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Procedures for China’s recognition and enforcement of Foreign Arbitral Awards

Author of article: attorney of Win and Win Law Firm

China’s civil procedure law provides the same procedure for the recognition and enforcement of foreign arbitral awards as the recognition and enforcement of foreign court decisions. In accordance with the decision of the Standing Committee of the National People’s Congress on China’s accession to the Convention on the recognition and enforcement of Foreign Arbitral Awards (i.e. the New York Convention) on December 2, 1986, and the relevant provisions of the civil procedure law, China’s current legal system for recognizing and enforcing foreign arbitral awards includes the following contents:

1. Execute foreign arbitral awards in accordance with Chinese laws.
According to Article 269 of the civil procedure law, a foreign arbitral award may be directly applied for recognition and enforcement in China. The parties may directly apply to the intermediate people’s court in the place where the property of the person subjected to enforcement is located or where the legal domicile is located for recognition and enforcement of the award made by the foreign arbitral institution. The people’s court shall handle it in accordance with the international treaties or agreements concluded or acceded to by China; In the absence of applicable international treaties or agreements, the people’s court may also decide whether to recognize and implement them in accordance with the principle of reciprocity.

China courts and judges must act in accordance with the provisions of the law Article 283 of the Civil Procedure Law of the people’s Republic of China (hereinafter referred to as the Civil Procedure Law) provides a basic legal basis for the recognition and enforcement of Foreign Arbitral Awards in China. The article stipulates: “if the award of a foreign arbitration institution needs to be recognized and enforced by the people’s Court, the parties shall directly apply to the intermediate people’s court in the place where the person subjected to enforcement has his domicile or where his property is located. The people’s court shall handle it in accordance with the international treaties in accordance with the principle of reciprocity.” According to this provision, the following problems should be paid attention to in practice:

If a foreign arbitral award needs to be recognized and enforced in China, the parties shall directly apply to the court. Secondly, as for the court of jurisdiction, from the perspective of regional jurisdiction, it should be the court where the person subjected to execution has his domicile or where his property is located; From the perspective Jurisdiction, it should be the intermediate people’s court. If two or more courts have jurisdiction, the applicant may choose one of them to file an application, and it is not necessary to file an application to two or more courts at the same time. According to the theory of private international law, once a foreign arbitral award is recognized by a local court, it will have enforcement force in China. If the property within the jurisdiction of the court recognizing the foreign arbitral award is insufficient to meet the applicant’s claims, the court may entrust other courts to enforce it on its behalf. Therefore, it is not necessary for the applicant to apply to more than two courts for recognition and enforcement of the same foreign arbitral award.

2. Recognition and enforcement of Foreign Arbitral Awards in accordance with the New York Convention.
Among the international treaties on the recognition and enforcement of Foreign Arbitral Awards concluded or acceded to by China, the New York Convention is the most important convention. Since most countries in the world have acceded to the Convention, the application for recognition and enforcement of Foreign Arbitral Awards in China will be handled mainly in accordance with the provisions of the Convention. When China joined the New York Convention, it made a declaration of reciprocal reservations and a declaration of commercial reservations. However, when acceding to the Convention, any state can declare that the provisions of the Convention apply only to Contracting States, which is “mutually beneficial reservation”. The so-called “commercial reservation” refers to that China only recognizes and executes the arbitral awards made on the disputes of contractual and non contractual commercial legal relations.

According to the commercial reservation statement made when China joined the Convention, China applies the convention only to disputes arising from contractual and non contractual commercial legal relations according to Chinese law. Specifically, it refers to the economic rights and obligations arising from contract, infringement or according to relevant laws, such as goods sales, property leasing, project contracting, processing contracting, technology transfer, joint venture, cooperative operation, exploration and development of natural resources, insurance, credit, labor services, agency, consulting services, maritime, civil aviation, railway Road passenger and freight transportation, product liability, environmental pollution, maritime accidents and ownership disputes, but excluding disputes between foreign investors and the host government.

After receiving the application, the people’s court with jurisdiction in China shall review the arbitral award applied for recognition and enforcement. If it considers that it does not have the circumstances listed in paragraphs 1 and 2 of Article 5 of the New York Convention, it shall make a ruling to recognize its effectiveness and implement it in accordance with the procedures stipulated in the laws of China; If it is found that it has one of the circumstances listed in paragraph 2 of Article 5, according to the evidence provided by the person subjected to execution, it shall rule to reject the application and refuse recognition and enforcement.

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