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By: Kun Zhao, Esq.

The United States is the largest trading partner of China. With the trading volume reaching $385.3 billion in 2010, disputes between companies in both countries in the international trading and investment business arena are unavoidable and mounting.

When resolution through good faith negotiations is infeasible and lawsuits are inevitable, parties will be predisposed to file litigation in their domestic forums. In this context, the critical question is whether a domestic judgment will be enforceable in the other country. As to Chinese companies, the general answer is yes in New Jersey, New York, and also many other states in the U.S.

In the United States, state law governs the recognition of judgments by a foreign country or sister state. In 1962, the National Conference of Commissioners on Uniform State Laws approved and recommended for enactment the Uniform Foreign Money-Judgments Recognition Act (“UFMJRA”). The UFMJRA applies to non-U.S. court judgments granting or denying the recovery of a sum of money. More than half of the states, including New Jersey and New York, have adopted the UFMJRA or some part of it.

In New Jersey, the Foreign Country Money-Judgment Recognition Act, N.J.S.A. 2A:49A-16 to 24 (“FCMJRA”), provides the statutory basis for enforcing judgments of other nations in New Jersey. According to FCMJRA, New Jersey’s courts must recognize a final foreign country judgment for money damages unless the judgment debtor establishes one of the specific grounds for non-recognition that are enumerated in the FCMJRA. New York Civil Practice Laws and Rules Article 53 largely mirrors New Jersey FCMJRA.

A  judgment rendered in China has been recognized in United States District Court for the Central District of California and affirmed by the Ninth Circuit, where California has similar laws adopting Uniform Foreign Money-Judgments Recognition Act. See, Hubei Gezhouba Sanlian Industrial Co. v. Robinson Helicopter Company, Inc., 2009 WL 2190187 (C.D. Cal. 2009), affirmed, 425 Fed.Appx. 580, 2011 WL 1130451 (9th Cir. 2011).

Therefore, monetary judgments of competent courts in China may be enforced in New Jersey and New York without a prior determination by state courts. In New Jersey, such money-judgments may be enforced by filing with the Clerk pursuant to N.J.S.A. 2A:59A-27.