【英文版】杜越:近20年194個案例!大數據分析我國法院對外國仲裁裁決的承認和執行情況

2021-02-24 國際貿易與金融法律研究

As we all know, an effective ruling with no enforcement power is a piece of waste paper, which means that the winner may take nothing. In the process of international trade and investment, one of the most important reasons for the wide recognition of international arbitration is that foreign arbitration awards are more enforceable than foreign court decisions. From the 「going global」 strategy to the 「One Belt One Road」 initiative, with the continuous expansion of the overseas blueprints of Chinese enterprises, the rise of commercial dispute resolution is inevitable. For both Chinese and foreign parties, it is rather important to carry out practical analysis on the recognition and enforcement of foreign arbitral awards by Chinese courts.

This article adopts the method of big data analysis, and has searched 194 cases of applications for recognition and enforcement of foreign arbitral awards accepted by Chinese courts in the past 20 years. In order to study and summarize the reasons invoked by Chinese courts for refusing the recognition and enforcement of foreign arbitral awards, this article then analyzes 38 cases where the foreign arbitral awards were ruled not to be recognized and enforced in China. In addition, this article also provides reasonable suggestions for both Chinese and foreign parties on recognition and enforcement of foreign arbitral awards through Chinese court to protect their commercial interests.

I. Legal Basis for Chinese Courts for Refusing Recognition and Enforcement of Foreign Arbitral Awards

A. New York Convention and its Article 5

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as the 「New York Convention」), which aims to develop international economics and trade, promote commercial dispute resolution and encourage the recognition and enforcement of arbitral awards worldwide, was signed and approved at the United Nations International Commercial Arbitration Conference held in New York on June 10, 1958. As countries continue to join, as of July 2020, the number of parties to the New York Convention has reached 164, which has increasingly demonstrated the influence of the New York Convention on countries and its vigorous vitality in the field of international commercial arbitration.

China joined the New York Convention on January 22, 1987. In order to ensure the implementation of the Convention in China, the Supreme Court of the People's Republic of China promulgated the Notice of the Supreme People's Court on the Implementation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards on April 10, 1987. According to the notice, regarding the recognition and enforcement of arbitral awards made in the territory of another contracting State, China applies the Convention in accordance with the declaration of reciprocal reservations made when China joined the New York Convention. If there is inconsistence between the New York Convention and the Civil Procedural Law of the People’s Republic of China, the provisions of the Convention shall prevail. This part of the content has also been confirmed in Article 260 of the Civil Procedural Law of the People’s Republic of China (2017 Revised), which clarifies the principle of priority application of international treaties, meaning that if there is inconsistence between the international conventions that China has concluded or joined and the Civil Procedural Law of the People’s Republic of China, the provisions of the international convention shall apply, except for the provisions that China has declared reservations. Therefore, regarding the recognition and enforcement of foreign arbitration awards made in the territory of another contracting State to the New York Convention, the provisions of the New York Convention shall apply.

According to Article 3 of the Notice of the Supreme People's Court on the Implementation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the applicant who is entitled to apply for recognition and enforcement of a foreign arbitral award to a Chinese court shall be a party to the arbitration award, and the court with jurisdiction shall be an Intermediate People's Court with connection to the place of residence or property of the person subject to enforcement, which is also confirmed in Article 283 of the Civil Procedural Law of the People’s Republic of China (2017 Revised).

Article 5 of the New York Convention sets out the reasons for refusing recognition and enforcement of foreign arbitral awards. From the restrictive expression of 「only if」 in Article 5, Paragraphs 1 and 2 of Article 5 of the New York Convention exhaustively enumerates seven circumstances under which recognition and enforcement of foreign arbitral awards may be refused, that is, the court shall not refuse to recognize and enforce foreign arbitration awards for reasons other than listed in Article 5. Besides, the five types of grounds in the first paragraph must be initiated by one party’s request, while the two types of grounds in the second paragraph could be reviewed by court at its own initiative. Therefore, to some extent the court of the contracting State is granted relatively great power of active review by the second paragraph of Article 5.

According to Article 3 of the Notice of the Supreme People's Court on the Implementation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, upon receipt of applications for recognition and enforcement of foreign arbitral awards, Chinese courts shall review the application in comply with Paragraphs 1 and 2 of Article 5 of the New York Convention, which is also confirmed by the principle of priority application of international treaties in Article 260 of the Civil Procedural Law of the People’s Republic of China (2017 Revised).

