On March 2, 2015, Philip W. Boesch, Jr. of The Boesch Law Group argued before the Ninth Circuit Court of Appeals that a Chinese Judgment against a U. S. company should not be recognized in the United States. (Watch here) It would be the first time in history, Boesch argued, that a Court decree from the People’s Republic of China, taken by default and without the opportunity to defend, has been recognized by a U.S. Court.
In this case, important to all American companies doing business in or with China, a Chinese Judgment of Declaratory Relief voided a contract after it was fully performed by the American company. The contract declared void by the Chinese Court was between Luoyang Ship Material Research Institute (“LSMRI”), a conglomerate owned by the Chinese government, and The Boesch Law Group’s client, Folex Golf Industries, Inc. Folex Golf designs, distributes and facilitates the manufacture, production, and distribution of golfing equipment around the world. LSMRI produced and sold the titanium alloy golf club heads.
The importance of the case to U.S. businesses was emphasized in Mr. Boesch’s arguments to the Ninth Circuit Court of Appeals. As Mr. Boesch pointed out, while China steadfastly refuses to recognize U.S. judgments, “comity” among nations has never before been the justification for enforcing a Chinese Judgment against a United States citizen, and this case should not be the first. The Chinese Judgment, Boesch argued, violated Folex’s fundamental right to due process of law when the Chinese Court entered a default Judgment after “service” of the Complaint by its publication in the People’s Court News. “It would be unfair and a violation of due process,” Boesch argued, “if all a Chinese Court had to do was publish a small notice in a Chinese newspaper that is not even distributed in the United States.” In fact, there is no other case where publication notice in a foreign country has served as fair and effective notice of a Complaint and as the basis for the recognition and enforcement in the U.S. of a foreign judgment. Finally, Mr. Boesch urged that there was no fairness on due process because Chinese Courts do not recognize U.S. Judgments and because Chinese law does not recognize the doctrine of collateral estoppel – which the District Court applied in recognizing the Chinese Judgment. The foreign Judgment, Mr. Boesch argued, should never have greater effect in the United States than it would have in the country that issued it.
The Ninth Circuit Court has taken the arguments under consideration and The Boesch Law Group looks forward to its decision on this important matter.