青岛弄海环境科技有限公司 v. 马超
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HCRE 23/2024 [2026] HKCFI 5896 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE RECIPROCAL ENFORCEMENT CASE NO 23 OF 2024 ________________________
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________________________ DECISION ________________________ Introduction 1.By summons dated 6 January 2025 (“the Set Aside Summons”), Mr Ma, the respondent herein, applies to set aside an ex parte order of Master Hui dated 11 June 2024 (“the Registration Order”) whereby the judgment of the People’s Republic of China (the “Intermediate Court”) under (2021) 鲁 02 民初399号 dated 31 August 2021 (“Mainland Judgment”) was allowed to be registered pursuant to the Mainland Judgments (Reciprocal Enforcement) Ordinance, Cap 597 (the “MJREO”). 2.Pursuant to the directions of this court, the parties have filed their respective written submissions for paper disposal of the Set Aside Summons. Mr Hui, together with Mr Yeung, represents Mr Ma and the applicant (“A”) is represented by Mr Zhu. This court is thankful for the written submissions lodged by counsel. 3.In his written submissions, Mr Hui confirms that Mr Ma no longer pursues his alternative relief in the Set Aside Summons and he asks for the registration of the Mainland Judgment to be set aside only. 4.In the Set Aside Summons, Mr Ma does not provide any grounds for his application. In his written submissions, Mr Hui advances three broad grounds for Mr Ma:
Material Background Facts 5.Mr Zhu, in his written submissions, has made a summary of the factual background and procedural history of these proceedings. I shall largely adopt his summary with my additions and modifications as follows. 6.On 24 August 2017, 青岛晨鸣众兴置业有限公司 as the Original Lender entered into a loan agreement with 昆明华金安信房地产开发有限公司 as the Borrower (“the Loan Agreement”). 7.The total amount which the Original Lender advanced to the Borrower is RMB250,181,852.40 (“the Loan”). 8.On 24 August 2017, Mr Ma executed a personal guarantee in favour of the Original Lender in respect of the Loan Agreement (“the Guarantee”). The Loan Agreement was secured by other guarantees. 9.On 25 August 2017, the Original Lender assigned its right and claims under the Loan Agreement to A. 10.In March 2021, due to the Borrower’s failure to repay the Loan, A commenced proceedings in Qingdao Intermediate People’s Court numbered (2021) 鲁02民初399号 against, among others, the Borrower and Mr Ma in the Mainland. 11.On 31 August 2021, Qingdao Intermediate People’s Court handed down the Mainland Judgment in favour of A against, among others, Mr Ma. 12.Two of the defendants in the Mainland Judgment, namely the Borrower and 华信超越控股有限公司 (collectively “the Appellants”), filed an application against the Mainland Judgment. Mr Ma did not file any. 13.On 8 July 2022, in view of the failure of the Appellants to pay the filing fee for the appeal within the specified period, the Shandong High People’s Court (“the Appellate Court”) ruled that the appeal was deemed to have been automatically withdrawn and the Mainland Judgment should take effect once their ruling was served (「本院...裁定如下: 本案按昆明华金安信房地产开发有限公司、华信超越控股有限公司自动撤回上诉处理。一审判决自本裁定书送达之日起发生法律效力」) (“Appeal Ruling”). 14.On 10 October 2022, A applied to the Qingdao Intermediate People’s Court to enforce the Mainland Judgment. Taking into account A’s recovery of RMB6,215,457.00, the Qingdao Intermediate People’s Court ruled that the PRC enforcement proceedings were completed and A was granted liberty to apply for restoration in the event of discovery of assets amenable to further enforcement. 15.On 23 April 2024, A applied to the Hong Kong Court to enforce the Mainland Judgment by way of registration. 16.On 11 June 2024, the Registration Order was granted. 17.On 6 January 2025, Mr Ma took out the Set Aside Summons. 18.On 6 June 2025, Mr Ma applied to Shandong High People’s Court for retrial and setting aside the Mainland Judgment. 19.On 27 November 2025, the Supreme People’s Court by way of ruling dismissed Mr Ma’s application for retrial and handed down a written decision dated 27 November 2025 (“the SPC’s Decision”). It was recorded in the SPC’s Decision that Mr Ma was dissatisfied with both the Mainland Judgment and the Appeal Ruling and hence he applied for a retrial. 