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INTERNATIONAL ENFORCEMENT OF ARBITRAL AWARDS:

Enforcement in China

27 June 2014Dr. Shujing SUI / Partner

Deheng Law offices (Shenzhen), ChinaE-mail address: suisj@dehenglaw.com

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Background

• International conventions - China acceded to the NY convention on Dec. 2nd, 1986； - entered into force as of April 22, 1987• National law -The Civil Procedure Law of the People’s Republic of China

( Revised in 2012 ), ( “ the Civil Procedure Law of PRC ” ) Article 283, refers to the NY Convention and makes

convention primarily applicable

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How to apply in China ?

One party applies for recognition and enforcement, submitting

documents as required

The intermediate people's court receives the application and review

If intermediate people's court agrees that the award shall be recognized, issue ruling

If intermediate people's court reviews and tends to refuse to recognize award, reports…

The award shall be enforcedReports to the Higher Court, then

reports to the Supreme Court; only after a reply, then ruling

two months

six months

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Statistics and Trend

Statistics: 2002-2006 ( from 17 provinces or cities in China )

Application received: 74 Refusal cases : 5 Ratio: 6.76 %

2000 – Sep., 2011 Reporting cases: 56 Refusal cases : 21 Ratio : 37.5 %

Trend

Why being refused ?

38%

43%

10%

5%5%

arbitration agreement is not valid (8)

not given proper notice of the appointment of the arbitrator/of the arbitration proceeding procedure/unable to present his case(9)

beyond the scope of the submission to arbitration(2)

subject matter of the difference is not capable of settlement by arbitration under the law(1)

contrary to the public policy(1) 5

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A Case Analysis• Case Analysis : - Suppose there is an arbitral award, one party is German company, the

other party is Chinese company, the seat of Arbitration is Hongkong.• Question: - If German company will start application in China , should they apply to

the NY convention? • The Arrangement on Reciprocal Enforcement of Arbitral Awards in

Mainland and the Hong Kong Special Administrative Region ("the Arrangement")

- If the seat of arbitration is Hong Kong, the awards should be deemed Hong Kong awards

- Not the NY convention, but the arrangement • What is the advantage ? - not apply for recognition, but for enforcement

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Suggestion

Suggestion: Take Hongkong as seat of Arbitration (1) Contrary to Chinese Public policy ? Violation of Chinese judicial sovereignty and the

jurisdiction of the Chinese courts, constitutes contrary to Chinese public policy

(2) Is ad hoc arbitration agreement recognized ? The validity of an ad hoc arbitration agreement is

recognized if the arbitration occurs outside Mainland China ( including Hong Kong, Macau and Taiwan), and the law of the place of arbitration allows ad hoc arbitration.

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Thank you !Deheng Offices