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On 23 April 2008, the Hong Kong Legislative Council passed the Mainland Judgments (Reciprocal Enforcement) Bill (the "Bill"). The Bill:

1. implements the provisions of the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and the HKSAR pursuant to Choice of Court Agreements between Parties Concerned (the "Arrangement"), which was entered into between Hong Kong and Mainland China on 14 July 2006.

2. provides for the registration and enforcement by the Hong Kong courts of money judgments given by designated courts of the Mainland, exercising their jurisdiction pursuant to a valid exclusive choice of court clause contained in a business-to-business agreement.

The negotiations relating to the Arrangement and the Bill commenced between Hong Kong and Mainland authorities in 2002. Since then, the negotiations have undergone a complex process, until the Bill was passed by the Hong Kong Legislative Council without opposing votes.

The following steps have to be taken in order for the Bill to take effect in Hong Kong:

1. The Chief Executive has to sign and promulgate the Bill in accordance with Article 76 of the Basic Law. Thereafter, the Bill will become the Mainland Judgments (Reciprocal Enforcement) Ordinance,

2.  The Hong Kong authorities have to announce the in-force date of the Bill in Hong Kong.

As for the implementation of the Arrangement in Mainland China, the Supreme People's Court in Beijing has to promulgate a Judicial Interpretation in respect of the Arrangement. Such Judicial Interpretation will serve as a legal instrument which will implement the Arrangement in Mainland China. As with the case in Hong Kong, the Mainland authorities have to announce the in-force date of the relevant law in the Mainland in order for the Arrangement to take effect.

It should be noted that the Arrangement or the Bill cannot be relied on yet, because the Arrangement will only apply where an exclusive jurisdiction agreement is entered into after the in-force date of the Arrangement.

In addition, it should be noted that the exceptions and process that will apply to enforcement of money judgments under the Arrangement are likely to be materially different from the exceptions and process that apply to the reciprocal enforcement of arbitration awards in Hong Kong and Mainland China.

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