華融華僑資產管理股份有限公司 v. 李晓鹏

HCA 1016/2024

[2025] HKCFI 6402

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1016 OF 2024

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J U D G M E N T

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A.  INTRODUCTION

1.  The Plaintiff is the assignee of a debt of which the Defendant is the guarantor. The Plaintiff obtained judgment pursuant to a Civil Mediation Certificate. After 4 ½ years, the Plaintiff issued the writ in the present action under common law for enforcement of the judgment. The Plaintiff has obtained an interim injunction and a disclosure order against the Defendant.

2.  Before me are 3 summonses taken out by the Plaintiff:

(a)  An Order 14 Summons for summary judgment to enforce the Civil Mediation Certificate for the sum of RMB150,000,000 and interest;

(b)  An Injunction Summons for continuation of the ex parte Mareva Injunction against the Defendant (“the Injunction Order”);

(c)  A Disclosure Summons for disclosure by the Defendant of (i) the whereabouts of the shares allegedly sold by Defendant and their proceeds, and (ii) assets above HK$10,000.

3.  The Defendant opposes all applications. The core defence that permeates all 3 Summonses is that s.22(2) of the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap 597) (“MJREO”) precludes common law enforcement of Mainland judgments which satisfy ss.5(2)(a)-(e) MJREO (“the s.22(2) Defence”).

4.  In gist, the Defendant’s position is that, if the s.22(2) Defence is established,

For the Summary Judgment Summons:

(1)  the Plaintiff’s application should be dismissed; or

(2)  there be unconditional leave to defend, as there are triable issues as to the s.22(2) Defence and/or the finality and conclusiveness of the judgment is not satisfied to the summary judgment standard;

For the Injunction Summons:

(3)  the Plaintiff’s application should be dismissed for want of a good arguable case due to the s.22(2) Defence; or

(4)  the Injunction Order should be discharged and not re-granted due to: (a) the Plaintiff’s material non-disclosure of the s.22(2) Defence at the ex parte stage; (b) material non-disclosure concerning the Defendant’s sale of shares and (c) material non-disclosure concerning sale of land.

For the Disclosure Summons:

(5)  while the Defendant accepts that the standard disclosure order (in respect of assets of HK$10,000 or more) should stand and fall with the Injunction Summons, that part of the Disclosure Summons which demands disclosure of the whereabouts of the Defendant’s shares should be deleted in any event.  

B.  BACKGROUND

B1.  Underlying facts leading up to the Civil Mediation Certificate

5.  The facts are taken from the helpful summary of Mr Fergus Tam, counsel for the Defendant.

6.  Huarong Qinghsi made a loan of RMB 160 million to Beijing DeWei. The Defendant was the guarantor of it pursuant to an Original Guarantee dated 10 November 2017, followed by the 1^st Supplemental Guarantee dated 25 September 2018 and the 2^nd Supplemental Guarantee dated 25 December 2018.

7.  There was a dispute resolution clause in the Original Guarantee, which provided that disputes between the parties could be brought before “the court with jurisdiction at the place of residence of the Party A” (ie the Plaintiff) (“the Dispute Resolution Clause”)

“12.2 凡因本协议之订立、解释与履行所产生的全部争议， 甲 [i.e. Plaintiff] 乙[ie Defendant] 双方应在争议发生后首先以友好协商的方式解决。如无法以友好协商方式解决的， 则可将争议提交甲方住所地有管辖权的法院通过诉讼方式解决。” (underline added)

8.  The Plaintiff’s address was provided as “青海省西宁市城中区昆仑中路 102 号 1 号楼”. Therefore, the court with jurisdiction at the place of residence of the Plaintiff was the Xining Intermediate People’s Court (“Xining IPC”) in Qinghai Province.

9.  The Dispute Resolution Clause was not in the Supplemental Guarantees. However, clause 6 of the Supplemental Guarantee provided that unless there was conflict or inconsistency with the Original Guarantee, the Original Guarantee shall continue to be in force.

10.  A similar dispute resolution clause in Clause 19 of the Loan Agreement provided that, “三方同意采取如下第2种方式加以解决 […] 2、 依法直接向受托人所在地人民法院起诉。[…]”. In the Loan Agreement, “受托人” 是 “中国银行股份有限公司西宁市城中支行” with an address at 青海省西宁市城中區東大街22號. Accordingly, the Loan Agreement was also to be resolved at the Xining IPC.

11.  The Defendant defaulted in repayment. On 13 June 2019, the Plaintiff commenced legal proceedings against Beijing DeWei, DeWei and the Defendant in the Xining IPC to recover the loan.

12.  On 24 October 2019, as a result of mediation, the parties, came to a settlement which gave rise to the Civil Mediation Certificate, under which the Defendant, Beijing DeWei and DeWei were jointly and severally liable for the total sum of RMB 150 million with interest at 18%.

13.  By successive transfer agreements, the rights under the Civil Mediation Certificate were transferred from the lender to the Plaintiff.

14.  The Defendant alleges that, on 24 Sept 2020, he resigned from People’s Public Security and moved to Hong Kong. He also left Beijing DeWei and DeWei.

B2.  Enforcement of the Civil Mediation Certificate in Mainland China

15.  On 15 November 2020, the Plaintiff commenced legal proceedings against the Defendant, Beijing DeWei and DeWei in the Xining IPC to enforce the Civil Mediation Certificate.

16.  On 2 subsequent occasions, the Xining IP issued enforcement rulings on 8 January 2021 (“the 2021 Ruling”) and on 21 September 2023 (“the 2023 Ruling”), confirming the joint and several obligation of the Defendant, Beijing DeWei and DeWei under the Civil Mediation Certificate to repay the outstanding loan with interest.

17.  Meanwhile, in 2021, the Defendant began acting as CEO and Executive Director of Frontier Services Group Limited (“FSGL”), a Hong Kong listed company.

18.  On 14 April 2023, the Defendant, by a VAM Agreement, received some FSGL shares, of which he retained part. The number of shares that he received or retained is disputed.

