Enforcement of Foreign Judgments in Hong Kong

The enforcement of foreign judgments in Hong Kong in civil and commercial matters may take place under the common law or, if the foreign judgment is given by a court in mainland China or certain other jurisdictions, under a statutory registration scheme. Once registered by legislation or recognized under the common law, the foreign judgment may be enforced in the same way as a Hong Kong judgment, meaning it can, for example, be enforced by charging order or garnishee proceedings or by writs of fieri facias. If you’d like more information about enforcement of foreign judgments in Hong Kong, please contact one of our commercial dispute resolution lawyers.

Table of Contents

Overview

Foreign judgments may be enforced in Hong Kong either through a statutory registration scheme or under the common law. The former however, is limited to the enforcement of foreign judgments from certain courts in certain jurisdictions. These jurisdictions are the mainland of the People’s Republic of China under the Mainland Judgments (Reciprocal Enforcement) Ordinance (“2019 Mainland Judgment Enforcement Ordinance”) and certain other countries under the Foreign Judgments (Reciprocal Enforcement) Ordinance (“Foreign Judgment Enforcement Ordinance”). In the absence of a statutory registration mechanism, judgments of a foreign court must be recognized under the common law.

Hong Kong is neither a signatory to the Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters 1971 nor to the Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters 2019. There is no statutory mechanism either to register judgements from the United States or the United Kingdom. In other words, enforcement of judgments from these two jurisdictions must fall within the common law regime.

In this article, we will first discuss the common law regime, then the Foreign Judgment Enforcement Ordinance and lastly the 2019 Mainland Judgment Enforcement Ordinance.

COMMON LAW RECOGNITION MATTERS

Where, as is often the case, a foreign judgment is ineligible for registration under either the Foreign Judgment Enforcement Ordinance or the 2019 Mainland Judgment Enforcement Ordinance, a judgment creditor must commence fresh proceedings by writ to recover the foreign judgment sum as a debt in Hong Kong. It follows that the foreign judgment is recognized and can be enforced in Hong Kong once judgment has been given by a Hong Kong court.

Procedure

Because the common law procedure requires that the judgment creditor sue upon the foreign judgment as a debt, the judgment creditor must issue and serve a writ on the judgment debtor. If the judgement debtor defaults in its defence, the judgment creditor may enter and then enforce default judgment. Where the judgment debtor defends, summary judgment procedures will often be available.

There is no requirement that a foreign judgment must originate from a common law jurisdiction to be eligible for recognition. Equally, there is no requirement that the foreign judgment be from a jurisdiction with reciprocal arrangements to recognize judgments from Hong Kong.

Conditions for Recognition

Under the common law, a foreign judgment is enforceable if the following conditions are satisfied:

We shall discuss the above conditions one by one below.

Final and Conclusive Judgment

When deciding whether to recognise a foreign judgment as a judgment debt in Hong Kong, a Hong Kong court will not look at the merits of the disputes giving rise to the debt itself, as a foreign judgment can only be recognized in Hong Kong if it is final and conclusive upon the merits. As may be expected, any interim orders will not be regarded as final and conclusive.

A Hong Kong court may regard a foreign judgment as final and conclusive even though the judgment may subject to appeal as the finality is in the court in which it was rendered. However, in practice, where an appeal is in fact outstanding in the foreign jurisdiction where the foreign judgment was given, the Hong Kong court may stay the recognition proceedings pending the outcome of the appeal in the home jurisdiction.

A default judgment is also regarded as final even though it may be capable of being set aside on limited grounds.

Monetary Claim in Personam

Under the common law, a foreign judgment can only be recognized in Hong Kong if it is for a fixed or liquidated sum against a particular person. The fixed sum cannot be in the nature of a tax or penalty as the Hong Kong courts will not entertain an action to enforce, either directly or indirectly, a law of a foreign state which is a penal, revenue or public law.

