Arrangement on Mutual Recognition and Enforcement of Judgments in Civil and Commercial Matters by Courts of Mainland And Hong Kong SAR

The Supreme People’s Court and HK SAR Government hereby make the following arrangement on recognition and enforcement of judgments in civil and commercial matters pursuant to choice of court agreements between parties concerned through consultation according to Article 95 of the Basic Law of Hong Kong Special Administrative Region of the People’s Republic of China:

Article 1 Final judgment, defined with payment amount and enforcement power, made between mainland court and HK SAR court in civil and commercial case with written jurisdiction agreement, the parties concerned shall apply to mainland people’s court or HK SAR court for recognition and enforcement based on this arrangement.

Article 2 “Final judgment with enforcement power” in this arrangement:

(1) On the mainland, it refers to:

1. Judgment of the supreme people’s court;

2. The second instance judgment and judgment made by the upper level people’s court according to judgment supervision procedure is effective, when judgment of first instance is not allowed to appeal by people’s high court, intermediate people’s court and basic people’s court (as appendix) that’s authorized to be in charge of foreign related, HK, Macao and Taiwan related civil and commercial matters of the first instance, or when the appeal is out of prescribed time limit.

(2) In HK SAR, it refers to effective judgment made by court of final appeal, court of the appeal of the high court, court of the first instance and district court.

Judgment in this arrangement refers to judgment paper, ruling paper, mediation agreement and payment order on the mainland; refers to judgment paper, order and evaluation certificate of legal expense in HK SAR.

After the party applies to HK SAR for recognition and enforcement of the judgment, if people’s court of the mainland shall legally review the case, such case should be raised by upper level people’s court of the court that makes effective judgment.

Article 3 “Choice of court agreement in written” in this arrangement refers to a written agreement defining the exclusive jurisdiction of either the mainland people’s court or HK SAR in order to revolve dispute with particular legal relation occurred or likely to occur by the parties concerned since effective date of this arrangement.

“Particular legal relation” of this article refers to contract of civil and commercial matters between parties, excluding contract of employment and contract involving natural person with individual consumption, family affair or other non-commercial purposes.

“Written form” in this arrangement refers to contract, letter and electronic data (including telegraph, telex, facsimile, electronic data exchange and email) and other forms that can physically present the carried content and can be used in the future.

Written choice of court agreement can be constituted of one or more copies.

The choice of court agreement exists independently and any change, relief, termination or invalidation of the contract won’t influence effect of the choice of court agreement, except when it’s otherwise prescribed in the contract.

Article 4 Application for recognition and enforcement of civil and commercial judgment prescribed in the arrangement, should be submitted to intermediate people’s courts of residence, living place or place of property of the applicant on the mainland, or submitted to high court of HK SAR.

Article 5 If residence, living place or place of property of the applicant are under jurisdiction of different intermediate people’s courts, the applicant shall choose one of the people’s court to apply for recognition and enforcement rather than applying it to two or more people’s courts.

If residence, living place or place of property of the applicant is both on the mainland and in HK SAR, the applicant can submit application to courts at these two places at the same time. Judgment enforcement amount of courts at both places shouldn’t exceed fixed amount of the judgment itself. Court that has partly or completely executed the judgment should provide status of executed judgment upon requirement of the other court.

Article 6 Applicant shall submit the following document for application of judgment recognition and enforcement:

(1) Application for recognition and enforcement;

(2) Copy of judgment paper with seal of court that makes the final judgment;

(3) Certificate issued by court of final judgment to prove such judgment is the final judgment referred to in Article 2 of this arrangement and can be executed at the place of judgment;

(4) Identification evidence:

1. If applicant is natural person, he shall submit ID card or notarized copy of ID card;

2. If applicant is legal person or other form of organization, they shall submit notarized copy of registration certificate of legal person or other form of organization;

3. If applicant is a foreign legal person or other form of organization, they shall submit related notarization and authentication materials.

