Background
Under the existing arrangement in 2008, Hong Kong and Mainland judgments are only reciprocally enforceable if issued pursuant to an exclusive jurisdiction clause.
On 18 January 2019, the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the HKSAR (the Arrangement) was signed between the Government of the Hong Kong Special Administrative Region (HKSAR) and the Supreme People’s Court (SPC) expanding the reciprocal enforcement regime to civil and commercial judgments not issued pursuant to an exclusive jurisdiction clause.
On 10 November 2023, the Government of the HKSAR announced that the Arrangement would come into operation on 29 January 2024. On the same day, the Government of the HKSAR also published the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules (the Rules) in the Gazette, as well as the Mainland Judgments in a Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Commencement) Notice (the Notice).
As per the Notice, the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (the Ordinance) will come into operation on 29 January 2024. In other words, Mainland Judgments (as defined in the Ordinance) in civil and commercial matters given on or after 29 January 2024 can be enforced in Hong Kong once a judgment creditor applies to the Hong Kong Court of First Instance (the Court) for a registration order to register a judgment.
Comprehensive mechanism for reciprocal enforcement of judgments
The scope of the Ordinance includes both monetary and non-monetary Mainland Judgments that are civil or commercial in nature unless it is expressly excluded in the Ordinance. A Mainland Judgment given in proceedings that are criminal in nature which contains an order for the payment of a sum of money in respect of compensation or damages may also be reciprocally recognised and enforced in Hong Kong.
The Ordinance specifically excludes Mainland Judgments that are given in respect of matrimonial and family cases, cases on succession, administration or distribution of estate, certain intellectual property cases, certain maritime cases, corporate insolvency or personal bankruptcy cases and proceedings on election, declaration of disappearance or death and determination of legal capacity. It further excludes proceedings for the confirmation of validity of an arbitration agreement or a setting aside of an arbitral award and the recognition or enforcement of judgment or arbitral award given by a court outside the Mainland or when the place of arbitration was not in the Mainland.
Pursuant to the Ordinance and the Rules, an ex parte application for registration of a Mainland Judgment can be made by way of an originating summons with a supporting affirmation. Once the registration order is obtained, a notice of registration is to be served by the judgment creditor to the judgment debtor.
Within 14 days after the service of the notice of registration (unless otherwise directed by the Court), the judgment debtor may apply to the Court to set aside the registration of the Mainland Judgment (or any part thereof) on certain grounds set out in the Rules.
After registration of the Mainland Judgment and service of the notice of registration, and provided that any setting aside application has been disposed of, the applicant may apply to enforce the registered Mainland Judgment in Hong Kong.
Implications for shipping and Admiralty cases
As mentioned above, the application of the Ordinance to maritime cases is limited in scope. The Ordinance does not apply to (amongst others) judgments in relation to marine pollution, limitation of liability for maritime claims, general average, emergency towage and salvage, maritime liens, and carriage of passengers by sea (Excluded Maritime Cases). One of the reasons is that there are separate local laws in Hong Kong that give effect to the applicable international conventions, which may contain rules on the enforcement of the judgments in relation to the Excluded Maritime Cases. However, Hong Kong and Mainland China have not signed up to the same international conventions, and their respective obligations under such conventions are therefore different.
Conclusion
As the spokesman said, the implementation of the Ordinance and the Rules establishes a more comprehensive mechanism in Hong Kong for reciprocal enforcement of Mainland Judgments in civil and commercial matters, thereby enhancing certainty and predictability of the enforceability of judgments, reducing the need for re-litigation of the same disputes in both places and offering better protection to the parties’ interests. The Ordinance and the Rules will become one of the key practical considerations of cross-border disputes involving Mainland China and Hong Kong as it will reduce the risks, legal costs and time usually associated with the cross-border enforcement of such judgments.
Meanwhile, the Arrangement is to be implemented in Mainland China by way of the SPC’s judicial interpretation which is expected to provide a more comprehensive mechanism for recognition and enforcement of Hong Kong judgments in Mainland China.
Client Alert 2023-260
