Practitioners assisting clients to register Mainland judgments under the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap. 597) (“MJREO”) and the new Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) (“Cap. 645”) often face the dilemma of deciding which judgment to register when a PRC judgment is subject to appeal.
Recently, the Court of Appeal provided important clarification on the requirements for registering and enforcing Mainland judgments in Huzhou Shenghua Financial Services Company Ltd v Hang Pin Living Technology Company Ltd [2025] HKCA 434, and a stark illustration of the consequences of registering the incorrect Mainland judgment.
Significantly, this judgment sets out the legal principles governing the “final and conclusive” requirement under ss.5(2)(c) and 6 MJREO. Highly similar requirements can be found in s.8 of the new Cap. 645. This judgment therefore equally provides important guidance to practitioners considering and advising clients on registration under Cap. 645.
Case Summary
This case arose from a loan dispute in Mainland China. The Defendant was a guarantor of loans taken out by the Plaintiff. In the PRC Judgment, the Intermediate People’s Court of Huzhou City (“IPC”) held that the guarantee was invalid due to lack of authority. But the Defendant was ordered to bear 50% compensation liability for any portion of the debt the borrowers could not repay under on Art. 7 of the SPC Interpretation Guarantee Law (“PRC Judgment”).
The Defendant appealed to the High People’s Court of Zhejiang Province (“HPC”), which affirmed the IPC’s decision; a further application to the Supreme People’s court of China (“SPC”) for retrial was rejected.
In Hong Kong, the Defendant successfully applied to set aside the registration of the PRC Judgment at first instance. The Plaintiff appealed to the Court of Appeal.
Key Legal Issues
The Court of Appeal examined the following issues relevant to s.5(2) MJREO:
- Whether the judgement orders a “payment of a sum of money” under s.5(2)(e).
- Whether the judgment is “final and conclusive as between the parties to the judgment” under s.5(2)(c).
Court Findings and Takeaways
- Sum of Money Readily Apparent. The Court confirmed that under s.5(2(e) MJREO, a Mainland judgment must be for a definite sum of money or can be ascertained by a simple arithmetical process. Given the summary nature of registration under the MJREO, the amount to be enforced must be readily apparent on the face of the Mainland judgment and should not involve an extensive evaluative exercise by the Hong Kong Court, although extrinsic evidence can be introduced to ascertain the sum payable. As some assets of the Borrowers had not been fully enforced against, the Defendant’s liability for the sum payable remains uncertain and unqualified. Thus, it does not meet the requirement of “the payment of s sum of money”. Practitioners should bear in mind the need for the amount to be enforced to be readily apparent when advising Clients on registration under the MJREO, especially if the liability under the Mainland judgment is not ascertained or liquidated in nature.
- 6(1) MJREO Exhaustive Definition of “final and conclusive”. The Court of Appeal authoritatively held only Mainland judgments that strictly fall within s.6(1) MJREO – for example, a judgment of the second instance (i.e., an appellate judgment) given by a designated court (s.6(1)(c)) – qualify as final and conclusive for registration. There are no residual categories outside s.6(1). Therefore, in this case, the PRC Judgment was not final and conclusive as it was appealed to the HPC. The judgment by the HPC was the final and conclusive judgment between the parties. Practitioners must remember to register the correct judgment in accordance with the requirements under s.6(1), otherwise registration will be set aside as in Hang Pin.
Read the judgment here at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=168577&currpage=T
Mr. John Hui and Mr. Joshua Yeung were instructed by CLKW Lawyers for the Defendant at first instance and on appeal.