If there’s no Chinese version of submitted document to the mainland people’s court, the applicant shall submit a correct Chinese translation.

Court at the enforcement place doesn’t need to require particular notarization for certificate issued by court prescribed in this article.

Article 7 The following items should be included in the application for recognition and enforcement:

(1) The name and living place of the party, who is natural person; name and location of legal person or other organization, and name, position and residence of the legal representative or principal;

(2) Reason of application and request content, place of property and property status of the applicant;

(3) Whether the judgment is applied in court of original place and the enforcement status.

Article 8 Applicant shall comply with law of the enforcement place while applying for recognition and enforcement of judgment of court on the mainland or in HK SAR, except for otherwise prescribed.

Application period for recognition and enforcement by applicant is two years.

During the above period, if judgment on the mainland is applied to be executed in HK SAR, it will calculate from the last day of performance period prescribed by the judgment; if the judgment requires performance in different period, it will calculate from the last day of each performance period; if the judgment doesn’t prescribe performance period, it will calculate since effective day of the judgment; if judgment in HK SAR is applied to be executed on the mainland, it will calculate from the day of judgment mandatory enforcement, which is put in the judgment; if the judgment has other prescription during performance period, it will calculate since maturity of performance period.

Article 9 For application for judgment recognition and enforcement, if debtor of the first trial provides evidence that proves one of the following situations and is proved by the court that handles the application, the judgment will not be recognized or executed:

(1) The jurisdiction agreement is invalid according to local law at the original court chosen by the parties concerned, except for jurisdiction agreement that is judged by the chosen court as being valid;

(2) The judgment is performed completely;

(3) Court of the execution place enjoys exclusive jurisdiction based on local law;

(4) The party that loses a lawsuit and doesn’t appear in court has no legal summon or hasn’t acquired legal replying time though with legal summon according to law at the original court, except for cases that original court announce service based on law or related regulation;

(5) Judgment is acquired by cheating;

(6) Judgment of the same lawsuit by court at enforcement place, or judgment of the same lawsuit request by courts abroad, or arbitration made by related arbitration institute have been recognized or executed by court at the enforcement place.

If the people’s court of the mainland believes enforcement of the judgment made by HK SAR impairs social public interests, or court of HK SAR believes enforcement of judgment made by court on the mainland violates public policy of HK SAR, the recognition and enforcement are not permitted.

Article 10 For judgment made by court of HK SAR, if the debtor confirmed by judgment has lodged suit or the procedure is still underway, the people’s court of the mainland, after checking and verification, can pause recognition and enforcement of the procedure. If all or part of the original judgment is maintained after appealing, the reorganization and enforcement procedure can be recovered; if the original judgment is overthrown, the recognition and enforcement procedure can be ceased.

If local people’s court of the mainland has arraigned adjudication of the made judgment according to judgment supervision procedure, or the Supreme Court has arraigned another adjudication, after being checked by the court of HK SAR, the recognition and enforcement procedure can be paused. If the second judgment maintains all or part of original judgment, the recognition and enforcement can be recovered; if the second judgment has changed overall original judgment, the recognition and enforcement procedure should be ceased.

Article 11 The effect of judgment that’s recognized according to this arrangement should be equal to judgment of local court.

Article 12 If the party doesn’t agree to the judgment of whether it’s recognizable or executable, he can apply to the upper level people’s court for review on the mainland, or to lodge suit based on law and regulation in HK SAR.

Article 13 The court won’t handle lawsuit, lodged by the party with the same fact, while the court is handling the application of recognizing and executing judgment of the party.

The court won’t handle judgment that’s recognized or executed if the party lodges lawsuit with the same fact.

The applicant can’t submit application for recognition or enforcement again based on judgment that should not be recognized or executed in Article 9 of this arrangement, but can lodge suit to local court with the same case fact according to law of executing place.

Article 14 Before court handles application for recognizing and executing judgment, they can adopt protective or compulsory measures for applicant property based on regulations of property preservation or assets transferring prohibition of local law and according to application of the applicant.

