Hong Kong and China have taken a major step forward in legal collaboration, with a reciprocal deal to recognise and enforce judgments in certain types of cases. The historic move will bring clarity and reduce litigation costs.
On 18 January 2019 in Beijing, Hong Kong’s Secretary for Justice, Teresa Cheng, and the Vice-President of the Supreme People’s Court of China, Yang Wanming, signed an arrangement on reciprocal recognition and enforcement of judgments (REJ) in civil and commercial matters.
When it is formally passed into law in both jurisdictions, the arrangement will mark a major step forward in reducing the need for re-litigation of the same disputes in both places. Further, this bilateral legal mechanism will offer greater clarity and certainty for REJ, reduce litigation costs and provide improved protection of the respective parties’ rights and interests. Apart from furthering legal co-operation between Hong Kong and the Mainland in civil and commercial matters, the arrangement will also enhance the former’s status as a regional centre for international legal and dispute resolution services.
The new arrangement applies to matters considered to be of a “civil and commercial” nature under both Hong Kong and Mainland law and covers both monetary and non-monetary relief, including all types of costs orders. However, it should be noted that there remain significant differences in the way Hong Kong and Mainland courts handle civil matters and so non-judicial proceedings and judicial proceedings relating to administrative or regulatory matters are excluded from the agreement.
The signing of this new agreement is good news for people doing business with individuals or companies that have assets in both Hong Kong and the Mainland. Beneficiaries of the legislation would certainly include investors in the Belt and Road Initiative and Greater Bay Area.