

Ask HN: What should you know before contracting with a Hong Kong firm? - SimpleDog

For example, I am considering an agreement between my firm and a large Hong Kong corporation. The agreement however states the following:<p>"The construction, validity, performance and enforcement of this Agreement and the rights and obligations of the parties hereto shall be governed in all respects by the laws of the Hong Kong SAR. The parties hereto hereby agree to irrevocably submit to the non-exclusive jurisdiction of the Courts of the Hong Kong SAR."<p>What exactly does this mean? That if a Hong Kong court says my firm acted outside the agreement, that we'd have to high tail it over there, or what? I've not done business outside the states before, and I suppose a good lawyer should read this, but I was wondering if anyone had any practical advice to start with.
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quant18
DISCLAIMER: I am not a lawyer and I'm assuming you live in the US, UK, Latin
America, Africa, or some other countries which LACK a bilateral agreement with
HK on enforcement of court judgments. Australia, Israel, Germany, & others
HAVE such agreements with HK which invalidate the rest of what I'm saying.
Look up Foreign Judgments (Reciprocal Enforcement) Ordinance. If you want more
free advice, I'd suggest asking the guys at <http://geoexpat.com> instead,
there's lots of HK lawyers there.

"Non-exclusive jurisdiction" clauses are put in because of problems with
enforcement of foreign court judgments. If you sue someone in your country and
win, but he has no assets in your country, you have to go to _his_ country and
convince a court there to enforce your country's judgment if you want to get
your hands on any of his money.

Contract law differs a lot between countries, but any judge anywhere whom you
ask to recognise a foreign court judgment wants to know at least three things:
#1: the court which issued the original judgment actually has jurisdiction.
#2: there's no more avenues of appeal above that court. #3: you informed the
other guy before you sued him. If you can prove any one of those three is
untrue, then you derail the enforcement of the foreign judgment. The "non-
exclusive jurisdiction" clause makes it impossible to argue about #1.

Signing a contract for "non-exclusive jurisdiction" in HK doesn't restrict you
or HKCorp trying to sue each other anywhere in the world you can convince a
judge to listen. But it _does_ mean that if HKCorp sues you in HK, wins, and
then comes to your country to collect, you can't argue that the HK court was
not a proper venue. While if you sue HKCorp in your country, win, and go to HK
to try to get the judgment recognised, the HK judge will want to know why you
didn't just sue in HK.

~~~
SimpleDog
Thanks for the detailed response. I think my real question is whether if
because of some disagreement, that my firm would be forced by law to fly to
Hong Kong to argue with them in court. Clearly that seems like a ridiculous
expectation, but I have no idea what kind of laws exist between countries
about these things. It would seem to me that if they sued our firm in HK
court, that our presence is at our own option. Not that we plan or look
forward to such an occurrence, but we want to fully understand the risks.

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albahk
This may be obvious to many, but with regards to the Legal system and contract
law Hong Kong is nothing like China. The Legal System in HK is based upon
English Law and is very robust. You can be assured of a fair and balanced
legal system here but if you are signing a contract with a large HK
corporation, I would be more worried about the specific terms of the contract.
I believe fighting a large corporation in court, even in the US, is a time and
money wasting exercise.

edit: insist on all English contracts as english is one of the official
languages of HK.

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atgm
My practical advice is to get a lawyer who specializes in international
business to cover your butt. If they say it's something that you can legally
agree to, then you should also get a lawyer familiar with the laws of the Hong
Kong SAR, preferably a bilingual one fluent in both Mandarin and English... or
possibly trilingual, depending on how much Cantonese you'd be dealing with.

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iworkforthem
Get a Hong Kong law firm whose focus in Technology, they will be able to
provide more details on the jurisdiction of the country. Maybe you want to go
through the list of law firms listed with the Law Society of Hong Kong:
<http://www.hklawsoc.org.hk/pub_e/default.asp>

