DoJ clarifies the 'fallacy' that mainland can confiscate HK assets once reciprocal enforcement regime commences

The Department of Justice (DoJ) made it clear on Tuesday that the mainland judgments will not automatically take effect in Hong Kong and investors' assets in the city will not be confiscated by the mainland directly, as the arrangement on reciprocal recognition and enforcement of civil and commercial rulings by the courts between HKSAR and the mainland come into force next week.

The clarification came after some suggested the judgments of the mainland courts would be automatically applicable in Hong Kong after the implementation of the arrangement, and some were concerned China could confiscate their possessions.

"This is a fallacy," said the DoJ spokesman.

DoJ said the creditor under the mainland judgment must first apply to the Chinese court for a copy of and a certificate for the relevant judgment, and submit them together with other relevant documents to the Court of First Instance of the High Court in Hong Kong to make a registration application about the relevant mainland judgment. 

It added that the registrant must also notify the other party of the judgment, in order to allow that party to consider applying to the Hong Kong court to set aside the registration. 

"A further application can be made for execution of the relevant mainland judgments through other legal proceedings on the basis of the mainland court's judgment only if the registration has not been set aside," the spokesman stressed.

DoJ said there was another fallacy in suggesting that "the courts of the two places will notify each other or exchange information on the details or enforcement of the cases" after the reciprocal enforcement regime comes into operation.

It stressed that it was a choice of the concerned parties whether to apply for enforcement of the relevant judgments in the other place. 

DoJ said the relevant arrangement is to respond to the need for a clear and comprehensive mechanism for mutual legal assistance in civil and commercial matters between Hong Kong and the mainland, reducing the need for relitigation of the same disputes and better balance the interests of creditors and debtors.

Regarding the implementation of the arrangement, Chief Executive John Lee Ka-chiu said relevant parties - who have opinions or any objection on whether a judgment from mainland courts can be made effective in Hong Kong - can also make their grounds known to the court while that would be a deal according to legal principles. 

"So the relevant party's rights, and also, his opinions and grounds for objection, will be heard by the court according to legal principle, ensuring that they operate within all the legal confines and there will be a fair process for all the opinions and reasons to be heard," he said