As Hong Kong whose status is undermined could gradually transfer its great strengths to Chinese Mainland, there will be increasingly more overlapped legal issues between Chinese Mainland and Hong Kong. Hong Kong lawyers (with qualifications of mainland lawyers) are able to practise law in litigation and other areas in nine cities in the Guang Dong-Hong Kong-Macao Greater Bay Area of Chinese Mainland. With the internationalization of Shanghai, Hong Kong lawyers are expected to practise law in Shanghai (especially in the arbitration area).

Considering the above, I studied effective legal provisions between Chinese Mainland and Hong Kong to find out connections between legal procedures of the two territories. This article mainly contains a brief description of legal matters for which we and Hong Kong give support to each other, which are set out in chronological order according to dates of cooperation agreements between Chinese Mainland and Hong Kong, especially bilateral ones, without respect to previous international conventions and an analysis of contents of arbitration awards in Hong Kong acceptable and enforceable in Hong Kong.

I. Mutually supported legal matters

1. According to documents I found, the first cooperation between legal authorities of Chinese Mainland and Hong Kong was in 1999. The Supreme People’s Court and courts in Hong Kong agreed on “mutual commitments on service of legal documents for civil and business cases”, under which the documents should be sent through high courts in Chinese Mainland and the High Court of Hong Kong.

Accordingly, if a court in Chinese Mainland wants to give a person in Hong Kong a legal document, the court should send the document to the high court of the local area, which will then be sent to the High Court of Hong Kong and given to the person according to laws of Hong Kong.

2. In early 2000 Chinese Mainland and Hong Kong started to give each other support for enforcement of arbitration awards under the Arrangements of the Supreme People’s Court on Mutual Enforcement of Arbitration Awards between Chinese Mainland and Hong Kong, which is an important part of the legal basis for enforcement of arbitration awards between Chinese Mainland and Hong Kong with two amendments made in 2020 and 2021. This document applies in many legal cases. I will discuss its contents and cases in which it applies in a single section below.

3. In 2008 courts of both sides started to accept and enforce court decisions between each other in civil and business cases where parties involved have a jurisdiction agreement. Good lawyers should make sure agreements made for their clients involving business affairs between the two places comply with these provisions so that they can apply for enforcing the decision on the opposing side’s property in Hong Kong directly to the High Court of Hong Kong with an effective judgement in their favor of a mainland court. Not all effective decisions of courts in Chinese Mainland, only decisions of some of lower, intermediate or higher courts are enforceable in Hong Kong. Lower courts mentioned above only include courts of Pudong New Area and Huangpu District. This provision is also applicable in case of appeals to intermediate courts without respect to lower courts.

This provision was only applicable where an applicable jurisdiction agreement exists. In 2019 the conditions of “jurisdiction agreements” and “local courts” were canceled by new cooperation provisions between Chinese Mainland and Hong Kong, which is not effective before completion of the related process in Hong Kong.

4. In 2017 courts of the two sides started to give each other additional support for “evidence collection”, including testimonies, written materials, objects, investigations and inspections. To get this support, Courts of Chinese Mainland should file applications with local high courts. In Hong Kong, the Administrative Department of the Office of the Chief Secretary for Administration deals with matters relating thereto. Courts collect evidence in few cases. The time limit on collecting evidence by commission is six months so that designated courts should try to finish collecting evidence within six months. As that costs much time, there are few cases where relevant provisions apply.

5. Applications for preservation in Chinese Mainland should be filed with the intermediate court concerned with application materials transferred to the mainland court by the arbitration authority of Hong Kong. Preservation applications to Hong Kong should be filed by persons concerned directly with the High Court of Hong Kong. The slight difference is that persons concerned should file applications directly.

In 2019 courts of the two sides added a section of “mutual support for preservation in arbitration procedures”, which entitles persons concerned to apply to a court of Hong Kong or Chinese Mainland for preservation, including property, evidence and behavioral preservation before an arbitration application accepted by an arbitration authority in Hong Kong or Chinese Mainland is decided.

6. According to new provisions that took effect in May 2021, the two sides give each other support in bankruptcy procedures. Considering the complexity of bankruptcy procedures, Chinese Mainland took these provisions into action on an experimental basis. Intermediate courts of Shanghai, Xiamen and Shenzhen of Chinese Mainland are designated to give support in bankruptcy procedures of Hong Kong under the above provisions in designated places where major property or business in bankruptcy procedures is located.

The above legal support related provisions are now in effect. Provisions relating to mutual acceptance and enforcement of decisions in civil, business, marriage and family cases are to be effective according to relevant procedures of Hong Kong.

The return of Hong Kong to China witnessed the establishment of the “one country, two systems” policy and coexistence of two completely different legal systems, the Anglo-American law system of Hong Kong and the civil law system with Chinese characteristics of the Chinese mainland. As time goes by, legal cooperation between Hong Kong and cities of the Chinese mainland becomes more and more common. The highest courts of the two areas have studied and explored effective and smooth connections between the two legal systems for over twenty years. Courts of the two sides have made arrangements for mutual support in service, evidence collection, preservation, insolvency and acceptance and enforcement of decisions and awards of courts and arbitration authorities of the opposite side, as described in Part I.

