Since 2019 there has been a “Mutual Arrangement” in place between Hong Kong and Mainland China to facilitate the enforcement in Mainland China of Hong Kong Judgments, and vice versa. However that Arrangement has had only limited effect due to stringent applicability requirements. They include a requirement that the relevant underlying commercial contract needed to specify which Chinese Court would be handling the judgment enforcement process. The Arrangement also only applies to money judgments, so Plaintiffs awarded injunctive and declaratory relief from the Hong Kong High Court were not assisted.
In any event, the Hong Kong legislature has recently passed (on 26 October 2022) the “Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance”. It is hoped that it will come into force some time in 2023.
The new Ordinance should greatly assist litigants in Hong Kong enforce civil and commercial judgments against assets in Mainland China, via a simple registration process. Of course the innate benefit of a Hong Kong judgment in this context also remains; there is no need to overcome onerous recognition hurdles faced by holders of non Hong Kong judgments seeking recognition and enforcement in Mainland China.
This development continues the welcome trend of procedural reciprocity that began with the 1999 Arrangement on Mutual Enforcement of Arbitration Awards Between the Mainland and Hong Kong. Collectively, these Arrangements should make it much more difficult for Mainland Chinese parties to evade the consequences of a Hong Kong Judgment or Award.
For further information, please contact:
Damien Laracy, Partner, Hill Dickinson
damien.laracy@hilldickinson.com
