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  • Currently there is thought to be no alternative except via arbitration if a client wants to enforce a contractual obligation in mainland China.
  • There is a bilateral agreement between Hong Kong and China for the mutual recognition, registration and enforcement of judgments.
  • Australians can take advantage of the Agreement by drafting a contract, applying the law of NSW, which permits litigation in Hong Kong and thereby obtaining a judgment that is enforceable in mainland China.

China is now one of Australia’s largest trade partners. Commercial transactions between an Australian client and a Chinese counterpart are now common. This has given rise to the problem of enforcement of contractual obligations in the event of a breach of contract.

Australian individuals and businesses involved in commercial transactions with mainland Chinese residents may want to be able to obtain a judgment enforceable against people and assets in mainland China, without having to litigate in mainland Chinese courts. It is understandable that Australian clients would prefer the familiarity of the common law process and New South Wales law. The issue is how to achieve that outcome, or at least seek to achieve it.

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