China, HK sign arrangement on reciprocal recognition of civil, commercial cases

HONG KONG — China’s Supreme Court and Hong Kong’s Department of Justice said on Monday that they signed an arrangement on the reciprocal recognition and enforcement of judgements in civil and commercial cases effective immediately in both places.

The arrangement reduces the need for parties to re-litigate the same dispute in the mainland and Hong Kong courts, reducing the risks, legal costs and time usually associated with the cross boundary enforcement of such judgements, Hong Kong’s Department of Justice said in a statement.

It is unclear how the reciprocal recognition and enforcement arrangement would work in practice as there has been no previous precedent with the mainland.

Hong Kong is the only jurisdiction to have an arrangement with the mainland on reciprocal recognition and enforcement of judgements with such a wide coverage, it said.

The move comes as Hong Kong prepares to enact a new round of national security laws this year known as Article 23 that is expected to further tighten China’s grip, and include counter-espionage legislation that could strengthen official control over foreign institutions.

When Hong Kong reverted from British to Chinese rule in 1997, Beijing promised the city a high degree of autonomy including the right to free speech and protest.

Western critics say Beijing has reneged on those promises amid the current national security law crackdown that has been used to arrest over 280 pro-democracy activists and politicians including leading China critic Jimmy Lai.

Lai’s trial has become a diplomatic focal point and a key test for the financial hub’s judicial independence and freedoms, with diplomats including those from the US, Britain, the European Union, Canada, and Australia in attendance.

Justice Secretary Paul Lam said that the new civil and commercial arrangement showcased the unique advantages enjoyed by Hong Kong under the “one country, two systems” formula that the city is governed under.

It will make the option of choosing Hong Kong with its common law system which the “international business community is familiar with and have confidence in, as the jurisdiction to resolve any contractual dispute more attractive,” knowing that a Hong Kong judgement may be recognised and enforced all over the mainland, Mr. Lam said.

“This will be conducive to enhancing Hong Kong’s status as an international legal and dispute resolution services centre. It may also make investors and business people from other countries more ready to explore investment and business opportunities on the mainland.” — Reuters