A new chapter of mutual recognition and enforcement of judgments between Mainland and Hong Kong: Hong Kong sets a date to implement the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645)

Introduction and legislative history

Recently, on 10 November 2023, the Hong Kong Government announced that the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) (the "Ordinance”) will become effective on 29 January 2024. This marks a new chapter for mutual recognition and enforcement of judgments in Mainland and Hong Kong.

The Ordinance implements the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and HKSAR (the "Arrangement”), which the Supreme People's Court of Mainland and the Hong Kong Government signed on 18 January 2019.

We have previously written a blogpost on the Arrangement here.

Alongside the Ordinance, the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules (the "Rules”) will also come into operation on the same date. The Rules are implemented to complement the Ordinance by setting out the detailed requirements and procedures for registration and execution of a Mainland judgment in Hong Kong.

In respect of registration applications, the key provisions of the Rules provide that:

• The registration application must be made ex parte to the Court of First Instance in Hong Kong by Originating Summons in the prescribed form of the civil procedural rules, and must be supported by an affidavit.
• The supporting affidavit must exhibit the identity documents, a copy of the relevant judgment duly sealed by the original Mainland Court, a certificate issued by the original Mainland Court certifying that the judgment is effective in the Mainland, evidence relevant to the enforceability of the judgment and a statement of costs in respect of the application.
• The applicant must draw up the registration order, which must specify that an action to enforce the judgment or part of it may only be taken after the expiry period within which a setting aside application may be made or after such application has been finally disposed of.
• Upon the making of a registration order, the applicant must serve a notice of registration on all persons, so far as known to the applicant, against whom the judgment or part of it may be enforced.

Major changes impacting Mainland and Hong Kong judgments

For completeness, we recap below the major changes implemented by the Ordinance.

1. Removal of the exclusive jurisdiction requirement

The Ordinance removes the previous requirement that parties must have agreed to the exclusive jurisdiction of a Mainland or Hong Kong Court.

The jurisdictional requirement may now be satisfied if the Mainland Court had jurisdiction at the time the proceedings were accepted, which may be evidenced by (i) the defendant's place of residence, representative office or branch office being in Mainland; (ii) the relevant contract was being performed in the Mainland; (iii) the relevant tortious act was being committed in the Mainland; or (iv) the parties having agreed to the exclusive or non-exclusive jurisdiction of the Mainland Court and there being a connection between the dispute and the Mainland.

2. Expansion of the scope and categories of enforceable Mainland judgments in Hong Kong

The Ordinance expands the scope of Mainland judgments that can be enforced in Hong Kong in several aspects.

Subject to an excluded list of cases, the scope of enforceable Mainland judgments covers judgments which are considered to be civil and commercial in nature (including both monetary and non-monetary rulings), as well as judgments which are criminal in nature but contain an order for the payment of a sum of money in respect of compensation and damages. A mainland judgment includes judgment, ruling, conciliatory statement or order of payment, but does not include a ruling given in respect of an interim measure.

The Ordinance also expands the levels of Mainland Courts that can grant enforceable judgments in Hong Kong.

Conclusion and impact of the Ordinance

The implementation of the Ordinance strengthens Hong Kong's status as a regional centre for resolving disputes with a Mainland connection. This is also an important milestone in the dispute resolution development in the Greater Bay Area.

The changes brought by the new streamlined mutual recognition and enforcement process will reduce costs of re-litigation of judgments and enable easier enforcement of cross-border court rulings. We anticipate mutual enforcement and recognition of Mainland and Hong Kong judgments will become more streamlined and efficient going forward, bringing practical benefits and certainty to corporations and businesses.

We will host a webinar to provide an overview of the latest Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance and Rules, and will discuss how these may affect cross-border recognition and enforcement actions, so please stay tuned.

If you have any queries, please contact Gareth Thomas, Partner, Rachael Shek, Partner, Jojo Fan, Partner, Peter Ng, Senior Associate, Trevor Ho, Senior Associate, or your usual Herbert Smith Freehills contact.