19.  In May 2023, the Plaintiff discovered that the Defendant held, allegedly, 226 million shares in FSGL. The Plaintiff alleged that the Defendant gave an oral undertaking not to dispose of these shares but subsequently began to sell off large tranches of them in April to May 2024.

20.  In June 2023, the Defendant made partial repayments to the Plaintiff in the total sum of RMB 2 million.

21.  On 25 April 2024, the Defendant resigned as CEO and Executive Director of FSGL.

B3.  Procedural history in Hong Kong

22.  On 24 May 2024, the Plaintiff discovered that the Defendant had resigned as CEO of FSGL.

23.  On 28 May 2024, Lisa Wong J granted the Injunction Order, freezing assets up to the value of RMB 284,742,500 (“the Injunction Order”); and 125,965,301 FSGL shares allegedly sold by the Defendant and their proceeds.

24.  On 29 May 2024, the writ in this action was issued.

25.  I shall first deal with the s.22(2) Defence before I analyze each of the Summonses.

C.  ENFORCEMENT OF MAINLAND JUDGMENT UNDER CAP 597

C1.  Legal principles on enforcement of Mainland judgment

26.  Under s.22(2) MJREO, which came into force on 1 August 2008,

“No proceedings for the recovery of a sum payable under a Mainland judgment which would satisfy the requirements specified in ss.5(2)(a) to (e) in an application for registration of the judgment under s.5(1), other than proceedings by way of registration of the judgment, shall be entertained in any court in Hong Kong.”

27.  Under s.5(2) MJREO,

“(2) On an application made under sub-s.(1), the Court of First Instance shall order the Mainland judgment to be registered in accordance with this Ordinance if the judgment creditor has proved to the satisfaction of the Court of First Instance that the following requirements are satisfied—

(a) the judgment is given on or after the date of the commencement* [ie 1.8.2008] of this Ordinance by—

(i) a chosen court which is a designated court;

(ii) a designated court upon a transfer of the case under the law of the Mainland from a chosen court;

(iii) a designated court upon an appeal against a judgment of the case given by—

(A) a chosen court; or

(B) a court to which the case has been transferred under the law of the Mainland from a chosen court; or

(iv) a designated court upon a retrial of the case which has been tried in—

(A) a chosen court; or

(B) a court to which the case has been transferred under the law of the Mainland from a chosen court;

(b) the relevant choice of Mainland court agreement is made on or after the commencemsent date* of this Ordinance [ie 1.8.2008] but before the commencement date# of the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) [ie 29.1.2024];

(c) the judgment is final and conclusive as between the parties to the judgment;

(d) the judgment is enforceable in the Mainland; and

(e) the judgment orders the payment of a sum of money (not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty).”

28.  Under ss.5(2)(a) to (e) MJREO, the main question is whether there was a “choice of Mainland court agreement” and that term is defined in s.3(2) MJREO:

“In this Ordinance, subject to sub-ss.(3) and (4), choice of Mainland court agreement (選用內地法院協議) means an agreement concluded by the parties to a specified contract and specifying the courts in the Mainland or any of them as the court to determine a dispute which has arisen or may arise in connection with the specified contract to the exclusion of courts of other jurisdictions”:

29.  Whether s.3(2) MJREO is satisfied is a question of construction: Bank of China Ltd v Yang Fan [2016] 3 HKLRD 7, §30, To J.

30.  Further, the definition of a choice of Mainland court agreement in s.3(2) does not require parties to that agreement to limit their choice to a specified designated court. A general choice of the courts of the Mainland would suffice: The Export-Import Bank of China v Taifeng Textile Group Co Ltd [2018] HKCFI 1840, per Lisa Wong J at §76.

31.  Jurisdiction clauses with wording of “可以” or “可” for litigation in a PRC court after mediation fails satisfies the test in s.3(2) MJREO. See e.g. the clause in Bank of China v Yang Fan, at §28[1] which was construed to mean “shall” on the basis that the parties could not have intended it to be permissible for them to start proceedings outside the PRC (§§34-35); and a similar clause in China Everbright Bank Co Ltd v China Kingho Energy Group Limited & Ors [2025] 2 HKC 863, at §30(c)(ii).

32.  Accordingly, enforcement of a Mainland judgment that meets the requirements of ss.5(2)(a) to (e) MJREO by a common law action (“the common law route”) is barred by s.22(2).

C2.  Choice of court agreement under the Guarantees

33.  All the parties to the Loan Agreement and the Guarantees and the subject matter of the transactions were all situated in Mainland China.  

34.  By the Dispute Resolution Clause, the parties intended all disputes relating to the Guarantees to be resolved in the Xining courts and nowhere else. Clause 19 of the Loan Agreement also mandated resolution of disputes in the Xining courts. Thus, the Plaintiff and the Defendant must have intended exclusive jurisdiction to be with the Xining courts.

35.  The Supplemental Guarantees were confirmations of the extension of the Original Guarantee to the change of payment schedule. With no dispute resolution clause of their own, the Dispute Resolution Clause in the Original Guarantee must have been extended to them as a matter of construction.

36.  Therefore, on a proper construction, the Dispute Resolution Clause was an exclusive Mainland jurisdictional agreement, and constituted a “choice of Mainland court agreement”.

C3.  The Civil Mediation Certificate meets the requirements of ss.5(2)(a) to (e) of MJREO

37.  The Plaintiff does not, rightly, dispute that ss.5(2)(a) to (e) of MJREO are satisfied in respect of the Civil Mediation Certificate. For the sake of completeness, I will deal briefly with each limb.

38.  S.5(a) is satisfied.  The Civil Mediation Certificate is a judgment given on or after the date of commencement of MJREO. The chosen court, ie Xining IPC, falls under paragraph 3 of Schedule 1 MJREO. Thus, it is a “designated court” on top of being a “chosen court”.

39.  S.5(b) is satisfied.  The Dispute Resolution Clause is a “choice of Mainland court agreement”, made in the Guarantees and entered into between 10 November 2017 and 25 December 2018, before commencement of the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance, Cap 645 (“Cap 645”) but after commencement of the MJREO.

