Enforcement of Mainland Judgement in Hong Kong – Case Updates HCMP 2080/2015

Enforcement of Mainland Judgement in Hong Kong – Case Updates HCMP 2080/2015

In 2015, I wrote an article entitled ‘If a Mainland Court Judgement is to be Run in Hong Kong’, which introduces two methods of enforcing a Mainland court judgement in Hong Kong. One method is by way of civil judicial assistance between the Mainland and Hong Kong, i.e. through the enforcement mechanism as defined in the Mainland/Hong Kong Reciprocal Operation of Judgements in Civil and Commercial Matters and its Arrangement signed by the two jurisdictions. The other method is by way of enforcement of foreign judgments under common law, i.e. filing a further action in Hong Kong using the Mainland court judgement as the cause of action, obtaining a Hong Kong court judgement and then applying for enforcement of the Hong Kong court judgement.

Limitations of the Arrangement on Reciprocal Operation of Judgments in Civil and Commercial Matters between the Mainland and Hong Kong and its Arrangements

The greatest difficulty in enforcing Mainland court judgments in Hong Kong through this form of mutual legal assistance between the two places lies in the fact that the conditions for application of the Arrangement include that it must be agreed by both parties to the contract that exclusive jurisdiction is to be exercised by a court of either the Hong Kong or the Mainland party. Such clauses are generally seldom found in contracts.

The second difficulty is that the party applying for the operation must prove to the Hong Kong court that the judgement of the Mainland court is final and enforceable. The Mainland’s retrial system (the new Mainland Civil Procedure Law has revised the time limit for applying for retrial from two years to six months) constitutes an obstacle to finding that a court judgement is final and enforceable in Hong Kong cases.

Court of First Instance Case HCMP 2080/2015

The court judgement in this case (in English) can be viewed, click to view the judgement. The judgement is noteworthy in the following ways:

1. In that case, what was being applied for to run was the Conciliation Settlement which was concluded by mediation and came into effect in the Mainland courts. The operation of the Mediation Order is no different from that of the Judgment, both of which can be applied for enforcement under the Arrangement.
2. In this case, the parties to the contract did not expressly agree in the contract that the Mainland courts would exercise exclusive jurisdiction, but rather agreed that ‘the People’s Court of the place where the loan contract is signed shall have jurisdiction’. However, as the loan contract was signed in the Mainland, the Hong Kong court held that the parties had agreed to the jurisdiction of the Mainland courts.
3. In this case, neither the loan contract nor the guarantee contract used the terms ‘sole jurisdiction’, ‘exclusive jurisdiction’, ‘exclusive jurisdiction’ or anything similar to ‘jurisdiction of other jurisdictions’. The Hong Kong courts have not interpreted the expressions ‘sole jurisdiction’, ‘exclusive jurisdiction’, ‘exclusive jurisdiction’ or expressions similar to ‘the courts of other jurisdictions are not competent to deal with such disputes’ and have directly held that CEPA is applicable.
4. On the understanding that a judgement is ‘final and executory’, the Court held that where the applicant has submitted a certificate from the court that the judgement is final and executory, the respondent is required to submit evidence to prove that the judgement is not ‘final and executory’ if it wishes to reverse this point. ‘final and executory’. In addition, whether or not the Respondent actually applied for a retrial within the six-month retrial period is an important consideration.

(Note: The Mainland in points 2 and 3 above are not mentioned in the HCMP 2080/2015 Judgment, but are known from the introduction of the article ‘Obstacles and Breakthroughs in the Recognition of Mainland Judgements by Hong Kong Courts’ by Mr. Lin Jianyi of the Shenzhen Intermediate People’s Court in the People’s Court Newspaper)

Significance of the Court of First Instance case HCMP 2080/2015 not being precedent-setting

It is a common law principle that a case does not become a precedent on a particular issue of controversy if the issue has not been analyzed and decided by the court on that issue of controversy. In addition, cases of the Court of First Instance of the High Court do not have precedential significance per se (only cases of the Court of Appeal or above), but only have reference significance.

It is therefore inaccurate for Mr. LIN Jianyi of the Shenzhen Intermediate People’s Court to say in his article ‘Obstacles and Breakthroughs in the Recognition of Mainland Judgements by Hong Kong Courts’ in the People’s Court Daily’ that the case in question ‘will form the basis for subsequent decisions under the common law principle of stare decisis’.

For matters relating to the enforcement of mainland court judgements in Hong Kong, please contact Yan Lawyers.

(Bob Yan, principal solicitor of Yan Lawyers, solicitors. Email: [email protected], Tel: +852 31881995, +86 15018939249, WhatsApp: +852 5103 9249)