I. Introduction
On 18 January 2019, the Supreme People’s Court of the People’s Republic of China (“SPC”) and the Hong Kong Government signed 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 (“2019 Arrangement”). The 2019 Arrangement seeks to improve the system, framework, and policy for mutual assistance in the civil and commercial matters involving Mainland China and Hong Kong.
The Hong Kong Government, on 10 November 2023, announced that the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) (“Ordinance”) and the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules (Cap. 645A) (“Rules”) will come into operation on 29 January 2024. The Ordinance sets out the operation of the relevant mechanisms, while the Rules cover matters including practice and procedure relating to applications under the Ordinance.
The Ordinance seeks to implement the 2019 Arrangement in Hong Kong. In Mainland China, the 2019 Arrangement will be implemented by way of judicial interpretation to be promulgated by the SPC.1
Upon its commencement, the 2019 Arrangement will supersede 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 Pursuant to Choice of Court Agreements between Parties Concerned (“2006 Arrangement”). The 2006 Arrangement was signed in 2006 and took effect in 2008. As the 2019 Arrangement only applies to judgements made on or after the commencement date of the Ordinance, i.e. 29 January 2024, the 2006 Arrangement and the existing Hong Kong regime under the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap. 597) will continue to apply to judgements rendered before 29 January 2024 under a contract with an exclusive jurisdiction agreement in favour of a Mainland Chinese or Hong Kong court.
II. Highlights and Changes
Here are some salient aspects of the 2019 Arrangement, with divergence from the 2006 Arrangement highlighted.
A. Jurisdiction requirement
The requirement for a written jurisdiction agreement that a Mainland court or a Hong Kong court has exclusive jurisdiction over the dispute(s)2 to which the rendered judgment relates is removed in the 2019 Arrangement. Under the 2019 Arrangement, the jurisdictional requirement is comparatively less strict, and will be satisfied if the dispute giving rise to the judgment has an adequate connection with the requesting place. Examples of such connection between the dispute and requesting place include: (a) the place of residence of the defendant being within the requesting place; (b) the defendant maintaining a representative office, branch, office, place of business or such other establishment without separate legal personality in the requesting place, and the action arose out of the activities of that establishment; (c) the action being brought on a contractual dispute where the place of performance of the contract is in the requesting place; and (d) the action being brought on a tortious dispute where the infringing act was committed in the requesting place.3
B. Types of matter
The 2006 Arrangement applies mainly to judgements arising out of contractual disputes, excluding contracts of employment or contracts to which a natural person is involved as a party for purposes of personal consumption, family affairs or other non-commercial purposes. The 2019 Arrangement, however, covers a wide range of civil and commercial matters, with a list of express exclusions in cases on succession, administration or distribution of estate, certain defined matrimonial and family matters, certain defined cases concerning intellectual property rights, cases involving certain maritime disputes, bankruptcy (insolvency) cases, cases on the confirmation of the validity of an arbitration agreement or the setting aside of an arbitral award, cases on the recognition and enforcement of judgments or arbitral awards of other countries or regions, and cases involving disputes of a personal nature, etc.4
Unlike the 2006 Arrangement, which only allows for the enforcement of “decision[s] of payment”5 (monetary relief), the 2019 Arrangement covers judgements entailing both monetary and non-monetary rulings.6 In practical terms, this means that specific performance, for example, may soon be enforceable cross-border.
As a further noteworthy point, the 2019 Arrangement also applies to judgments concerning civil damages awarded in criminal cases.7
C. Scope and categories of enforceable judgments and level of courts
Under the 2019 Arrangement, a ruling concerning preservation measures from a Mainland court and an anti-suit injunction or an order for interim relief from a Hong Kong court are specifically excluded from the definition of “judgement[s]” which are to be reciprocally recognised and enforced.
The levels of courts of both Mainland China and Hong Kong which are empowered to issue qualifying judgements have expanded in the 2019 Arrangement. Under the 2006 Arrangement, the Mainland courts include the SPC, the High People’s Courts, the Intermediate People’s Courts and certain designated Basic People’s Courts as annexed to the 2006 Arrangement. The 2019 Arrangement, by contrast, provides for the same, except without the need for Basic People’s Courts to be designated. As for the Hong Kong courts, the 2019 Arrangement further includes the Labour Tribunal, the Lands Tribunal, the Small Claims Tribunal and the Competition Tribunal, on top of the Court of Final Appeal, the Court of Appeal, the Court of First Instance of the High Court, and the District Court.8
In addition, the 2019 Arrangement merely requires the judgements to be “legally effective” as opposed to “final decisions with executive force” (in the 2006 Arrangement). The new terminology is likely to be more appropriate, as judgements subject to review might not be rigidly “final”.
