To address the mutual recognition and enforcement of civil and commercial judgments in the mainland and in Hong Kong, the Supreme People’s Court recently announced the promulgation of the Arrangements of the Supreme People’s Court and the Hong Kong Special Administrative Region Government on the Mutual Recognition and Enforcement of Judgments in Civil and Commercial Matters by Courts on the Mainland and the Hong Kong Special Administrative Region (the “Arrangements”) in conjunction with the Hong Kong Special Administrative Region Government. The Arrangements mainly cover the scope of civil and commercial cases, judgments and how they are effective, the application procedures, denial of recognition and enforcement and the termination of the recognition and enforcement process.
1. Scope of civil and commercial cases
“Civil or commercial cases” refer to those dealing with matters that are considered as civil and commercial under the laws of the mainland as well as of the Hong Kong Special Administrative Region. This includes the mutual recognition and enforcement of effective civil damages judgments in criminal cases, but do not include judicial review cases in the Hong Kong Special Administrative Region and other cases directly arising from the exercise of administrative powers.
Meanwhile, the provisions of the Arrangements temporarily do not apply to eight categories of special cases involving [familial] support, inheritance, patents, maritime affairs, bankruptcy, voter qualifications, declaration of disappearance or death, disposing capacity of natural persons, confirmation of the validity of arbitration agreements, and recognition and enforcement of judgments or awards rendered in other countries and regions.
2. Judgments and their effectiveness
Judgments on the mainland include judgments, rulings, mediations, payment orders but do not include preservation rulings, while judgments in the Hong Kong Special Administrative Region include judgments, orders, decrees, and court cost assessment certificates but do not include anti-suit injunctions and temporary relief orders. Effective judgments on the mainland refer to second instance judgments or first instance judgments that are not appealable or those whose appeal deadline is past, as well as any such judgment rendered according to a trial supervision procedure. In the Hong Kong Special Administrative Region, effective judgments refer to those rendered by the Court of Final Appeal, the Court of Appeal of the High Court and the original trial court, the regional courts and the Labour Tribunal, the Lands Tribunal, the Small Claims Tribunal and the Competition Tribunal that have already taken legal effect.
3. Application procedure
Regarding an application filed pursuant to the Arrangements to recognize and enforce a judgment stipulated under the Arrangements, an application in the mainland shall be filed with the intermediate people’s court where the applicant or the respondent is domiciled or the property is located; applications in the Hong Kong Special Administrative Region shall be filed with the High Court. If an applicant applies to more than two competent people’s courts, the people’s court that sets up a case file first shall have jurisdiction.
The application to recognize and enforce a judgment requires the submission of the following materials: (1) an application; (2) a copy of the judgment with the stamp of the court that rendered the effective judgment; (3) a certificate issued by the court that rendered the effective judgment and shows that the judgment is an effective judgment, for judgments with enforcement details, it must be shown that it is enforceable in the original trial court; (4) supporting documentation in case of a default judgment, which indicates that the parties have been lawfully summoned, except when the judgment has specifically provided an explanation or if the recognition and enforcement application is being filed by the absent party; and (5) proof of identity.
4. Circumstances where recognition or enforcement is denied
In case the respondent provides evidence of any of the following in an application to recognize and enforce a judgment and the court has verified as authentic, recognition and enforcement shall be denied: (1) the jurisdiction of the original trial court over the relevant lawsuit does not comply with Article 11 of the Arrangements; (2) the respondent was not lawfully summoned or was not granted with a reasonable opportunity to make a statement or participate in oral argument pursuant to the law in the place where the original trial court is located; (3) the judgment was obtained by fraudulent means; (4) the original trial court accepted a complaint filed over the same dispute and rendered a judgment after the court for the respondent accepted the relevant lawsuit; (5) the court for the respondent has rendered a judgment on the same dispute or has recognized a judgment rendered in another country or region on the same dispute; or (6) the respondent’s side has rendered an arbitration award on the same dispute or has recognized an arbitration award rendered in another country or region on the same dispute.
If a mainland people’s court considers that the recognition and enforcement of a judgment rendered by a court in the Hong Kong Special Administrative Region is in clear violation of the basic legal principles of the mainland or social or public interest, or vice versa, such judgment shall not be recognized and enforced.
In addition, if the respondent can provide evidence showing that the lawsuit heard by the original trial court was in violation of the effective arbitration agreement or jurisdiction agreement between the parties on the same dispute, the court for the respondent may decline to recognize and enforce the judgment after verification of such evidence.
Any part of a judgment concerning the validity, establishment or existence of intellectual property rights as rendered by the original trial court will not be recognized or enforced, provided that if the resulting assumption of relevant liabilities from those parts meet the Arrangements, they may be recognized and enforced. Meanwhile, the court for the respondent shall not refuse the recognition and enforcement of a judgment merely on the ground that the prerequisite issues of the judgment do not fall within the scope of application of the Arrangements.
5. Termination of recognition and enforcement
In case of a judgment rendered by a court in the Hong Kong Special Administrative Region, if one of the parties has appealed or a people’s court on the mainland has granted a retrial, the court receiving the application may terminate the recognition and enforcement procedure after verification. If the original judgment is upheld in whole or in part after being appealed or retried, the recognition and enforcement procedure may be resumed; and if the original judgment is completely changed, the recognition and enforcement procedure will be terminated.
In addition to the above, the Arrangements also stipulate the content of judgments that may be mutually recognized and enforced, regarding cases involving intellectual property infringement, and issues relating to the litigation of the same case and the recognition and enforcement procedure. The effective date of the Arrangements has not yet been set, but once the Arrangements become effective, the original Arrangements on the Mutual Recognition and Enforcement of Judgments in Civil and Commercial Matters under the Jurisdiction Agreement between the Parties by Courts on the Mainland and in the Hong Kong Special Administrative Region will be abolished, and applications for the recognition and enforcement of civil and commercial judgments in the mainland and in Hong Kong will no longer require a jurisdictional agreement between the parties.