Introduction
In June 2024, a court in Nanning, China, made a groundbreaking decision by recognizing and enforcing a civil and commercial judgment issued by a Thai court. This landmark ruling signifies a new era of judicial cooperation between China and Thailand. This article delves into the current state and challenges of recognizing and enforcing civil and commercial judgments between China and Thailand. Furthermore, it evaluates the prospects of Thailand recognizing and enforcing Chinese judgments and explores the future outlook of such judicial cooperation. This discussion is set against the backdrop of China’s industrial shift towards Southeast Asia and the accompanying increase in cross-border debt disputes. Effectively resolving these disputes, especially in the context of Thailand and other Southeast Asian nations, is becoming a critical issue in bilateral economic interactions.
1. China’s First Recognition and Enforcement of a Thai Judgment
On June 18, 2024, the Nanning Intermediate People’s Court made a significant ruling to recognize and enforce a Thai court’s civil and commercial judgment. This case involved a contractual dispute over airline ticket sales between a Chinese travel company and a Thai airline company. Following the dispute, the Chinese company filed a lawsuit in the Central Intellectual Property and International Trade Court of Thailand. In September 2019, the Thai court issued a civil judgment, case number GorKor 166/2562, ordering the Thai airline to pay over 18 million yuan in ticket fees and corresponding interest to the Chinese company.
Given that the Thai airline has several branches and potentially executable assets in China, the Chinese company sought recognition and enforcement of the Thai judgment in China. Despite the absence of a bilateral agreement between China and Thailand regarding the recognition and enforcement of civil judgments, the Nanning Intermediate People’s Court relied on the principle of “presumed reciprocity” proposed in the Nanning Statement. The court presumed the existence of a reciprocal relationship under Chinese civil procedural law and ultimately recognized and enforced the Thai judgment.
The Nanning Statement, introduced on June 8, 2017, at the second China-ASEAN Justice Forum in Nanning, provides judicial guarantees for cross-border transactions and investments between China and ASEAN countries. China’s recognition and enforcement of a Thai judgment can be seen as a positive signal of judicial cooperation towards Thailand.
2. Prospects of Thailand Recognizing and Enforcing Chinese Judgments
Despite China’s groundbreaking recognition and enforcement of a Thai judgment, the prospects of Thailand reciprocating by recognizing and enforcing Chinese judgments remain uncertain. As a civil law country, Thailand’s legal system is primarily based on statutory law, which currently lacks provisions for the recognition and enforcement of foreign judgments. Additionally, there is no bilateral treaty or international convention between China and Thailand addressing the mutual recognition and enforcement of each other’s judgments.
Historically, Thailand’s judiciary has adopted a conservative stance towards enforcing foreign judgments. There is only one recorded instance of Thailand recognizing and enforcing a foreign judgment, which dates back nearly 90 years (Thai Supreme Court Judgment No. 585/2461). This case, influenced by the British legal tradition, does not align with Thailand’s current legal principles.
Given Thailand’s general refusal to recognize and enforce foreign judgments, the lack of specific legislation, and the absence of Thailand’s participation in relevant international treaties, it is unlikely that Thailand will readily recognize and enforce Chinese judgments in the near future. This analysis is supported by research from the Asian Business Law Institute of the Singapore Academy of Law, which has been published in China.
3. Conclusion and Outlook
Considering Thailand’s domestic legal framework, China’s initial recognition and enforcement of a Thai judgment may not significantly influence Thailand’s stance on recognizing and enforcing Chinese judgments. While the Nanning Statement, to which Thailand is a signatory, represents a consensus without legal binding force, overcoming Thailand’s legal traditions remains challenging. Informal opinions from some Thai judges reflect this viewpoint.
For Chinese creditors seeking to enforce Chinese judgments in Thailand, initiating separate lawsuits in Thai courts, using Chinese judgments as evidence of debt, may be necessary. These judgments would need to meet specific conditions, such as the Chinese court’s jurisdiction over the case, the judgment’s finality, respect for the debtor’s right to a fair trial, and compatibility with Thai public policy or morals.
Compared to countries like the USA, Canada, Australia, and New Zealand, the presence of Chinese high-net-worth debtors with assets in Thailand is relatively low. However, as China’s manufacturing capabilities shift to Thailand and other Southeast Asian nations, the prevalence of industrial asset allocation in these regions is increasing. Consequently, incorporating Southeast Asia into cross-border debt collection efforts is becoming a market imperative.
Our limited debt collection experiences in Thailand indicate that solutions often mirror practices in other Southeast Asian countries, primarily through mediation and influential intermediaries. Major Chinese state-owned enterprises operating in Southeast Asia also employ such methods for debt recovery.
We anticipate that as China’s industrial chain further integrates with Southeast Asia, cross-border debt collection within the region will become a crucial component of the economic chain. Subsequent articles will analyze new trends and strategies for cross-border debt collection in Southeast Asia, aiming to provide valuable insights and reference points for practitioners in this field and to gather collective wisdom and strength from domestic and international peers.