24 November 2017

Arrangement with the Mainland on Reciprocal Recognition and Enforcement

Rita Ku
Partner | Hong Kong

The need for a solution to the problem of reciprocal recognition and enforcement of matrimonial judgments between Hong Kong and the Mainland has long been recognized. It is welcome news that Hong Kong and the Mainland have just agreed on such a solution, especially given the substantial rise in cross border marriages in recent years.

In June 2016, the Legislative Council Panel on Administration of Justice and Legal Services published the 'Proposed Arrangement with the Mainland on Reciprocal Recognition and Enforcement of Judgments on Matrimonial and Related Matters'. At the same time, the Department of Justice conducted a public consultation on the Proposed Arrangement, and the Government has since continued working towards an agreement with the Mainland. Both sides have now agreed on final details for the Arrangement, and it will now be implemented through legislative procedures in both jurisdictions.

So, why is this development so important? Under existing arrangements, Hong Kong will recognize a foreign court’s decree of divorce, provided that certain statutory requirements are met. However, the Mainland does not recognize a decree from Hong Kong or any order for financial settlement or maintenance payments. On the other hand, parties divorced on the Mainland can apply for the leave of the court in Hong Kong to enforce a decree from the Mainland. Hong Kong also has legislation to deal with the reciprocal enforcement of foreign maintenance orders, but this does not extend to orders made in the Mainland.

This situation creates real problems for the dissolution of cross border marriages. If a marriage is dissolved under Hong Kong law but the divorce is not recognized in the Mainland, the parties are subjected to the “limping marriage” problem. In addition to being deeply unsatisfactory, it can give rise to practical problems: if the man dies, is the survivor a widow or not?

Since Hong Kong financial awards, including those made in Hong Kong following a foreign decree, are not recognized or enforceable under Mainland law, it is virtually impossible to enforce those awards against Mainland properties and assets. Because full and frank disclosure of assets is obligatory in Hong Kong yet not in the Mainland, many parties seek the jurisdiction most favourable to their case: they go forum shopping. These evidential and procedural differences result in huge disparities in the real life result of a divorce, and the jurisdictional disputes that arise are expensive for the parties and time consuming for the courts. Sometimes the results are deeply prejudicial to one of the parties.

At the moment, there is no rule regulating the recognition and enforcement of foreign child custody orders in either jurisdiction, and the Arrangement will formalise the recognition of such orders between both jurisdictions. In addition, unlike Hong Kong, the Mainland is currently not a signatory to the Hague Convention on International Child Abduction, and the Arrangement includes measures in respect of abducted children.

The Arrangement will cover the recognition of divorce and nullity decrees in each jurisdiction (including 'divorce certificates' in the Mainland and customary marriages in Hong Kong). In respect of judgments from the Hong Kong side, the Arrangement will cover important matters including periodical payments, maintenance pending suit and lump sum, transfer and sale of property, orders made during the lives of parties for the alteration of maintenance payments, orders following a foreign decree, custody, adoption and injunctions. In respect of judgments made by Mainland courts, the Arrangement will include the division of property during the marriage, division of property after divorce, performance of an agreement made during the divorce, disputes as to agreements made by the parties, custody, parentage, adoption, guardianship, access and protection from domestic violence. It will not cover applications to the other court to vary an original order. Importantly, the Arrangement will allow for simultaneous applications for enforcement in both Hong Kong and the Mainland if the relevant assets are situated in both Hong Kong and the Mainland.

The statistics show that this has become a problem that can no longer be ignored: cross border marriages registered in Hong Kong had by 2014 increased to 37%, and the proportion of cross border divorces handled by Hong Kong courts from 2010 to 2014 ranged between 20 to 30%. This represents a significant impact on families in Hong Kong and the Mainland both in terms of the divorce itself and the status of marriage, the division of assets and, most importantly the effect on children. With the mutual recognition of decrees and orders and the enforceability of orders in respect of finances and children, the uncertainty and much of the expense involved in cross border disputes will be alleviated. We welcome the agreement that has been reached, and look forward to all parties collaborating in the final stages to implement it for the benefit of all.

Category: Article