CONFIDENTIAL
7
Mr Fifoot and I both consider Mr Keller's paper useful and well researched and his recommendations sensible (see paragraph 4 of Mr Fifoot's minute to me of 6 September). However, the response to it from the Deputy Political Adviser of 21 August was negative. As far as I know, no further thought has been given to the matter within HKG. During my visit to Hong Kong, I made a point of raising the issue with all of those whom I knew to have some interest in it to find out if there was any reason of substance for not following Mr Keller's recommendations (Mr Ehrman, Mr Galsworthy, one or two CAB officials, Mr Stock, Mr Edwards and others in Legal Department, as well as Mr Betts, Supreme Court Registrar). The outcome is that there does not appear to be any such reason; all those to whom I spoke either agreed that it would be desirable to pursue the matter or at least had no strong objection.
BACKGROUND
8.
Existing arrangements for HK/mainland reciprocal judicial assistance in civil matters
There are none except for an agreement between the Hong Kong Supreme Court and the Guangdong Higher People's Court entered into in 1988 by exchange of letters. This only covers service of court documents, not enforcement of judgments, and it does not apply to Chinese courts outside Guangdong Province. It has been little used by Hk parties, probably because its existence has not been
Practical problems resulting from lack of arrangements publicised
9.
In
It can cause extreme inconvenience for businesses in Hong Kong wishing to sue Chinese parties who are no longer present in Hong Kong or do not have worthwhile assets in Hong Kong. particular, a judgment obtained in a Hong Kong court against such a person is not enforceable in China. (See the attached cutting from the SCMP, and our recent correspondence with Peking on this subject for illustrations of these problems.)
10.
Advantages of developing new reciprocal arrangements
Chinese parties can in fact obtain indirect enforcement of Chinese judgments in the Hong Kong courts, since the common law is more generous to foreigners in this respect than Chinese law. The status quo therefore gives Chinese businesses an advantage over their Hong Kong counterparts. It seems that the Chinese are only just becoming aware of this (see paragraph 15 of Mr Keller's paper). It would therefore be of immediate benefit to the Hong Kong commercial sector if new arrangements on a reciprocal basis are negotiated. Furthermore, it would establish a framework for the consideration of future mainland-SAR arrangements.
ALLAAD
CONFIDENTIAL