Case Note: Hubei Gezhouba Sanlian Indus Co v Robinson Helicopter Co

Abstract

I. Background to the CaseOn March 29, 2011, the United States (US) Court of Appeals for the Ninth Circuit (the Ninth Circuit Court) affirmed the judgment of the United States District Court for the Central District of California (the District Court) in the case of Hubei Gezhouba Sanlian Indus Co v Robinson Helicopter Co1 That decision recognised the judgment of the High People's Court of Hubei Province of China (the Hubei High Court) in favour of Hubei Gezhouba Sanlian Indus Co (Sanlian) and Hubei Pinghu Cruise Co, Ltd (Pinghu) against Robinson Helicopter Co (Robinson), a Californian corporation.The case resulted from a helicopter accident in 1994 in which three people died and multiple damages occurred. The helicopter was manufactured by Robinson, owned by Sanlian and operated by Pinghu. In March 1995, Sanlian and Pinghu sued Robinson in the Los Angeles Superior Court for damages based on theories of negligence, strict liability and breach of implied warranty. On November 8, 1995, the action in the Los Angeles Superior Court was stayed in favour of a Chinese forum subject to forum non conveniens (FNC). Robinson agreed to submit to the jurisdiction of the appropriate court in China, to toll the statute of limitations during the pendency of the California State action, and to abide by any final judgment rendered in China.After the case was first stayed on FNC grounds, the plaintiffs' action in the Hubei High Court was dismissed in December 1995 on the grounds that the purchase agreement for the helicopter contained a provision requiring arbitration. Then Sanlian and Pinghu filed a motion to have the stay lifted on the grounds of no tribunal available in China. After several motions and appeals, the Los Angeles Superior Court finally ruled the stay remains in effect on 27 January 1998. Then Sanlian and Pinghu had to initiate arbitration proceedings against Robinson in the International Court of Arbitration of the International Chamber of Commerce (ICC). In 2000, the arbitral tribunal ruled that it lacked jurisdiction because no valid arbitration agreement existed between the two Chinese companies and Robinson. Subsequently, the plaintiffs re-filed an action in the Hubei High Court in 2001. In 2004, that Court issued a default judgment in favour of the plaintiffs. In 2006, Sanlian and Pinghu filed their complaint against Robinson in the District Court requesting enforcement of the Chinese judgment.In 2007, the District Court denied the plaintiffs' motion for summary judgment and granted a summary judgment in favour of Robinson on the grounds that the statute of limitations had expired before the Chinese lawsuit was filed. That decision was denied by the Ninth Circuit Court in 2008. The case was reversed and remanded. In 2009, the District Court issued a judgment in favor of the plaintiffs (the 2009 judgment).2 The defendant Robinson appealed to the Ninth Circuit Court. In 2011, The Ninth Circuit Court affirmed the judgment of the District Court (the 2011 judgment).II. Main Issues in SanlianThe case had undergone some complicated arbitration and litigation proceedings. In recognition and enforcement of the Chinese judgment, the District Court in the 2009 judgment mainly addressed four issues: (i) the statute of limitations; (ii) service of process; (iii) finality, conclusiveness and enforceability of the Chinese judgment; and (iv) non-recognition grounds in California's Uniform Foreign- Money Judgments Recognition Act (UFMJRA).3The first issue was the statute of limitation. Robinson argued that it agreed to toll the statute of limitations for the period beginning on the date that the plaintiffs filed their complaint in the California State court action, and ending on the date that the California State court action was finally dismissed. The District Court firstly granted Summary Judgment in favour of defendant on the grounds that the statute of limitations had expired before the Chinese lawsuit was filed. …