Ruling clarifies enforceability of Chinese judgments in England & Wales

Many Chinese creditors who are successful in a Chinese court assume the story ends if their debtors leave China. However, a ruling from the High Court in England & Wales in February 2026 clarifies that Chinese creditors can enforce in England in some instances, opening up considerably the potential avenues for Chinese creditors to either go after judgment debtors themselves or sell their claims.

In Li v Yuan, five Chinese creditors brought claims to enforce final judgments obtained in the courts of the People's Republic of China (PRC) against a husband and wife who had relocated to the United Kingdom. 

The total claim was for approximately £28.4 million. The defendants had not paid any of the judgment debts, which remained outstanding inChina. Despite the defendants disputing enforcement in England, the High Court ruled on 11 February in favour of the Chinese creditors at common law, and English judgments were entered for the claimants.  

Basis for decision 

England has no reciprocal judgment enforcement treaty with China, but this does not mean a Chinese judgment is unenforceable in England and Wales. The criteria which must be satisfied in a claim for enforcement of a foreign judgment at common law are well-established: a foreign judgment must be the final and conclusive judgment of the court which pronounced it; it must have been given by a court which English law regards as competent; and it must be a judgment for a fixed sum of money. 

If those conditions are met, an English court can convert a Chinese judgment into an English judgment and enforce it against assets in England and Wales. While the common law rules do not enable the enforcement of judgments for injunctive relief, such as the transfer of real property, the conditions are broad enough to meet almost all money judgments. 

Li v Yuan highlights two of the routes by which an English court will recognise that a Chinese court has the necessary jurisdiction and hence is a competent court to hear the dispute. 

Jurisdiction clause

If a contract with the debtor names a Chinese court for disputes, that is likely sufficient. A foreign court will be deemed to have jurisdiction where the parties agree to that jurisdiction, including where a relevant contract contains a jurisdiction clause.

However, the court in Li v Yuan went further by confirming that even where the named court had been reorganised and merged into a successor court, the clause was still held to be valid. The court found that the provisions of law applicable in the PRC, which governed this dispute, required a clear, specific, and enforceable jurisdiction clause to be satisfied. It also found that the clause identified with sufficient precision the court to which the parties had agreed to submit their disputes.  

Put simply, if the underlying contract pointed to a Chinese court and that court dealt with the dispute, the English courts may recognise its ruling. The English courts have long taken a pragmatic view when considering whether the court which has given the judgment was competent to do so. They typically strive to uphold what was, objectively speaking, the parties’ intention at the time of contracting.

Residence clause

Even without a jurisdiction clause, English law recognises the jurisdiction of a foreign court if the defendant was resident there when proceedings were issued. This matters enormously for Chinese creditors whose debtors may have fled China after borrowing money, but before – or just as –proceedings were commenced. 

Here, the couple claimed they had already permanently relocated to Cyprus before the proceedings were issued. The High Court rejected this comprehensively. There was no dispute that, at least until the summer of 2016, the couple was resident in the PRC, meaning the debtor was still living in China when it was sued.

The court also rejected attempts to use a last-minute change of Hukou registration address as evidence of departure. The court found it more likely than not that the defendants maintained their residence in Nanjing at the time the proceedings commenced, at least up until and including 12 January 2017. 

Implications for Chinese creditors 

For individuals and businesses that hold a final Chinese money judgment against a debtor who is now in the UK, this case serves as an important reminder that the absence of a reciprocal enforcement treaty between China and England is not a barrier to enforcement in the English courts.

Moreover, a jurisdiction clause in your contract – even one which might require the court to adjudicate on it – acts as powerful supporting evidence for the foreign court to recognise and enforce the judgment. Even without a jurisdiction clause, if your debtor was living in China when you commenced proceedings, the English courts are still likely to recognise the Chinese judgment.

Li v Yuan also gives Chinese creditors reassurance that any attempts by debtors to claim they had "already left" China will be scrutinised rigorously in the English courts, and, as this case has shown, may well fail. 

There are still defences to the recognition of judgments in England and Wales – most notably public policy reasons not to enforce judgments, particularly if the claims in China or elsewhere appear potentially politically motivated. However, this judgment indicates that the English courts will not reject out-of-hand judgments emanating from China.  

The message to Chinese creditors is: your Chinese judgment may be worth far more than you think. The door to recovery in England is open.