Introduction

The forthcoming implementation of the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 597) (the MJREO) and the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules (the Rules) on 29 January 2024, following their passage by the Legislative Council on 26 October 2022, signals a transformative moment in the legal relations between the jurisdictions of Mainland China and Hong Kong.

Building on the foundations laid by the 2019 Arrangement, the MJREO lays out the major guiding principles of reciprocal enforcement of the judgments, while the Rules provide a detailed procedural road map covering, among other things, the registration applications and execution of registered judgments. This legislative development introduces a robust framework for recognition of judgments between Hong Kong and Mainland China, enhancing the efficacy of cross-border dispute resolution by minimising the need for relitigating disputes before Hong Kong or the Mainland courts.

Recap of key points – 2019 Arrangement versus the existing regime

In May 2020, we published an article illustrating the differences between the existing regime of cross-border enforcement¹ and the key features of the 2019 Arrangement (see here).

To recap, the 2019 Arrangement sets out, among others, the key features of having the requirement to have jurisdictional basis for the purpose of mutual recognition of judgments while eliminating the need for exclusive jurisdictional clauses. Relevant factors for jurisdictional basis include the place of the defendant’s residence, the place of the defendant’s business and the place of performance of the contract or tort.
The other highlights of the 2019 Arrangement include the recognition of judgments made by a broader range of courts and tribunals (including lower courts in the Mainland and the Competition Tribunal, Lands Tribunal, Labour Tribunal and Small Claims Tribunal in Hong Kong), and the expansion of the scope of cases and types of judgments to be covered:

• Most civil and commercial cases (including both monetary and non-monetary judgments) are covered unless expressly excluded. Excluded matters include judgments relating to corporate insolvency, debt restructuring and personal bankruptcy, certain matrimonial or family matters, certain maritime matters and matters in relation to succession of estate of a deceased.
• The 2019 Arrangement also applies to judgments in relation to civil damages awarded in criminal cases.
• In terms of the types of judgments, any judgment, ruling, conciliatory statement and order of payment are included, while a ruling on preservation measures, anti-suit injunction and an order for interim relief are excluded.

The 2019 Arrangement also delineates specific grounds for refusal of judgments recognition, clarifying the factors negating the recognition of judgments under different contexts and scenarios.

The MJREO and mechanism of registering Mainland judgments in Hong Kong

The MJREO establishes the mechanism for (a) registering civil and commercial judgments from the Mainland in Hong Kong; and (b) obtaining certified copies of Hong Kong civil and commercial judgments and requisite certificates for pursuing recognition and enforcement of these judgments in the Mainland, to reflect the content of the 2019 Arrangement². Eligible Mainland judgments given on or after 29 January 2024 can be registered in Hong Kong under the MJREO³.

The MJREO and the Rules provide a streamlined approach for initiating the mechanism of registering Mainland judgments in Hong Kong, as elaborated below:

• Registration application: An application by a judgment creditor under a qualified Mainland judgment must be made ex parte to the Court of First Instance by originating summons for a registration order to register the judgment (or any part of the judgment) and supported by an affidavit⁴. The affidavit in support of the registration application shall contain, among others, the particulars of the parties and the Mainland judgment, while the detailed content requirement varies according to the nature of the Mainland judgment. For example, further information should be contained in the affidavit if the Mainland judgment has the effect of prohibiting or restricting performance of acts (similar to an injunction).⁵
• Scope of registration: MJREO facilitates the registration of a qualified judgment seeking monetary damages and non-monetary damages⁶. It specifies that a judgment must not be registered to the extent that:
  • it relates to a relief other than monetary damages, including punitive or exemplary damages, awarded in proceedings brought in respect of a dispute over an infringement of a specified intellectual property right (other than an infringement of a right in a trade secret) or act of unfair competition committed in the Mainland⁷;
  • it concerns a ruling on the validity, establishment or subsistence of a specified intellectual property right, after taking into account the principle of territoriality applicable to intellectual property rights⁸;
  • it is for a tax or other charge of a like nature, or certain fine or other penalty⁹.
• Registration order: Upon a registration application of a qualified Mainland judgment, the Court of First Instance may order the judgment, or any part of the judgment, to be registered if it is satisfied that the application is compliant with the application requirements¹⁰.
• Service of a notice of registration: On the making of a registration order, the applicant must serve a notice of registration of the judgment, setting out the relevant particulars¹¹, on all persons against whom the judgment may be enforced¹². Service of the notice can be effected by personal service or service by registered post and service out of jurisdiction is permissible without leave¹³.
• Setting aside registrations: A person against whom a registered judgment is enforced may apply to the Court of First Instance to set aside the registration of the judgment. Generally, this application must be made within a short window of 14 days following the service of the notice of registration. The applicant must prove to the satisfaction of the Court of First Instance that any of the prescribed grounds for setting aside the registration applies. A few examples of the prescribed grounds for setting aside the registration include (a) failure to meet the jurisdictional requirement; (b) the judgment registered being obtained by fraud; (c) the existence of a judgment by a Hong Kong court/an arbitral award by an arbitral tribunal (where the place of arbitration was in Hong Kong) on the same cause of action involving the same parties; and (d) the fact that the judgment debtor was not summoned to appear in the Mainland court or was so summoned but was not given a reasonable opportunity to make submissions or defend the proceedings¹⁴.
• Judgment enforcement: A registered judgment may be enforced in Hong Kong as if it were a judgment originally given by the Court of First Instance and the Court of First Instance had jurisdiction to give it¹⁵.

