Since the handover in 1997, the economic ties between Hong Kong and the Mainland have grown stronger due to the implementation of the "Closer Economic Partnership Arrangements" (CEPA).

 

At present, there is no reciprocal enforcement of judgments between Hong Kong and the Mainland. One has to rely on the common law for assistance. That is, a fresh legal proceedings in Hong Kong has to be instigated so as to enforce the Mainland judgments.

 

The position will soon be different. On 23 February 2007 a draft legislation entitled "The Mainland Judgments (Reciprocal Enforcement) Bill" was published. The bill is expected to come into effect in the near future. When that happens, monetary judgments on commercial contracts, with a valid choice of forum provision specified in the contract documents, given by the Intermediate People's Court or the Superior Court in the Mainland or the District Court or Superior Court in Hong Kong will be mutually enforceable.

 

In light of the difference between the two legal systems, a foreign party to the contract may in future choose to designate a Court in Hong Kong to adjudicate any dispute which may arise under the contract to the exclusion of the courts of the Mainland or vise versa.

 

This new legislation has little effect on the arbitral awards between Hong Kong and the Mainland which remain enforceable by virtue of the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958.

 

Albert Lam

Partner

Hampton, Winter And Glynn

May 2009