黃书建 v 代威

HCMP 1556/2017

[2019] HKCFI 1386

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1556 OF 2017

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DECISION

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1.  This is the Respondent’s summons dated 27 October 2017 for the setting aside of the registration of a Mainland judgment under s 18(1) of the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap. 597) (“the Ordinance”) on the ground that the subject agreement did not contain a “choice of Mainland court agreement” as defined in s 3(2) of the Ordinance.

2.  After the oral hearing, L Wong J on 3 August 2018 handed down the decision in The Export-Import Bank of China v Taifeng Textile Group Co Ltd[1] (“Taifeng”).  Since the court had been asked to deal with a similar issue in that case, I invited the parties to make further submissions on the Taifeng case.

BACKGROUND

3.  The Applicant entered into an agreement dated 7 November 2014 (“the Agreement”) with a Mr. Liao Gaoming (“Liao”), the Respondent and a company known as “大連大顯集團有限公司” (“the Company”), pursuant to which the Respondent and the Company agreed to be jointly liable for the sum of RMB76,000,000 owed by Liao to the Applicant.

4.  Clause 6 of the Agreement (“Clause 6”) provides that:

“本協議在履行過程中若發生爭議，應友好協商解決。協商不成的，各方均可向本合同簽訂地北京市朝陽區有管轄權的法院起訴。”

(translation: If there is dispute in the course of the performance of this agreement, the parties should try to resolve their dispute through mutual consultation.  If it is not successful, any party can, in the Beijing Chaoyang district which is the place for the signing and the making of this agreement, institute legal proceedings.

5.  On 12 March 2015, the Applicant commenced action against, inter alia, Liao, the Respondent and the Company at Beijing No. 3 Intermediate People’s Court to recover the said sum of RMB76,000,000 and interest.

6.  On 31 December 2015, Beijing No. 3 Intermediate People’s Court handed down judgment and made, inter alia, the following orders:

(i)   Liao, the Respondent and the Company do pay the Applicant RMB76,000,000 and “違約金” (sum for breach of contract) calculated at 4 times the prevailing interest rate for 6-month loans of financial institutions of the People’s Bank of China from 31 December 2014 to date of payment;

(ii)   Liao, the Respondent and the Company do pay the Applicant costs in the sum of RMB 1,500,000 and 擔保費 (sureties) in the sum of RMB 355,050.

7.  On 14 April 2016, the Company appealed against the said judgment.

8.  On 6 July 2016, the Beijing Higher People’s Court issued the judgment dismissing the appeal and affirming the first instance judgment (“the Mainland Judgment”).

9.  By an Ex-parte Originating Summons filed on 5 July 2017, the Applicant made an application for the Mainland Judgment to be registered pursuant to the Ordinance.

10.  By an order dated 4 August 2017 (“the Order”), Master Hui ordered that the Mainland Judgment be registered as a judgment in the Court of First Instance for payment of the following sums to the Applicant:

(i)   RMB 76,000,000;

(ii)   RMB 37,101,088.88, being “違約金” calculated as at 14 August 2017;

(iii)   Costs in the sum of RMB 1,500,000;

(iv)   “擔保費” in the sum of RMB 355,050; and

(v)   Interest calculated as at 14 August 2017 in the sum of RMB 5,259,108.63.

11.  The Order also provided that the Respondent was at liberty to apply to set aside the said registration within 14 days after service of the Notice of Registration.

12.  The Notice of Registration of the Mainland Judgment was served on the Respondent on 11 September 2017.  By an order made by Master Hui on 6 October 2017, the time for taking out application to set aside the registration was extended to 27 October 2017.

13.  On 27 October 2017, the Respondent took out this summons to set aside the registration of the Mainland Judgment.

THE RESPONDENT’S GROUND TO SET ASIDE THE REGISTRATION

14.  The registration of the Mainland Judgment was made under the provisions of the Ordinance.  Part 4 of the Ordinance provides for the grounds under which the judgment debtor may apply to set aside such registration.