20.On 15 December 2025, Shandong High People’s Court by way of ruling dismissed Mr Ma’s application for retrial and handed down the ruling numbered (2025) 鲁民申10788号《民事裁定书》. 21.Mr Ma alleges to have been ignorant of the proceedings in the Mainland throughout and hence he has not taken any part in the same. A does not accept this allegation and casts doubt on the relevant evidence of Mr Ma. I need not resolve this dispute here because the parties agree that the reason why Mr Ma allowed the Mainland Judgment to be made without opposition is of little significance in this application. Applicable legal principles 22.The relevant provision is section 18(1) of the MJREO which sets out cases in which registration of a Mainland judgment shall be set aside. It provides,
23.Sections 5(2)(a) to (e), referred to in section 18(1)(a), are as follows:
24.Section 6(1) provides that for the purpose of section 5(2)(c), a Mainland judgment is final and conclusive as between the parties to the judgment if:
25.Now I turn to the three grounds advanced by Mr Hui. Finality and Conclusiveness Ground 26.Both parties have adduced evidence on the issue as to whether the Mainland Judgment is final and conclusive. Mr Ma relies on the expert evidence of Mr Zhang Tian Hong and Mr Wang Wei Sheng whereas A has adduced the expert evidence of Mr Li. 27.The primary contention of Mr Hui is that A has simply registered the wrong Mainland Judgment. A should have registered the Appeal Ruling instead of the Mainland Judgment. His argument runs as follows. 28.Mr Hui draws my attention to Huzhou Shenghua Financial Services Company Ltd v Hang Pin Living Technology Company Ltd [2025] 3 HKLRD 447 in which G Lam JA rejected the submission that the list of section 6(1) is not exhaustive and held that where there was an appeal from a first instance judgment, it was the appellate judgment, being a “judgment of the second instance” referred to in section 6(1)(c) that was final and conclusive and to be registered. 29.G Lam JA went on to say that under the scheme of section 6(1), where the court of second instance simply dismisses the appeal and affirms the first instance judgment containing an order for the payment of a sum of money, it may be treated for the purposes of the MJREO as a judgment re-making that order, so that the second instance judgment also satisfies the sum of money requirement. 30.Mr Hui, thus, argues that the Appeal Ruling is final and conclusive rather than the Mainland Judgment. 31.Mr Zhu highlights to this court that Mr Ma himself has not taken any step to appeal against the Mainland Judgment. 32.As held by G Lam JA in Huzhou Shenghua at §78, sections 5(2)(c) and 6(1) both contain the words “as between the parties to the judgment” and whether a judgment is final and conclusive has to be seen in the context of the specific parties in question. In that case, the defendant appealed whereas some other parties did not. The first instance judgment would be final and conclusive on those non-appealing parties by virtue of section 6(1)(b)(ii) and is not so as between the plaintiff and the defendant by reason of the appeal of the defendant. 33.For the same proposition, Mr Zhu refers to林代銳 v 黎 康 新and Anor [2025] HKCFI 5238. DHCJ Jonathan Wong came to the conclusion that the first instance Mainland judgment was final and conclusive on the non-appealing defendant (the 2nd defendant) but not on the 1st defendant who had mounted an appeal albeit unsuccessful. 34.In the present case, Mr Zhu submits that absent any appeal ever filed by Mr Ma, the Mainland Judgment remains the only judgment between A and Mr Ma. It should be final and conclusive. 35.However, as pointed out by Mr Hui, there is a distinctive feature in the present case. Mr Ma was actually named as one of the respondents (被上诉人) together with A in the Appeal Ruling. Thus, the Appeal Ruling should be the final and conclusive judgment as between A and Mr Ma. 36.Mr Hui further relies on the expert evidence of Mr Wang. Mr Wang says that upon appeal by any party, the Mainland Judgment is no longer considered to be a judgment within the meaning of Art. 155 of the PRC Civil Procedure Law which requires the expiry of the time limit and the lack of any filing of an appeal. The Mainland Judgment therefore no longer has legal effect and cannot be qualified as a final and conclusive judgment enforceable under 《最高人民法院关于內地与香港特别行政区法院相互认可和执行当事人协议管辖的民商事案件判决的安排》, which is the Mainland counterpart of the MJREO. 