After a lengthy, year-plus collaboration between China’s mainland judicial authorities and the Hong Kong judiciary on the detailed mechanism for implementing the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance, the Hong Kong government gazetted the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules and the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Commencement) Notice on 10 November 2023.
As per the notice, the reciprocal enforcement ordinance comes into operation on 29 January 2024. The comprehensive mechanism for reciprocal recognition and enforcement of judgments under the reciprocal enforcement ordinance and rules will soon change the landscape of cross-border enforcement actions.
Mainland judgments, as defined in the ordinance, in civil and commercial matters given on or after 29 January 2024 may be registered pursuant to the ordinance and the rules, and then be enforced in Hong Kong.
While a creditor under a mainland judgment will have a greater chance of enforcing the judgment in a more efficient manner compared with the old regime, a judgment debtor will have to carefully consider where it can set aside the registration of the mainland judgment. The ordinance and the rules will certainly become one of the key regimes of cross-border disputes involving the mainland and Hong Kong.
In more detail
Under the ordinance, a civil and commercial mainland judgment creditor may seek to enforce the judgment in Hong Kong by applying to the Hong Kong Court of First Instance (CFI) for an order to register the mainland judgment. The registration system will elevate the certainty and predictability of cross-border enforcement actions.
For establishing the detailed procedures of the registration system, the Chief Judge of Hong Kong’s High Court made the reciprocal enforcement rules pursuant to section 35 of the ordinance.
In particular, a registration application should be made ex parte to the CFI by an originating summons with the support of an affidavit. Except as provided by the reciprocal enforcement rules, the practice and procedure under the Rules of the High Court (Cap. 4) shall apply with necessary modifications in the proceedings under the reciprocal enforcement ordinance.
The reciprocal enforcement rules also set out the detailed requirements for the supporting affidavit in the following circumstances:
- Mainland judgment given partly in respect of civil or commercial matters;
- Mainland judgment prohibiting or restricting performance of acts;
- Mainland judgment requiring sums of money or acts to be paid or performed (other than in stages);
- Mainland judgment requiring sums of money or acts to be paid or performed (in stages);
- Mainland judgment given in absence of party at trial; and
- Mainland judgment registered previously.
After a mainland judgment is registered, the other side may apply to the CFI for an order to set aside the registration within 14 days of the notice of registration being served on that person. The court has discretion on the conduct of such an application, including extending the 14-day time limit, as well as imposing any terms (like security) that it considers appropriate and just.
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
