Recover a debt due in Hong Kong based on a U.S. judgment

Imagine finding a Willy-Wonka golden ticket which makes you eligible to enter the chocolate factory, but not automatically – you still have to convince Willy-Wonka at the door, but it’s not all that difficult. U.S creditors can’t enforce a judgement in Hong Kong directly through a simple registration procedure, a new application must be filed.

This article is a step-by-step guide on the procedure of enforcing a U.S judgement in Hong Kong. Depending on whether the debtor files a defence, this process usually lasts between six to twelve months.

The law in this respect is complex. While this article is meant to inform, it’s not exhaustive and should not be construed as legal advice.

Step 1: Check eligibility for recognition under common law

The judgement must be:

• rendered not more than six years ago;
• against an individual or entity (as opposed to property);
• final and conclusive (and not an interim measure);
• for a payable sum of money;
• not an injunction or specific performance – an order to stop doing something or to do something (however, interim measures can be applied for in Hong Kong if the U.S judgement is registered or registrable under the laws of Hong Kong);
• not taxes or fines.

Step 2: Initiate legal proceedings

The U.S. judgment is in and of itself the cause of action. A writ needs to be filed.

Typically, once the recognition criteria are met, the creditor can obtain summary judgment. If not, the creditor must start from scratch and file new proceedings without reference to the U.S. judgment.

Step 3: Serve the writ on the debtor (and hope they file no defence)

The debtor must be served with the writ locally, and has 14 days to state their intention to defend, and 28 days to file a defence. Otherwise, the creditor can apply for a default judgement. A local firm can assist with service in accordance with Hong Kong laws (which can be tricky).

The debtor can challenge the judgement on the following grounds:

• the U.S court had no jurisdiction;
• the judgement was obtained by fraud;
• the judgement breached principles of natural justice;
• the judgement was contrary to public policy in Hong Kong.

Step 4: Enforcement

If no defence is filed, or the court is satisfied that there is no valid defence, a local judgement is rendered and enforceable. But once the creditor has got the golden ticket, it’s time to actually walk into the chocolate factory and take what they’re owed. That’s enforcement.

The choice of enforcement route should depend on the debtor’s available assets in Hong Kong. Key routes (amongst others) available to the creditor are:

• garnishee proceedings: a third party (eg. bank or employer) satisfies the debt;
• charging order against land, securities and funds in court;
• a writ of execution (such as, a bailiff seizing personal property).