Mainland Chinese civil & commercial judgments now enforceable in Hong Kong

China (represented by the Supreme People’s Court) and Hong Kong have just entered into an arrangement that significantly changes (by strengthening) the existing regime for the mutual recognition and enforcement of judgments by mainland and Hong Kong courts. The headline is a little too sweeping, so please read on for the details.

In 2006, China and Hong Kong entered into an agreement (called an “arrangement” because “agreement”, “treaty”, and other terms might imply that the parties had equal status) for the mutual recognition and enforcement of certain judgments. But its reach was very limited. Due among other things to the concerns of the Hong Kong bar about the fairness of mainland court proceedings, the arrangement’s coverage was limited to money judgments of a court where the parties had already contractually agreed that the court in question would have exclusive jurisdiction over any disputes. If the parties had agreed that a mainland court had jurisdiction, Hong Kong courts would enforce their judgment, and vice versa. In other words, it functioned the same way as an agreement to enforce arbitration awards. Nobody would ever have a mainland court judgment enforced against them under this arrangement unless they had contracted for it.

The new arrangement changes this. Like the old arrangement, it covers civil and commercial judgments (“judgments” being defined broadly), with some carve-outs for a number of specific exceptions, such as patent litigation. Most importantly, however, it eliminates the condition of voluntariness. Hong Kong courts will now, if the requisite conditions are present, enforce mainland judgments even where the parties didn’t explicitly agree on mainland jurisdiction. This is a major shift in the underlying principle behind these arrangements, and is another symbolically significant mark of the erosion of “One Country, Two Systems.”

Background material:

  • Hong Kong Department of Justice web page with texts and background information of 2006 arrangement, 2019 arrangement, and a 2017 arrangement specifically directed at marriage and divorce issues (Chinese | English).
  • Chinese text of 2019 arrangement from Supreme People’s Court website.
  • Chinese source for text of 2006 arrangement (with details about when passed, when effective, etc.) This document says that the arrangement did not come into effect until Aug. 1, 2008; I had always thought it came into effect much earlier than that. If anyone can explain in the comments what the 2008 date is about, I’d appreciate it.
  • Commentary by attorney Graeme Johnston on the 2006 arrangement, with helpful links to background materials.

 

3 thoughts on “Mainland Chinese civil & commercial judgments now enforceable in Hong Kong”

  1. Sorry, I don’t understand how is that an abrogation from one-country / two systems. Isn’t it consistent with how judicial-recognition agreements are commonly structured in the context of let’s call them ‘two-country / two-systems’ relationships? I know that American courts can and do enforce judgements by French courts even in absence of express consent to French jurisdiction by the judgement-debtor.

    Of course, I am not suggesting that the HK-PRC agreement was a ‘wise’ one from the perspective of rule of law in HK. But that would be a different question.

    Mike

    1. I didn’t call it an abrogation. I called it an erosion. I am of course aware that many countries voluntarily enter into mutual recognition and enforcement agreements with each other, and nobody thinks it impinges on their sovereignty. But it is also true that a US legal system that automatically enforces French judgments is tied more closely to the French legal system than a US legal system that does not automatically enforce French judgments. This seems to me undeniable, and the fact that US legislators may think it’s a good idea to tie the US legal system more closely to that of French doesn’t change that. In the case of Hong Kong, one might also question the voluntariness of the new arrangements. Back in 2006, the HKSAR government did not go this route because there was pushback from the bar based on concerns about the PRC legal system. What has changed since then? I don’t think anything has happened to the way PRC courts operate that would decrease the concerns of the HK bar. But I do think the HKSAR government has become more willing to listen to Beijing and less willing to listen to Hong Kongers. But perhaps someone familiar with HK politics and the legal profession can weigh in.

  2. Your response raised an interesting question regarding the constitutional nature of the one-country / two-systems principle. Particularly among the UK public-law scholars (see especially Martin Loughlin), a distinction is often drawn between ‘legal constitutionalism’ (eg. the US) and ‘political constitutionalism’ (eg. the UK). Your interpretation of the one-country / two-systems principle — which I agree with at a functional level — is, I would argue, a political-constitutional interpretation. My interpretation is a legal-constitutional interpretation. It would be a very interesting theoretical question whether the Basic Law sets out a legal or a political constitutional framework. The irony here is I am generally attracted to political conceptualizations of constitutionalism rather than legal conceptualizations, but for some reason I’ve always approached the Basic Law and the OC-TS framework as a primarily legal articulation. I need to think about this more, but I think for now I need to give you this one. Thanks.

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