HK passes bill for reciprocal enforcement of mainland judgments

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Hong Kong’s Legislative Council (Legco) passed the long overdue Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Bill on 26 October 2022, implementing the agreement between the Supreme People’s Court (SPC) of mainland China and the Hong Kong government almost four years ago.

The bill provides a more comprehensive mechanism for reciprocal recognition and enforcement of judgments in civil and commercial matters between the two jurisdictions, reducing the need to relitigate the same disputes in both places. This will offer better protection and certainties to parties’ interests, and enhance Hong Kong’s competitiveness as a regional centre for legal and dispute resolution services.

KEY TAKEAWAYS

The bill expands the scope of judgments granted by the mainland courts to be recognised and enforced in Hong Kong.

Compared to the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap 597), which gave effect to the choice of court arrangement made between the SPC and the Hong Kong government in 2006, the bill covers both monetary and non-monetary judgments in civil and commercial matters, as well as compensation or damages awarded in criminal proceedings. It also removed the requirement that the parties have to agree on exclusive jurisdiction clauses when signing the agreement.

Although the bill has been passed by Legco, it only becomes effective after both Hong Kong and the mainland put in place implementation mechanisms, and will apply to judgments made on or after the commencement date of the legislation.

SCOPE OF JUDGMENTS

Subject to the “excluded list” mechanism, most civil and commercial cases will be covered under the bill. Monetary and non-monetary judgments can be enforced. Excluded matters include judgments relating to corporate insolvency, debt restructuring and personal bankruptcy, succession of estate of a deceased, and certain matrimonial or family matters.

The bill removes the need for the parties to agree on exclusive jurisdiction clauses when signing the agreement. It also sets out jurisdictional grounds for the purposes of recognition and enforcement, as well as grounds for refusal of recognition and enforcement.

REGISTRATION MECHANISM

A judgment creditor under a mainland judgment (as defined in the bill) may apply to the Hong Kong Court of First Instance (CFI) for an order to have the mainland judgment registered with the CFI on an ex parte basis, provided the following conditions are met:

  • The mainland judgment was given on or after the commencement date of the bill;
  • The mainland judgment is effective in the mainland; and
  • There was a default in complying with the mainland judgment’s requirement and the default occurred within two years before the date of the application, and has not been made good.

POST-REGISTRATION

A registered mainland judgment may be enforced in the same way as a judgment originally given by the CFI.

Where a registration application is made in relation to a mainland judgment and is still pending, any Hong Kong proceedings in respect of the same cause of action shall stay. Likewise, the party may not bring in a court in Hong Kong proceedings in respect of the same cause of action.

The judgment debtor under a mainland judgment registered under the bill may apply to set aside the registration on the grounds as specifically set out in the bill.


Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Howard Wu (Shanghai) at howard.wu@bakermckenzie.com