15.  In this application, the Respondent relies on s 18(1) of the Ordinance to set aside the registration.  Under s 18(1)(a), the registration of a Mainland judgment shall be set aside if the court is satisfied that the judgment is not a Mainland judgment which fulfills the requirements specified in s.5(2)(a) to (e).  S 5(2)(b) requires that the parties had entered into a “choice of Mainland court agreement” on or after the commencement of the Ordinance.  

16.  The “choice of Mainland court agreement” is defined in s 3(2) as follows:

“In this Ordinance, subject to subsections (3) and (4) [irrelevant for present purposes], “choice of Mainland court agreement” 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 in connection with the specified contract to the exclusion of courts of other jurisdictions.”

17.  The Respondent’s case is that the dispute resolution clause in Clause 6 is a non-exclusive jurisdiction clause, and so the Mainland Judgment fails to satisfy s 5(2)(b) of the Ordinance and ought to be set aside.  According to established conflict of law principle[2], the Respondent contends that Clause 6 should be construed according to Mainland law which is the law governing the Agreement.

18.  On the other hand, Ms Lok, counsel for the Applicant, submits that Hong Kong law should be applied in the construction of the meaning of Clause 6.  According to her, the requirement of s 3(2) of the Ordinance (a Hong Kong statute), and whether or not it is satisfied by a particular jurisdiction clause, are plainly questions of Hong Kong law.  Relying on the dicta of Stone J in T&K Electronics Ltd v Tai Ping Insurance Co Ltd[3], the question is one of the construction of the Agreement and nothing more. It cannot be assumed that because by applying Hong Kong conflict rules the Agreement is governed by Mainland law, the jurisdiction clause must also be governed by Mainland law.  The limited relevance of foreign law is that, to the extent that foreign law is the governing law of the jurisdiction agreement, principles of interpretation under that set of foreign contract law is applied to construe the true meaning of the jurisdiction agreement, that is, to find out whether the real intention of the parties was to oblige themselves to bring proceedings in certain court to the exclusion of others.

19.  Ms Lok also seeks to rely on s 4 of the Ordinance to support the proposition that the jurisdiction clause is, at least for the purpose of the Ordinance, regarded as an agreement independent of the other terms of the contract.  S 4 of the Ordinance reads as follows:

“Unless otherwise provided in the specified contract between the parties, a choice of Hong Kong court agreement or a choice of Mainland court agreement that forms part of the contract shall be regarded for the purposes of this Ordinance as an agreement independent of the other terms of the contract and the validity of the agreement shall not be affected by any modification, discharge, termination or nullification of the contract.”

20.  In case that Mainland law is to be applied in the construction of Clause 6, both parties have adduced Mainland law expert opinions on such issue:

(i)   The Respondent has adduced a Mainland law expert report of Mr Tang Zhifeng (“Mr. Tang”) dated 26 October 2017.[4]  Mr Tang concludes that Clause 6 is a non-exclusive jurisdiction clause.

(ii)   The Applicant has adduced a Mainland law expert report of Mr. Li Qianhuang (“Mr. Li”) dated 16 January 2018.[5]  Mr Li takes the opposite view that Article 6 is an exclusive jurisdiction clause.

(iii)   The Respondent has adduced a supplemental report of Mr. Tang dated 28 March 2018 in response to Mr. Li’s report.[6]

21.  The issues before the court are therefore:

(i)   What is the governing law of the jurisdiction clause (Clause 6)?

(ii)   If it is Mainland law, what is the content of the Mainland law which applies to construe a jurisdiction clause?

(iii)   Applying the applicable Mainland law on the proper construction of a jurisdiction clause, does Clause 6 require proceedings to be brought in the Mainland courts (s 3(2) satisfied), or merely confer jurisdiction on the Mainland courts without requiring proceedings to be brought there (s 3(2) not satisfied)?