Article 15 If the party applies to related court for judgment enforcement, they should pay execution fee or court expense based on law and regulation on lawsuit charge of execution place.

Article 16 The bidding scope recognized and executed by courts of the mainland and HK SAR includes but not limited to fixed amount confirmed in judgment, but also interests required by the judgment, lawyer fee and legal cost ratified by the court, excluding tax and fine.

Legal cost in HK SAR refers to lawsuit fee prescribed or ordered amount in evaluation certificate of lawsuit fee by the judge or judicial executive officer.

Article 17 This arrangement is applicable to judgment made by courts of the mainland and HK SAR since the effective day (including the effective day) of this arrangement.

Article 18 If any problem occurs during implementation of this arrangement or modification is necessary, the Supreme People’s Court and government of HK SAR shall resolve through consultation.

Appendix:

Name List of Basic People’s Court Authorized to Handle Foreign-Related, HK, Macao and Taiwan Civil and Commercial Case of the First Instance (omitted)

Source: http://www.fdi.gov.cn

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Difference between Trademark Registration and Company Registration

Separate laws and systems regulate the registration of company names, business names and trademarks in Hong Kong. A company name registration at the Companies Registry or a business name registration at the Business Registration Office (Inland Revenue Department) is not the same as a trademark registration at the Trade Marks Registry. A business or company name registration is not an indication of trademark rights.

There have been recent reports of registered trademarks or well-known trademarks being registered without authorization as company names with the Companies Registry (often with a minor variation of the name). We understand that such company name registrations are then used outside Hong Kong (principally in the Mainland) as a cover for promoting or dealing in infringing trademark goods.

A Hong Kong business registration certificate or a company registration certificate does not by itself indicate that the business or company has rights to use its name or a trademark in promoting or dealing in goods and services.

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Undisclosed Commercial Information – Trade Secrets

Trade secrets and undisclosed commercial information are confidential information in a commercial setting, such as formulaes, methods, technologies, designs, product specifications, business plans and client lists, that have commercial value. In Hong Kong, trade secrets and undisclosed commercial information are protected by common law of confidence. An obligation of confidence will arise whenever the information is communicated to or acquired by a person who knows or ought as a reasonable person to know that the other person wishes to keep that information confidential. An industry or trade custom or practice may also impose an obligation of confidence. The release of trade secrets and undisclosed commercial information would be detrimental to the owner or advantageous to his or her competitors or others. The remedies available for breach of confidence include injunctions, damages, account of profits and delivery up of materials containing confidential information. To enhance the protection of trade secrets and undisclosed commercial information, you should sign non disclosure agreement with everyone who has knowledge of your secrets.

Protection of trade secrets and undisclosed commercial information is of particular importance when the IP is not registrable or you find the period of patent protection (20 years) not long enough. Whereas patents enjoy a limited term of protection, trade secrets and undisclosed commercial information protection last until the information becomes public knowledge. The formulae for Coca Cola is a good example of long-kept trade secrets and undisclosed commercial information. However, trade secrets and undisclosed commercial information do not give you exclusive rights. Your competitors may independently invent an identical product or process or come up with the same ideas which they can exploit freely.

How do trade secrets and undisclosed commercial information differ from patents or copyright?

The application for a patent requires disclosure of details of invention. In other words, details of a patented invention cannot be kept confidential as trade secrets and undisclosed commercial information. As said above, patents enjoy a limited term of protection but trade secrets and undisclosed commercial information last for as long as the information remains confidential.

Copyright only protects the form in which ideas and information are expressed, but not ideas and information per se. The law of confidence protects the substance of ideas and information, no matter how they are expressed. There are statutory permitted acts for works protected by copyright but not works protected by confidence.

The above only set out some basic principles of trade secrets and undisclosed commercial information. You may seek independent professional advice for protection of your trade secrets and undisclosed commercial information from Ming Dynasty (HK) Limited.

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