Qing Li & Ors v Fan Demetris Yuan & Anor

Foreign judgments in personam are enforceable at common law where the foreign court had jurisdiction by the defendant’s presence or residence when proceedings were commenced, voluntary submission, prior consent, or the defendant’s participation as claimant or counterclaimant. Residence is sufficient even where the defendant is temporarily absent. It means a settled or usual place of abode, assessed as a question of fact and degree by reference to the quality and nature of the defendant’s connection, settled pattern of life and reasons for being there. A contractual jurisdiction clause is construed under the governing foreign law, with experts proving the foreign rules of construction and the court interpreting the contract. A clause referring to a non-existent court may nevertheless identify the intended competent successor court where the contractual context makes that intention sufficiently clear.

Five judgment creditors sought to enforce at common law final PRC judgments for unpaid debts arising from loan, investment and guarantee agreements. The validity, finality and amounts of the PRC judgments were not disputed. The defendants had not appeared in the PRC proceedings and argued that the PRC courts lacked jurisdiction because they were resident in Cyprus and absent from the PRC when the claims were issued.

The court considered two issues: whether the defendants had agreed in advance to the jurisdiction of the PRC courts in the claims brought by Qing Li and Zhongyong Jiang; and whether the PRC courts had jurisdiction over all five claims because the defendants were resident in Nanjing when proceedings commenced.

1. Enforcement criteria. A foreign judgment must be final and conclusive, given by a court regarded by English law as competent, and for a fixed or ascertainable sum. The court does not re-examine the foreign judgment’s merits.
2. Jurisdiction by agreement. Prior consent to foreign jurisdiction need not be contractual and may be implied or inferred. The relevant contracts were governed by PRC law. Under Contract Law Articles 34 and 125, the court construed the jurisdiction clauses in their contractual context, applying the PRC rules of construction proved by the experts.
3. In Qing Li’s contracts, reference to the Baixia District Court was an error because that court had merged into the Qinhuai District Court before the contracts were made. The contractual references to Baixia as the place of contract sufficiently identified the Qinhuai District Court as the intended competent court. In Jiang’s contract, agreement to submit disputes to a competent People’s Court included the Qinhuai District Court, which was competent under PRC law.
4. Jurisdiction by residence. Residence in the foreign country when proceedings are issued is sufficient. The court followed Emanuel v Symon and treated the issue date as the relevant time. Mere temporary absence does not necessarily defeat jurisdiction where the defendant remains resident.
5. Residence has its ordinary meaning: a settled or usual place of abode with some degree of permanence or continuity. It is assessed factually and by reference to the quality and nature of the defendant’s presence, the settled pattern of life and the reasons for it. The court adopted the approach in Bestolov v Povarenkin.
6. The defendants retained strong residential, contractual, administrative and financial connections with Nanjing. The evidence did not establish a settled or usual place of abode in Cyprus before the relevant dates. The defendants therefore remained resident in Nanjing when all five proceedings were commenced.
7. The PRC courts accordingly had the necessary in personam jurisdiction. The judgments were enforceable in England as common-law judgment debts. The claimants succeeded, and judgment was entered for them. Consequential orders were to be agreed or determined at a consequentials hearing.