Recognition and Enforcement of Foreign Judgments in Hong Kong and the Hague Conference’s proposed Convention

In October 2016, Hong Kong’s Department of Justice released a Consultation Paper, seeking views (by the end of November 2016) on the Hague Conference’s proposed convention for the recognition and enforcement of judgments between member states. This article looks at Hong Kong’s regime for the recognition and enforcement of foreign judgments and what the Convention could mean for Hong Kong. 

Hong Kong has a statutory registration scheme for the recognition and enforcement of foreign judgments, based on   reciprocity, namely the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap 319), under which a judgment creditor with a final and conclusive judgment obtained from a superior court of a country designated under Cap 319, can apply to Hong Kong’s Court of First Instance to register that judgment. Once registered, the judgment has the same force and effect as a Hong Kong judgment for the purposes of enforcement.

There are 15 designated countries under Cap 319, namely Australia, Bermuda, Brunei, India, Malaysia, New Zealand, Singapore, Sri Lanka, Belgium, France, Germany, Italy, Austria, The Netherlands and Israel. The PRC is not a designated country, but final and conclusive money judgments of designated PRC courts can be registered in Hong Kong (if certain criteria are satisfied, including the parties having entered into a Choice of Mainland Court Agreement) under the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap 597). Once registered, the PRC judgment has the same force and effect as a Hong Kong judgment for the purposes of enforcement. 

Hong Kong has not entered into any multilateral convention or bilateral treaty regarding recognition and enforcement of foreign judgments. The consequence is that foreign judgments (other than those qualifying for enforcement under Caps 319 and 597, referred to above) can only be enforced in Hong Kong under common law, which entails issuing fresh proceedings in Hong Kong based on the judgment. However, this may change in future as a Special Commission set up by the Hague Conference on Private International Law (Hague Conference) has been tasked with producing a Convention on the recognition and enforcement of foreign judgments between Member States. Membership of the Hague Conference is limited to States and China is a Member State. A representative of Hong Kong’s Department of Justice participated in the Special Commission as part of the Chinese delegation and will continue to be represented in the Special Commission’s work.

Following a meeting in The Hague in June 2016, the Special Commission produced a “2016 Preliminary Draft Convention on the Recognition and Enforcement of Foreign Judgments” (Preliminary Draft Convention). The aim of the proposed Convention is to:

• enhance access to justice;
• facilitate cross-border trade and investment by reducing the costs and risks associated with cross-border dealings;

The Convention will focus on the recognition and enforcement of judgments between Contracting States and set out the minimum requirements for the courts of one Contracting State to recognise and enforce a judgment of another Contracting State. The Preliminary Draft Convention includes the following major Articles, under which many of the provisions still require further discussion by the Special Commission:

(1)   Scope of the Convention: The Convention is to apply to the recognition and enforcement of judgments relating to civil or commercial matters. Further discussion is required in relation to what this includes, for example, whether it is to apply to anti-trust or competition matters or to claims brought by a government agency or public authority on behalf of affected parties to claim compensation for harm suffered. The Draft lists those matters to be excluded from the Convention, for example, wills and succession, insolvency, defamation and arbitration proceedings.

(2)   Bases for recognition and enforcement: The Preliminary Draft Convention lists the requirements for a judgment to be eligible for recognition and enforcement. One of the bases to be further discussed is enforcement of a judgment against a natural person in his principal place of business where the judgment arises out of the activities of that business.

(3)   Refusal of recognition or enforcement: The Preliminary Draft Convention sets out the grounds upon which a judgment may be refused recognition or enforcement, for example on the grounds of public policy, where the judgment was obtained by fraud or where the judgment is inconsistent with a judgment in the requested State in a dispute between the same parties.

(4)   Documents to be produced by the party seeking enforcement: The Preliminary Draft Convention sets out the documents required to be produced by the party seeking enforcement, including, for example, a certified copy of the judgment and any documents necessary to establish that the judgment has effect or is enforceable in the State of origin.

(5)   Procedure: The Preliminary Draft Convention provides that procedure shall be governed by the law of the requested State, unless the Convention provides otherwise.

(6)   Costs of proceedings: The Preliminary Draft Convention provides that a requested court cannot require security, a bond or deposit from the party seeking enforcement solely on the ground that the party seeking enforcement is a foreign national or not domiciled or resident in the requested State. 

The Preliminary Draft Convention will be further discussed at a second meeting of the Special Commission scheduled for February 2017 and the aim is to finalise the Convention in 2017. Once finalised by the Special Commission, it will be submitted to members of the Hague Conference for consideration at a diplomatic conference. If adopted, by the Hague Conference, the Hong Kong Government will consider the Convention’s application to Hong Kong, after assessing the views of interested parties and the impact it will have on Hong Kong’s legal system.

If adopted in Hong Kong, the Convention would be a welcome addition, as it would provide judgment creditors with an effective regime for enforcing in Hong Kong those foreign judgments not currently qualifying for enforcement under Caps 319 and 597 and for Hong Kong judgment creditors to enforce their judgments in member states. It would also no doubt facilitate cross-border trade and investments by reducing the risks associated with such.