On July 3, 2008, the Supreme People’s Court of the PRC issued the Arrangement of the Supreme People’s Court between the Mainland and Hong Kong SAR on Reciprocal Recognition and Enforcement of the Decisions of Civil and Commercial Cases under Consensual Jurisdiction (the Arrangement), which came into force on August 1, 2008. This Arrangement represents the first time that mainland China and the Hong Kong Special Administrative Region (Hong Kong) have agreed to reciprocally recognize and enforce monetary court judgments on commercial contract cases in which the parties consented in writing to the exclusive jurisdiction of mainland or Hong Kong courts.
The recognition and enforcement of court judgments in other jurisdictions is an important part of judicial assistance in civil and commercial matters. The Arrangement only applies to commercial contract dispute cases and situations in which the parties agreed in writing to the exclusive jurisdiction of mainland or Hong Kong courts.
The Arrangement does not apply to employment contracts, consumer contracts, or contracts involving family or other non-commercial matters. In addition, the Arrangement only applies to monetary judgments, which must be final, and does not apply to specific performance or confirmation of rights and interest. The Arrangement specifically defines judgments to include decisions, rulings, mediation awards, and payment orders in the mainland, as well as decisions, orders, and legal fee appraisal certificates in Hong Kong.
The Arrangement only applies to court judgments made after the effective date of the Arrangement. The statute of limitations for petitioning for the recognition and enforcement of a judgment is two years. In the mainland, the petition is filed with the intermediate people’s court in the location of residence or property of the party against whom the petition is filed. In Hong Kong, the petition is filed with the High Court of Hong Kong SAR.
- A court will refuse to recognize and enforce a judgment if:
- the jurisdiction agreement between or among the parties is invalid; however, an exception will be made if the court to which the parties consented jurisdiction determines such jurisdiction agreement to be valid;
- the judgment has been fully satisfied;
- the court of the place of enforcement has exclusive jurisdiction over the case according to the law in that jurisdiction;
- the losing party did not receive proper notice, or was not granted the time for defense in accordance with the law of the place of the original trial court;
- the judgment was obtained by fraud; or
the court of the place of enforcement or in a foreign country already delivered a judgment on the same claim, or an arbitral agency has made an arbitral award and the court at the place of enforcement has recognized or enforced the judgment. In addition, courts in the Mainland and Hong Kong SAR may refuse to reciprocally recognize or enforce a judgment based on public policy reasons.
Under the Arrangement, if a party refuses to accept a ruling regarding allowing or disallowing the recognition and enforcement of a judgment, it may petition for reconsideration to the people’s court at the next higher level in the mainland, or may appeal in Hong Kong in accordance with Hong Kong law. Moreover, a court can order an attachment of property or take other compulsory measures against the party’s property against whom the application is filed before or after accepting a petition for the recognition and enforcement of a judgment under the Arrangement.
The Supreme People’s Court of the PRC and the Hong Kong government will solve any problems encountered in the implementation of the Arrangement through mutual consultation.