D. Grounds for refusal
The grounds for refusing recognition and enforcement are largely similar in the two Arrangements. Should one of the following, inter alia, be made out upon a review of the evidence adduced by the respondent, the court of the requested place shall refuse recognition and enforcement: (a) the judgment does not satisfy the jurisdictional requirements of the respective Arrangement; (b) procedural unfairness on the part of the respondent during the original trial; (c) the judgement having been obtained by fraud; (d) the court of the requested place having rendered judgement or an arbitral award having been made in the on the same dispute, or the requested place having recognised and enforced a judgement or an award of another jurisdiction on the same dispute; and (e) the court of the requested place considering that the recognition and enforcement of the judgement from the other jurisdiction would manifestly violate the basic principles and social and public interests or public policy of the requested place.9 These grounds are also bases to set aside the registration of a judgment before a Hong Kong court under the Ordinance.10
III. Procedures provided by the Ordinance
The Ordinance provides the mechanisms to facilitate the reciprocal recognition and enforcement of Mainland Chinese and Hong Kong judgments:
A. Registration of Mainland judgments in civil or commercial matters in Hong Kong to facilitate the enforcement of Mainland judgements in Hong Kong
Effect of registration: A registration would render the registered Mainland judgment enforceable in Hong Kong as if it were a judgment originally given by the Court of First Instance of the High Court on the day of registration. The judgment or part is to be recognised in a Hong Kong court as conclusive in any proceedings in respect of the same cause of action between the same parties and may be relied on by way of defence or counterclaim in any such proceedings.11
The time limit for registration: within two years from a default by the other party in complying with required actions set out in the judgment.12
The application procedures for registration:
(a) The applicant makes an application to the Court of First Instance of the High Court, supported by a sealed copy of the Mainland judgement, a certificate of effectiveness of the judgement and an affidavit, among other things.
(b) If the court is satisfied that the requirements for registration are met, it may make a registration order for the Mainland judgment, or for a part of it to be registered. The applicant then serves a notice of registration on all potential respondents.
(c) Within 14 days after the notice of registration is served (unless some other time limit is specified by the court), a respondent may apply to the court to set aside the registration.
(d) After the time limit for a setting aside application has expired or after any setting aside application, if made, has been finally dismissed, the Mainland judgment may be registered.13
B. Application for judgment copy and certificate for enforcement of Hong Kong judgments in civil or commercial matters in the Mainland
(a) Generally, the application should be made on affidavit to the registrar of the Hong Kong court which gave the judgment.14
(b) If such an application is made to a specified Hong Kong court in accordance with the Ordinance, that court must issue to the applicant a certified copy of the judgement and a certificate.15
(c) The applicant then makes an application to the Mainland courts for recognition and enforcement of the Hong Kong judgment in the Mainland in accordance with Mainland law.
IV. Conclusion
The 2019 Arrangement “establishes a more comprehensive mechanism for reciprocal recognition and enforcement of judgments in a wide range of civil and commercial matters between Hong Kong and the Mainland”. It includes a broad range of disputes, including those arising out of intellectual property rights. It covers both monetary and non-monetary relief. It enhances certainty and predictability of the civil and commercial judgement enforceability, reduces re-litigation risk and, increases time and cost efficiency. It also strengthens Hong Kong’s competitiveness as an international dispute resolution hub and a regional intellectual property trading centre.16
[1] https://www.info.gov.hk/gia/general/202311/10/P2023110900551p.htm
[2] Articles 1 and 3, 2006 Arrangement.
[3] Article 11, 2019 Arrangement.
[4] Article 3, 2019 Arrangement.
[5] Article 1, 2006 Arrangement.
[6] Article 16, 2019 Arrangement.
[7] Article 1, 2019 Arrangement.
[8] Article 4, 2019 Arrangement; Article 2, 2006 Arrangement.
[9] Article 9, 2006 Arrangement; Article 12, 2019 Arrangement.
[10] Section 22(1), Ordinance.
[11] Sections 26-28, Ordinance.
[12] Section 10, Ordinance.
[13] Sections 10, 13, 20-21, Ordinance.
[14] Section 33, Ordinance.
[15] Section 34, Ordinance.
[16] https://www.info.gov.hk/gia/general/202311/10/P2023110900551p.htm