A significant step towards simpler judicial procedures and reduced re-litigation: Hong Kong and the Mainland sign a broader arrangement to recognise and enforce judgments in civil and commercial matters

On Friday 18 January 2019, Hong Kong and the Mainland reached a milestone by signing the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters between the Courts of the Mainland and of the Hong Kong Special Administrative Region (“Arrangement“). When taken together with other similar arrangements that are in train, the Mainland Supreme People’s Court envisages that approximately 90% of judgments of a civil and commercial nature will soon be reciprocally recognised and enforced between Hong Kong and the Mainland. The Arrangement sets out, amongst others, the scope of judgments, jurisdictional grounds, grounds for refusing the reciprocal recognition and enforcement of judgments (“REJ“), and procedural requirements. It will be implemented by local legislation in Hong Kong and take effect after both systems have completed the necessary procedures to enable implementation. Once implemented, the Arrangement will apply to judgments made on or after the commencement date. Continue reading

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Filed under Announcements, China, Hong Kong

Japan and Hong Kong agree arbitration and mediation cooperation

On 9 January 2019, Hong Kong’s Department of Justice and the Ministry of Justice of Japan signed a Memorandum of Cooperation (MoC) to “strengthen collaboration on international arbitration and mediation“. The MoC, a copy of which is available here, provides a general administrative framework for cooperation between Japan and Hong Kong in relation to international arbitration and mediation. Continue reading

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Hong Kong Court spits out ceviche: “objectionable” Peruvian fisheries business Chapter 11 trustee refused common law assistance

In a highly international cross-border restructuring, the High Court of Hong Kong has refused to assist the New York-based Chapter 11 trustee of a Singaporean subsidiary of the Cayman-incorporated Peruvian business China Fishery Group (“CFG”).

Significantly, the Court held that there was no way that the Chapter 11 proceedings could be recognised given the applicant had no connection to the US. Assistance was also refused on the grounds of public policy as Chapter 11 proceedings had been commenced for the purpose of preventing the enforcement of undertakings made by CFG group companies. This was held to be objectionable and an affront to the Hong Kong Court.

The judgment also reiterated the general principles of common law recognition and assistance to foreign insolvency proceedings and officeholders, but did not consider specifically how the Hong Kong Court would deal with a Chapter 11 recognition application. Continue reading

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Filed under Hong Kong, Insolvency

Hong Kong Court of Appeal ends 12-year Xiamen v Eton Properties saga

As discussed in this post, Xiamen Xingjingdi Group Co Ltd (XJ) and various co-defendants affiliated with Eton Properties Ltd (together, EP) have been involved in a long-running dispute in multiple fora, including a PRC-seated CIETAC arbitration and several Hong Kong court proceedings. The case appears now to have come to an end, with the Court of Appeal (Court) confirming its position on common law actions to enforce arbitral awards and rejecting both parties’ applications for leave to appeal the Court’s 15 April 2016 judgment.

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Filed under Arbitration, China, Hong Kong

Hong Kong funding law to take effect 1 February

Hong Kong has published its long-awaited Code of Practice for third party funders, and announced that amendments to the Arbitration Ordinance which permit funding of Hong Kong arbitrations will come fully into force on 1 February 2019. Similar amendments to the Mediation Ordinance (Cap. 620) have been deferred for further consultation.

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LEGAL ADVICE PRIVILEGE: WHY HK LAWYERS AND BUSINESSES NEED TO KNOW ABOUT THE NARROW POSITION UNDER ENGLISH LAW

Hong Kong law and English law have over recent years diverged on the meaning of “client” for the purposes of asserting legal advice privilege. Practitioners and businesses in Hong Kong need to be aware that communications involving an in-house lawyer and their “client” may not be privileged under English law as it currently stands, whereas they would be privileged under Hong Kong law. While the narrow English interpretation has not been adopted by the Hong Kong Courts, any Hong Kong based client who could potentially become involved in English litigation (whether through an English business/subsidiary or in relation to an English law governed contract) should be aware of the developments on legal advice privilege in the English Courts. Privilege is determined by the law of the forum of the litigation under both English and Hong Kong law.

The recent English High Court decision in Glaxo Wellcome UK Ltd v Sandoz Ltd [2018] EWHC 2747 (Ch) shows the potential holes in what businesses would usually consider to be privileged in-house communications. The English Court held that an in-house lawyer’s communications with an employee of the business, who was accepted to be her in-house “client” in these circumstances, were not protected by legal advice privilege where the purpose of those communications was to seek and obtain information to provide to external lawyers in order to obtain their legal advice. In doing so, the English Court applied the narrow interpretation of “client” established in the notorious Three Rivers No 5 decision, as recently confirmed by the English Court of Appeal in the ENRC case (see here).