40.  S.5(c) is satisfied.  The relevant test is set out in s.6(1) MJREO, which provides that:

“For the purposes of s.5(2)(c), a Mainland judgment is final and conclusive as between the parties to the judgment if—

(a) …

(b) it is a judgment of the first instance given by … an Intermediate People’s Court … and—

(i) no appeal is allowed from the judgment according to the law of the Mainland; or

(ii) the time limit for appeal in respect of the judgment has expired according to the law of the Mainland and no appeal has been filed.”

41.  The Plaintiff itself concedes that the Civil Mediation Certificate satisfies s.6(1)(b) as being final and conclusive as between the Plaintiff and the Defendant. According to both legal experts, the parties could have applied for a retrial within 6 months of that Certificate, but neither party had appealed and the time for doing so had long expired.

42.  S.5(d) is satisfied.  The Civil Mediation Certificate is enforceable and in fact had been enforced in the Mainland by execution. It has also been confirmed twice by the 2021 and 2023 Rulings.

43.  S.5(e) is satisfied.  This limb in essence requires that there is a judgment debt, an obligation arising from a judgment to pay a definite sum of money: China Minsheng Trust Co, Ltd v Fu Kwan [2025] HKCA 462 at §35. The Plaintiff’s PRC legal opinion (§3(1)) states that the Civil Mediation Certificate is equivalent to a final judgment. It orders the payment of a sum of money (not being in the nature of taxes, fine or penalty). Ng Yuk Keung v Yan Xiaojie [2018] 6 HKC 338 also held that the appropriate cause for enforcing a PRC Court issued mediation certificate in Hong Kong is to proceed for recognition and enforcement, either at common law or under statute.

D.  COMMON LAW ENFORCEMENT IS BARRED

44.  As ss.5(2)(a) to (e) are satisfied, s.22(2) MJREO, which is in clear and mandatory terms, bars common law proceedings for recovery of a sum payable under a Mainland judgment.

45.  Ss.5 and 7 MJREO, read together, creates a time period of 2 years within which a judgment creditor can apply for registration of a Mainland judgment.

46.  Mr Li, counsel for the Plaintiff, rightly concedes that the Plaintiff was out of time for registration under MJREO. He relies on the common law route, citing, amongst others, China Everbright Bank Co Ltd v China Kingho Energy Group Limited & Ors [2025] 2 HKC HCA 863, where the judgment creditor was similarly out of time.

47.  Keith Yeung J held that there was a good arguable case that the common law route was still open despite the expiry of the 2-year time limit under the MJREO when the writ was issued. D4’s application for leave to appeal was dismissed: [2025] HKCFI 735, §§9 and 10. There is a rolled-up hearing for leave is appeal to Court of Appeal and the appeal itself if leave is granted, to be heard on 8 January 2026.

48.  The rationale of Keith Yeung J’s ruling was set out in §38 of his decision:

“(a) An important premise of Mr Ng’s submission is that MJREO is “ modelled ” upon the FJREO;

(b) Whilst that may be so, there is at least one important difference between the 2 regimes. Under the FJREO, the time limit for application under s.4(1) is 6 years after the judgment. This is to be contrasted with the time limit of 2 years under the MJREO regime;

(c) The time limit under the FJREO regime is more in line with those set by the Limitation Ordinance, whilst that under the MJREO is much tighter;

(d) The above are to be considered with the fact that prior to the commencement of the MJREO, judgments from courts in the Mainland could be (but only be) enforced under the common law. The limitation period was governed by the Limitation Ordinance. The MJREO regime was introduced to facilitate enforcement of certain types of judgments. The process was streamlined via registration. The time limit of 2 years is imposed if the streamlined regime is to be taken benefit of. There is no readily discernable policy or other reasons for the proposition that the common law enforcement route once existed, and in particular during the balance of the longer limitation period, was intended to be abrogated. There is further no readily discernable policy or other reasons to justify why those other judgments not qualified to be registered could enjoy a longer limitation period, while those which do no longer do;

(e) I have considered the policy considerations for s.22 of MJREO as explained in Lu Yongliang. None of them necessarily justifies the abrogation theory put forward by Mr Ng. In particular, permitting a claimant to start common law enforcement after the expiry of the 2-year time limit under the MJREO regime without any prior attempted registration will not involve the defendant being vexed twice. Any threat of registration during that 2-year is in my view not sufficient to justify the interpretation Mr Ng puts forward;

(f) Given the above, the reliance by Mr Ng of the FJREO regime (and the English position under the 1933 Act) is of limited value;

(g) There is further the explanations given by Lam VP (as the PJ then was) at §§47-49 in Lu Yongliang on the different concepts of “recognition” and “registration” under the MJREO, and how s.22(2) thereof should be read in conjunction with s.16, that:

“47. …s 22(2) should be construed in the context and purpose of the MJREO. It has to be read together with s 16 of the ordinance:

[the text of which has been cited above and omitted here]

48. Thus, as specifically stated in sub-ss.(1) and (3), there are instances where unregistered Mainland judgments are given recognition and effect in the courts in Hong Kong. Under the scheme of the MJREO, recognition and enforcement are two different concepts. The common law in Hong Kong has always given recognition in at least three ways to Mainland judgments which are final and conclusive: (a) through the doctrine of res judicata, see First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd …; (b) foreign judgment as a cause of action on its own, see China NPL Holdings v Mo Haidan [2021] 2 HKC 97 , [2021] 1 HKLRD 344 ; (c) foreign judgment as evidence of foreign law on a particular issue between the same parties, see Guangzhou Green-Enhan Bio-Engineering Co Ltd v Green Power Health Products [2004] 4 HKC 163 , [2004] 3 HKLRD 223 .

49. In light of s 16, the restriction in s 22(2) of the MJREO cannot be construed in such a way to preclude recognition being given to unregistered Mainland judgments under our common law.”

(h) Mr Ng submitted that the judgment in China NPL was in fact not one which could be registered under the MJREO. Whilst that is so, that does not affect the generality of the scope of the 2^nd way of recognition explained by the learned Vice President;

(i) I accept Mr So’s submissions that Lu Yongliang can be read as supporting the proposition that P’s present claim remains viable.”

