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

Source: Mankiw Blockchain Law

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

01 The history of mutual judicial assistance between the two places

Hong Kong Mainland Civil and Commercial Affairs Adjudication has a relatively long history of judicial assistance.

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

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

1. On December 30, 1998 The "Arrangement on Mutual Entrustment of the Service of Judicial Documents in Civil and Commercial Matters" was adopted by the courts of the Mainland and the Hong Kong Special Administrative Region and came into effect on March 30, 1999

2. On June 18, 1999 The "Arrangement Concerning the Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region" was adopted and came into effect on February 1, 2000.

3. Adopted on June 12, 2006 and passed in 2008 The "Arrangement on the Mutual Recognition and Enforcement of Judgments in Civil and Commercial Cases Over which the Courts of the Mainland and the Hong Kong Special Administrative Region Have the Jurisdiction by Agreement of the Parties" came into effect on August 1.

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

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

6. In2019 The "Arrangement on the Mutual Recognition and Enforcement of Judgments in Civil and Commercial Cases by the Courts of the Mainland and the Hong Kong Special Administrative Region" was passed on January 14 and will take effect on January 29, 2024

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

8. The "Supplementary Arrangement on the Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region" adopted on November 9, 2020 and effective on November 27, 2020

It can be seen from the history of the adoption of the above-mentioned arrangements thatthe degree of judicial assistance between the two sides of the Taiwan Straits has increased from the initial service of documents and extraction of evidence to mutual recognition and enforcement, from procedures to entities, from arbitration to judgment. The deeper and broader the scope, this will help strengthen cooperation between the two places, improve the efficiency of the judicial system, and protect the legal rights and interests of relevant parties In particular, the problem of "difficulty in cross-border execution" can be solved to a great extent.

02 Impact on the Web3.0 industry

The Hong Kong Government's "Mainland People's Commercial Judgments (Mutual Enforcement) Rules" and "Mainland Civil and Commercial Judgments (Mutual Enforcement) Ordinance" (Effective Date) Announcement, "Mainland Civil and Commercial Judgments (Mutual Enforcement) Ordinance (Chapter 645) and "Mainland Civil The Commercial Judgments (Mutual Enforcement) Rules will come into effect on January 29, 2024. The Supreme People's Court's "Arrangement on the Mutual Recognition and Enforcement of Judgments in Civil and Commercial Cases between the Mainland and Hong Kong Special Administrative Region Courts" was also implemented on January 29, 2024. The two places have completely synchronized their implementation of judicial assistance matters.

Currently in the Mainland, due to regulatory reasons, the results of disputes involving virtual currencies, whether court judgments or arbitration awards, are full of uncertainty, and may be deemed invalid by judicial authorities on the grounds of violating public order and good customs. Extremely high sex. However, Hong Kong is committed to building a world center for Web 3.0, and its attitude towards the Web 3.0 industry is very different from that of the mainland. Naturally, it is foreseeable that Hong Kong's judicial organs will be more open and tolerant in legal disputes involving virtual currencies.

Although there is the principle of international comity under common law. For example, although a contract stipulates that Hong Kong law shall be applicable, but the contract violates mainland law when it is performed in mainland China, the Hong Kong court may based on this In principle, the party refuses to enforce the contract.

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

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

First, the mainland’s regulatory policies are not laws at the level of effectiveness, but are just policy documents, and policy documents are highly time-sensitive and volatile;

2. Hong Kong has its own ideas about the Web3.0 industry.

Therefore, since the judicial attitude of the Hong Kong judicial authorities towards virtual currencies can be expected, and with the mutual execution of civil and commercial judgments and arbitration awards between the two places becoming more convenient, it is entirely possible to regulate currency-related disputes by It is agreed that after obtaining a winning judgment or award in Hong Kong, the court in the mainland will seek enforcementenforcement in accordance with the relevant judicial assistance arrangements, which can avoid the current virtual restrictions imposed by the mainland courts. Currency-unfriendly policy regulations can also enable judicial remedies for commercial arrangements.

03 Summary

Since the Hong Kong government has made efforts on Web3.0 , for mainland Web3.0 entrepreneurs, the biggest worry has begun to be gradually cleared by the Hong Kong government. Many things in Web 3.0 can begin to be arranged through various arrangements. Like other industries, you can innovate business models without worrying about lack of legal protection. The future is gradually becoming brighter.