This decision confirms that (under English law) an individual may be a lawyer’s “client” and therefore entitled to communicate information to the lawyer under the protection of privilege for one purpose but not for others. In equivalent circumstances in Hong Kong, the broader meaning of “client” would potentially make all such communications privileged. Continue reading

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China’s new law on judicial assistance in criminal matters will impact investigations

The People’s Republic of China recently enacted a new law that will impact foreign authorities, corporations and individuals involved in overseas criminal enforcement actions. The Law on International Judicial Assistance in Criminal Matters allows Chinese authorities to block requests for documents, testimony and assets requested in international criminal investigations.

The law introduces new procedures governing how and when assistance should be provided with approval from a “Chinese competent authority” (eg the National Supervisory Commission, the Supreme People’s Court, the People’s Procuratorate, Ministries of National and Public Security) required before a Chinese entity or individual provides assistance to a foreign body or person.

The law’s stated goal is simultaneously to curb corruption and stem extra-territorial claims by foreign authorities, some of whom approach Chinese counterparts/contacts direct for evidence. The law acts as a break on this practice and allows China to screen requests and withhold its consent. For jurisdictions where treaties are already in place (like the UK, US and 39 others), there may be little change as similar procedures already apply. But for jurisdictions without a treaty in place, or where informal practices have evolved in lieu of treaty provisions, this creates a new procedural hurdle in the context of criminal investigations. Continue reading

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Supreme People’s Court Issues Rules of Procedure for the China International Commercial Courts

On 1 July 2018, the Supreme People’s Court of China (SPC) promulgated Provisions on Several Issues Regarding the Establishment of International Commercial Courts (Fa Shi 2018 – No.11). We reported this major development here. The SPC has now, on 5 December 2018, released further rules canvasing out the operation of the China International Commercial Courts (CICC).

On 5 December 2018, the CICC Rules of Procedure (trial implementation) (Fa Fa Ban 2018 – No.13) (CICC Rules of Procedure) came into force. The SPC promulgated concurrently the Working Rules of the CICC Expert Committee (CICC Expert Committee Rules) (Fa Fa Ban 2018 – No.14). Also issued on the same day was the SPC’s Notification on the International Commercial Arbitration and Mediation Institutions Included in the “One-stop-shop” International Commercial ADR Mechanism (Fa Ban 2018 – No.12) (One-stop-shop Institutions Notification).

These rules provide further details on the CICC and its procedure. However, the CICC Rules of Procedure, consisting of only 40 articles, are still relatively brief. It appears that the CICC Rules of Procedure have its blueprint from the Chinese civil procedure law, and not international arbitration rules. It is likely that, when applying these rules in practice, reference to PRC civil procedure rules will need to be made frequently. We will now turn to the features of these new rules. Continue reading

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Hong Kong Court grants injunction, holds tortious claim unaffected by arbitration agreement

In Castlemil Infant (HK) Supplies Co Ltd v Care N Love Development Ltd [2018] HKDC 1419, the Hong Kong District Court granted a mandatory injunction, having found that the plaintiff’s underlying tort claims did not fall within the scope of the parties’ arbitration agreement. Continue reading

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Filed under Arbitration, Hong Kong, Interim applications

A new international Convention for the enforcement of mediated settlements

We are soon to have a new international regime for the enforcement of mediated settlement agreements.

The UN Convention on International Settlement Agreements Resulting from Mediation, which will be known as the Singapore Convention, was approved in June 2018 by UNCITRAL (the United Nations Commission on International Trade Law).  It is expected to be open for signature from 1 August 2019 and will come into force upon ratification by at least three contracting States.

The Convention will oblige contracting States (except in specified limited circumstances) to recognise international settlement agreements resulting from mediation in commercial disputes, either to enforce the agreement or allow it to be invoked as a defence to a claim (that is, either as a sword or a shield).

It is hoped that the Singapore Convention will achieve for mediation what the New York Convention has for international arbitration, encouraging a greater global acceptance of mediation as a credible and reliable dispute resolution mechanism in international commerce.

For more detail on the Convention, and commentary on how likely it is to achieve that aim, see the article by Jan O’Neill (Professional Support Lawyer, London) recently published on the Practical Law Dispute Resolution Blog, here.

 

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Filed under ADR, Mediation (General)