49.  In sum, Keith Yeung J’s rationale can be broken down into (a) MJREO being modelled on FJREO; (b) a query why the time limit was restricted to 2 years instead of 6; (c) the lack of a readily discernable policy for abrogating the common law route; and (d) reading s.22(2) in conjunction with s.16, a foreign judgment can be a cause of action on its own.

50.  In my view, there can be answers to Keith Yeung J’s queries.

51.  Firstly, I agree with Mr Tam, counsel for the Defendant, that the context, purpose, and legislative policies of legislation upon which MJREO is modelled upon is exclusivity. MJREO is modelled on FJREO: Huzhou Shenghua Financial Services Company Ltd v Hang Pin Living Technology Company Ltd [2025] HKCA 434, per Godfrey Lam JA at §40. S.8 FJREO precludes common law enforcement: Re James Chor Cheung Wong [2018] 2 HKLRD 284 §4, DHCJ A To. The wording of s.22(2) MJREO is purposely similar to that of s.8 FJREO. FJREO is, in turn, modelled on the English Foreign Judgments (Reciprocal Enforcement) Act 1933 (23 & 24 Geo. 5, c. 13) (“1933 Act”).  S.6 of the 1933 Act precludes common law enforcement: Rubin v Eurofinance SA [2013] 1 AC 236 §170. Whether the limitation period is 2 years or 6 years does not undermine the clear wording of s.22(2) MJREO that a Mainland Judgment that meets the requirements in s.5(2) should exclusively be registered under Cap 597 and the common law route is precluded.

52.  Secondly, the 2 year limitation period is deliberate, policy driven and stems from reciprocity and certainty.

53.  The policy under FJREO is that a foreign judgment is not registrable if, at the date of application, it is not enforceable in the country of the original court. See the Administration’s Response to Issues Raised at the Bills Committee Meeting held on 14 May 2007 in respect of the MJRE Bill, at §9.

54.  Before enactment of MJREO, a Mainland judgment could only be enforced under the common law route. There were then questions as to whether a Mainland judgment could meet the requirements of finality and conclusiveness having regard to its system of appeal, review and trial supervision. On the other hand, Mainland laws had not clearly provided for the recognition and enforcement of Hong Kong judgments. See Report of the Bills Committee on the MJRE Bill dated 10 April 2008, §§3-4.

55.  The Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region pursuant to Choice of Court Agreements between Parties Concerned made between the Supreme People’s Court of the People’s Republic of China and the Government of the Hong Kong Special Administrative Region (“2006 Arrangement”) sets out a level-playing field on mutual enforcement. It was a pioneer arrangement for reciprocal enforcement of judgments in the Mainland and Hong Kong, although due to the then policy, the scope of application was limited to judgments in civil or commercial matters given pursuant to choice of court agreements.

56.  The 2006 Arrangement enabled Hong Kong judgments to be enforced on the Mainland and vice versa, within an initial period of 1 year (if one or more parties were natural persons) or 6 months (for corporations or other entities): 2006 Arrangement Art. 8.

57.  Such periods reflected the then prevailing time limit under the Civil Procedure Law Art. 219[2], and was consistent with s.4(1)(b) FJREO, whereby a foreign judgment should not be registered if at the date of the application, it could not be enforced in the original court. Further, for a judgment to be registrable in Hong Kong, under s.5(2)(d) MJREO it must also be enforceable in the Mainland, reflecting the 2006 Arrangement Art 2.

58.  The time limits in the Mainland were revised from 1 year/ 6-months to a uniform 2 years (regardless of the parties being natural persons or corporations) in 2007. It resulted in parallel revision to the 2006 Arrangement to 2 years in February 2008, which was implemented by s. 7 MJREO.

59.  MJREO, which implemented the 2006 Arrangement, thus create a codified route for registering Mainland Judgments in a summary way so that the Hong Kong courts do not need to revisit the merits of the claims that had already been adjudicated in the Mainland.

60.  Further, s.6 MJREO introduced a simpler and more certain way to define what is a “final and conclusive” Mainland judgment as between the parties for the purposes of s.5(2)(c). In Re Shenzhen Qianhai Orient Ruichen Fund Management Co Ltd [2025] HKCFI 707, DHCJ KC Chan held that (which I agree):

“28. It is evident that the purpose of [MJREO] is to provide a new and convenient mechanism to facilitate, among others, the enforcement of Mainland judgments in Hong Kong. I accept Mr Chan’s submission as correct that when enacting the Ordinance the Legislature had in view the said controversy at common law over whether a Mainland judgment can be regarded as final and conclusive with the supervisory function of the People’s Procuratorate which might order a retrial by the original court and was enacting s.6 as a measure to overcome the controversy.

…

30. Since I have reached the above conclusion, I do not find relevant the opinions offered by the respective experts on whether the 2 Mainland Judgments are considered as ‘final and conclusive’ under Mainland laws; nor do I find it necessary to resort to the case laws regarding whether such a Mainland judgment is ‘final and conclusive’ for purpose of enforcement of the same by a common law action.”

61.  Accordingly, whether on its express wording or the policy intent of reciprocity and certainty behind its enactment, s.22(2) MJREO does purposely displace common law enforcement and reduce the limitation period for registration to 2 years where a Mainland Judgment satisfies s.5(2) MJREO.

62.  If the Legislature had intended to leave the common law route open for all Mainland judgments whether registrable under s.5(2) or not, there would have been no need to include s.22(2) in MJREO at all.

63.  If one traces on, this policy of exclusivity, reciprocity and certainty has continued to be reflected in Cap 645 which came into force on 29 January 2024. This Ordinance greatly expands the scope of application to the bulk of judgments in civil or commercial matters, excluding only specified judgments in s.5. S.31 thereof is similar to s.22(2) MJREO. The policy intent of using a statutory code for registration of registrable Mainland Judgments with a 2 year limitation period and barring the common law route is clear and consistent.

