Reciprocal enforcement of arbitral awards between HK and Macau

It is unusual for two jurisdictions that are part of a larger state to ceremonially conclude an agreement allowing for the mutual enforcement of arbitral awards between them. Yet, under the People’s Republic of China (PRC) Special Administrative Region (SAR) regime, that is what recently occurred. On 7 January 2013, Hong Kong’s secretary for justice, Rimsky Yuen, and Macau’s secretary for administration and justice, Florinda Chan, signed the Arrangement Concerning Reciprocal Recognition and Enforcement of Arbitral Awards Between the Hong Kong Special Administrative Region and the Macau Special Administrative Region. The HK-Macau arrangement will provide for the mutual recognition and enforcement of arbitral awards between Hong Kong and Macau, the two SARs of China, but will only become effective upon a future date to be agreed between the Hong Kong SAR and Macau SAR governments.

Current position

Since both Hong Kong and Macau are SARs of the PRCF, neither are independent parties to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention). While China has extended its membership of the convention to both Hong Kong and Macau – thus allowing awards made in the PRC, Hong Kong and Macau to be enforced in the 148 member states of the New York Convention, and vice versa – the convention does not apply between these jurisdictions, as they are all jurisdictions within a single state.

The PRC has already concluded separate agreements with Hong Kong and Macau regarding the mutual enforcement of arbitral awards. The Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong SAR (HK-PRC arrangement), was signed in 1999 and entered into force in 2000. This was in response to the uncertainty caused by the handover of Hong Kong to China in 1997, which manifested itself in the case of Ng Fung Hong v ABCI, where Hong Kong’s High Court held that PRC awards would no longer be enforceable in Hong Kong. A similar concern arose with Macau’s return to China in 1999, which resulted in the Arrangement concerning Mutual Recognition and Enforcement of Arbitral Awards between the SAR of Macau and the Mainland (Macau-PRC arrangement) being signed in 2007 and which entered into force in 2008.