37.Mr Wang concluded that the Appeal Ruling is final and conclusive as a matter of PRC law. 38.Mr Hui draws my attention to a recent decision of DHCJ Alan Kwong in 乐推(上海)文化传播有限公司 v 深圳市麦凯萊科技有限公司 and Tai Lai Heung (戴丽香) [2026] HKCFI 3204, which, in his submission, is highly analogous to the present case. 39.There, the 1st defendant and the 2nd defendant were ordered by the Shanghai Jiading District People’s Court (“the First Instance Court”) to, among other things, pay the plaintiff a sum of RMB12,688,822.63 with interest and costs. 40.The 1st defendant lodged an appeal to the Shanghai Second Intermediate People’s Court of the People’s Republic of China (“the Shanghai Second Intermediate Court”). There is no mention of any appeal by the 2nd defendant. 41.The 1st defendant failed to pay the prescribed case acceptance fee and the Shanghai Second Intermediate Court made an order that his appeal be treated as automatically withdrawn and the first instance judgment shall stand and take effect on the date when the intermediate judgment was served. It was further ordered that the intermediate judgment is final and conclusive. 42.The plaintiff registered the intermediate judgment in Hong Kong pursuant to the MJREO. The 2nd defendant applied to set aside the registration. 43.The learned deputy judge found that the 2nd defendant had not filed an appeal against the intermediate judgment and hence section 6(1)(b) was engaged. Furthermore, the learned deputy judge concluded that the intermediate judgment arose from the 1st defendant’s appeal against the first instance judgment and must be a judgment of the second instance and the Shanghai Second Intermediate Court is a “designated court” within the meaning of Schedule 1 to the MJREO. Section 6(1)(c) was also engaged. 44.Mr Hui makes a few points out of this decision. First, the fact that the 2nd defendant did not appeal personally had no effect on the finality and conclusiveness of the intermediate judgment made on the 1st defendant’s appeal. By the same token, even though Mr Ma did not appeal against the Mainland Judgment, the Appeal Ruling, rather than the Mainland, is final and binding on him. 45.Second, though the appeal of the 1st defendant was treated as automatically withdrawn rather than being dismissed on merit, this had no effect on the application of section 6(1)(b) of the MJREO. The intermediate judgment remained to be a judgment given by the Shanghai Second Intermediate Court notwithstanding that it was made on procedural grounds. By the same token, in the present case, whether the Appeal Ruling was made on procedural grounds or otherwise is irrelevant. 46.Third, the learned deputy judge, following Huzhou Shenghua at §77, held that a second-instance judgment affirming the first judgment may be treated for the purposes of the MJREO as a judgment re-making that order. Hence, the second-instance judgment should be regarded as ordering the payment of a sum of money though it does not expressly say so. Applying the same logic, the Appeal Ruling can be considered as a remake of the Mainland Judgment. 47.Mr Zhu submits that in 乐推, the 2nd defendant acted in person (actually did not appear at the hearing) and did not take issue with the finality and conclusiveness of the Mainland Judgments at all. The learned judge seemingly did not consider whether the intermediate judgment or the first instance judgment should be final and conclusive given the fact that the 2nd defendant did not file any appeal in light of Huzhou Shenghua. 48.I agree to the analysis of Mr Hui. 49.First and foremost, it cannot be disputed that Mr Ma, unlike the non-appealing defendants in Huzhou Shenghua and 林代銳, is a party to the Appeal Ruling despite the absence of any appeal filed by him. There is no expert evidence on why he was joined as a respondent. Mr Ma might be joined so that the Appeal Ruling, which is deemed to remake the Mainland Judgment, could be binding on him. Or perhaps the Appellants sought to deflect their liability onto Mr Ma. 50.I need not surmise the reason for the joinder. To all intents and purposes, Mr Ma is a party to the appeal for whatever reason and the Appeal Ruling is final and conclusive as between the parties including Mr Ma to it. 51.It should be noted that a ruling issued by an Intermediate Court is within the definition of “Mainland Judgment”: see 中国民生信托有限公司(China Minsheng Trust Co., Ltd) v 傅军(Fu Kwan) [2025] 4 HKC 682 at §33. The Appellate Court is a High People’s Court and there is no reason why its ruling is outside the definition of “Mainland Judgment”. Mr Zhu does not make such a suggestion in any event. 