64.  Thirdly, Keith Yeung J considered that the policy considerations for s.22(2) MJREO set out in Lu Yongliang v Bank of China, Dongguan Branch [2021] 6 HKC 46 did not necessarily justify the abrogation of the 6 year limitation period.

65.  Lu Yongliang, §56 held that:

“(a) A party should not be vexed twice by the same substantive issues;

(b) This is particularly so when the foreign judgment is subject to a pending appeal;

(c) Risk of inconsistent findings in parallel proceedings; and

(d) To preclude a plaintiff who had won only an unsatisfying victory from suing again on the original cause of action hoping to achieve a better result.”

66.  Whilst these considerations in Lu Yongliang do not apply to the present case, the other policy reasons in paragraphs 51-63 do provide justification for abrogating the common law route for registrable judgments.

67.  Fourthly, whilst s.16 MJREO preserves the recognition of a registrable Mainland judgment as conclusive inter se in “any proceedings founded on the same cause of action” and may be relied upon by defence or counterclaim, properly construed, this only preserves recognition proper (i.e. by res judicata, whether by cause of action estoppel or issue estoppel). One can hardly see how this section can be used to preserve the common law route in the light of the clear wording of s.22(2).

68.  China NPL Holdings Pte Ltd v Mo Haidan [2020] HKCFI 980 (CFI) & [2021] 1 HKLRD 344 (CA), relied on by the Plaintiff, concerned the finality and conclusiveness of the Mainland judgment that was subject to an order for retrial. That case does not support the proposition that the common law route for a registrable Mainland Judgment is preserved under MJREO.

69.  Further, when Lam VP (as he then was) referred, in Lu Yongliang, to 3 ways of recognition at common law, he was making a general observation. I do not think he was stating affirmatively that the 2^nd way of recognition was open despite a Mainland Judgment being registrable under s.5(2). In any case, Lu Yongliang did not involve a Mainland Judgment that satisfied s.5(2) MJREO and anything about whether the common law route is open is obiter.

70.  Despite my analyses above, it is not necessary for me to make a definitive decision in contradiction to Keith Yeung J’s decision. For the purpose of the present Summonses, it is good enough that the common law route is arguable and so is the s.22(2) Defence.

E.  CIVIL MEDIATION CERTIFICATE NOT ENFORCEABLE AT COMMON LAW

71.  Assuming that the common law route is not precluded by s.22(2) MJREO, Mr Tam submits that the Civil Mediation Certificate is not final and conclusive and hence not enforceable at common law.

72.  The phrase “final and conclusive” means “final and conclusive on the merits” of the cause. If a judgment is provisional or nisi in that the judicial system provides for a procedure to enable the parties to re-argue their case before the same court pronouncing the judgment which would enable the same court to set aside the judgment or alter it, such a judgment is not final. But the possibility of appeal to a higher court and the fact that the judgment is currently under appeal do not alter its finality. The test of finality is therefore the treatment of the judgment by the tribunal pronouncing it as res judicata between the parties and putting it beyond its power to abrogate or alter its decision: Fabiano Hotels Ltd v Profitmax Holdings Inc  [2017] 6 HKC 414 at §19.

73.  By a majority decision, the Court of Appeal held that the question of whether a PRC judgment could be considered final and conclusive in light of the trial supervision system in the Mainland was an issue of public importance and involved complicated legal questions that could not be determined by summary judgment in the absence of a trial and cross examination of expert witnesses in PRC law: Lee Yau Wing (李祐榮) v Lee Shui Kwan (李瑞群) [2007] 2 HKLRD 749, at §§23-28. The Court of Appeal set aside the summary judgment that was granted.

74.  Lee Yau Wing was a pre-2006 Arrangement authority not having the benefit of s.6 MJREO on the definition of “final and conclusive”, but its principles have been followed in various cases:

(1)  In Lin Chien Cheng v Hui Chi Keung [2019] HKCFI 2686 at §§10-21, after conducting a review of recent first instance authorities on the matter, Mr Recorder Manzoni SC concluded that he remained bound by Lee Yau Wing and he refused summary judgment. I note that Lin Chien Cheng involved an actual review of the Mainland judgment under the “Adjudication Supervision System” of the PRC laws (§8), whereas the present case does not.

(2)  In Poon Sing Wah v Poon Sing Nam [2025] HKCFI 720 at §117(a), Keith Yeung J cited the same principle. However, this was not a case on enforcement of a Mainland judgment. It was about the plaintiff’s reliance on the Mainland judgment to prove that the defendant was estopped from challenging certain matters already decided by the Mainland Judgment. The context was totally different from the present case. Keith Yeung J did have to consider expert evidence on PRC laws at a trial to decide if the Mainland judgment gave rise to an estoppel. This was, in my view, akin to the application of s.16 of MJREO.

75.  The Plaintiff disagrees with Mr Tam’s approach and submits that if a retrial or protest is actually pending or a stay of enforcement has been ordered, then the judgment is not enforceable in Hong Kong while the stay persists. Otherwise, the mere theoretical possibility of protest or retrial does not strip the judgment of finality: Bank of China Ltd v Yang Fan, [2016] 3 HKLRD 7, To J, §§53-54.

76.  To J’s statement was made in the context of an interlocutory application. At §§53-54, he discussed the substantive changes in the adjudication supervision regime and protest regime in Mainland China and the remedies available. He held that the Court of Appeal has left open the issue of whether PRC judgments were not final and conclusive by reason only of the protest regime, and he would be slow to hold that they were not. He considered himself bound by the Court of Appeal decisions that in view of its complicated nature and public importance, that question could not be determined in interlocutory proceedings, without hearing evidence from expert witnesses, although he was satisfied, for the purpose of the s.21M HCO application, that the plaintiff had discharged its burden of showing an arguable case that such judgment, if obtained, was final and conclusive.

77.  Yang Fan merely held that there was a good arguable case that the judgment was final and conclusive but did not support the Plaintiff’s proposition in paragraph 75 above.

78.  The Plaintiff also relies on China NPL Holdings Pte v Mo Haidan [2021] 1 HKLRD 344 §§32-54 in support of its proposition in §75 above. However, §§32-53 dealt with a situation where the foreign judgment was actually subject to a stay.

