Long-awaited Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance set to take effect on 29 January 2024

Introduction

The long-awaited Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) (the “Ordinance”) is set to come into force on 29 January 2024. The Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules (Cap. 645A) (the “Rules”) have also been implemented to complement the Ordinance.

The Ordinance will implement the 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 which was signed between Hong Kong and the Mainland authorities on 18 January 2019 (the “2019 Arrangement”), establishing a more comprehensive and streamlined mechanism for reciprocal enforcement of Hong Kong judgments in Mainland China and vice versa.1

Noteworthy Developments

The 4 noteworthy developments under the Ordinance are as follows:

  1. Removal of the exclusive jurisdiction agreement requirement: One of the most significant changes under the Ordinance is the replacement of the ‘exclusive jurisdiction agreement’ requirement under the Old Arrangement with a jurisdictional test based on a ‘connection’ with the Mainland or Hong Kong.

    The Old Arrangement required a written exclusive jurisdiction agreement in favour of the Mainland courts in the underlying contract for enforcement of Mainland judgments in Hong Kong. Under the Ordinance, the judgment creditor will only need to establish a connection with the Mainland at the time when the proceedings were accepted. The connection test will be satisfied if:
    • the defendant’s place of residence was in the Mainland;
    • the defendant’s representative office, branch, office, place of business or other establishment was in the Mainland;
    • the place of performance of the disputed contract was in the Mainland;
    • the proceedings were brought in respect of a tortious dispute, and the tortious act was committed in the Mainland; or
    • the parties agreed in writing to submit to the jurisdiction (whether exclusive or non-exclusive) of the Mainland courts, and if the places of residence of all the parties were in Hong Kong, together with evidence that there was a connection between the Mainland and the dispute (such as the contract was or was to be performed, or signed in the Mainland, or the subject matter was situated in the Mainland).

    The same factors will be considered for applicants seeking to enforce Hong Kong judgments in the Mainland.

    The removal of the exclusive jurisdiction agreement requirement will provide greater flexibility to parties when drafting dispute resolution clauses.
  2. Expansion of subject matter: The Ordinance extends coverage to judgments arising from most civil and commercial matters, as well as compensation or damages awarded in criminal proceedings.

    The Ordinance adopts an exclusion list, excluding only certain types of judgments in civil and commercial matters, such as insolvency and bankruptcy cases, certain arbitration-related matters, certain matrimonial, family and succession cases, certain intellectual property and maritime matters, however, most of these matters are covered under alternate Mainland-Hong Kong mutual assistance arrangements.

    The Old Arrangement, on the other hand, was limited to judgments arising from contractual disputes only.
  3. Expansion of enforceable relief: The categories of remedies have also been expanded under the Ordinance to cover both monetary and non-monetary relief (e.g., orders for specific performance, injunction orders, etc.).

    The Old Arrangement only covered monetary judgments.
  4. Expansion of Courts: The Ordinance has expanded the coverage to judgments made by lower courts and tribunals. In the Mainland, judgments of all Primary People’s Courts will now be covered in addition to the Supreme People’s Court, Higher People’s Court, Intermediate People’s Court. In Hong Kong, in addition to judgments of the Court of Final Appeal, the High Court and the District Court, judgments issued by Tribunals, including the Labour Tribunal, Lands Tribunal, Small Claims Tribunal and the Competition Tribunal will now be included.