Hong Kong Litigation Lawyers: Enforcement of Mainland Judgment in Hong Kong
As a lawyer dealing with cross border legal matters, I often encounter clients seeking consultation on or engaging us on the matters of enforcement of Mainland Judgment in Hong Kong. The common scenario is the Plaintiff, because of the convenience and swiftness, firstly litigates in Mainland China and obtains a judgment in favour, but as the Defendant is a Hong Kong company or resident and with no asset in Mainland China that can be enforced, the Plaintiff would like to enforce the Judgment in Hong Kong.
Reciprocal Recognition and Enforcement of Civil and Commercial Judgments between Hong Kong and the Mainland and its limitation
Hong Kong has passed the Mainland Judgments (Reciprocal Enforcement) Ordinance (Chapter 597) (“Ordinance”) in 2008, formally establishes a mechanism to enforce Mainland Judgment based on the above Ordinance.
However, the prerequisite for enforcement based on the Ordinance is the parties must have reached an agreement in advance for any disputes arisen thereafter to be submitted to either the Courts of Mainland China or Courts of Hong Kong exclusively.
In practice, unless the parties are advised by lawyers when drafting the contract, the contract parties will not usually agree to such provision, especially the exclusive jurisdiction clause. Therefore, there are not many case laws for enforcement through this route.
Recognition and Enforcement of Mainland Judgment by Hong Kong common law
Under common law, the Plaintiff can initiate proceedings in Hong Kong Courts based on a final and conclusive judgment obtained in Mainland China Courts, and requesting the Hong Kong Courts to rule in accordance with the Mainland Judgments.
In this scenario, the Hong Kong Courts will not try the issues involved in the Mainland Judgments, but rule based on the Mainland Judgment itself. If the Defendant cannot provide reasonable defence, then the Plaintiff can apply for summary judgment, which is a faster way to obtain judgment without undergoing a full trial.
The possible defence that can be raised by the Defendant are:-
- The Plaintiff’s Mainland Judgment in not final or conclusive
Due to the re-trial system in Mainland China, the appeal period against a final judgment in Mainland China is 2 years, and this may not be regarded as a final and conclusive judgment by Hong Kong Courts, the relevant case law is Chiyu Banking Corporation Limited v. Chan Tin Kwun [1996] 2 H.K.L.R. 395 (H.C.).
In this case, the defence was although this was a Judgment of Second Instance, under the Mainland China legal system, the Defendant could still appeal to the Supreme People’s Procuratorate, hence the Judgment of Second Instance was not a final and conclusive judgment. The then Supreme Court of Hong Kong (before Hong Kong reunification) confirmed the above case law and this is still the precedent currently applied. In some cases, the Plaintiff may apply to the Procuratorate in Mainland China for a “Decision of No Defence” and submits this to the Hong Kong Courts as evidence, this can certify that there will not be any defence, and therefore it is a final and conclusive judgment that should be accepted.
- The Mainland China Courts have no jurisdiction to rule.
In the Mainland China courts wrongly exercise its jurisdiction to reach a judgment, such judgement can be refused to enforced in Hong Kong.
- There is injustice in the trial of Mainland Courts, eg. violation of natural justice (e.g. service to the Defendant is not in accordance with the regulations) or violation of Hong Kong public policy, or time barred, etc.
Although there may be hurdles to apply for enforcement of Mainland Judgment based on the common law principles, especially the possible defence of “Judgment of Second Instance is not a final and conclusive judgment”, but up until now, this is one of the routes that the Plaintiff who obtains the Mainland Judgment can consider.
For more questions regarding the enforcement of Mainland Judgment in Hong Kong, kindly comment here or consult our litigation team.