79.  Mr Tam submits that, although the time for the Defendant to apply for a retrial has lapsed, the Civil Mediation Certificate cannot be held to be final and conclusive because, according to the Defendant’s PRC legal opinion:

(1)  The People’s Procuratorate can raise a protest against the Civil Mediation Certificate, if the Civil Mediation Certificate damages national security, social public interest (§2);

(2)  The President of the Xining IPC of Qinghai Province, the High People's Court of Qinghai Province and/or the Supreme People's Court may initiate a retrial of the Civil Mediation Certificate, if the Civil Mediation Certificate is found to contain any error (§3); and

(3)  A third party, having an independent claim or interest on subject matter of the proceedings, may file a lawsuit against the Civil Mediation Certificate within 6 months of the third party knowing or being in a position where he should have known of his interests being harmed by it. Such a third party lawsuit may result in the Civil Mediation Certificate being altered or reversed (§4).

80.  Whilst I bear in mind the principles laid down in Lee Yau Wing, I note that there is not even a hint of an appeal, a protest, a review or an application for re-trial in relation to the Civil Mediation Certificate. This is exactly the type of a “theoretical possibility of protest or retrial” described by To J which I share. It should not affect the finality and conclusiveness of the Civil Mediation Certificate, which had twice been confirmed by the 2021 and 2013 Rulings of Xining IPC. For the purpose of the present Summonses, I would not find against the Plaintiff on finality and conclusiveness if the common law route were open.

F.  SUMMARY JUDGMENT SUMMONS

81.  Once the preliminary requirements have been satisfied, it is for the defendant to show that there is a triable issue or an arguable defence on the merits: Hong Kong Civil Procedure 2021, Vol 1, Practice Note 14/4/1. Unless it is obvious that the defence put forward by the defendant is “frivolous and practically moonshine”, Order 14 ought not to be applied: Man Earn Ltd v Wing Ting Fong [1996] 1 HKC 225 at 228E.

82.  In the summary judgment procedure, the court can decide a question of law if it is clear and unarguable and the relevant facts are not in dispute. If the court is not minded to rule on the question of law definitively at this stage, leave to defend should be given where a difficult question of law is raised: Hong Kong Civil Procedure 2025 at §14/4/12.

83.  The Plaintiff confirms that it is only seeking summary judgment to enforce, at common law, the Civil Mediation Certificate. I take the view that the s.22(2) Defence bars the common law claim. This ground alone is sufficient to dismiss the O.14 Summons.

84.  Alternatively, even if I were to rely on the case of Keith Yeung J in China Everbright Bank v China Kingho, the Plaintiff would still  not be able to obtain judgment. All that Keith Yeung J did was to hold that the plaintiff there has shown a good arguable case to support the interim injunction. A good arguable case is “one that is more than barely capable of serious argument and yet not necessarily one which the judge believes to have a better than 50% chance of success”: China Everbright, §27. That threshold is not sufficient for a plaintiff to obtain summary judgment. There is no authority that has affirmatively held that the common law route is still open to the Plaintiff. The s.22(2) Defence is not moonshine.

85.  Further, under the Civil Mediation Certificate, the monthly instalments were spread from 20 December 2019 to 20 May 2020. The remaining amount of RMB 38,403,521.81 and interest for the period from 1 June 2019 to 19 June 2020 (calculated at a rate of 18% per annum) to be paid by 19 June 2020”. Therefore, the 2-year time limit for enforcement of the last payable debt had expired on 19 June 2022. The generally endorsed writ was taken out only on 29 May 2024. It is not even clear if the Civil Mediation Certificate remained enforceable in the Mainland on the date of the writ.

86.  To the extent the Plaintiff seeks to expand the bases of its application by relying on the 2021 and 2023 Rulings, it is not open to the Plaintiff for the following reasons:

(1)  At common law, a judgment needs to be “for a debt or definite sum of money” to be enforceable: Huzhou Shenghua Financial Services Company Ltd v Hang Pin Living Technology Company Ltd [2025] HKCA 434, §32.

(2)  中国民生信托有限公司 v Fu Kwan [2024] 3 HKC 475, was a case concerning s.5(2)(e) MJREO. At §§42-49, DHCJ Herbert Au-Yeung (as he then was) accepted the defendant’s submission that on a plain reading of the rulings (similar to the 2021 and 2023 Rulings), there was no demand for payment against the defendant at all. Apart from pronouncing the termination of the execution process, the “adjudication” (裁定) did no more than describing the continuing obligation on the part of the defendant to pay. It was not an order of payment in itself. It only referred to an obligation which had been pronounced by the Beijing Court some time ago. This conclusion was not affected by the fact that the amount due was stated in the earlier part of the rulings. The judgment was upheld on appeal: China Minsheng Trust Co, Ltd v Fu Kwan [2025] HKCA 462 at §§32-37.

(3)  As pleaded in the Statement of Claim, both the 2021 and 2023 Rulings were “confirmatory’ rulings. They recited the Civil Mediation Certificate in their preamble, but did not order the Defendant to pay any debt. The substantive orders of the 2021 and 2023 Rulings that followed the phrase “裁定如下” only related to freezing and enforcing the outstanding debts against the Defendant’s assets. They have similar effect to post-judgment injunctions.

(4)  None of the 3 PRC legal opinions adduced by the Plaintiff stated that the 2021 and 2023 Rulings were orders to pay a debt or a definite sum of money, or that the Rulings extended the time for recognition under the common law route.

87.  In light of the analyses in Section F, summary judgment cannot be granted, whether under MJREO or the common law route.

G.  INJUNCTION SUMMONS

G1.  General principles relating to Mareva injunctions

88.  The requirements for a domestic Mareva injunction have been set out in Hong Kong Civil Procedure 2025, Vol 1, §29/1/65. It is for the Plaintiff to establish:

(1)  A good arguable claim over which the Court has jurisdiction;

(2)  That the Defendant has assets within the jurisdiction;

(3)  That the balance of convenience favours the grant;

(4)  There is a real risk of dissipation or removal of assets from the jurisdiction, rendering judgment nugatory.