52.The Appeal Ruling is a judgment given by the Appellate Court on the appeal of the Appellants. The Appellate Court is a designated court included in Schedule 1 to the MJREO and is not a recognized Primary People’s Court. In the premises, I opine that section 6(1)(c) is engaged. 53.I do not accept the submission of Mr Zhu that by the Appeal Ruling, the Appellate Court merely treated the appeal as if it had been withdrawn and had never been in existence. He relies on the expert evidence of Mr Li. 54.I am unable to accept Mr Li’s evidence. 55.As rightly pointed out by Mr Hui, it was expressly ordered in the Appeal Ruling that the Mainland Judgment would take immediate effect only after the service of the Appeal Ruling was effected. It follows that before the service, the Mainland Judgment could not take any effect. The Appellants’ appeal, though deemed to have been withdrawn automatically, was not really treated as a nullity ab initio. 56.More pertinently, the incontrovertible fact is that there was an appeal filed and as recorded in the Appeal Ruling, the Appellate Court was convened in accordance with the law and considered the appeal (本 院依法組成合议庭对本案进行了审理). By the Appeal Ruling, no appeal was allowed from the Mainland Judgment. Whether the decision was based on consideration of procedural matters or substantive grounds, it is still the decision of the Appellate Court. 57.It is noteworthy that regarding an appeal or a judgment of the second instance under section 6(1), no distinction is made between procedural determination and determination on merits. 58.In addition, as agreed by Mr Zhu, the MJREO is intended to facilitate the simple and quick registration of Mainland judgments so that they can be enforced in Hong Kong. I agree to the submissions of Mr Hui that requiring the Hong Kong court to determine the nature of a second instance Mainland judgment in light of expert evidence its consideration of its registrability under the MJREO actually runs counter to the purpose of the MJREO. 59.Lastly, Mr Li relies on the certificate issued by the Intermediate Court on 28 March 2024 (“the Certificate”) to prove that the Mainland Judgment had legal effect and A could apply to the court of Hong Kong for recognition and enforcement. 60.I do not think the Certificate can assist A to prove finality and conclusiveness of the Mainland Judgment. It was issued long after the Appeal Ruling was given. The Mainland Judgment referred to in the Certificate actually relates to the one which is deemed to have been remade as a result of the Appeal Ruling. 61.In the premises, I opine that the Appeal Ruling falls within the definition of a final and conclusive Mainland Judgment as between the Appellants, A and Mr Ma, all being parties to the Appeal Ruling under section 6(1)(c). The Appeal Ruling, and not the Mainland Judgment, is registrable pursuant to section 5(1). 62.I, therefore, come to the conclusion that the Mainland Judgment should not have been registered and the Registration Order should be set aside. Unenforceability Ground 63.In light of my rejection of the Finality and Conclusiveness Ground, I need only deal with the remaining two grounds briefly. 64.The Unenforceability Ground is now confined to the imposition of double interest for delay in repayment of the debt amounting to RMB22,179,502.79 (“the Enhanced Interest”) made by the Intermediate Court in the Mainland Judgment. 65.The order for the Enhanced Interest was expressly made in accordance with Article 253 of the PRC Civil Procedure Law (2017). 66.Similar orders for such enhanced interest in Mainland judgments have been held to be penal in nature and not registrable under the MJREO. 