Hong Kong and mainland China have agreed to mutually enforce legal judgements made in the other’s civil and commercial court cases, China Daily reports.
The milestone agreement came into force on Monday – the same day a Hong Kong court ordered the mainland property giant Evergrande to liquidate assets worth US$240 billion in a bid to cover the developer’s massive debts.
The move toward legal reciprocity will boost Hong Kong’s standing as an international legal hub, according to officials from both sides. It will also spare creditors from filing separate legal actions for the same dispute in two jurisdictions, saving time and money for parties involved.
Vice-president of China’s Supreme People’s Court, Yang Wanming, said more than 90 percent of civil and commercial cases between the mainland and Hong Kong would be mutually recognised and enforced under the new agreement.
Yang said he believed the agreement would encourage overseas businesses and investors to resolve cases involving mainland assets in Hong Kong courts. According to him, having that option would improve investor confidence in the mainland.
International media has speculated on whether Chinese courts will recognise a Hong Kong judge’s ruling on Evergrande, as it was made in a separate legal jurisdiction.