The courts of the Mainland and the Hong Kong Special Administrative Region will not exchange information on the status of the cases or enforcement applications made by the parties, the Department of Justice (DoJ) said today.

The DoJ made the statement in response to media enquiries on the Arrangement on Reciprocal Recognition & Enforcement of Judgments in Civil & Commercial Matters by the Courts of the Mainland & of the Hong Kong Special Administrative Region, which will come into operation on January 29.

The DoJ noted that some discussions suggest that after the arrangement has taken effect, the courts of the two places will notify each other or exchange information on the details or enforcement of the cases. The DoJ pointed out that this is a fallacy.

It explained that as an arrangement for mutual legal assistance between the Mainland and Hong Kong in civil and commercial matters, the arrangement only concerns reciprocal recognition and enforcement of civil and commercial judgments of both places.

Whether to apply for enforcement of the judgments in the other place is entirely a choice of the parties.

Applications for enforcement of judgments are to be initiated by the parties, which is consistent with the current practice for applications for enforcement of foreign judgments in Hong Kong in accordance with the principles under common law and the applicable statutory provisions.

Furthermore, some people suggest that after the implementation of the arrangement, “judgments of the Mainland courts would become automatically applicable in Hong Kong, and assets in Hong Kong could be confiscated by the Mainland directly.”

The DoJ stated that this is another fallacy and clarified that Mainland judgments will not automatically take effect in Hong Kong, and assets in Hong Kong will not be confiscated by the Mainland directly after the arrangement has come into operation.

The creditor under the Mainland judgment must first apply to the Mainland court for a copy of and a certificate for the judgment, then submit together with other documents to the Court of First Instance of the High Court to make a registration application in relation to the Mainland judgment.

More importantly, the registrant must 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 in accordance with the Mainland Judgments in Civil & Commercial Matters (Reciprocal Enforcement) Ordinance.

A further application can be made for execution of the Mainland judgment through other legal proceedings on the basis of the Mainland court's judgment only if the registration has not been set aside.

The DoJ stressed that in actual fact, the lawful rights of creditors and debtors are fully protected and fairly balanced under the arrangement.

Such an arrangement, it added, provides a legal mechanism with a higher degree of certainty and predictability for cross-boundary enforcement of judgments in civil and commercial matters between the two places, thereby enhancing the business environment.