on 14 july 2006, the hong kong sar government and the courts of mainland china signed an arrangement on the reciprocal enforcement of judgments in civil and commercial matters ("the arrangement").
in a press release published by the hksar government, the objective of the arrangement is stated to be to establish a mechanism for the reciprocal enforcement of judgments made by the courts of the mainland and of the hksar so that a judgment creditor will no longer need to spend a large amount of time and money to bring a legal action again in the place where the property of the debtor is located.
the full text of the arrangement has not yet been published in hong kong, or in mainland china, however some details of the workings of the arrangement were released in the press release. in summary:
- the arrangement only covers monetary judgments relating to commercial contracts;
- the litigants must have submitted to the exclusive jurisdiction of a court of the mainland or the hong kong sar;
- for judgments issued in the mainland, only those by an intermediate people's court or above, or a basic people's court which has been authorised to exercise jurisdiction in civil and commercial cases involving foreign parties will be covered;
- hong kong judgments must be issued by the district court or a higher court.
this is a very significant positive development. its potential effect on hong kong judgment creditors wanting to enforce in the mainland, and vice versa, is not to be underestimated. however, it remains to be seen how quickly judgment creditors will be able to rely on the arrangement. a briefing paper prepared by the hong kong sar government for the legco panel on administration of justice and legal services in february 2006, shortly before the conclusion of the arrangement, cautions that the arrangement will only become effective when the hong kong sar government has completed the relevant legislative procedures and the supreme people's court has promulgated a judicial interpretation to give effect to the arrangement. our offices on the mainland report that, thus far, news in the prc media on the arrangement is decidedly muted and there is no indication as to the timescale for the prc supreme people's court to issues its judicial interpretation. we will keep you updated both when we are able to make a comprehensive assessment of its impact on the release of the full text, and when we become aware of its imminent implementation. |