RECENT DECISIONS ON THE MEANING OF S 3(2) OF THE ORDINANCE

22.  There are two recent cases in which the courts were asked to consider whether a particular jurisdiction clause fell within the meaning of s 3(2) of the Ordinance.

23.  The first case is Bank of China v Yang Fan (“Yang Fan”)[7]. In support of 5 actions commenced by the plaintiff bank in the Mainland, the plaintiff obtained an ex parte Mareva injunction restraining the defendant from disposing of his assets in Hong Kong up to RMB 500 million. Upon a summons by the plaintiff to continue the injunction and cross-summons by the defendant to discharge it, the questions which arose included whether any judgment obtained in those actions would be capable of being enforced in Hong Kong.

24.  In determining the question, To J had to construe the dispute resolution clauses in the relevant agreements, which stated that in the case of dispute and the negotiation fails, both parties “can”, using the Chinese words “可以”, resolve the dispute by filing a lawsuit in the Mainland court with jurisdiction.  Like the present case, the issue was whether the parties had entered into a “choice of Mainland court agreement” within the meaning of s 3(2) of the Ordinance.

25.  No expert evidence on Mainland law as to the meaning of the dispute resolution clauses had been filed by the parties.  Taking into account that all the parties were Mainland parties, the agreements were executed in the Mainland, the parties’ contracted place of performance and place of breach were in the Mainland and the governing law of the agreements was Mainland law, To J held that the phrase “可以” should be construed as having the imperative meaning as “shall”.  To litigate outside Mainland did not make sense in the light of the factual matrix, and the clauses were held to be exclusive jurisdiction clauses for the purpose of s 3(2).

26.  Similar issue arose in the Taifeng case, which again involved a loan agreement with the lender, borrower and guarantor all in the Mainland.  The dispute resolution clause provided that in the case of dispute, the parties should resolve the same by way of mutual consultation. If not successful, any party “should”, using the Chinese word “應”, bring legal proceedings in the Peoples’ Court in Beijing.  The Beijing No 4 Immediate People’s Court granted judgment against both the lender and the guarantor, and the judgment creditor registered the judgment in Hong Kong under the Ordinance.  The judgment debtors sought to set aside the registration on the same ground as that in the present case.

27.  In construing the meaning of s 3(2), L Wong J said the following:

“57. To properly construe s 3(2), it is essential to ascertain:

(1) first, the context and purpose of the Arrangement in general as [the Ordinance] gives effect to the Arrangement; and

(2) second, the context and purpose of the specific requirement for an exclusive choice of court agreement.

58. The purpose of [the Ordinance], giving effect to the Arrangement, is ultimately to facilitate the recognisation and enforcement, by registration (as opposed to action) in Hong Kong, of monetary judgments given by courts in the Mainland in civil and commercial matters over which the courts in the Mainland have exclusive jurisdiction by agreement between the parties.

59. A jurisdiction clause may in substance and effect confer exclusive jurisdiction on the court nominated, irrespective of whether “exclusive” (or like words) is used.

60. Adopting the literal approach advocated on behalf of Liu will frustrate or defeat the purpose of [the Ordinance] in a case where the jurisdiction clause does not contain “exclusive” (or like words) but in substance and effect confers sole jurisdiction on the court chosen on a proper construction under PRC law. A legislative intent to prefer form over substance should not be found in the absence of clear evidence, especially when this may potentially affect a significant number of cases where the jurisdiction clause was not professionally drafted with any awareness that s 3(2) of [the Ordinance] is to be construed as suggested on behalf of Liu.