89.  At the ex parte stage, the applicant has a duty of full and frank disclosure, the guiding principles of which have recently been summarized in Ozner Water International Holding Ltd (in Liquidation) and anor v Ernst & Young (a firm), [2025] HKCFI 4203, Au-Yeung J: 

“36.(1) An applicant making an ex parte application must act fairly in all material aspects when preparing and presenting the application.

(2) This includes the duty to disclose to the Court all matters which are material, meaning those matters material to the court’s assessment and decision whether or not to grant the relief without notice, and if so on what terms.

(3) The test as to materiality is an objective one, and ultimately a question for the court. Hence, it is no excuse for an applicant subsequently to say that he was generally unaware, or did not believe, that the facts were relevant or important.

(4) Non-disclosure may be material even if its effect is just to give a seriously different ‘flavour’ to the case.

(5) The duty of full and frank disclosure is a stringent one, designed to protect the absent party.

(6) Therefore, if material non-disclosure has occurred at the ex parte application, the order obtained at such an application would likely be set aside automatically without going into the merits. The general rule is that it should discharge the order obtained in breach and refuse to renew the order until trial.

(7) Nevertheless, there is a discretion to re-grant the same order. That jurisdiction should be only sparingly exercised, taking into account the need to protect the administration of justice and uphold the public interest in requiring full and fair disclosure.

(8) Hence, an assessment will be made as to the degree and extent of the culpability with regards to the non-disclosure. The more serious or culpable the non-disclosure, the more likely the court is to set its order aside and not renew it, however prejudicial the consequences.

(9) It is therefore relevant that the breach was innocent, but there is no general rule that an innocent breach will not attract the sanction of discharge. Nor is there a general rule that a deliberate breach will attract that sanction.

(10) The application of principles which seek to uphold the integrity of the judicial process should not be carried to such lengths as will allow them to become the instrument of injustice.

(11) Because of the penal nature of the jurisdiction, the court should have regard to the proportionality between the punishment and offence.

(12) When exercising the discretion whether to re-grant the order, the court should take into account all relevant circumstances.”

37. The duty of disclosure on the plaintiff encompasses “significant factual, legal and procedural aspects of the case”, which includes disclosure of matters that are or may be adverse to the applicant, and the plaintiff should fairly state the points made against him by the defendant. ...

38. The duty of disclosure extends to identifying potential defences, which would have been available to be taken by the defendant had he been present at the application, provided that: the defence (i) is one which can reasonably be expected to be raised in due course by the defendant; and (ii) is not one which can be dismissed as without substance or importance …

39. A defence which is or may be fatal to the applicant’s case or which may go to demolish the applicant’s cause of action and hence no serious issue to be tried, is almost certainly material matter which influences the court’s discretion on granting or refusing leave, and therefore must be disclosed and drawn to the court’s attention. …”

90.  The overriding question is what the interest of justice requires in the circumstances. Proportionality is relevant, and trivial or unintentional non-disclosure ought fairly be excused: Bank of China Limited v Yang Fan [2016] 3 HKLRD 7 at §79, To J.

G2.  Grounds in opposition to continuation of the Mareva injunction

91.  The Defendant opposes continuation of the Mareva injunction on the grounds of (a) material non-disclosure of the s.22(2) MJREO Defence; (b) material non-disclosure regarding the Defendant’s sale of the FSGL Shares; and (c) material non-disclosure concerning the sale of land. On grounds (a) or (b), the Defendant suggests that there be a discharge of the Mareva injunction without re-grant.

G3.  Material non-disclosure of the s.22(2) MJREO Defence

92.  I agree with Mr Tam that there was material non-disclosure of the s.22(2) Defence. At the time of the ex parte application on 29 May 2024, China Everbright v China Kingho was not yet decided. It was only published on 13 December 2024. Accordingly, the law then was that the s.22(2) Defence might have demolished the Plaintiff’s cause of action and hence a good arguable case to support the ex parte injunction. It was plainly material by an objective test. The fact that Mr Li had considered s.22(2) of MJREO but found it immaterial, is irrelevant. Solely on the ground of failure to do so, the Mareva injunction ought to be discharged.

G4.  Material non-disclosure regarding the Defendant’s sale of the FSGL Shares

93.  According to the Plaintiff (Xu-1^st §34), in around June 2023, Xu Lin (“Xu”) on behalf of the Plaintiff allegedly inquired with the Defendant regarding his shares in FSGL and requested the Defendant to sell them to repay the Plaintiff. The Defendant gave Xu an undertaking that he would not sell his FSGL shares without informing Xu beforehand (“the Undertaking”); and the Defendant said that he would not actually sell his shares anyway because he was the CEO of company. In around 24 May 2024, Xu discovered that the Defendant resigned as CEO of FSGL, and had sold around 125 million FSGL shares between May 2023 and April 2024, contrary to the alleged Undertaking. This was the primary basis relied upon by the Plaintiff to infer a real risk of dissipation by the Defendant.

94.  The law does not require proof of nefarious intent or subjective intent on the part of the defendant to dissipate assets for the purpose of defeating any judgment, but is concerned with the effect of his conduct. Risk of dissipation is not established from allegations of breach of contract without solid evidence, assessed holistically on all the evidence, pointing to dishonesty or any attempts to conceal inventory or proceeds. See Convoy Collateral Limited v Cho Kwai Chee [2020] 6 HKC 81, §§37-45, CA; Great Wall Pan Asia International Investment Co Ltd v Cervera Holdings Ltd, HCCT 13/2016, §§18-20, Minnie Chan J.

95.  The Plaintiff’s evidence on the Undertaking has undergone material changes when challenged by the Defendant and is dubious.

96.  First, the Defendant denied giving the Undertaking as he did not know and had never dealt with Xu at all (D-1^st §§21-23). The only person from the Plaintiff whom the Defendant was in contact with was Mr. Li Yougen (李有根), whom the Defendant only came to know in around 23 January 2024.

