The Secretary of Justice, Mr. Paul Lam, SC, shared in a recent blog post that the Department of Justice will strive to bring the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (the “Ordinance”) into operation as soon as possible.
The bill for the new regime was passed on 26 October 2022 but no effective date had been announced. Based on the recent blog post, we expect this to happen soon. Once the Ordinance comes into effect, it will give rise to a new cross-border enforcement regime, which would significantly expand the scope of reciprocal enforcement and streamline the judgment registration procedure.
Enforcement of Mainland Judgments in Hong Kong
We summarise below the key updates to the new regime for enforcement of Mainland judgments in Hong Kong:-
- Currently, the judgment creditor must show that the underlying contract (that is, the contract giving rise to the dispute in the Mainland) designates the Mainland Courts as having exclusive jurisdiction in the disputes arising from the contract. Under the new regime, there will no longer be a requirement for the underlying agreement to contain an exclusive jurisdiction clause. Instead, this requirement can be satisfied by showing that the dispute has sufficient connection with the Mainland. Factors that would be taken into account may include the place of business of the defendant company, and activities that gave rise to the proceedings in question having originated in the Mainland.
- Under the current regime, only final and conclusive monetary judgments on commercial disputes may be enforced. The new regime significantly increases the scope of judgments that may be enforced in Hong Kong. Most civil and commercial judgments will be enforceable (subject to certain exceptions), which would include both monetary and non-monetary judgments in civil or commercial matters, and judgments for civil damages awarded in criminal proceedings.
- The new regime also expands the scope of enforceability by including judgments from lower Mainland Courts in the cross-border enforcement regime. Applicants will be able to seek to enforce a judgment from the Supreme People’s Court, a Higher People’s Court (at the second instance), an Intermediate People’s Court (at the second instance), a Higher People’s Court, an Intermediate People’s Court or a Primary People’s Court (at the first instance and on the condition that no appeal is allowed or the time for appeal has expired).
An applicant seeking to enforce a Mainland judgment may make an application to the Court of First Instance (“CFI”) for registration of the judgment on an ex parte basis (i.e. without the involvement of the judgment debtor). Once granted, the applicant must serve a notice of registration on the judgment debtor.
There will be opportunities for the judgment debtor to contest the registration within a prescribed time period on limited grounds. Only after the period for challenging the registration has expired may the judgment creditor take action to enforce the same.
Enforcement of Hong Kong Judgments in the Mainland
As for enforcement of Hong Kong Judgments in the Mainland, the scope of applicable judgment has been extended to include those issued by the Competition Tribunal, Lands Tribunal and Labour Tribunal.
A party may apply to the Intermediate People’s Court in the place of residence of the applicant or respondent or where the property of the respondent is located for recognition and enforcement of a Hong Kong judgment in a civil or commercial matter subject to other requirements set out in the judicial interpretation to be issued by the Supreme People’s Court and relevant guidelines.
In terms of facilitating such an enforcement process, the Ordinance provides that a judgment creditor to a Hong Kong judgment may apply to the court for a certified copy of the judgment and a certificate certifying the effectiveness of the Hong Kong judgment.
We will provide an update again once the Ordinance comes into effect.
Contact us today if you need help with cross-border enforcement actions.