61. In this connection, the SJ’s statement that the Bill establishes a summary mechanism for the enforcement of judgments given by the Mainland courts should be taken in its proper context. As explained by the SJ on the same occasion before such statement:

“It has always been the case that judgments given by mainland Courts requiring payment of money could only be recognized and enforced in Hong Kong by beginning a new action in debt at common law. Since Hong Kong and the Mainland each has its own legal system and adopts different legal principles, such proceedings are often time-consuming and involved high legal costs. Due to the increased volume of economic activities between Hong Kong and the Mainland, the Administration conducted a consultation exercise in 2002 on the need for reciprocal enforcement of court judgments with the Mainland. Having consulted the Panel on Administration of Justice and Legal Services of this Council, the legal professional bodies, chambers of commerce and trade associations, and after detailed discussion with the mainland authorities, the Arrangement was signed.”

See again page 4914 of the official record of proceedings in the Legislative Council dated 7 March 2007.

62. It is with reference to this explanation of the context and purpose of the Arrangement that one should understand the SJ’s said later statement on the same occasion that the Bill establishes a summary mechanism for the enforcement of judgments given by the Mainland courts. The mechanism is summary because it allows a judgment creditor under a judgment given by a court in the Mainland to enforce the judgment in Hong Kong by registering the Mainland judgment in Hong Kong as a CFI judgment, without having to commence a new action in debt at common law in a court of Hong Kong.

63. That Mainland judgments can be enforced in Hong Kong through the summary process of registration does not mean that it is intended that the masters or judges of the CFI seized of an application to register a Mainland judgment should merely have to mechanically tick boxes and should not have to exercise any professional judgment. To the contrary, s 5 of [the Ordinance] expressly requires the CFI to be satisfied that the conditions for registration laid down in sub-s (2) (including the existence of a choice of Mainland court agreement made at or after the commencement of [the Ordinance] under sub-s (2)(b)) are met.

64. As for the specific requirement for an exclusive “choice of Mainland court agreement”, as explained in paragraph 28 of the Report of the Bills Committee on the Bill dated 21 April 2008 (“Bills Committee Report”):

“adopting such agreement in the Arrangement would minimize the risk of parallel proceedings being instituted in the courts of both places. It is difficult, if not impossible, to agree on a common set of principles to resolve problems brought by parallel litigation, as each jurisdiction has its own laws, litigation rules and procedures on enforcement of judgments which are quite different from the other.”

65. The purpose of minimizing the risk of parallel proceedings being instituted in the courts of both the Mainland and Hong Kong can be achieved by jurisdiction clauses which do not use the word “exclusive” but which are exclusive in substance and effect on a proper construction according to the relevant governing law.

66. Hence, neither the context or purpose of the Arrangement nor the context or purpose of the specific requirement of an (exclusive) choice of Mainland court agreement, properly understood, necessitates the exclusivity requirement to be met in the literal way advocated on behalf of Liu.

67. This, I believe, is further made clear by the Administration’s following answer to members of the Bills Committee on the Bill, recorded in paragraph 37 of the Bills Committee Report, as to how the exclusivity requirement can be satisfied:

“The Administration considers that the question of whether a choice of court agreement has specified the courts of Hong Kong (or the Mainland, as the case may be) or any of them as the court to determine a dispute to the exclusion of the courts of other jurisdiction is a question of law to be determined by the relevant court. It is inappropriate to specify in the Bill any rules for interpretation of the terms of choice of court agreement.”

68. Ms Po objects to the use of such statement by the Administration on the ground that, citing HKSAR v Cheung Kwun Yin, supra, per Li CJ at [15], it is impermissible to use extrinsic materials such as statements by government officials to ascertain the meaning of words in a statute. With respect, paragraph 37 of the Bills Committee Report is deployed to confirm that the purpose of the exclusivity requirement of the choice of Mainland court agreement is not to eliminate arguments on construction.

69. For these reasons, I am not with Ms Po on the construction of s 3(2). In my opinion, the requirement for a choice of Mainland court agreement under s 5(2)(b) as defined in s 3(2) is fulfilled if the jurisdiction clause, properly construed in accordance with the governing law of the contract, confers exclusive jurisdiction on the courts in the Mainland or any of them.

