Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance and Rules taking effect in January 2024

Introduction

In November 2022, we issued a legal update on Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) (MJREO) (see here).

To recap, the MJREO is to give effect to the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by Courts of the Mainland and of the Hong Kong Special Administrative Region signed on 18 January 2019 (the 2019 Arrangement), which is intended to provide for a simple and streamlined registration mechanism that allows for a wider range of judgments to be enforced between Mainland China and Hong Kong.

The commencement date for the MJREO is now set for 29 January 2024 per the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Commencement) Notice published by the Secretary for Justice on 30 October 2023. Along with the MJREO, the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Rules (the Rules) will also come into operation on the same date. 

Pursuant to s.35 of the MJREO, the Rules are intended to complement the MJREO by providing detailed provisions for practice and procedures relating to the making of applications, execution of registered judgments and for carrying out the purposes and provisions under the ordinance.

Key Provisions under the Rules

For a detailed analysis of the MJREO, please refer to our previous article published here, where we highlighted some key changes under the 2019 Arrangement, including the removal of the exclusive jurisdiction requirement, expansion of the scope of applicable matters to be covered and the expansion of categories of remedies to both monetary and non-monetary relief. For completeness, we further set out some important provisions of the Rules below.

1. Registration applications

   Part 2 of the MJREO provides that a judgment creditor under a Mainland judgment in a civil or commercial matter may apply to the Court for a registration order to register the judgment (or any part of it) if certain conditions are satisfied and on payment of the prescribed fees (s.10(2) of MJREO).

   The Rules further stipulate that such registration application must be made ex parte to the Court of First Instance in Hong Kong (the Court) by originating summons in a prescribed form (Form No. 11 in the Rules of High Court (Cap.4A)) and must be supported by an affidavit. Apart from identity documents (see s.5(1) of the Rules), the supporting affidavit must also exhibit, among others, a copy of the judgment duly sealed by the original Mainland court (s.5(2) of the Rules), a certificate issued by the original Mainland court certifying that the judgment is effective in the Mainland (s.5(2) of the Rules), evidence relevant to the enforceability of the judgment (s.5(4) of the Rules) and a statement of costs in respect of the application (s.5(4) of the Rules). Additional requirements for the supporting affidavit apply for different types of applications, and practitioners are advised to familiarize themselves with Division 2 of the Rules.

   It should also be noted that a draft registration order must be drawn up by or on behalf of the applicant along with the registration application per s.14 of the Rules. Such registration order must also specify that an action to enforce the judgment (or part of it) may only be taken after the expiry of the period within which a Setting Aside Application (defined below) to set aside the registration of the judgment (or any part of it) may be made or after such an application has been finally disposed of.

2. Notices of registration

   S.13(3)(b) of the MJREO stipulates that on the making of a registration order in relation to the Mainland judgment (or any part of it), the applicant must serve a notice of registration on all persons, so far as known to the applicant, against whom the judgment (or part or it) may be enforced. The required mode(s) of service are set out at s.16 of the Rules.

3. Setting aside the registration of a judgment

   If a person against whom a registered judgment may be enforced intends to set aside the registration of the judgment (or any part of it), such person may make a setting aside application (Setting Aside Application) within 14 days (or such longer period as specified by the Court) after the date on which a notice of registration is served on him (s.21 of MJREO) on the grounds specified under s.22 of MJREO.

   Per s.17 of the Rules, such Setting Aside Applications must be made by summons supported by affidavit. When considering the application, the Court may order any issue between the parties to be tried in any way in which an issue in action may be ordered to be tried (s.17(2) of the Rules), and/or may impose any terms (whether as to giving security or otherwise) it considers appropriate as a condition of the further conduct of the Setting Aside application if it deems just to do so (s.17(3) of the Rules).

   Notably, s.13 of the Rules also provides that the Court may order the applicant to give security for costs in a registration application or a Setting Aside Application.

4. Execution applications

After registering the judgment and complying with the notification requirements, provided that the period within which a Setting Aside Application may be made has expired or such application has been disposed of, the applicant may proceed to the enforcement stage by issuing an application for execution on the registered judgment (Execution Application). Apart from providing a supporting affidavit (see s.19(2) of the Rules for the requirements), such Execution Application must also be accompanied by an affidavit of service of the notice of registration and the order made by the Court in relation to the judgment (s.19(1) of the Rules). Applicants should also observe the relevant procedural requirements under the Rules of High Court (Cap.4A) in relation to such proceedings.

Conclusion

With the commencement date set for both the MJREO and the Rules, mechanisms in Hong Kong to implement the 2019 Arrangement are now fully established. The remaining step would be for the Supreme People’s Court in the Mainland to promulgate judicial interpretation in order to give full effect to the 2019 Arrangement, which would be completed by the mutually agreed commencement date of 29 January 2024.

In summary, we anticipate that the MJREO and the Rules should reduce the need for the parties to re-litigate matters that have been decided by the Mainland Courts and therefore enhancing Hong Kong’s competitiveness as a choice of dispute resolution venue when Mainland elements are involved. As mentioned in our previous article, parties should also take this opportunity to re-examine their dispute resolution clauses and to consider whether it would be helpful to adopt/reinstate asymmetric exclusive jurisdiction clauses in financing transactions with a Mainland China nexus reflecting the abolition of the exclusive jurisdiction requirement.