<center><span class="news-text_medium">Court:</span> King's Bench Division (Commercial Court)</center>
<center><span class="news-text_medium">Judgment Date:</span> 11 February 2026</center>
In <span class="news-text_italic-underline">Li v Yuan</span>, five Chinese creditors brought proceedings in the English courts to enforce final judgments obtained in the courts of the People's Republic of China (“<span class="news-text_medium">PRC</span>”) against a husband and wife who had relocated to the United Kingdom. The total claim amounted to approximately £28.4 million, representing outstanding obligations under loan and guarantee agreements which the defendants had not satisfied. Despite the defendants' opposition, the High Court ruled in favour of the claimants on 11 February 2026, entering English judgments for the full amounts claimed.
Many Chinese creditors who obtain a successful judgment in the PRC courts assume that recovery becomes impossible if their debtor leaves China. <span class="news-text_italic-underline">Li v Yuan</span> offers an important corrective to that assumption. England has no reciprocal judgment enforcement treaty with China, but the absence of such a treaty does not render a Chinese judgment unenforceable in England and Wales. Under well-established common law principles, a foreign judgment may be enforced in the English courts where (i) it is the final and conclusive judgment of the court which pronounced it; (ii) it was given by a court which English law regards as competent; and (iii) it is a judgment for a fixed sum of money. Where those conditions are satisfied, an English court may convert the foreign judgment into an English judgment and enforce it against assets located in England and Wales.
The case helpfully clarifies two routes by which an English court will recognise that a PRC court had the necessary jurisdiction to hear the dispute. The first is the jurisdiction clause route. Where a contract names a PRC court for the resolution of disputes, that is likely to be sufficient to establish the competence of the PRC court in the eyes of English law. The Court in <span class="news-text_italic-underline">Li v Yuan</span> went further, confirming that even where the named court had subsequently been reorganised and merged into a successor court, the jurisdiction clause remained valid. The Court found that the clause identified with sufficient precision the court to which the parties had agreed to submit their disputes and that it met the requirements of PRC law for a clear, specific and enforceable jurisdiction clause. The English courts have long taken a pragmatic approach to such questions, striving to give effect to the objectively ascertainable intention of the parties at the time of contracting.
The second is the residence route. Even in the absence of a jurisdiction clause, English law recognises the jurisdiction of a foreign court where the defendant was resident in that jurisdiction when proceedings were commenced. This is of considerable practical significance for Chinese creditors whose debtors may have left China after incurring obligations but before or during the commencement of proceedings. In <span class="news-text_italic-underline">Li v Yuan</span>, the defendants claimed they had permanently relocated to Cyprus before the Chinese proceedings were issued. The Court rejected this argument comprehensively, finding on the evidence that the defendants had maintained their residence in Nanjing at the time proceedings commenced. The Court also declined to treat a last-minute change of a Hukou registration address as evidence of departure from China.
The implications for Chinese creditors are significant. A final PRC money judgment against a debtor now based in the United Kingdom may be considerably more valuable than previously assumed. A jurisdiction clause in the underlying contract, even one whose precise scope requires judicial determination, provides powerful supporting evidence for English court recognition. Even without such a clause, residence in China at the time proceedings were commenced is likely to suffice. The court also made clear that attempts by debtors to assert that they had already left China before proceedings were issued will be scrutinised rigorously and, as this case demonstrates, may well fail. Whilst defences to recognition remain available, most notably on public policy grounds, particularly where claims appear politically motivated, <span class="news-text_italic-underline">Li v Yuan</span> signals that the English courts will not reject PRC judgments out of hand. The door to recovery in England is open.
A separate procedural issue arising from the same proceedings also merits attention. One working day before trial, the defendants applied to amend their defence to raise a new argument that the jurisdiction clause in the loan agreement was unenforceable because it referred to the “People's Court of Baixia District”, a court which no longer existed. The claimants consented to the amendment on the basis that their expert would be examined in chief on the issue at trial, which duly occurred. Following the conclusion of his evidence, the claimants' expert undertook further independent research without notifying the claimants and prepared a supplemental report identifying relevant PRC court rulings. The defendants did not consent to the report being adduced and the claimants applied for permission to rely upon it.
The application was refused. The Court held that the expert had not materially changed his opinion and that the supplemental report merely added references to PRC court rulings which were unnecessary to the determination of the jurisdiction clause issue. The Court had before it all the codified principles required to resolve the enforceability question, noted that the PRC is not a common law jurisdiction in which case law operates as binding precedent and confirmed that the interpretation of a contractual provision is a matter for the court rather than for experts.
The Court further held that the application did not arise from the defendants' late amendment. The jurisdiction clause issue had been known to the claimants since the preparation of their particulars of claim and had been addressed in the experts' joint written statement and the claimants' skeleton argument. The claimants had consented to the amendment and their expert had been examined upon the relevant issues at trial.
On the broader question of admissibility, the Court affirmed that its discretion to admit evidence after trial is governed by four fundamental principles: that parties must bring their whole case before the court; that there must be finality in litigation; that the overriding objective must be given due weight; and that fairness, justice and proportionality must be respected. Admitting the report without affording the defendants an opportunity to cross-examine the expert on its contents would be unjust. Reopening the trial for that purpose would be disproportionate. The Court applied <span class="news-text_italic-underline">ACL Netherlands BV v Lynch [2023] EWHC 1847 (Ch)</span>.
This aspect of the judgment serves as a timely reminder that expert evidence must be complete and in final form before proceedings conclude. An expert's ongoing duty to assist the court under CPR Part 35 does not extend to conducting fresh research and preparing supplemental reports after the conclusion of evidence, particularly where no genuine and significant change of opinion has occurred.