28.  The following points can be made about the judgment in Taifeng:

(i)   To facilitate the enforcement of Mainland judgment in Hong Kong by way of summary process, in construing whether a clause is an exclusive jurisdiction clause within the meaning of s 3(2),the court, in giving effect to the legislative intent, is to look at the substance rather than the form of the relevant clause.  The exclusivity requirement may be met without using the word “exclusive” or other similar words.

(ii)   The requirement for the “choice of Mainland court agreement” is to minimize the risk of parallel proceedings being instituted in the courts of both the Mainland and Hong Kong.

(iii)   The jurisdiction clause should be construed in accordance with the governing law of the contract.

29.  Further, the judge, in §76 of the Decision, held that the definition of “a choice of Mainland agreement” in s 3(2) does not require parties to limit their choice to a specified designated court.  A general choice of the courts of the Mainland would suffice.

30.  In Taifeng, the judgment debtors sought to argue that, since the governing law of the relevant contract was Mainland law, there was no expert evidence on Mainland law on the construction of the jurisdiction clause which had been properly adduced before the court, and as a result the judgment creditor failed to establish that the parties had made “a choice of Mainland agreement”.  However, since the judgment debtors raised such argument so late, L Wong J, by way of case-management decision, refused to entertain such argument. In any event, the judgment creditor did put forward Mainland law expert opinion to the effect that the relevant jurisdiction clause was, according to Mainland law, an exclusive jurisdiction clause, and the judge accepted that such expert evidence was properly admissible before the court.

31.  Mr Wong, SC, counsel for the Respondent, tries to distinguish the Yan Fan case on the ground that there was no expert evidence on Mainland law before the court.  In the Taifeng case, the judge accepted the expert evidence adduced by the judgment creditor.  The present case is very different because there is conflicting evidence on Mainland law on the issue.  As the expert evidence adduced by the Respondent is much more credible, Mr Wong submits that the court should come to a different conclusion and set aside the registration of the Mainland Judgment.

32.  Ultimately, the court has to resolve the dispute on Mainland law relating to the construction of Clause 6. 

THE CONFLICTING EXPERT EVIDENCE ON THE CONSTRUCTION OF CLAUSE 6

(i)   Approach of the court in dealing with conflict of expert evidence on foreign law

33.  The function of expert witnesses on foreign law has been summarized by the English Court of Appeal in MCC Proceeds Inc v Bishopsgate Investment Trust:[8]

“(1) to inform the court of the relevant contents of the foreign law; identifying statutes or other legislation and explaining where necessary the foreign court’s approach to their construction;

(2) to identify judgments or other authorities, explaining what status they have as sources of the foreign law; and

(3)    where there is no authority directly in point, to assist the English judge in making a finding as to what the court’s ruling would be if the issue was to arise for decision there.”

34.  The proper approach in evaluating expert evidence on the law of a different jurisdiction is set out in中國山水投資有限公司 v 張才奎, in which G Lam J said the following:[9]

“The laws of other jurisdictions are, in Hong Kong proceedings, treated as facts, but they are facts of a special kind. The judge is obliged to use his legal training where it has a bearing in determining such facts, especially where the concepts are not very different from Hong Kong law, and where appropriate may form his own view as to the meaning of the statutes of another jurisdiction.”

35.  In Full Wisdom Holdings Ltd v Traffic Stream Infrastructure Co Ltd,  Le Pichon JA also said the following:[10]

“In studying the validity of any opinion based on foreign law, the court does not simply accept any stated conclusion as being correct, even where there may be no legal opinion contradicting it. The court is entitled to (and indeed must) look at the basis of the legal reasoning as well as the terms of the State Council Notice in determining what weight, if any, should be attached to the Opinion.”

36.  The court is entitled to and indeed duty bound to reject foreign expert evidence if the relevant expert has “never applied his mind to the real point of law” or “if the matters stated by the expert did not support his conclusion according to any stated or implied process of reasoning”.[11]

(ii)   The Respondent’s expert evidence

37.  The Respondent’s expert report made by Mr Tang was filed first.  Mr Tang also prepared a supplemental report in reply.

