Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 8

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 3
Chunk 8
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 to enforcement a judgment against us. As a result, there is uncertainty as to the enforceability in the BVI of judgments rendered against us by United States courts.

There is currently no arrangement providing for the reciprocal enforcement of judgements between Hong Kong and the United States. Judgements of United States courts, or any other foreign jurisdiction without a treaty of reciprocity, will not be directly enforced in Hong Kong. However, under common law, a foreign judgment (including one from United States courts) may generally be treated by the courts of Hong Kong as a cause of action in itself and sued upon as a debt between the parties. In a common law action for enforcement of a foreign judgment, the judgment creditor has to prove that (i) the judgment is in personam; (ii) the judgment is in the nature of a monetary award; (iii) the judgment is final and conclusive on the merits and has not been stayed or satisfied in full; and (iv) the judgement is from a court of competent jurisdiction. The defenses available to the defendant in a common law action for enforcement of a foreign judgment include breach of natural justice, fraud and enforcement would be contrary to the public policy of Hong Kong. Enforcing a judgment from United States Courts in Hong Kong will require a separate cause of action in Hong Kong, which will cause both parties to incur additional expenses and lead to additional delays in any recovery on the part of a plaintiff. As a result, there is uncertainty as to the enforceability in Hong Kong of judgments of United States courts of civil liabilities predicated solely upon the federal securities laws of the United States or the securities laws of any State or territory within the United States.

Likewise, there is currently no arrangement providing for the reciprocal enforcement of judgements between China and the United States. There is uncertainty as to whether Chinese courts would enforce judgements of United States Courts against us or our officers and directors located in China.

According to the PRC Civil Procedures Law, courts in China will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States or any other foreign jurisdiction without a treaty of reciprocity. Under the PRC Civil Procedures Law, foreign shareholders may originate actions based on PRC law against us in China if they can establish sufficient connection to China for a PRC court to