In the above arrangements, for both sides, the top priority is acceptance and enforcement of valid court decisions and awards of one side in the area of the other side. For acceptance and enforcement of valid court decisions of the opposite side, the two sides made new arrangements in 2019, which will not take effect until they go through the legislative process of Hong Kong (as mentioned in Part I). If these arrangements are effective, most civil, business, marriage and family cases will be acceptable and enforceable.

This article is mainly about enforcement of arbitration awards of Hong Kong.

In early 2000, the Chinese mainland and Hong Kong started to give each other support for enforcing arbitration awards by executing the Arrangements for Mutual Enforcement of Arbitration Awards Between Chinese Mainland and Hong Kong, as amended in 2020 and 2021, an important basis for enforcement of arbitration awards between the Chinese mainland and Hong Kong. Two important points in these arrangements are as follows.

I. Filing an acceptance application is a prerequisite for filing an enforcement application.

Despite these arrangements called “Mutual Support for Enforcement of Arbitration Awards”, an arbitration award could not actually be enforced until the prerequisite is met by applying for court acceptance of the arbitration award. This prerequisite was officially included in the Arrangements at the end of November 2020. The process of enforcing an arbitration award of the Chinese mainland or Hong Kong in the Arrangements should be construed as including the process of accepting and enforcing such award.

In practice, an applicant for enforcement by a court of the Chinese mainland of an arbitration award of Hong Kong cannot apply for filing the enforcement case directly to the case filing court. The applicant should first apply for acceptance and enforcement of the arbitration award. The court judge will review and decide to approve or refuse the application. If the applicant does not accept the court decision, the applicant may appeal. If the enforcement application is approved, the enforcement process will start.

II. Refusal of enforcement

Article 7 of the Arrangements is critical to the whole document and the main basis on which an arbitration award of Hong Kong is found as enforceable. Three events where the enforcement of the arbitration award is not allowed are (I) material issues connected with the arbitration award (articles 1, 3 and 5); (II) procedural issues connected therewith (articles 2 and 4); (III) priorities given to the Chinese mainland (two blanket clauses). All clauses in this article are basically the same as provisions about unenforceable foreign arbitration awards in Article 5 of New York Convention 1958. Specific clauses are as follows.

If the respondent in an arbitration award enforcement application filed in the Chinese mainland or Hong Kong presents evidence of the occurrence of one of the following circumstances after receipt of notice, if confirming it is true, the relevant court can decide the award is unenforceable.

1. The parties to the arbitration agreement have no ability to act according to applicable law, the arbitration agreement is invalid according to the agreed governing law or provisions relating to application of laws of the place of arbitration that do not set out governing law are invalid.

In this case, laws that the parties concerned should act according to may be referred to as laws applicable to the parties concerned or governing law in the arbitration agreement. Applicable laws based on which a person’s ability to act legally is decided may be different from one country to another. In China, laws of the places where the person usually lives and where they do activities are applicable laws. The governing law set out in the arbitration agreement is not always the same as the law applicable to the parties thereto. The latter should also be set out in an agreement. In addition, it is usually agreed in contracts that British laws apply.

2. The respondent does not receive a appropriate notice from the appointed arbitrator or fails to express their arguments for other reason.

This is a common reason which the respondent gives to defend themselves. However, “not actually receiving the notice” may not be accepted as a reason for defense. In fact, a notice sent by Hong Kong International Arbitration Committee to the address set out in the contract will be legally deemed to have been received, whether or not the addressee received it.

3. If the dispute resolved by an arbitration award is not the matter referred to for arbitration or set out in clauses of the arbitration agreement, or the award decides a matter not included in matters that can be referred to for arbitration, if the decision of the matter referred to for arbitration can be separated from the matter not referred to for arbitration, the decision of the matter referred to for arbitration in the arbitration award should be enforced.

In such case, the specific matter decided beyond the arbitrator’s authority is unenforceable. The specific matter decided within the arbitrator’s authority is enforceable even if the arbitration award confirms the facts not covered by the arbitration application.

4. The constituents or procedures of the arbitration tribunal do not accord with the agreement between the parties involved or without such agreement, laws of the place of arbitration.

5. The arbitration award is not binding on the parties thereto or withdrawn or found as no longer enforceable by a court or law of the place of arbitration.

If a competent court finds the dispute cannot be resolved by arbitration according to laws of the place of enforcement, the arbitration award may be found as unenforceable.

If a court in the Chinese mainland finds an arbitration award, if enforced in the Chinese mainland, will be in contrary to social and public interests in the local area or a court in Hong Kong finds an arbitration award, if enforced in Hong Kong, will be in contrary to public policy of Hong Kong, neither of the arbitration awards is enforceable.

Regarding two blanket clauses, arbitration awards for family cases such as marriage and inheritance cases, which according to laws of the Chinese mainland cannot be resolved by arbitration, and arbitration awards in contrary to social and public interests are unenforceable. An arbitration award alleged to be in contrary to public interests will be examined strictly. The award will not be deemed as unenforceable unless the decision itself affects a social aspect.

In Arbitration Law of China, unenforceable arbitration awards are divided into Chinese and foreign arbitration awards, neither of which are the same as unenforceable arbitration awards of Hong Kong, as in New York Convention of the United Union.