38.  Mr Tang is of the view that Clause 6 is a non-exclusive jurisdiction clause.  According to him, applying the principles of contractual interpretation under Mainland law, the language of Clause 6 is permissive rather than mandatory and does not confer exclusivity to the Mainland courts.

39.  First, citing a Mainland Supreme Court’s decision[12], the primary approach to contract interpretation is literal interpretation.  The Chinese words “可以” used in Clause 6 are permissive rather than mandatory in nature and operate to confer a discretion upon the parties.

40.  Second, Mr Tang relies on 2 Mainland authorities to show that similarly worded provisions were held to be non-exclusive jurisdiction clause.[13]  He nevertheless tries to distinguish a third case which held that a jurisdiction clause using the permissive word “可” was an exclusive jurisdiction clause[14], i.e. the Xu Zhiming case.

41.  Third, the parties did use imperative words such as “應” or “不得” to describe binding or restrictive obligations in other clauses in the Agreement.  Had the parties intended Clause 6 to be an exclusive jurisdiction clause, they could have used words which are more mandatory in nature.

(iii)   The Applicant’s expert evidence

42.  The Applicant filed his expert evidence in opposition.

43.  First, according to his expert, Mr Li, Clause 6 should be construed according to Hong Kong law because the present application involves the Ordinance which is a piece of Hong Kong legislation.

44.  Second, Mainland adopts the civil law system with no similar concept of stare decisis in the court system.  The cases cited by Mr Tang are therefore not binding on other Mainland courts.  Further, the reasoning in the judgments cited by Mr Tang does not actually support his view that Clause 6 is a non-exclusive jurisdiction clause.

45.  Third, according to the literal Chinese interpretation of the relevant sentence in Clause 6, the adverbial “可” refers to the verb “起訴”.   The phrase “向本合同簽訂地北京市朝陽區有管轄權的法院” qualifies the verb (action) “起訴”.  Hence, the meaning is that if the dispute cannot be resolved by negotiation, any party can sue, but they are not obliged to sue.  If they sue, they sue at the specified Mainland court and not other Mainland courts, i.e. the one with jurisdiction in the Chaoyang District in Beijing.

46.  Fourth, an important context in understanding the parties’ intention is Article 34 of the Mainland Civil Procedure Law.   Clause 6 was the provision where the parties specified the method of dispute resolution, and they must intend the clause to be effective.  It singled out the Mainland court located at the place of signing of the Agreement (Chaoyang District in Beijing) and with jurisdiction (本合同簽訂地…有管轄權的法院) to be their court.   That was plainly a reference to Article 34 which provided that the parties may specify in writing a court to litigate their dispute based on the defendant’s location, place of performance, place of signing of the agreement, the plaintiff’s residence or location of the subject matter, being locations which have substantial connection with the dispute, and where the court chosen has jurisdiction to deal with the matter.

47.  Fifth, Mainland law also requires the court to ascertain the intention of the parties in construing the terms of a contract.  Taking into account all the Mainland connections and factors in the present case, it is clear that Clause 6 was intended by the parties to be an exclusive jurisdiction clause.

(iv)   Discussion on the expert evidence

48.  Having considered the expert evidence, I prefer to accept the opinion of the Applicant’s expert and find that Clause 6 is an exclusive jurisdiction clause for the purpose of s 3(2) of the Ordinance.

49.  First, even Mr Tang accepts that there is no statutory law in the Mainland relating to the difference between exclusive and non-exclusive jurisdiction clauses.  He also accepts that past judicial decisions are not binding and not part of the law, save and except the guiding cases published by the People’s Supreme Court to which the lower courts should refer in cases bearing similar facts.

