The memorandum of guidance (MOG) was signed by Singapore chief justice Sundaresh Menon and his Chinese counterpart Zhou Qiang, chief justice and the president of the Supreme People's Court of the People's Republic of China in August.
The MOG aims to facilitate and promote mutual understanding of the laws and judicial processes that govern the enforcement of Singapore court judgments in the PRC, and enforcement of PRC court judgments in Singapore.
A statement from the Supreme Court of Singapore said "This will enhance business confidence by providing greater legal support for companies in both our countries, and enhance our cooperation under the belt and road initiative."
The MOG also applies to judgments made in the Singapore International Commercial Court (SICC). In turn, the potential for enforcement of SICC judgments in respect of commercial disputes between non-Singaporean and Chinese parties could be improved as a result of the MOG, further increasing the attractiveness of the SICC for resolving disputes.
Litigation expert Sean Hardy of Pinsent Masons, the law firm behind Outlaw.com, said: "Enforcement of foreign court judgments in the PRC can be challenging to say the least. The PRC is not a party to the Hague or any other enforcement convention and even if the judgment is from a country which has a bilateral enforcement treaty with the PRC – which Singapore does not– enforcement is certainly not guaranteed. "
"For countries, like Singapore, with no bilateral treaty, judgments may still be enforceable, but subject to demonstrating reciprocity and other requirements," he said. "The MOG is designed to try and provide clarity on the existing processes applied by the Chinese courts when considering enforcement of a Singapore court judgment, and vice-versa. It is not legally binding and is also non-exhaustive, so its potential impact should not be overstated."
"However, it is nevertheless a positive development which it is hoped will improve the prospects of the various PRC courts taking a consistent approach to enforcement, and of Singapore court judgments ultimately being enforceable in the PRC," said Hardy.