Should Chinese Court Rulings Hold in New Zealand?

Chinese media are taking a growing interest in how judgments made in courts in China are treated by the legal system of other countries. That exact question was under scrutiny in New Zealand in a recent case.

In the High Court of New Zealand, the Chinese company Hebei Huaneng Industrial Development Limited sought a summary judgment for the decision of the Hebei Province Higher People’s Court in the New Zealand Court of Appeal in November 2022. The request posed a unique question of whether a People’s Republic of China court ruling has jurisdiction in the court system of New Zealand. 

The case concerns a debt allegedly owed by an affluent Chinese businessman with substantial land holdings in New Zealand. Hebei Huaneng Industrial Development Limited has sought to use the businessman’s land holdings to cover a debt created by a contractual dispute in China, highlighted in a Hebei Higher People’s Court judgment. However, the grounds for a summary judgment put forward by the Chinese company were disputed by the Chinese businessman in the New Zealand High Court. 

The New Zealand High Court refused to come down either way on whether the judgment of a Chinese court like the Hebei Higher People’s Court had a place in a New Zealand courtroom. The defense provided by the Chinese businessman, that the Hebei Higher People’s Court is not an independent and reliable source for the New Zealand High Court, posed a unique challenge for the judge. A ruling in favor of this would, as the judgment pointed out in the final section, have wide implications that the judge was not comfortable with – it would impact all Chinese court rulings that had been used in New Zealand courts in the past. 

Chinese media outlets had their own take on the New Zealand ruling. Legal scholars in China argued that the ruling means the New Zealand High Court acknowledged the decision made by the Hebei Province Higher People’s Court. This suggested to legal scholars in China grounds for more mutual acknowledgement of rulings by Chinese courts in New Zealand in the future. 

However, the more recent ruling by the New Zealand Court of Appeal turns that on its head. The Court of Appeal ruling in November 2022 highlights that the Higher People’s Court in China “lacked the necessary independence and impartiality required before it could be said to be exercising a judicial function.”  

The ruling by the Court of Appeal goes on to talk about the importance of a judgment by a Chinese court meeting certain criteria in order for it to be upheld by a New Zealand court. The Court of Appeal was concerned that the judgment by the Hebei Higher People’s Court had been made by a state committee prior to the court’s proceedings. Chinese courts are known, for instance, not to operate in an autonomous way, and their judgments can in many ways reflect the expectations of party officials. The New Zealand Court of Appeal judgment talks about how the “operation of judicial committees [in China] provided an arguable basis for a defence of breach of natural justice.”

While Chinese commentators have a keen interest in seeing judgments made by Chinese courts accepted by foreign courts, New Zealand has a unique legal system with ties to its heritage as a British colony. New Zealand courts are also reluctant to address questions of legal precedent tied to New Zealand’s relationship with China. Elected members of New Zealand’s Parliament are seen to have the important role of using their lawmaking power to decide to what degree Chinese judgments should have jurisdiction in a New Zealand Court. This is why the September 2020 High Court judgment was so reluctant to come down either way on this matter. 

Legal commentators in China may have a keen interest in seeing the rights of Chinese exercised in foreign countries using judgments made by Chinese courts. The Court of Appeal judgment, in this case, shows that New Zealand is willing to put the brakes on Chinese rulings being used in New Zealand courtrooms. 

A summary judgment is a unique request for a Chinese company to use. In this case, the New Zealand Court of Appeal judgment showed an unwillingness to bend or open any floodgates for more requests like this.