Injunctive relief issued by a foreign court will not be recognized by the Hong Kong courts at common law. In other words, any judgment which requires the foreign defendant to perform a service to act in a particular way or to refrain from doing something cannot be recognized in Hong Kong. To give effect to these types of judgments, it will be necessary to commence fresh proceedings in Hong Kong relying upon the fact that issues in dispute have already been determined in the foreign jurisdiction.

Defences

It is not for the Court in Hong Kong to re-try the case so any defences which allege that the foreign court has wrong in applying the facts or the law will not be a valid defence to recognition. A foreign judgment will normally be recognized in Hong Kong if it satisfies the above conditions, subject to a narrow range of defences as set out below.

Lack of Jurisdiction

Hong Kong courts will generally refuse recognition of a foreign judgment if the foreign court giving the judgment lacked jurisdiction. In this regard, Hong Kong courts assess jurisdiction based on Hong Kong law rather than the law of the foreign jurisdiction whose court gave the judgment.

The foreign court’s jurisdiction may arise where a judgment debtor was, at the time of the commencement of the foreign proceedings, physically present in the foreign jurisdiction or where the judgment debtor submitted to the foreign court’s jurisdiction.

Fraud

A judgment debtor may resist recognition of a foreign judgment if the foreign judgment was obtained by fraud on the part of the judgment creditor or the foreign court. Judgment creditor fraud may, for example, constitute the giving of knowingly false evidence or the procuring of knowingly false evidence. Fraud may take place on the part of the foreign court where it accepts a bribe.

Fraud is not necessarily fatal to recognition of the foreign judgment. Issues which may affect a determination as to whether fraud will prevent the recognition of a foreign judgment include whether the fraud was material to the foreign judgment, which means there must be evidence that this fraud affects the outcome of the case at the foreign court, and whether the question of fraud had been litigated in the foreign court.

Natural Justice

Under the common law, a Hong Kong court will not enforce a foreign judgment if the foreign proceedings resulting in that judgment offend against Hong Kong notions of natural justice. Here, there is no requirement that the due process in the foreign court giving the foreign judgment be similar to that in Hong Kong as a precondition to recognition of the judgment. However, the judgment debtor must have had reasonable notice of the foreign proceedings and a reasonable opportunity to be heard in those proceedings.

A foreign judgment does not necessarily offend against Hong Kong concepts of natural justice even if it is manifestly wrong on the merits and even if there is mere procedural irregularity.

A judgment debtor’s failure to pursue available remedies in respect of procedural injustice in the foreign jurisdiction may debar relief in Hong Kong.

Public Policy

The recognition of a foreign judgment should not be contrary to Hong Kong notions of public policy. Generally, the public policy defence is available if it is proved that enforcement of the judgment would be contrary to fundamental conceptions of morality and justice in Hong Kong. The public policy exception is a narrow one. Simply because a case could have been decided differently in Hong Kong does not justify refusing recognition. Equally, error in fact or law by a foreign court does not necessarily justify refusing recognition.

A Hong Kong court may refuse recognition of a foreign judgment which is inconsistent with a Hong Kong judgment (e.g. a Hong Kong anti-suit injunction).

FOREIGN JUDGMENT ENFORCEMENT ORDINANCE

The Foreign Judgment Enforcement Ordinance facilitates enforcement of judgments, including orders, in any civil proceedings given or made by prescribed courts in 15 foreign countries, which includes courts in Australia and a court having unlimited jurisdiction in civil and criminal matters in Bermuda, Brunei, India, Malaysia, New Zealand, Singapore and Sri Lanka as well as Austria, Belgium, France, Germany, Israel, Italy, and the Netherlands.

Where a foreign judgment has been partially satisfied, the foreign judgment may only be registered in respect of the balance remaining payable. Judgments relating to in personam claims in connection with matrimonial matters, the administration of the estates of deceased persons, bankruptcy, the winding-up of companies, lunacy and the guardianship of infants are ineligible for registration.