50.  Second, Article 125 of the Mainland Contract Law provides:

“當事人對合同條款的理解有爭議的，應當按照合同所使用的詞句、合同的有關條款、合同的目的、交易習慣以及誠實信用原則，確定該條款的真實意思。合同文本采用兩種以上文字訂立並約定具有同等效力的,對各文使用的詞定具有相同含義。各文本使用的詞句不一致的,應當根據合同的目的予以解釋。”

51.  Mr Tang accepts that, in construing the terms of a contract, the court needs to consider: （1）文義解釋 (literal construction);（2）整體解釋 (overall construction);（3）目的解釋 (purposive construction);（4）習慣解釋 (custom construction); and（5）誠信解釋 (equity construction).  The exercise is to ascertain the true intention of the parties (確定該條款的真實意思). It resonates with the principles articulated in Yang Fan and Taifeng, and indeed common sense, that literal reading of a contract may not reflect the parties’ true intention.  In construing such intention, the court will therefore look at all the circumstances of the case and not just the literal words used by the parties.

52.  One should not lose sight of the factual matrix in the present case.  All the parties to the Agreement are Mainland individuals and entities. The parties’ place of residence, place of incorporation and place of business are all in the Mainland.  The Agreement was executed in the Mainland, with the performance of the Agreement and its breach all in the Mainland.  Under such circumstances, it would be against common or any business sense to suggest that, when the parties made the agreement contained in Clause 6, they intended that the parties would be free to commence legal proceedings outside the Mainland.  I do not accept that the Mainland courts will come to such conclusion which is very much against common sense and the real intention of the parties.

53.  Mr Wong submits that, under Mainland law, the construction of contract would focus on the literal meaning of the words used by the parties.  It is only when the words are not clear that the court would look at factors beyond the actual words used.  In support of his argument, he also relies on the following passage in the People’s Supreme Court decision referred to in Mr Tang’s expert report:[15]

「從合同解釋角度來看，當事人對合同條文發生爭議時，必須探究當事人內在的真實意思表示，判斷當事人真實的意思表示首要方法是判斷當事人字面的意思表示。這正所謂合同解釋中的文義解釋方法，只有在文義解釋不能確定該條款的准確含義時，再運用其他解釋方法去確定合同條款的含義以及填補合同的漏洞。」

54.  In my judgment, Mr Wong’s proposition is too narrow even from the perspective of Mainland law.  In determining foreign law which is a special kind of fact, the judge is obliged to use his legal training where it has a bearing in determining such facts, especially where the concepts are not very different from Hong Kong law, and where appropriate may form his own view as to the law in another jurisdiction.  In a way, the cardinal task of the court, both in Mainland and Hong Kong, is to ascertain the intention of the parties in construing the terms of a contract.  If the intention of the parties is clear, it would be very difficult for me to accept that the Mainland court would not give effect to such intention.  In particular, whether certain word is mandatory or permissive, even literally, depends on the context of the case.

55.  If Mr Wong’s argument is correct and the words “均可” are always permissive in nature, I wonder why the Mainland court made a different decision in the Xu Zhiming case[16]. In that case, the word “可” was used and yet the Mainland Supreme Court held that it was an exclusive jurisdiction clause conferring jurisdiction on the Mongolian court. Mr Tang seeks to distinguish this case on the ground that the clause expressly provided for the right to apply to freeze the assets of the debtor.  However, I do not see how this would make a difference unless such remedy was only available in the Mongolian court and no other courts.

56.  According to the passage in the judgment quoted in §36 of Mr Tang’s first report, the Mainland People’s Supreme Court in the Xu Zhiming case took the view that, if the contract provided for the remedy to freeze the assets, it would certainly be more advantageous to the counter-party to sue in the Mongolian court.  In my judgment, this clearly shows that, even under Mainland law, the word “可” does not only have one meaning, and the Mainland court may take into account all the circumstances of the case and factors beyond the written contract in construing the terms of a contract.

