Originally published 3 July 2006

By Fai Hung Cheung, Andrew Jeffries and Angus Ross

According to recent press reports, after years of discussions and consultation, an agreement on reciprocal enforcement of judgments is close to being reached between the mainland and Hong Kong. The timeframe is expected to be later this year.

The current proposal covers only money judgments given by a court in the mainland or Hong Kong exercising its jurisdiction pursuant to a valid choice-of-forum clause contained in a commercial contract.

Two features of the proposal deserve special attention:

  • the proposal covers mainland judgments not only from the Intermediate People's Court (and courts from a higher level), but also from certain Basic Level People's Court designated to have jurisdiction over foreign-related civil and commercial disputes; and

  • reciprocal enforcement will only apply to judgments from either Hong Kong or the mainland courts exercising jurisdiction pursuant to a valid choice-of-forum clause contained in commercial contracts, where the parties have agreed that courts from either or both places will have jurisdiction.

The mainland judiciary comprises four levels of courts that deal with civil and commercial cases: the Supreme People's Court in Beijing; the Higher People's Courts sitting on the provincial level; the Intermediate People's Courts sitting on the prefecture level; and also the Basic People's Courts in counties, towns, and municipal districts.

One major concern for the Hong Kong business and legal communities has been the consistency of quality across this broad range of mainland courts.

The Hong Kong government has assured our legislators that whilst there are more than 3,000 Basic Level People's Courts, only 42 are designated to have jurisdiction over foreign-related civil and commercial disputes, and that the designated courts are subject to stringent controls.

Together with the higher level courts, there are about 100 mainland courts whose judgments are proposed to be enforceable in Hong Kong by registration. It appears that this issue remains a cause for concern for some people.

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