1. With the new reciprocal enforcement of civil judgment between Hong Kong and mainland, a Hong Kong judgment can also be enforced in mainland now against a mainland subcontractor which has assets in mainland.

  2. As an option to court litigation, and arbitration awards are also enforceable in both Hong Kong and mainland. The good thing about arbitration is that the party can choose the arbitrator who would have the right industry knowledge, and also confidentiality of the proceedings.
    (HKIAC, http://www.hkiac.org/HKIAC/HKIAC_English/main.html and
    CIETAC, http://www.cietac.org.cn/index_english.asp)

  3. However, no matter which way to go, there is always the challenge of actual enforcement of the Hong Kong judgment/arbitration awards. The awards may be challenged by the mainland party or court, especially if the body corporate (法人)has special social status.

  4. Thus, if simply relying on court ruling or arbitration to settle the disputes involving partners in mainland, it will mostly be a losing situation. The more practical approach for the protection of both sides is to institute a fair performance-based payment schedule in the contract. Regular inspection of work progress and output quality, timely resolutions of perceived problems are important in the management of subcontractors. This is even more important when the work is done in dispersed locations involving parties in different cities.