57.  For myself, I do not see the need to decide whether Article 34 of the Mainland Civil Procedure Law would have the effect as contended for by Mr Li.  I note that L Wong J in Taifeng relied on such statutory provision in accepting the Mainland law expert opinion adduced by the judgment creditor.  However, since no contrary expert opinion was available in that case, it may not be appropriate for this court to rely on the dicta of L Wong J in this regard.

58.  Mr Wong also attacks the other reasons given by Mr Li in support of his opinion, in particular his reliance on Article 30 of the Interpretation of Mainland Civil Procedure Law and the rejection of jurisdictional challenge by the Beijing No. 3 Intermediate People’s Court as the basis to support his opinion.  Again there is no need for me to deal with these particular arguments.  After all, having considered the other Mainland legal materials before me, in particular Article 125 of the Mainland Contract Law and the judicial decisions referred by the experts, there should not be great difference between Mainland law and Hong Kong law so far as the construction of contractual terms is concerned.  Hence, even based on the contractual interpretation principles under Mainland law, I find that Clause 6 is an exclusive jurisdiction clause for the purpose of s 3(2) of the Ordinance. 

OBERSERVATIONS ON THE GOVERNING LAW ON THE CONSTRUCTION OF THE JURISDICTION CLAUSE

59.  It is an established conflict of law principle that the Hong Kong court will regard the contract as governed by the system of law by reference to which the contract was made or that with which the transaction has its closest and most real connection.[17]

60.  Apply such principle and taking into account all the Mainland elements involved in the making and the performance of the Agreement, there is no serous dispute that the governing law of the Agreement is Mainland law which also applies to the construction of Clause 6.  S 4 of the Ordinance only provides that the jurisdiction clause shall be regarded as an agreement independent of the other terms of the contract and the validity of the jurisdiction clause should not be affected by any modification, discharge, termination or nullification of the main contract.  It does not alter the conflict of law principle mentioned above.  For such reason, I reject the setting aside application because of the finding of fact in respect of Mainland law on the construction of Clause 6, and not by reason of the application of Hong Kong law in the construction exercise.

61.  However, as observed by L Wong J in Taifeng, the object of the Ordinance is to provide a summary mechanism for the enforcement of Mainland judgments in Hong Kong.  It is therefore highly questionable whether it is the legislative intention behind the Ordinance to introduce technical and cumbersome argument over foreign law in the registration process, which is supposed to be a costs efficient alternative from enforcement via common law.  Such approach is counter-productive to the facilitation of reciprocal enforcement of Mainland judgments in Hong Kong.

62.  All these arguments relating to Mainland law arise out of the requirement for a “choice of Mainland court agreement” as specified in the Ordinance.  As the rationale for such requirement is to minimize the risk of parallel proceedings being instituted in the courts of both the Mainland and Hong Kong, it is an attractive proposition that the Hong Kong courts, without bothering with the Mainland law, can just apply Hong Kong law in construing the relevant jurisdiction clause.  After all, if a Hong Kong court concludes that it has no jurisdiction to hear a claim by reason of the jurisdiction clause, there is no more risk of parallel proceedings.  

63.  I understand that the governments of the Mainland and the Hong Kong Special Administrative Region had, on 18 January 2019, signed a new “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”.  With this new Arrangement which will come into operation at some future date, it is hoped that all these arguments relating to the requirement of a “choice of Mainland court agreement” can be avoided in future enforcement proceedings.

64.  As I find that Clause 6, construed under Mainland law, is an exclusive jurisdiction clause for the purpose of s 3(2), I dismiss the Respondent’s setting aside application.

65.  I have heard the parties’ submissions on costs. They agree that costs should follow the event, and I therefore order that the costs of the application be to Applicant.

Ms Frances Lok, instructed by Rowdget W Young & Co, for the Applicant (Judgment Creditor)

Mr William Wong, SC, and Ms Ellen Pang, instructed by Fred Kan & Co, for the Respondent (Judgment Debtor)