Newsletter - Enforcement of foreign judgments in civil and commercial matters in Hong Kong

Newsletter 14.11.04enforcement 201411

Often in international business transactions, the judgment debtor may not have any assets in their home town but the creditor knows or suspects that there may be assets abroad. A foreign judgment can be registered and enforced in any country where an agreement has been reached as to reciprocal enforcement of judgments. At present, these countries include Australia, Austria, Belgium, Bermuda, Brunei, France, Germany, India, Italy, Israel, Malaysia, Netherlands, New Zealand, Singapore and Sri Lanka. However, in a number of countries, notably the United States, Japan and since 1997, the United Kingdom, a Hong Kong judgment is not directly enforceable, but is only enforceable at common law. In other words, in those countries it is necessary to commence fresh proceedings to pursue the Hong Kong judgment and to obtain and enforce a judgment of the Courts of that country.

STATUTORY REGISTRATION SCHEME
There is a statutory registration scheme for foreign judgments under the Foreign Judgments (Reciprocal Enforcement) Ordinance, Chapter 319 of the Laws of Hong Kong to facilitate reciprocal recognition and enforcement of judgments on the basis of reciprocity.

A judgment creditor, with a judgment from a jurisdiction designated under Cap 319, such as Australia, Austria, Belgium, Bermuda, Brunei, France, Germany, India, Italy, Israel, Malaysia, Netherlands, New Zealand, Singapore and Sri Lanka may apply to the Court of First Instance, ex parte, for registration of the judgment provided that the relevant requirements as set out in Cap 319 are met. The judgment would then be registered and the judgment debtor would only be informed of the registration at this stage. The judgment debtor may apply to the court to set aside the registration on a number of grounds within a period of time in accordance with the relevant provisions of Cap 319.

Once the judgment is registered, the foreign judgment can be enforced in the same way as a Hong Kong judgment. A recent judgment.

COMMON LAW ACTION
With respect to foreign judgments that may not be registered under Cap 319, they may be enforced by common law. The common law permits an action to be brought upon a foreign judgment. That is to say, a foreign judgment itself may form the basis of a cause of action since the judgment may be regarded as creating a debt between the parties to it. In a common law action for enforcement of a foreign judgment, the judgment creditor has to prove that the foreign judgment is a final judgment conclusive upon the merits of the claim. Such a judgment must be for a fixed sum and must also come from a "competent" court (as determined by the private international law rules applied by the Hong Kong courts). The defences that are available to a defendant in a common law action brought on the basis of a foreign judgment include lack of jurisdiction, breach of natural justice, fraud and contrary to public policy.

It should be noted that a foreign judgment does not have to originate from a common law jurisdiction in order to benefit from the common law rules. Neither is reciprocity a requirement under the common law. Hence, a judgment originating from a jurisdiction which does not recognise a Hong Kong judgment may still be recognised and enforced by the Hong Kong courts provided that all the relevant requirements at common law are met.

After commencement of the action by issue and service of a writ, the plaintiff (the foreign judgment creditor) can apply for summary judgment on the ground that the defendant has no defence. If the application fails, the action will proceed towards a trial in the usual way. The Hong Kong Court tends to define narrowly the defences to an action on a foreign judgment (particularly the defences based on public policy or natural justice).