67.Kwan JA (as she then was) in Hung Fung Enterprises Holdings Ltd v Agricultural Bank of China [2012] 3 HKLRD 679 at §90 accepted that the imposition of double interest pursuant to Article 229 of the PRC Civil Procedure Law (2007) could not be protective, remedial or compensatory when the defendant had already been ordered by the PRC courts to pay interest according to the contractual terms and the interest rates set by the People’s Bank of China until the judgment debts have been fully discharged. The learned judge went on to conclude at §92 that the double interest imposed by the PRC courts is a penalty and unenforceable. 68.This decision was consistently followed by the first instance courts dealing with double interest imposed by the PRC courts ordered under the identical or similar PRC provisions: Foshan Nanhai Branch of Industrial and Commercial Bank of China Ltd v Foshan Ruifeng Petroleum and Chemical Fuel Co Ltd [2019] 2 HKLRD 478 per Mimmie Chan J (Article 229 of the PRC Civil Procedure Law (2007)); Tianjin Jinrong Investment Service Group Co Ltd (天津津融投資服務集團有限公司) v Jinan Muhe Enterprise Management Co Ltd (濟南穆和企業管理有限公司) [2026] 1 HKLRD 1104 per DHCJ Gary Lam (Article 260 of the PRC Civil Procedure Law (2021) ) and 兴业银行股份有限公司宁波分行 v 宁波百丯选矿有限公司 and Anor. [2026] HKCFI 2455 per DHCJ Jonathan Wong (Article 260 of the PRC Civil Procedure Law (2021)). 69.In light of these authorities, I have no hesitation in concluding that the Enhanced Interest is a penalty within the meaning of section 5(2)(e). Hence, registration of the Mainland Judgment in respect of the Enhanced Interest is contrary to public policy under section 18(1)(j). The Unenforceability Ground is made out and this part of the Mainland Judgment is, in any event, not registrable. 70.In all fairness, Mr Zhu fairly accepts that the Enhanced Interest is not enforceable by way of registration notwithstanding the expert evidence of Mr Li in this regard. MND Ground 71.It is not in dispute that A had the duty to make full and frank disclosure in its ex parte application for the Registration Order. Mr Hui argues that A has failed to discharge this duty. 72.The alleged material non-disclosure includes:
73.To my mind, there is no material non-disclosure regarding the non-registration of the Appeal Ruling. A did not fail to disclose anything and its erroneous choice of the Mainland judgment to be registered is a matter of professional judgment only. 74.The same cannot be said about the failure to draw to the attention of the master the long line of authorities regarding the penal nature of enhanced interest ordered pursuant to the same or similar PRC legal provisions. The legal representatives of A must be assumed to be aware of such authorities and they should alert the master to them. Their non-disclosure of such authorities and the relevant conclusions is inexcusable. 75.I am satisfied that this material non-disclosure is established and the relevant part of the registration must be set aside on this ground. 76.Lastly, as regards the non-disclosure of the Partial Repayment, Mr Zhu does not argue that A had no knowledge of the Partial Repayment. He submits that the Partial Repayment is irrelevant to the validity of the Mainland Judgment and it only concerns the execution stage of the same. At the stage of recognition of the Mainland Judgment, the Partial Repayment is not material. 77.Mr Zhu further refers to section 10 of the MJREO, which reads,
78.This provision actually confirms the materiality of the Partial Repayment. It should have been disclosed to the master and the registration should only be confined to the balance remaining payable by Mr Ma. There is no reason why A did not disclose this to the master. In my view, this is plainly a breach of its duty of full and frank disclosure. 79.I can conclude that the MND Ground is made out. Conclusion and order 80.For the reasons given, I find that all of the three grounds advanced on behalf of Mr Ma are established. Accordingly, I grant his application by the Set Aside Summons and I order that the Registration Order be set aside. 81.Costs should follow the event. I make a costs order nisi that costs of and occasioned by the Set Aside Summons including any costs reserved be paid by A to Mr Ma, to be taxed if not agreed. I do not believe that this matter justifies certificate for two counsel. 82.It remains for me to thank Mr Zhu, Mr Hui and Mr Yeung for their assistance.
Mr Peter Zhu, instructed by Messrs Yinfan Lawyers, for the Applicant Mr John Hui and Mr Joshua Yeung, instructed by Messrs CLKW Lawyers LLP, for the Respondent |
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