97.  Faced with this challenge, Xu gave contradictory evidence as to whether he personally had communicated with the Defendant (Xu-3^rd, §§19-21):

(1)  Xu stated that he was responsible for collecting debts from the Defendant. He stated that the Defendant’s version was false.

(2)  However, Xu implicitly admitted that he had never directly spoken to the Defendant. Xu stated that “李有根 might not have told the Defendant about my presence explicitly” in the phone calls between the Defendant and Li Yougen.

(3)  Xu stated that “It is my understanding that the person on the other end of these calls was indeed the Defendant”, without even stating the grounds for his belief.

98.  Xu never clarified that the Undertaking was given to Li Yougen personally. Xu-5^th at §26 purported to clarify that “I [Xu] was present on several occasions when 李有根 held conversations with the Defendant by telephone to chase repayment of the debt”. Li Yougen never made an affirmation to corroborate Xu’s version.

99.  Xu believed that the FSGL shares were the only asset that the Defendant owned (Xu-5^th, §5) and actually requested the Defendant to sell them to repay the Plaintiff. Further, as submitted by Mr Li, counsel for the Plaintiff, the Defendant had “a documented history of evading enforcement of Mainland Court orders and failed to honour clear PRC judgments despite repeated demands”. And yet there was not a shred of document to show that there was such an important Undertaking or a request for the Undertaking to be put into writing. Worse still, the Plaintiff had relied on the oral Undertaking of such an evasive debtor and sought the ex parte Injunction Order only a year later.

100.  Paragraphs 95-99 above give rise to doubt as to whether the Undertaking was ever given, in light of the Defendant’s denial.

101.  Second, the Plaintiff’s allegation that the Defendant held 226,288,377 FSGL shares and dissipated 125,965,301 of them turned out to be wrong. The Plaintiff’s documentary proof as to the quantity of shares that the Defendant allegedly held turned out to show only the maximum of anticipatory shares that the Defendant could own but never did. This was supported by contemporaneous evidence of the Defendant’s enquiries with the secretary of the board of FSGL and a copy of the shares confirmation issued by FSGL to the Defendant.

102.  Nor had the Defendant disposed of the alleged volume of FSGL shares. He transferred 8,976,923 FSGL shares to his team members on 8 May 2024. He only disposed of 40,065,302 shares to satisfy his debts with other creditors after resigning from his positions at FSGL, but around late April to May 2024, rather than in May 2023.

103.  The inaccurate information as to the Defendant’s shareholding gave a false impression of the Defendant’s assets and exaggerated his disposal. Coupled with the allegation that he had breached the Undertaking, it gave a false impression of the dishonesty of the Defendant.

104.  Third, a mere disposal of shares to creditors other than the Plaintiff was insufficient to establish a risk of dissipation. The FSGL shares were never pledged or charged to the Plaintiff as security for the Defendant’s debts. The Defendant was in financial difficulty. There is no evidence to point to dishonesty or concealment of the proceeds of sale.

105.  A worldwide freezing order is not supposed to provide the plaintiff with security but to restrain a defendant from evading justice by disposing of, or concealing, assets otherwise than in the normal course of his business in a way which will have the effect of making him judgment proof: Convoy Collateral Limited v Cho Kwai Chee [2020] 6 HKC 81, [2020] HKCA 537 at §35(6), CA.

106.  In light of the analyses in this Section, the Plaintiff has not shown “solid evidence” for concluding that there is a real risk of dissipation.

G5.  Material non-disclosure concerning the sale of land

107.  The Xining IPC ordered, on 16 October 2023, that land no. 110113104001GB00115 owned by DeWei (“the Land”) be sold by auction to satisfy the debt due under the Civil Mediation Certificate (“the Order to Auction”). The relevant announcement recited the value of the Land to be RMB 200.1847 million.

108.  The Plaintiff did not disclose this to the Court at the ex parte stage. Xu explained that (i) there was a bank which was the secured creditor of Beijing DeWei with higher priority than the Plaintiff and was holding a charge over the Land for a debt of approximately US$18 million (RMB 130 million); and (ii) an auction of the Land for RMB 160 million was unsuccessful in 2024.

109.  These explanations are not acceptable.

(1)  The existence of the Order to Auction and the Land were material facts that ought to have been disclosed at the ex parte stage to enable the Court to decide whether to grant the Injunction Order and, if so, the amount to be frozen. As it turned out, the Injunction Order froze RMB 284,742,500 worth of assets, based on the outstanding debt under the Civil Mediation Certificate.

(2)  The Defendant has adduced evidence of a PRC judgment to show that the outstanding debt owed to the bank has been reduced to about US$10,071,680.79 (about RMB 72,409,845.46). Taking into account the above value of the Land (and the Plaintiff has not suggested another value), there would still be a substantial balance available to settle the Plaintiff’s debt. Such equity should be taken into account in reducing the quantum of the Mareva injunction.

110.  I am of the view that the non-disclosure of the attempted sale of the Land was material, even though it only affected quantum.

G6.  Re-grant of Injunction Order

111.  In this case, the material non-disclosures were of law and of facts. They were serious. One cannot say with certainty that, had there been proper disclosure, the Injunction Order would still have been granted, or on the same terms. I am unable to accept that the failure to mention the s.22(2) Defence or attempted sale of the Land were minor or unintentional as Mr Li submits. Given the seriousness of those two non-disclosures, individually or collectively, and lack of solid proof of risk of dissipation, there should not be a re-grant of the Injunction.

H.  DISCLOSURE SUMMONS

112.  To make a Mareva injunction effective, the court has a discretion to order the defendant to make a statement of his assets and to give discovery of documents in aid of an injunction. In this case, the Disclosure Summons should fall with the Injunction Summons.

I.  CONCLUSION AND COSTS

113.  The Order 14 Summons is dismissed as the Plaintiff should fail in the light of the s.22(2) Defence or should have known there is a triable issue on s.22(2) MJREO. The Injunction Summons is dismissed without a re-grant of an interim injunction for material non-disclosure. The Disclosure Summons is dismissed.

114.  On a nisi basis, the Plaintiff shall bear costs on all 3 Summonses, to be taxed if not agreed.

115.  I thank counsel for their assistance.