The Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region (the "New Arrangement") came into force on 29 January 2024.
In comparison to the existing Arrangement of the Supreme People's Court between the Mainland and the HKSAR on Reciprocal Recognition and Enforcement of Decisions in Civil and Commercial Cases under Consensual Jurisdiction, which came into effect on 1 August 2008 (the “2008 Arrangement”), the New Arrangement reflects a number of significant developments.
1. Expanded Scope of Enforceable Judgements
The scope of judgments recognized and enforced under the New Arrangement is broader than that under the 2008 Arrangement. Importantly, it is no longer limited solely to judgments concerning the payment of money. Instead, the New Arrangement extends to include both monetary and non-monetary judgments in general commercial and civil cases. Furthermore, the New Arrangement encompasses judgments on civil damages awarded in criminal cases, allowing for their recognition and enforcement. That said, any punitive (ie non-compensatory) aspect of the damages ordered in criminal cases will still not be recognized and enforced, except as stipulated under Article 17.
The 2008 Arrangement | The New Arrangement |
Article 1 provides: “For a final decision of payment with executive force made by a people's court in the mainland and a court of the HKSAR in a civil or commercial case under a written jurisdiction agreement, the party concerned may apply to the people's court in the mainland or the HK court for the recognition and enforcement of the decision.” | Article 1 provides: “This Arrangement applies to the reciprocal recognition and enforcement of legally effective judgments in civil and commercial matters between the courts of the Mainland and of the HKSAR. This Arrangement also applies to the reciprocal recognition and enforcement of legally effective judgments in relation to civil damages awarded in criminal cases.” |
2. Expansion in the Range of Courts Available and Removal of Filing Restrictions
A key modification in the New Arrangement involves the inclusion of the court where the applicant resides as one of the competent authorities permitted to preside over the enforcement / recognition proceedings. This broadening of jurisdictional scope is designed to improve accessibility and convenience for individuals seeking recognition and enforcement within mainland China.
The New Arrangement has also eliminated previous constraints on the number of courts to which an applicant could submit filings. This change empowers applicants to pursue their claims through multiple avenues where appropriate, streamlining the process and making it more flexible. In instances where an applicant submits applications to more than one competent court, the court that initiates the filing will be granted jurisdiction over the case.
The 2008 Arrangement | The New Arrangement |
Article 4 provides “An application…shall be filed with, as in the mainland, the intermediate people's court at the place of domicile, the place of residence or the locality of the property of the party against whom the application is filed, and, as in HK, the High Court of HKSAR. ” | Article 6 provides “Place of residence” referred to in this Arrangement means, in the case of a natural person, his/her place of household registration, place of permanent residence or place of habitual residence; and in the case of a legal person or other organization, its place of incorporation or registration, place of principal office, principal place of business or principal place of management.” |
Article 5 provides: “If the place of domicile, the place of residence and the locality of the property of the party against whom the application is filed are under the jurisdiction of different intermediate people's courts, the applicant may choose any of them to file the application and may not file with two or more people's courts at the same time. If the place of domicile, the place of residence or the locality of the property of the party against whom the application is filed is under the jurisdiction of both the mainland and the HK SAR, the applicant may file the application with the competent courts of both places simultaneously, but the total amount of enforcement may not exceed the amount determined in the decision. Where one of the courts has partly or completely executed the decision, it shall provide detailed information about its enforcement for the other court if the other court so requires.” |
3. Enhanced Requirements for Documentation in Enforcing / Recognizing Default Judgements
The New Arrangement introduces additional requirements for applications to recognize and enforce judgments that have been procured by default. In the event that a judgment is rendered as a default judgment, proof of legal service of process on the absent party must be submitted. However, this requirement is waived if the judgment explicitly provides otherwise, or if the absent party has acknowledged and / or applied for enforcement.
4. Abolishment of a Default 2-Year Application Limitation Period
In the 2008 Arrangement, applicants seeking to recognize and enforce a judgment had only two years from the date of the judgment to apply for recognition and enforcement . However, the recent New Arrangement has eliminated this limitation period. The updated provision now explicitly states that "The time limits, procedures, and manner for making an application for recognition and enforcement of a judgment shall be governed by the law of the requested place."
The 2008 Arrangement | The New Arrangement |
Article 8 provides “An application for the recognition and enforcement of a decision made by a people's court in the mainland or a HKSAR court shall be governed by the law of the place of enforcement in terms of application procedures, unless it is otherwise provided in this Arrangement. The time limit for an applicant to apply for the recognition and enforcement of a decision shall be two years.” | Article 10 provides “The time limits, procedures and manner for making an application for recognition and enforcement of a judgment shall be governed by the law of the requested place.” |
5. Clearer Criteria for Deciding Court Jurisdiction
Article 12 of the New Arrangement stipulates that if, following examination and verification by the court considering the application for recognition / enforcement, the court which rendered the judgment in fact lacked jurisdiction over the proceedings in question, the former court shall be precluded from recognizing and enforcing said proceedings. Additionally, Article 11 delineates specific circumstances under which the court which rendered the judgment is acknowledged as possessing jurisdiction.
6. Provision regarding prerequisite issues
According to Article 14 of the New Arrangement, the requested court (ie the Court considering the application for recognition and / or enforcement) cannot refuse to recognize and enforce a judgment solely because preliminary issues associated with the judgment do not fall within the scope of the New Arrangement.
7. Time limit for Reconsideration Applications in Mainland China
The New Arrangement specifies that in the event an applicant wishes to seek reconsideration of a court's decision regarding the recognition and enforcement of a judgment in mainland China before the higher courts, the application for reconsideration must be submitted within ten days from the receipt of the ruling.
As introduced above, the New Arrangement comprehensively addresses the scope and specifics of applications for mutual recognition and enforcement between mainland China and the HKSAR for judgments in civil and commercial cases. It outlines procedures for applying, jurisdiction review, circumstances under which recognition will not be granted, avenues for redress, and more. It is anticipated that the New Arrangement will broaden mutual recognition, decrease duplicative litigation, and enhance legal cooperation. The New Arrangement boosts efficiency in enforcement, safeguards parties' rights, and establishes a sturdy legal link for economic collaboration. The implementation of this agreement sets the stage for deeper judicial cooperation between mainland China and the HKSAR.