Chinese court enforces $73 million U.S. judgment: door opens for more foreign order enforceability, including UPC

Context: Historically, Chinese courts have been reluctant to enforce U.S. judgments (June 19, 2022 China Justice Observer article). Last month, the Unified Patent Court’s (UPC’s) Court of Appeal’s (CoA) first panel reversed a lower court’s denial of a request for collateral in the JingAo v. Chint Chinese-Chinese solar cell patent dispute, based on doubts that a UPC cost order would be practically enforceable in China (July 10, 2025 ip fray article). It ruled that enforcement against parties based outside the European Economic Area (EEA) may be difficult while EU law guarantees recognition and enforcement across EU/EEA member states. In a ruling issued in July 2016 (No.  502381), the San Mateo County Superior Court (in California) ordered a defendant to compensate the plaintiff $73 million. Following appeals in both California and China, the Wuxi Intermediate Court ruled in August 2017 that under China’s Civil Procedure Law, which notes that a foreign judgment cannot be upheld unless it is final and conclusive, the U.S. order could not be enforced.

What’s new and direct impact: The Wuxi Intermediate Court has now enforced the San Mateo court’s judgment (which was eventually made final in 2019), marking the first time a Chinese court has enforced a U.S. judgment based on reciprocity.

Wider ramifications: As noted by Ping Gu at Zhong Lun Law Firm today, this decision signals that China is open to recognizing foreign judgments (August 5, 2025 LinkedIn post by Ping Gu). Notably, the decision could have implications for future UPC security decisions, as it weakens the argument that Chinese courts won’t enforce a UPC court order. Chinese companies may now be able to argue that if U.S. judgments are enforced, UPC judgments could similarly or equally be enforced.

Last year, the UPC’s Mannheim LD’s Presiding Judge Prof. Peter Tochtermann declared that a Panasonic complaint against a Hong Kong-based Xiaomi Technology entity would be treated as if it had been served because Chinese authorities rejected the politically incorrect location name (August 8, 2024 ip fray article). In official documents, including court filings, Chinese authorities expect Hong Kong, if it is or appears to be treated at a level with sovereign states such as the People’s Republic of China, to be called “Hong Kong SAR, China,” with SAR meaning Special Administrative Region. In his order, Judge Prof. Tochtermann said the UPC is unwilling to comply with those requirements.

ip fray looked at the issue from the Chinese perspective:

“ip fray believes that the law of the land should always be respected when serving complaints abroad. If the rules are clear and it is reasonably possible to find out beforehand, then there is no reason not to comply. Germany also has its sensitivities. Presumably, if a foreign company wanted a complaint to be served on a German company and described the country as “Deutsches Reich” (German Empire) in the address, German authorities would also reject it because it’s inappropriate.”

But the UPC’s CoA then inferred from the problems that arose in that case that this may leave the door open for other doubts on general enforceability in China. Which is why, in July last year, it held that the Chinese defendant in JingAo v. Chint must pay in the form of a deposit or a bond to avoid any uncertainty if the plaintiff is successful in its suit.

Today’s news may have major implications for this line of thinking, however.

Ms. Gu noted that the ruling also clarifies China’s stance on several key cross-border judgment enforcement factors, including its definition of reciprocity. The Wuxi court clarified that actual precedent is sufficient to satisfy reciprocity, significantly lowering the threshold for enforcing judgments from jurisdictions like the U.S., which do not have bilateral treaties with China.

The court also narrowed the interpretation of “public interest”: while the defendants had argued that the U.S. ruling violated China’s regulatory norms, the Wuxi court held that the enforcement of a foreign judgment will not be denied based on differences in legal systems or economic rules. This, it added, will only occur where fundamental political or social order is “threatened”.

The court also dismissed the defendant’s fraud defence, emphasizing that it would not re-evaluate facts and evidence already adjudicated abroad. This, according to Ms. Gu, shows “growing judicial respect for foreign sovereignty” and limits enforcement proceedings to procedural fairness.