Procedure

Registration of a foreign judgment under the Foreign Judgment Enforcement Ordinance offers a simpler procedure than that available under the common law regime. A judgment creditor seeking to enforce a foreign judgment under the Foreign Judgment Enforcement Ordinance may apply ex parte to the Court of First Instance to register the foreign judgment. Similar to the common law regime, the application must establish that the foreign judgment is final and conclusive and that the foreign judgment calls for the payment of a sum of money (not being a sum payable in respect of taxes or penalties). The application must establish that the judgment has not been wholly satisfied and could be enforced by execution in the foreign country. A foreign judgment can be registered if the above criteria are met.

It should be noted that if the judgment to be enforced is a judgment eligible for registration under the Foreign Judgment Enforcement Ordinance, the statutory regime must be used and the judgment creditor cannot opt to seek enforcement under the common law regime.

Once registered, the judgment creditor should serve notice of the registration of the foreign judgment on the judgment debtor and the judgment debtor may apply to court in specified circumstances to set the registration aside.

Grounds for Challenge

A judgment debtor may apply to set aside the registration of a foreign judgment under the Foreign Judgment Enforcement Ordinance in certain circumstances. These circumstances include the following:

A Hong Kong court has the discretion to set aside the registration of a foreign judgment if it is satisfied that the matter in dispute in the court giving the foreign judgment had been the subject of a final and conclusive judgment by a different court having jurisdiction in the matter.

Effect of Registration

Once registered, for the purposes of execution, a foreign judgment is given the same force and effect as if it were a judgment given by a Hong Kong court entered on the day of registration. A registered foreign judgment carries interest.

However, no execution may be issued on the registered judgment so long as it is competent for any party to apply to set aside the registration (or where such application has been made, until after the application has been finally determined).

2019 MAINLAND JUDGMENT ENFORCEMENT ORDINANCE

Though legislation was passed in 2022 to further facilitate enforcement of mainland judgments in Hong Kong, as at October, 2023, that legislation, the Mainland Judgements in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (“2022 Mainland Judgment Ordinance”), has not yet been brought into operation. As a result, the 2019 Mainland Judgment Enforcement Ordinance continues to govern how mainland judgments can be enforced in Hong Kong.

Under the 2019 Mainland Judgment Enforcement Ordinance, a judgement creditor in civil or commercial matters in certain mainland China courts may apply to the Court of First Instance in Hong Kong to register the mainland judgment. These courts include the Supreme People’s Court, the Higher People’s Court, the Intermediate People’s Court and any recognized Primary People’s Court. Though the 2022 Mainland Judgment Enforcement Ordinance will no longer require exclusive jurisdiction, under the 2019 Mainland Judgment Ordinance, to be eligible for registration, mainland judgments must relate to contracts which provide for the mainland courts to have exclusive jurisdiction over disputes. Mainland judgments relating to contracts of employment and personal consumption or relating to family or other non-commercial purposes are ineligible for registration.

Registration is conditional upon the mainland judgment being final and conclusive as between the parties to the judgment. A mainland judgment is final and conclusive if:

To be registrable a mainland judgment must be enforceable in mainland China and the judgment must order the payment of a sum of money (not being a sum payable in respect of taxes or penalties). A certificate issued by the court certifying that the judgment is final and enforceable in China is deemed, until the contrary is proved, to be enforceable in the mainland.

Grounds for Challenge

Registration of a judgment under the 2019 Mainland Judgment Enforcement Ordinance may be set aside upon an application to the Court of First Instance. The Court of First Instance must, at the time of registering the mainland judgment, specify the time period in which such an application may be made.

The grounds to set aside the registration of a mainland judgment include:

The Court of First Instance may set aside the registration of a mainland judgment or adjourn a set-aside application if an appeal is pending against the judgment or the judgment is ordered to be retried.

Effect of Registration

Subject proceedings to set aside, as with the Foreign Judgment Enforcement Ordinance, for the purposes of execution, once registered, a mainland judgment has the same force and effect as if it had been a judgment originally given in the Court of First Instance and entered on the day of registration.

