What impact will the implementation of judicial assistance in the Mainland and Hong Kong have on the Web3.0 industry?

Written by Jin Jianzhi, senior lawyer at Shanghai Mankiw Law Firm

The Supreme People's Court announced the "Arrangement on the Mutual Recognition and Enforcement of Judgments in Civil and Commercial Cases between the Mainland and Hong Kong Special Administrative Region Courts" to be implemented on January 29, 2024. So far, all arrangements on mutual legal assistance that have been adopted by the Mainland and Hong Kong have come into effect.

01 The history of mutual judicial assistance between the two places

Hong Kong and the Mainland have a relatively long history of judicial assistance in civil and commercial adjudication.

Enforcement of court judgments and arbitration awards across jurisdictions usually relies on international judicial assistance treaties. In Hong Kong and the Mainland, this is achieved through various arrangements negotiated and signed between the two places. Article 95 of the "Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China" stipulates: The Hong Kong Special Administrative Region may conduct judicial contacts and provide mutual assistance with judicial authorities in other regions of the country through consultation and in accordance with the law.

Currently, the two places have signed an agreement on mutual judicial assistance as follows:

1. Adopted on March 30, 1998, the Arrangement on Mutual Entrustment of the Service of Judicial Documents in Civil and Commercial Matters between the Mainland and Hong Kong Special Administrative Region Courts, which came into effect on March 30, 1999.

2. Adopted on June 18, 1999, the "Regulations on Mutual Enforcement between the Mainland and the Hong Kong Special Administrative Region" which came into effect on February 1, 2000 Arrangements for Arbitral Awards"

3. Adopted on June 12, 2006, the "Regarding the Agreement between the Mainland and the Arrangements for mutual recognition and enforcement of judgments in civil and commercial cases under the jurisdiction of the courts of the Hong Kong Special Administrative Region by agreement between the parties"

4. On October 31, 2016 Adopted the "Arrangement on Mutual Entrustment of Evidence Collection in Civil and Commercial Cases between the Mainland and Hong Kong Special Administrative Region Courts" which came into effect on March 1, 2017

5. Adopted on May 22, 2017, the "Arrangement on the Mutual Recognition and Enforcement of Judgments in Marriage and Family Civil Cases between the Mainland and Hong Kong Special Administrative Region Courts" which will take effect on February 15, 2022

6. Adopted on January 14, 2019, the "Arrangement on the Mutual Recognition and Enforcement of Judgments in Civil and Commercial Cases between the Mainland and Hong Kong Special Administrative Region Courts" which will take effect on January 29, 2024.

7. Adopted on March 25, 2019, the "Regarding the Law between the Mainland and the Courts of the Hong Kong Special Administrative Region" which came into effect on October 1, 2019 Arrangement for Mutual Assistance and Preservation in Arbitration Proceedings"

8. Adopted on November 9, 2020 and came into effect on November 27, 2020 "Supplementary Arrangements Regarding the Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region"

It can be seen from the adoption history of the above arrangements that From the initial service of documents and the extraction of evidence to mutual recognition and enforcement, from procedures to substantive matters, from arbitration to judgment, the degree of judicial assistance between the two sides is getting deeper and wider, which helps to strengthen the relationship between the two sides. Cooperate to improve the efficiency of the judicial system and protect the legal rights and interests of relevant parties. In particular, it can solve the problem of "difficulty in cross-border execution" to a great extent.

The impact of 02 on the Web3.0 industry

The Hong Kong Government’s Mainland Civil and Commercial Judgments ( Mutual Enforcement) Rules" and the "Mainland Civil and Commercial Judgments (Mutual Enforcement) Ordinance" (Effective Date) Announcement" Mutual Enforcement) Rules will be implemented on January 29, 2024. The Supreme People's Court's "Arrangement on the Mutual Recognition and Enforcement of Judgments in Civil and Commercial Cases by the Courts of the Mainland and the Hong Kong Special Administrative Region" was also implemented on January 29, 2024. The two places have completely synchronized their implementation of judicial assistance matters.

Currently in the Mainland, due to regulatory reasons, the results of disputes involving virtual currencies, whether they are court judgments or arbitration awards, are full of uncertainty, and have been criticized by judicial authorities. There is a high possibility that the application will be deemed invalid due to violation of public order and good customs. However, Hong Kong is committed to building the world's Web3.0 center, and its attitude towards the Web3.0 industry is very different from that of the mainland. Naturally, it is foreseeable that Hong Kong's judicial authorities will be more open and tolerant in legal disputes involving virtual currencies.

Although there is the principle of international comity under common law. For example, although the contract stipulates that Hong Kong law shall be applicable, the contract will violate the laws of the mainland when it is performed in mainland China. , the Hong Kong court can refuse to enforce the contract agreement based on this principle.

However, the application of the principle of international comity is very cautious. Judges will comprehensively consider various factors and will never simply cite them.

Mankiw Lawyer Jin Jianzhi understands that it is unlikely that the Hong Kong judicial authorities will invoke the principle of international comity to deny the validity of the legal actions of mainland citizens and enterprises involving virtual currencies. There are two main reasons:

1. Mainland regulatory policies are not laws at the level of effectiveness. It is just a policy document, and policy documents are highly time-sensitive and volatile;

2. Hong Kong has certain requirements for the Web3.0 industry My own opinion.

Therefore, since the judicial attitude of the Hong Kong judicial authorities towards virtual currencies can be expected, and with the civil and commercial judgments of the two places, Mutual enforcement of arbitral awards is more convenient. It is entirely possible to stipulate the jurisdiction of currency-related disputes in Hong Kong. After obtaining the winning judgment or award in Hong Kong, the court in the mainland can seek enforcement according to the relevant judicial assistance arrangements, which can avoid the current legal requirements of the mainland courts. The unfriendly policies and regulations of virtual currencies can also provide judicial relief for commercial arrangements.

03 Summary

Since the Hong Kong government has made efforts on Web3.0, for the mainland For Web3.0 entrepreneurs, the biggest worry has begun to be gradually cleared by the Hong Kong government. Many things in Web3.0 can begin to be arranged through various arrangements. Like other industries, you can innovate business models without worrying about lack of legal protection. The future is gradually becoming brighter.