Facilitation of recognition and enforcement in Mainland of Hong Kong judgments in civil or commercial matters

According to Article 7(1) of the 2019 Arrangement, an application for recognition and enforcement of a Hong Kong judgment should be filed with an Intermediate People’s Court of the place of residence of the applicant or the respondent, or the place where the property of the respondent is located.

Despite the fact that the Supreme People’s Court of PRC has not promulgated a judicial interpretation on recognition and enforcement¹⁶, MJREO has already stipulated the mechanism for a judgment creditor under a Hong Kong judgment to apply for a certified copy of the judgment, together with a certificate for the purpose of enforcement under the 2019 Arrangement¹⁷.

Charting new waters in legal collaboration in cross-border disputes

The enactment of the MJREO and the Rules has laid down a more thorough and structured framework for mutual enforcement of civil and commercial judgments between the Mainland and Hong Kong. The MJREO and the Rules will have significant implications on handling cross-border disputes between Mainland China and Hong Kong, particularly concerning jurisdictional choices and enforcement strategies.

The lack of an exclusive jurisdictional clause in parties’ agreements will no longer be an obstacle for recognition of judgments between Mainland China and Hong Kong under the new mechanism, which effectively reduces the necessity to relitigate disputes with the same cause of action and the same parties in both regions, reduces the costs to be incurred by the parties in the cross-border enforcement process and enhances certainty and predictability of the outcome of recognition of judgments.
MJREO’s adaptability in jurisdictional requirements, encompassing a broader spectrum of judgments including non-monetary and specific criminal judgments with compensatory elements, reflects a keen understanding of the multifaceted nature of modern business disputes. This expanded scope under MJREO offers comprehensive legal solutions taking into account the dynamism of today’s commercial transactions.

The notable inclusion of certain intellectual property rights judgments positions Hong Kong as the first jurisdiction with such an extensive reciprocal enforcement of judgments arrangement with the Mainland. This reinforces Hong Kong’s role as a key regional hub for intellectual property trading and a leading centre for international legal and dispute resolution services, aligning with the role of Hong Kong under the 14th Five-Year Plan for National Economic and Social Development.

In the evolving landscape of cross-border recognition and enforcement of judgments between the Mainland and Hong Kong, managing disputes in this transformative era requires legal practitioners to possess a profound and comprehensive understanding of the MJREO and the Rules, which is vital for delivering effective advice and services from strategising in an early stage of litigation to enforcing qualified judgments, and navigating the complexities inherent in cross-border disputes throughout.
In short, the MJREO truly transforms the Greater China, regional dispute resolution landscape, by setting Hong Kong and the Mainland apart from all other regional dispute resolution centres. The MJREO now offers clarity and certainty when parties’ relationships breakdown and structured conflict resolution is mandated. It does so by providing comfort to the parties that speedy, transparent and effective measures are readily available to them, to secure the early recognition and enforcement of parties’ arrangements, where judicial intervention has been invoked, and where recovery efforts are the last piece in the jigsaw to obtaining the welcome relief to closure of the dispute resolution process.

As the world’s largest law firm, we have unparalleled presence and capabilities across all major jurisdictions in the world. Our Hong Kong team has a wealth of experience in a wide variety of litigation, mediation and arbitration matters, and the capability to provide world-class legal service. If you are looking to enforce a Mainland judgment or award in Hong Kong, apply for interim measures in aid of arbitral proceedings or formulate your dispute management strategy generally, please get in touch with us.

Man Fung Yeung, one of the litigation team trainees co-authored this article.

1. Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap. 597) which came into effect on 1 August 2008.
2. LEGISLATIVE COUNCIL BRIEF – Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Chapter 645) (https://www.legco.gov.hk/yr2023/english/brief/cpa5041123c_20231108-e.pdf).
3. Section 10(1)(a) of the MJREO.
4. Section 10(1) of the MJREO and Rule 4 of the Rules.
5. Rules 5 to 12 of the Rules.
6. Section 10(1)(b) of the MJREO.
7. Sections 16(3) and 18(3)(c) of the MJREO.
8. Section 15(1) of the MJREO: Paper brief in relation to Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Bill and Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules of the Legislative Council Panel on Administration of Justice and Legal Services (LC Paper No. CB(4)192/2022(04)): https://www.legco.gov.hk/yr2022/english/panels/ajls/papers/ajls20220328cb4-192-4-e.pdf.
9. Sections 18(3)(a) and (b) of the MJREO.
10. Section 13(1) of the MJREO.
11. Rule 16(3) of the Rules.
12. Section 13(3) of the MJREO.
13. Rule 16(1) and (2) of the Rules.
14. Section 22(1) of the MJREO.
15. Section 26(1) of the MJREO.
16. Article 29 of the 2019 Arrangement.
17. Section 34 of the MJREO.