Michael Ma Naidong (Partner), Hua Danjing (Partner), and Ni Haolin (Attorney) from Dacheng Shanghai Office recently represented a client in a groundbreaking case involving the recognition of a Hong Kong court’s decree absolute by a PRC mainland court. Their efforts also facilitated a successful settlement regarding the division of marital assets. This case represents a pioneering application of Article 9 of Arrangement on Reciprocal Recognition and Enforcement of Civil Judgments in Matrimonial and Family Cases by the Courts of the Mainland and of the Hong Kong Special Administrative Region (hereinafter referred to as the “Family Judgments Arrangement”). Notably, the team’s professional arguments—initially differing from the court’s preliminary opinion—ultimately persuaded the court to adopt the client’s position, leading to the recognition of the Hong Kong decree absolute.

At the time of engagement, the parties had initiated divorce proceedings in mainland China and Hong Kong, respectively. The mainland court first issued a judgment refusing the divorce, while the Hong Kong court subsequently granted a decree absolute and a child custody order. Since the majority of the couple’s assets were located in the mainland, the client had not sought property division in the Hong Kong proceedings—setting the stage for further disputes over marital property.

Upon taking on the case, considering that the Hong Kong court had already issued a decree absolute, the team promptly applied to the mainland court for recognition of the Hong Kong decree to prevent the opposing party from initiating parallel divorce proceedings in the mainland. However, given the scarcity of precedent cases under the Family Judgments Arrangement since its enactment, the mainland court initially interpreted Article 9.1.4 as treating the earlier mainland judgment of "divorce refusal" as constituting "a prior judgment on the same dispute by the requested court," and thus preliminarily decided to reject the application.

Faced with this hurdle, the team adopted a two-pronged approach: 1. Legal Analysis: The team presented a rigorous analysis of Article 9.1.4 to the court, contending that a "divorce refusal" judgment does not qualify as a "judgment" under the Family Judgments Arrangement. Their analysis covered the definition of "judgment", the unique nature and legal effects of a "divorce refusal" ruling, and the legislative intent behind the Family Judgments Arrangement; 2. Negotiation: Simultaneously, they engaged in settlement discussions with the opposing party regarding marital asset division, addressing potential outcomes of ongoing mainland litigation, the impact of financial contributions on asset distribution ratios, and the enforceability of a marital commitment letter signed during the marriage.

Through proactive mediation, the parties reached an early settlement on asset division, with the opposing party expressly affirming its acceptance of the Hong Kong decree absolute to the mainland court. Combining persuasive legal advocacy with a balanced consideration of both parties’ interests, the court ultimately adopted the client’s position that a "divorce refusal" judgment should not be expansively interpreted as a "judgment" under Article 9.1.4 of the Family Judgments Arrangement. The Hong Kong decree was formally recognised, securing a favourable outcome for the client.

（Judgment）

Nevertheless, it is noteworthy that in another divorce case of an entrepreneur handled by Michael Ma 's team around the same time, the conflict of divorce judgments made by the China mainland court and Hong Kong court arose again. Unlike the previous case, Hong Kong court issued decree absolute, and the mainland court issued a divorce judgment, but the Hong Kong court had accepted the case, and the decree absolute came into effect earlier than the judgment made by the mainland court. The dispute centred on whether the mainland court's subsequently issued divorce judgment constituted a scenario where "the requested court has already adjudicated the same dispute." However, the two levels of the mainland courts in this case exhibited significant divergence in their interpretation and application of the law:  

The first-instance court, adhering to the principle of interregional comity, held that since the Hong Kong court's decree absolute had taken effect first, this did not fall under the circumstance where "the requested court has already adjudicated the same dispute," and thus the Hong Kong decree absolute should be recognised.  

In contrast, the second-instance court ruled that the term "already adjudicated" in the legal provision should be determined based on the time when the court reviewing the recognition and enforcement application conducts its examination, rather than the chronological order in which the judgments were actually issued by the two courts. On this ground, it overturned the first-instance ruling.

The two cases handled by Ma Naidong 's team—involving jurisdictional conflicts and the validity of divorce judgments made by the mainland courts and decree absolutes of Hong Kong courts under interregional parallel litigation—highlight the interpretive and applicative disputes encountered in the judicial implementation of the Family Judgments Arrangement. These cases not only underscore the complexity and challenges inherent in cross-border divorce litigation but also test the expertise and adaptability of the teams.

Given the increasing number of PRC private enterprises listing in Hong Kong, disputes involving both mainland China and Hong Kong are expected to become more frequent. However, judicial practice currently lacks unified rules regarding jurisdictional conflicts and the recognition of matrimonial judgments between the two jurisdictions. UHNW families should reasonably anticipate such judicial uncertainties and proactively seek assistance from professional legal teams with extensive cross-border dispute resolution experience to ensure proper wealth protection planning.