011号), was made by the Fengtai District People’s Court, Beijing (the “Beijing Court”) in Yun Zhang v. Zhiwen Yang and Ying Liu on 31 July 2017.

This is the first time for a Washington state court, and the sixth time for a US court, to recognize and enforce a Chinese monetary judgment, more specifically in this case, a judgment of a Beijing local court. More information about the history of Chinese judgments successfully recognized and enforced by US courts can be found in this post.

I. Case background

The defendants (judgment debtors) Mr. Zhiwen Yang and Ms. Ying Liu are husband and wife. The plaintiff(judgment creditor) Ms. Yun Zhang was the couple’s neighbor in Beijing.

From 2012 to 2015, the plaintiff Ms. Zhang lent money to the defendants in several batches, agreeing on an annual interest rate of 24%, which was the maximum annual interest rate allowed by Chinese laws for loans made by parties other than financial institutions before 2020.

Later, the plaintiff lost contact with the defendants, and therefore was unable to request them to repay the principal and the interest accrued.

Consequently, the plaintiff filed a lawsuit against the defendants with the Beijing Court, requesting that the defendants repay the total loan principal of CNY 14,650,000 and pay the interest accrued from the date of borrowing until the date of repayment.

On 31 July 2017, the Beijing Court made a default judgment, supporting the plaintiff’s claim.

Thereafter, the plaintiff filed a lawsuit with the King County Superior Court against the defendants, Rainbow USA Investments LLC (a Washington limited liability company established by the defendants), and their Marital Community, requesting the court to recognize the judgment made by the Beijing Court.

On 6 Dec. 2021, the King County Superior Court granted the motion for summary judgment and ruled to recognize and enforce the judgment made by the Beijing Court according to the Washington’s Uniform Foreign-Country Money Judgments Recognition Act.

On 22 Dec. 2021, the King County Superior Court rendered a further judgment, ordering the defendants to pay the loan principal and the interest accrued from July 31, 2017 to December 6, 2021, totaling USD 4,698,122.

II. Our comments

As of today, this is the sixth time, out from nine cases, for a US court to recognize and enforce a Chinese judgment, with a success rate of 66.7%.

By contrast, we have found six US judgments, out of 12 cases, being recognized and enforced by Chinese courts, with a success rate of 50%.

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However, it is worth noting that since the first time that a Chinese court recognized a US judgment in 2017(Liu Li v. Taoli & Tongwu, (2015) E Wu Han Zhong Min Shang Wai Chu Zi No. 00026), six US judgments out of eight cases have been enforced, with a success rate of 75%. In other words, in the past five years, the enforcement success rate of US judgments in China has increased significantly.

This, in our opinion, means that the mutual recognition and enforcement of the judgments between China and the US have become a new normal.

***

Below is a brief history of Chinese judgments successfully recognized and enforced by US courts.

  • On 22 Dec. 2021, in Yun Zhang v. Rainbow USA Investments LLC, Zhiwen Yang et al., Case No. 20-2-14429-1 SEA, the Superior Court of Washington for King County recognized and enforced a judgment rendered by the Fengtai District People’s Court, Beijing, China.
  • On 6 Jan. 2020, in Huizhi Liu vs Guoqing Guan et al.(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.

 

 

 

 

Photo by Robert Ritchie on Unsplash



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