The Qianhai Court for the first time recently applied Hong Kong law for the judicial confirmation of a loan contract dispute, which helped litigants quickly and efficiently resolve their dispute.
In 2016, a Hong Kong bank signed a loan agreement with a Chinese mainland resident surnamed Yuan. The bank issued two loans totaling HK$20 million (US$2.54 million) to Yuan. After the loan term expired in 2020, Yuan still owed more than HK$17.35 million in principal and interest and failed to repay on time. The Hong Kong bank then filed a lawsuit in the Qianhai Court to request Yuan to repay the loan.
As the two litigants had agreed in the loan agreement that any disputes involved shall be resolved by Hong Kong laws, the Qianhai Court appointed a Hong Kong mediator to conduct an online mediation for them. The two parties applied Hong Kong law to reach a mediation agreement and applied for judicial confirmation from the Qianhai Court.
Subsequently, the court entrusted a Hong Kong lawyer to conduct a neutral third-party assessment and to issue an assessment report, concluded that the mediation agreement reached by the two parties was valid and didn’t violate any Hong Kong law. During the judicial confirmation process, the Qianhai Court formed a collegial panel to conduct an online hearing on the authenticity and legality of the mediation agreement. The collegial panel believed that the mediation agreement was an expression of the true intentions of both parties, and it didn’t violate the laws and regulations of the Chinese mainland or of Hong Kong, nor did it harm the social and public interests of the mainland, thus judicially confirming the agreement.
Compared with the normal legal proceedings, this form of pre-trial mediation plus judicial confirmation can resolve disputes in a shorter period of time and all the process can be handled online. In addition, the mediation and judicial confirmation procedures are completely free of charge.
This effort made by the court is helpful for creating an equal and open business environment in Qianhai, and for safeguarding the integrated development of the Greater Bay Area.