Introduction
The long-awaited Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) (the “Ordinance”) is set to come into force on 29 January 2024. The Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules (Cap. 645A) (the “Rules”) have also been implemented to complement the Ordinance.
The Ordinance will implement 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 which was signed between Hong Kong and the Mainland authorities on 18 January 2019 (the “2019 Arrangement”), establishing a more comprehensive and streamlined mechanism for reciprocal enforcement of Hong Kong judgments in Mainland China and vice versa.1
Noteworthy Developments
The 4 noteworthy developments under the Ordinance are as follows:
- Removal of the exclusive jurisdiction agreement requirement: One of the most significant changes under the Ordinance is the replacement of the ‘exclusive jurisdiction agreement’ requirement under the Old Arrangement with a jurisdictional test based on a ‘connection’ with the Mainland or Hong Kong.
The Old Arrangement required a written exclusive jurisdiction agreement in favour of the Mainland courts in the underlying contract for enforcement of Mainland judgments in Hong Kong. Under the Ordinance, the judgment creditor will only need to establish a connection with the Mainland at the time when the proceedings were accepted. The connection test will be satisfied if:
• the defendant’s place of residence was in the Mainland;
• the defendant’s representative office, branch, office, place of business or other establishment was in the Mainland;
• the place of performance of the disputed contract was in the Mainland;
• the proceedings were brought in respect of a tortious dispute, and the tortious act was committed in the Mainland; or
• the parties agreed in writing to submit to the jurisdiction (whether exclusive or non-exclusive) of the Mainland courts, and if the places of residence of all the parties were in Hong Kong, together with evidence that there was a connection between the Mainland and the dispute (such as the contract was or was to be performed, or signed in the Mainland, or the subject matter was situated in the Mainland).
The same factors will be considered for applicants seeking to enforce Hong Kong judgments in the Mainland.
The removal of the exclusive jurisdiction agreement requirement will provide greater flexibility to parties when drafting dispute resolution clauses.
- Expansion of subject matter: The Ordinance extends coverage to judgments arising from most civil and commercial matters, as well as compensation or damages awarded in criminal proceedings.
The Ordinance adopts an exclusion list, excluding only certain types of judgments in civil and commercial matters, such as insolvency and bankruptcy cases, certain arbitration-related matters, certain matrimonial, family and succession cases, certain intellectual property and maritime matters, however, most of these matters are covered under alternate Mainland-Hong Kong mutual assistance arrangements.
The Old Arrangement, on the other hand, was limited to judgments arising from contractual disputes only.
- Expansion of enforceable relief: The categories of remedies have also been expanded under the Ordinance to cover both monetary and non-monetary relief (e.g., orders for specific performance, injunction orders, etc.).
The Old Arrangement only covered monetary judgments.
- Expansion of Courts: The Ordinance has expanded the coverage to judgments made by lower courts and tribunals. In the Mainland, judgments of all Primary People’s Courts will now be covered in addition to the Supreme People’s Court, Higher People’s Court, Intermediate People’s Court. In Hong Kong, in addition to judgments of the Court of Final Appeal, the High Court and the District Court, judgments issued by Tribunals, including the Labour Tribunal, Lands Tribunal, Small Claims Tribunal and the Competition Tribunal will now be included.