No action may be taken to enforce a registered mainland judgment during the period of time within which an application to set aside may be made or if an application to set aside has been made, until after the application has been finally disposed of.

JURISDICTIONAL RESTRICTIONS

The Foreign Judgments (Restriction on Recognition and Enforcement) Ordinance (“Foreign Judgment Enforcement Restriction Ordinance”) prohibits the recognition and enforcement in Hong Kong of any foreign judgment given by a foreign court in any circumstance where the judgment creditor and debtor had agreed that the dispute in question was to be settled otherwise than by proceedings in that foreign court and the judgment debtor did not submit to the jurisdiction of that foreign court. It follows that such a foreign judgment cannot be registered under the Foreign Judgment Enforcement Ordinance or the 2019 Mainland Judgment Enforcement Ordinance and cannot be recognized under the common law.

MERITS OF FOREIGN JUDGMENT

In proceedings to recognize a foreign judgment, whether through registration under a statutory scheme or by suing upon the foreign judgment as a debt, Hong Kong courts do not concern themselves with the underlying merits of the dispute giving rise to the foreign judgment. No distinction is drawn between a judgment after trial and a judgment by default. Thus, under the common law, a foreign judgment is regarded as final and conclusive even though it is a default judgment liable to be set aside in the court which rendered the foreign judgment.

LIMITATION PERIODS

A judgment creditor may apply for registration of a foreign judgment within the scope of the Foreign Judgment Enforcement Ordinance at any time within 6 years after the date of the judgment (or, if there has been an appeal against the judgment, after the date of the last judgment given).

In contrast, a judgment creditor in a mainland judgment must apply for registration of the judgment under the 2019 Mainland Judgment Enforcement Ordinance within 2 years from the last day of any period for performance specified in the judgment or in any other case, from the date from which the judgment takes effect.

RES JUDICATA

Res Judicata prevents a foreign judgment from being registered or recognised in Hong Kong for the purpose of enforcement if the foreign judgment has been the subject of a previous, final and conclusive judgment which has been satisfied.

The Foreign Judgement Enforcement Restriction Ordinance prohibits a person from bringing proceedings in Hong Kong on a cause of action in which a foreign judgment has been given in his favour unless the foreign judgment is neither enforceable nor entitled to recognition in Hong Kong.

Similarly, under the 2019 Mainland Judgment Enforcement Ordinance, any mainland judgment eligible for registration is to be recognized in any Hong Kong court as conclusive between the parties to the judgment in any proceedings founded on the same cause of action unless the judgment has, if registered, been or, if not yet registered, is liable to be set aside.

ENFORCEMENT

Once a foreign judgment has been recognised in Hong Kong the judgement creditor can enforce the judgement in Hong Kong as if it were a judgement given by the courts in Hong Kong. So for example, a judgment for the payment of money could be enforced, by way of a writ of fieri facias, garnishee proceedings or charging order.

A writ of fieri facias directs a bailiff to seize in execution the judgment debtor’s goods, chattels and other properties, which are authorised to be seized by law to satisfy the judgment debt and the costs of execution as well as interest.

A charging order imposes on any property of the judgment debtor specified in the order a charge to secure the payment of the judgment debt. A charging order, may be followed by fresh proceedings to enforce it by way of an order for the sale of the property or the appointment of a receiver over the property.

The most common method of execution is by way a garnishee order which tenables a judgment creditor to attach a debt owed to the judgment debtor by a third party. Typically, the third party is a bank, so that the bank would be required to pay the judgment debt from the account balance. However, the third party may be, for example, a customer of the judgment debtor who would then be required to pay monies owed by the customer to the judgment debtor to the judgment creditor instead.

All these foregoing remedies are without prejudice to any other remedy available to recover the sums due under a judgment by way of bankruptcy or winding up of the debtor or the debtor company. In this regard, a foreign judgment eligible for registration under the Foreign Judgment Enforcement Ordinance must be registered before it can be relied upon to initiate insolvency proceedings.

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