The Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap 645) (REO) has just come into force (29 January 2024) and will now apply to judgments obtained in either mainland China or Hong Kong, replacing the old regime. For companies who pursue cross-border litigation involving counter-parties based in China or Hong Kong, this improved avenue for the enforcement of judgments is of great interest.

Clients should be aware of the following three significant changes brought about by the new regime:

• Increased scope: the under old regime, reciprocal enforcement was only possible in contractual disputes. The REO covers almost all civil and commercial matters, save for those excluded by section 5 (matrimonial cases, for example). The REO specifically excludes reciprocal enforcement of liquidation orders [s.5(1)(e)].
• More relief: under the old regime, reciprocal enforcement was only available to seek monetary relief. Non-monetary relief may now also be applied for, including, for example: (i) specific performance or (ii) declaratory relief.
• Enforcement without exclusive jurisdiction: under the old regime, judgments could only be reciprocally enforced if the underlying contract contained an exclusive jurisdiction clause. The REO has jettisoned this.

A party only has 14 days to apply to set aside a judgment registered in Hong Kong [s.21(1)], beginning from the date that a notice of registration is served: this 14-day deadline can be extended upon application [s.21(2)]. The offshore community will be familiar with the care required to successfully serve out of the jurisdiction.

There are also a number of grounds upon which a court may set aside the registered judgment [section 22(1)), many of which will be familiar to litigants seeking to enforce in cross-border offshore disputes, but some of the more noteworthy grounds are:

• The deciding court did not have jurisdiction to decide the underlying dispute [s.22(1)(b)];
• The case was accepted by a mainland Chinese court after concurrent proceedings had already been started in Hong Kong [s.22(1)(e)];
• That enforcement would be contrary to Hong Kong public policy [s.22(1)(j)].

These grounds, in particular, are likely to be fiercely contested and will require early input from legal advisers to judgment creditors.

In summary, the REO can be used to enforce Hong Kong judgments in China without having to re-litigate an underlying dispute, saving clients not only time and money but setting the conditions to prevent further loss. This will be of particular interest in fraud and asset tracing cases: offshore claimants seeking to recover dissipated assets from a counterparty listed or with underlying operations in mainland China now have greater flexibility when seeking relief in the Hong Kong courts following judgment.