February, 2024 - Hong Kong and Mainland China - reciprocal enforcement of judgments
- Date: 02/02/2024
The new Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance Cap 645 (the “Ordinance”) came into force on 29th January, 2024 and introduces a comprehensive mechanism to streamline the reciprocal enforcement of judgments between Hong Kong and Mainland China. Prior to the introduction of the Ordinance, judgments between could only be enforced reciprocally under limited circumstances.
This key changes introduced by the Ordinance are as follows:
1. Removal of the exclusive jurisdiction requirement
This is a significant change as the Ordinance provides that an exclusive jurisdiction specifying the courts of Mainland China is no longer a requirement in the contract. The jurisdictional requirement will instead be satisfied by showing the following ‘connection’ at the time the Mainland courts accepted the proceedings:
- the defendant’s place of residence, or representative office/branch/place of business/other establishment was in the Mainland;
- the place of performance of the disputed contract was in the Mainland;
- the relevant tortious act was being committed in the Mainland; or
- the parties agreed in writing to submit to the jurisdiction (whether exclusive or non-exclusive) of the Mainland courts, and if the places of residence of all the parties were in Hong Kong, together with evidence that there was a connection between the Mainland and the dispute (e.g. the contract was performed/signed in the Mainland).
2. Expanded scope of recognised judgments
In addition to monetary judgments, the Ordinance has expanded the scope of judgements that can be recognised and enforced to include non-monetary judgments given by the Mainland courts arising from civil, commercial and criminal matters. However the Ordinance has excluded certain types of judgments in civil and commercial matters e.g. insolvency and bankruptcy cases, certain arbitration-related matters, certain intellectual property and maritime matters. The reason for excluding maritime matters is because of the different international conventions applicable in Hong Kong and Mainland China respectively.
3. Broader range of courts
The Ordinance also expands the number of acceptable Mainland Courts and categories of dispute resolution centres in Hong Kong. For the Mainland, this means that un-appealable judgments will include all Primary People’s Courts in addition to the Supreme People’s Court, Higher People’s Court and Intermediate People’s Court. For Hong Kong, enforceable judgments/awards will be expanded to the Labour Tribunal, Lands Tribunal, Small Claims Tribunal and the Competition Tribunal in addition to judgments from Hong Kong courts.
Alongside the Ordinance, the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules (“the Rules”) will also come into force on 29th January, 2024. Pursuant to the Rules, the qualifying Mainland judgment may be registered ex parte to the court of first instance by way of an originating summons with a supporting affirmation. Upon the obtaining the registration order, a notice of registration must be served to the judgment debtor. Within 14 days after the service of the notice of registration, the judgment debtor may apply to the court to set aside the registration on certain grounds limited to specified jurisdictional, procedural fairness and public policy grounds. The court may impose any conditions for setting aside application. Provided there is not duplicate proceedings and any setting aside application has been disposed of, after registration of the Mainland judgment and service of the notice of registration, the applicant may apply to enforce the judgment in Hong Kong.
This new law will streamline the mutual recognition and enforcement process and strengthen Hong Kong’s status as the venue of choice for dispute resolution with a Mainland China connection.
As always, if Members have any questions in relation to the above issues they are invited to contact the Club for further information.