I. Background

The Supreme People’s Court and the Hong Kong Special Administrative Region Government signed the “Arrangement on Mutual Recognition and Enforcement of Judgments in Civil and Commercial Matters Between the Courts of the Mainland and the Hong Kong Special Administrative Region” on January 18, 2019. To implement this Arrangement, the Supreme People’s Court has published relevant judicial interpretations, and the Hong Kong Legislative Council has enacted the “Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance” (Cap. 645) (hereinafter “Cap. 645”). Both the Mainland judicial interpretation and Cap. 645 took effect on January 29, 2024.

Coming into effect simultaneously with Cap. 645 are the “Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules” (Cap. 645A) (hereinafter “Cap. 645A Rules”) made by the Chief Judge of the High Court of Hong Kong, and “Practice Direction 38” (hereinafter “Practice Direction”) formulated and issued by the Judiciary. These two documents provide detailed provisions on the application procedures and application documents for recognition and enforcement of judgments between the two regions.

For the avoidance of doubt, references to “judgment” or “Mainland judgment” in this article refer to judgments of a civil or commercial nature.

II. Objectives and Effects of Cap. 645

From the perspective of the party holding a Mainland judgment, the coming into effect of Cap. 645 and related rules will have the following impacts:

1. A more comprehensive mechanism for recognition and enforcement of civil and commercial judgments will be established between Mainland China and Hong Kong, covering more types of judgments. After Cap. 645 takes effect, the vast majority of civil and commercial judgments between the two regions can be recognized and enforced;

2. The need for repeated litigation on the same dispute in both Hong Kong and Mainland China will be reduced, thereby saving time and litigation costs;

3. The standards for application procedures will be more relaxed, allowing for better protection of the interests of the successful party.

From Hong Kong’s perspective, Cap. 645 and related rules will bring the following advantages:

1. Hong Kong will become the first jurisdiction to sign an arrangement with Mainland China for mutual recognition and enforcement of judgments with such broad scope, reflecting the advantage of “one country, two systems”;

2. Cap. 645 and related rules have, to a certain extent, incorporated intellectual property cases and anti-unfair competition cases, which will enhance Hong Kong’s competitiveness as a regional intellectual property trading center and a regional international legal and dispute resolution services center.

III. Relationship Between Cap. 645 and Other Mechanisms

Before the enactment and coming into effect of Cap. 645, the successful party of a Mainland judgment could recognize and enforce the Mainland judgment in Hong Kong through one of two methods: i) through the “Mainland Judgments (Reciprocal Enforcement) Ordinance” (Cap. 597) (hereinafter “Cap. 597”); or ii) through Hong Kong common law.

After Cap. 645 takes effect, generally, judgments made by Mainland courts on or after the effective date (January 29, 2024) need to apply Cap. 645 for recognition and enforcement in Hong Kong, while judgments made before the effective date need to apply Cap. 597.

Therefore, generally speaking, the coming into effect of Cap. 645 does not mean that Cap. 597 will immediately become invalid or be completely replaced. For some time to come, both will be two parallel mechanisms, applicable to different categories of Mainland judgments respectively. If a party to a Mainland judgment is considering applying for recognition and enforcement of the judgment in Hong Kong, it is recommended to consult Hong Kong lawyers at an early stage to clarify which ordinance applies.

IV. Key Highlights of Cap. 645

If the successful party in a Mainland judgment wishes to enforce the judgment in Hong Kong, the Mainland judgment must first be registered in Hong Kong. The registration requirements under Cap. 645 are more relaxed compared to Cap. 597, specifically:

1. Elimination of the requirement for a choice of court agreement. In practice, parties may fail to enter into a choice of court agreement meeting Cap. 597 requirements for various reasons, causing difficulties in recognition and enforcement of judgments. Cap. 645 eliminates this requirement, replacing it with a rebuttable presumption of court jurisdiction.

2. Coverage of a wider range of dispute categories. Cap. 597 only applies to judgments on civil and commercial contract disputes. Cap. 645 adopts a “negative list” approach—as long as the judgment is not within the exclusion scope, it can apply for recognition and enforcement under Cap. 645.

3. Relaxation of restrictions on the scope of Mainland courts. The Mainland courts specified in Cap. 597 include the Supreme People’s Court, Higher People’s Courts, Intermediate People’s Courts, and authorized Basic People’s Courts. Cap. 645 removes the “authorized Basic People’s Courts” restriction, meaning that judgments from all Basic People’s Courts can apply for recognition and enforcement as long as conditions are met.

4. Modification of the finality requirement for judgments. Cap. 597 requires that Mainland judgments be “final judgments.” Due to differences in civil procedure between the two regions, the “final judgment” requirement often creates difficulties for the successful party’s application. Cap. 645 changes the “final judgment” requirement to “effective judgment,” facilitating applications by the successful party and reflecting mutual respect between the two legal systems.

No longer limited to monetary judgments. Cap. 597 requires that the judgment content be a monetary payment, i.e., the judgment requires one party to pay a sum of money to the other. Cap. 645 expands the scope of judgment content to include non-monetary judgments.

V. Summary and Recommendations

The coming into effect of Cap. 645 means that most categories of civil and commercial judgments between the two regions can now be mutually recognized and enforced. It should be noted that recognition and enforcement of Mainland judgments in Hong Kong are two separate stages. Cap. 645 mainly addresses the first stage. Additionally, it should be noted that Hong Kong courts do not automatically register Mainland judgments; application by the party holding the Mainland judgment is required.

For those considering applying for enforcement of a Mainland judgment in Hong Kong, they may consider:

1. Cap. 645 lowers the threshold for registration standards but still sets some exceptions. Whether the judgment falls within these exceptions needs attention;

2. There are time limits for applying in Hong Kong, so early consideration and action are necessary to avoid exceeding the time limit;

3. Investigation of the judgment debtor’s property in Hong Kong can be conducted first to ensure the judgment debtor has assets available for enforcement;

4. Monitor the judgment debtor’s movements. If there are signs of asset transfer, consider applying for an asset freezing order.