On April 30, 2021, the New York Supreme Court issued its judgment in Shanghai Yongrun Investment Management Co. Ltd. v. Kashi Galaxy Venture Capital Co. Ltd. & Xu, denying enforcement of a judgment from a Chinese court on the basis that the Chinese judgment “was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law.” The judgment stands in contrast to U.S. and foreign court practice regarding the quality of the Chinese legal system in the context of the recognition of judgments. The original dispute concerned Kashi Galaxy’s alleged breach of a repurchase agreement which was covered by Chinese law and chose Beijing courts as the forum for the settlement of any disputes. The trial court found in favor of Shanghai Yongrun (affirmed on appeal), but the judgment could not be enforced because there were no assets based within the court’s jurisdiction. Consequently, Shanghai Yongrun brought suit against Kashi Galaxy in New York state court to have the Chinese judgment recognized and enforced. New York law provides that final money judgments of foreign courts are enforceable in New York courts unless one of the enumerated exceptions applies. The defendants argued against enforcement based on the exception relating to judgments rendered in a system as described above. They pointed to U.S. State Department Annual Country Reports on China for 2018 and 2019 to support their contention. Arguing against the use of the reports, Shanghai Yongrun pointed out that the reports are “focused on political prisoners and criminal prosecution of human rights activists” (emphasis in original) and that “[n]othing in the report[s] stat[e] or event sugges[t] that civil litigants in an ordinary commercial dispute case will not be afforded due process of law by the PRC judicial system.” The Court disagreed, stating that the reports go beyond the scope suggested by the plaintiff, citing the executive summary of the 2018 report, which reads “[t]he [Chinese Communist Party] continued to dominate the judiciary and controlled the appointment of all judges and in certain cases directly dictated the court’s ruling…”. After citing several other similar provisions in the reports, the Court granted the defendants motion to dismiss, stating: “As today's decision demonstrates, New York judges do not rubber stamp foreign judgments; rather, we carefully scrutinize the judicial system of the source thereof, and then we decide what the law requires.