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Updates in respect of Recognition of Civil Judgement Between Hong Kong and Mainland China


In order to facilitate the cooperation between HKSAR and Mainland China Judiciary system, the Government of HKSAR and the Supreme People’s Court have signed multiple “Arrangements” in respect of mutual recognition of legal documents covering Arbitration Awards, Matrimonial Judgments, Civil and Commercial Judgments etc.

 

But before 2024, the “Arrangement of the Supreme People's Court between the Mainland and the HKSAR on Reciprocal Recognition and Enforcement of the Decisions of Civil and Commercial Cases under Consensual Jurisdiction”(“the Old Arrangement”) enacted from 2008 is proved not very effective in facilitating mutual recognition of Civil Judgments. From 2008 to 2014, only 6 Hong Kong Civil Judgments have been recognized by People’s Court of Mainland. On the other hand, the first recognition of Mainland Chinese Judgement pursuant to the Old Arrangement only took place in Hong Kong in 2016. This is because of the limited scope of the Old Arrangement and the difference between two different legal systems.

 

However, such circumstance is going to be changed after the enactment of “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” (“the New Arrangement”) and Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (“Cap. 645”) both on 29th January 2024, the writer will discuss the updates brought by the New Arrangement in the following article.

 

Scope of Recognition

In the Old Arrangement, the scope of judgement recognition only covers the monetary enforceable judgement. After the enactment of the Cap. 645, this scope includes most of the Mainland Judgments given in proceedings that are civil or commercial in nature under the law of the Mainland, most of the Hong Kong Judgments given in civil proceedings, and orders for compensation and damages arising from criminal proceedings from both sides.

 

Also, some kind of cases are excluded from this recognition process, 8 types of cases are listed both in the New Arrangement and Cap. 645. Namely “matrimonial and family cases; intellectual property and patent cases; martime cases; bankruptcy cases; determination of voter’s qualification cases; declaration of disappearance, death or lack of capacity of a natural person; arbitration cases (validity of arbitration agreement and set aside arbitration award); and recognition of judgments or arbitral awards of other countries.”


Final and Conclusive?

As one of the prerequisite of reciprocal enforcement in common law, Lord Watson have pointed out that for a foreign judgement to be recognized, it must be final and conclusive in the court which pronounced it. But due to systematical reasons of Mainland China, it is hard for the Judgments pronounced by People’s Court in Mainland to satisfy this requirement. The adjudication supervision (審判監督) system, which can make the case re-trialed by the people's court at the next higher level and possibly alter the decision, even if it is a decision that exhausted chances of appeal or without the leave of original court. To maintain the stability of the reciprocal recognition system of Hong Kong, the Hong Kong courts tended to regard most of the Mainland Judgments as inconclusive decisions, which rendered all of them unrecognizable in Hong Kong.

 

Above stance of Hong Kong have been slightly changed in 2016, which do not simply regard the MainlandJudgement as inconclusive in interlocutory applications. In such procedure, the court will treat the mainland judgement as final and conclusive if the Plaintiff can show a good arguable case. On the other hand, the reform of Civil proceedings in Mainland China also specified the limit of re-trial and put the scrutinization of court as the prerequisite of the re-trial process, which greatly increased the stability of Mainland decision, and it is conductive to reduce the relevant concerns of Hong Kong court.

 

After the Enactment of the New Arrangement and Cap.645, the determination of nature (final and conclusive) of Mainland Judgement is now mainly a statutory matter instead of common law: the Mainland Judgement shall be considered as final and conclusive as long as it’s “given by the Supreme People’s Court, second instance Judgement, and first instance Judgement that no appeal is allowed or no appeal filed within time limit”. Also, it does not affect the case decided prior to the enactment of the New Arrangement.

 

Jurisdiction

For the Jurisdiction matter of the mutual recognition, the Old Arrangement only covers the cases under consensual and exclusive jurisdiction, which means a judgement can be recognized only when parties in dispute have entered exclusive jurisdiction clause that specified Mainland or Hong Kong Court. On the determination of validity of exclusive jurisdiction clause, the Hong Kong court have reiterated the principle developed by Lord Hoffmann. The interpretation shall be based on the background knowledge of a reasonable person and matrix of fact.

 

However, after the enactment of the New Arrangement and Cap. 645, the exclusive jurisdiction clause agreed by parties in dispute is no longer the prerequisite of mutual recognition of judgments. The statutory requirement will be the major factor that determines whether the recognition falls within the jurisdiction of Hong Kong court.

 

On the other hand, in the Old Arrangement, acceptable judgments from the Primary People's Courts will be limited to only those courts that are specified in a list published in the Gazette, and the Judgments from Competition Tribunal, Lands Tribunal and Labour Tribunal of Hong Kong will not be recognized by Mainland Court as well. Such limits are all removed in the New Arrangement, which expands the scope of recognized court for both jurisdictions.

 

Conclusion

The New Arrangement will enable closer economic and trade ties between the Mainland and Hong Kong, and will also provide greater opportunities for cooperation between the legal communities of these two jurisdictions. Thereafter, the enforcement of judgments of the courts of the these two jurisdictions will cross the barriers created by the different legal systems, so that civil and commercial cases made by the courts of the two places that meet the statutory prerequisites will be recognized and enforced.


September 2024

Dr. Anthony Lai and Mr. Jeremy Xia

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