Introduction

With increasingly close interaction between Mainland China and Hong Kong, a new agreement (the “Arrangement”) on reciprocal recognition and enforcement of judgments in civil and commercial matters was signed by the Secretary for Justice and the Vice President of the Supreme People’s Court on 18 January 2019. The Arrangement aims to enable that parties in the Mainland China and Hong Kong can enforce relevant judgments in a wider range of civil and commercial matters through a clear and effective legal regime.This article briefly introduces the contents of the Arrangement.

Upon commencement of the Arrangement, the 2008 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 Pursuant to Choice of Court Agreements between Parties Concerned (the “Choice of Court Arrangement”), which is applicable only to monetary relief, will be terminated. However the Choice of Court Arrangement will remain applicable to any written agreement signed between the parties concerned before the commencement of the Arrangement, in which a people’s court of the Mainland China or a court of Hong Kong is expressly designated as the court having sole jurisdiction for resolving any dispute which has arisen or may arise in respect of a particular legal relationship.

Scope of the Arrangement

The Arrangement covers legally effective judgements (i.e. judgments legally enforceable under the law of the requesting place) in relation to matters which are considered to be civil and commercial in nature under both Mainland China laws and Hong Kong laws, as well as civil damages awarded in criminal cases. Non-judicial proceedings and judicial proceedings relating to administrative or regulatory matters would be excluded.

Judgments not governed by the Arrangement

It should be noted that the Arrangement does not apply to judgments of the following matters:

1. cases heard by a people’s court of the Mainland on maintenance of parent(s) or grandparent(s), maintenance between siblings, dissolution of adoptive relationship, guardianship of adults, disputes after divorce on liability for damages, or division of property arising from a co-habitation relationship; or cases heard by a court of the HKSAR on whether a decree of judicial separation should be granted;

2. cases on succession, administration or distribution of estate;

3. cases on the tortious infringement of invention patents and utility model patents heard by a people’s court of the Mainland; cases on the tortious infringement of standard patents (including “original grant” patents) and short-term patents heard by a court of the HKSAR; cases on the confirmation of the licence fee rate of a standard-essential patent heard by a court of the Mainland or a court of the HKSAR; and cases concerning intellectual property rights not covered under Article 5 of the Arrangement;

4. cases on marine pollution, limitation of liability for maritime claims, general average, emergency towage and salvage, maritime liens, and carriage of passengers by sea;

5. bankruptcy (insolvency) cases;

6. cases on the determination of a natural person’s qualification as a voter, declaration of disappearance or death of a natural person, or the determination of limited or lack of legal capacity of a natural person for civil acts;

7. cases on the confirmation of the validity of an arbitration agreement or the setting aside of an arbitral award; and

8. cases on the recognition and enforcement of judgments or arbitral awards of other countries or regions.

Relief

The Arrangement applies to both monetary and non-monetary relief. Exemplary or punitive damages will not be recognised and enforced except for tortious claims for infringement of intellectual property rights and civil disputes over acts of unfair competition under Article 6 of the Anti-Unfair Competition Law of the People’s Republic of China, disputes over passing off heard by a Hong Kong court, or disputes over infringement of trade secrets.

Where the respondent has property in both Mainland China and Hong Kong which may be subject to enforcement, the applicant may file applications for enforcement with the courts of the two places respectively.

Conclusion

The Arrangement will come into effect on a date to be announced, after both sides have completed their respective procedures to enable implementation and will apply to judgments made on or after the commencement date of the Arrangement. In light of the increasing number on cross-border civil and commercial disputes, the Arrangement will facilitate the reciprocal recognition and enforcement of judgments on civil and commercial cases, reducing the need for re-litigation of the same dispute(s) in both places, and offer better protection to the parties’ interests.