Comparison Table
| Old Arrangement MJREO (Cap. 597) | 2019 Arrangement The Ordinance (Cap. 645) | |
|---|---|---|
| Exclusive jurisdiction agreement requirement | Requirement for a written exclusive jurisdiction agreement in favour of Mainland / Hong Kong courts. | No such requirement. Only a connection with Mainland / Hong Kong at the time when the proceedings were brought is required. |
| Applicability | Exclusive jurisdiction agreement made before the commencement date of the Ordinance. | Judgments given on or after the commencement date of the Ordinance (however, the Old Arrangement will continue to apply where the exclusive jurisdiction agreement was made before the commencement date of the Ordinance). |
| Subject matter | Civil and commercial contracts, excluding any employment contracts and contracts to which a natural person acting for personal consumption, family or other non-commercial purposes is a party. | Judgments arising from most civil and commercial matters, as well as compensation or damages awarded in criminal proceedings, subject to the exclusion list. |
| Enforceable relief | Monetary judgments only. | Monetary and non-monetary relief. |
| Courts | Mainland: • The Supreme People’s Court • A Higher People’s Court • An Intermediate People’s Court • A recognised Primary People’s Court (as listed in the Gazette from time to time) Hong Kong: • The Court of Final Appeal • The Court of Appeal • The Court of First Instance • The District Court | Mainland: • The Supreme People’s Court • A Higher People’s Court (2nd instance) • An Intermediate People’s Court (2nd instance) • A Higher People’s Court, an Intermediate People’s Court or a Primary People’s Court (1st instance and no appeal is allowed or the time for appeal has expired) Hong Kong: Same as the Old Arrangement, but judgments issued by the Labour Tribunal, Lands Tribunal, Small Claims Tribunal and the Competition Tribunal are also now covered. |
Statutory Framework
Registration and enforcement of Mainland Judgments in Hong Kong
- Registration application and Notice: A judgment creditor under a qualifying Mainland judgment may apply to the Court for a registration order2. The limitation period is 2 years. The registration application must be made ex parte to the Court of First Instance by way of an originating summons supported by an affidavit and a draft order3.
Upon the registration order being made, the applicant must serve a notice of registration on all persons against whom the judgment may be enforced4.
- Setting aside application: An application to set aside the registration of the judgment may be made within 14 days after the service of the notice of registration5.
The grounds for setting aside are limited to specified jurisdictional, procedural fairness, and public policy grounds6. The Court may also impose any terms as a condition for the further conduct of the setting aside application7.
- Execution application: An action to enforce a registered judgment may be taken after the expiry of the period for making the setting aside application or upon such application being disposed of in favour of the applicant8.
- Restriction on duplicate proceedings: Importantly, the Ordinance contains provisions to prevent duplicate proceedings, including (1) provisions to stay pending Hong Kong proceedings in respect of the same cause of action between the same parties if an application for registration of a corresponding Mainland judgment is made; and (2) restriction against commencement of proceedings by a party if a Mainland judgment on the same cause of action between the same parties is registered or pending registration in Hong Kong9.
Registration and enforcement of Hong Kong Judgments in the Mainland
- The applications for recognition and enforcement of Hong Kong judgments in the Mainland should be filed with an Intermediate People’s Court of the place of residence of the applicant or respondent or where the property of the respondent is located.
- To facilitate the applications, the Ordinance provides for procedures for obtaining a certified copy of the Hong Kong judgment and the certificate certifying the effectiveness of the Hong Kong judgment for use in the Mainland10.
Conclusion
Given the sheer volume of commercial and business activity between Hong Kong and Mainland, the implementation of the Ordinance is a tremendously positive step forward.
The expanded scope and distinct improvements under the new regime will offer better protection to parties’ interests as it will reduce the need for parties to re-litigate the same dispute in both jurisdictions and will also enhance certainty and predictability of cross-border enforceability, reducing the time, costs, and risks usually associated with enforcement.
Together with other reciprocal arrangements in force between Hong Kong and the Mainland, the Ordinance consolidates Hong Kong’s position as a leading dispute resolution centre, especially for disputes involving a cross-border connection.
1 The Ordinance will supersede the current statutory regime that has been in place since August 2008, i.e., the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap. 597) (“MJREO”) which implemented 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 made between Hong Kong and the Mainland authorities signed on 14 July 2006 (the “Old Arrangement”).
2 Section 10 of the Ordinance
3 Rules 4 and 14 of the Rules
4 Section 13(3)(b) of the Ordinance
5 Section 21 of the Ordinance
6 Section 22 of the Ordinance
7 Rule 17(3) of the Rules
8 Section 27 of the Ordinance
9 Sections 29 and 30 of the Ordinance
10 Sections 33 and 34 of the Ordinance