Besides, Article 2 of the Notice of the Supreme People’s Court on the Handling of Issues Concerning Foreign-related Arbitration and Foreign Arbitration by People』 Courts in 1995 also provides that, if the Intermediate People’s Court intends to decide not to recognize and enforce the award, it must report to the Higher People's Court of the ruling district for review, and if the Higher People’s Court agrees not to recognize and enforce, the Supreme People’s Court shall review the decision. Only after receiving the reply from the Supreme People’s Court, the court shall decide not to implement or refuse to recognize and enforce the arbitral award. Such provision actually elevates the power to refusing recognition and enforcement of foreign arbitral awards to the Supreme People’s Court, which unifies local courts』 understanding and practice of the New York Convention through the reply of the Supreme People’s Court, to the largest extent respecting and encouraging the recognition and enforcement of foreign arbitral awards in China.

II. Rejection of Recognition and Enforcement of Foreign Arbitral Awards by Chinese Courts under Big Data

The author adopts 「arbitral award」, 「recognition」, 「enforcement」 and 「Article 5 of the New York Convention」 as keywords, and conducts research in databases such as Wolters Kluwer, Peking University Magic Treasure, and China Judgment Document Net. Since 2001, there have been 194 cases regarding applications for the recognition and enforcement of foreign arbitral awards in Chinese courts, among which, except for 38 foreign arbitral awards which were ruled not to be recognized and enforced by Chinese courts, more than 80% of foreign arbitral awards have been actively recognized by Chinese courts.

In order to fully analyze the reasons for Chinese courts refusing the recognition and enforcement of foreign arbitral awards, besides cases where Chinese courts refused to recognize and enforce foreign arbitral awards under Article 5 of the New York Convention, 3 cases regarding non-enforcement of Hong Kong arbitral awards under Article 7 of the Mainland-Hong Kong Arrangement are also included in this article.

Through statistics on the judgement time, recognition and enforcement status of 194 cases (see Figure 1): From 2001 to 2015, Chinese courts accepted a total of 90 cases of applications for recognition and enforcement of foreign arbitral awards, of which 30 cases were ruled not recognize and enforce. From 2016 to the present, in less than five years, the number of cases accepted by Chinese courts for recognition and enforcement of foreign arbitral awards has reached 104, which has exceeded the number of related cases accepted by Chinese courts in the previous 15 years, and only 8 cases were refused to be recognized and enforced, meaning that the recognition and enforcement rate has reached up to 92.3%.

It can be seen that with the rapid development of foreign trade and investment of Chinese enterprises, the number of arbitration awards caused by commercial disputes is also increasing, which has led to a large number of cases regarding applications for recognition and enforcement of foreign arbitral awards in China. Meanwhile, with the significant rise in the number of applications, the recognition and enforcement rate ruled by Chinese courts has also increased substantively compared to the past.

Through statistics on the reasons cited in 38 cases where Chinese courts refused recognition and enforcement of foreign arbitral awards in accordance with Article 5 of the New York Convention from 2001 to the present (Figure 2): The most common reason is 「no valid arbitration agreement」 in Article 5.1 (a) of the New York Convention, and a total of 12 cases cited this reason; 「deciding beyond the scope」 under Article 5.1 (c) and 「composition or procedure of the arbitration discrepancy」 under Article 5.1 (d) are also frequently cited, and each appeared in the conclusions of 10 cases; 「party not given proper notice」 under Article 5.1 (b) was cited in 7 cases; 「matter not capable of settlement by arbitration」 under Article 5.2 (a) and 「Public policy reservation」 under Article 5.2 (b) are less frequently cited, only 1 and 3 cases respectively invoked relevant reason; in Chinese judicial practice so far, Chinese courts have not refused the recognition and enforcement of foreign arbitral award for 「award not binding」 reason under Article 5.1 (e).

The following section of this article will analyze the seven grounds for not recognizing and enforcing foreign arbitral awards under Article 5 of the New York Convention in Chinese judicial practice in detail.

III. Analysis of Seven Reasons for Rejection of Recognition and Enforcement of Foreign Arbitral Awards under Big Data

A. No Valid Arbitration Agreement

According to Article 5.1 (a) of the New York Convention, under two circumstances shall the recognition and enforcement of the foreign arbitral awards be refused, that is, the parties are under incapacity or the arbitration agreement is invalid. Owing to the fact that the direct result of the incapacity of the parties is usually to be the invalidity of the arbitration agreement, thus Article 5.1 (a) of the New York Convention is usually summarized as the inexistence of valid arbitration agreement in practice.

Under Article 5.1 (a) of the New York Convention, the governing law for reviewing the validity of the arbitration agreement shall firstly be the law agreed by both parties. However, as arbitration agreements often exist in the form of clauses as part of the main contract in practice, it is uncommon for the parties to separately agree on the governing law regarding the validity of the arbitration clause. Under the circumstance that the parties have not agreed on the governing law for the arbitration agreement, there exist two mainstream views in practice, namely, applying the substantive law or the law of the seat of arbitration. The substantive law is the law applicable for solving the substantive issues of the main contract, which reflects the mutual consent of both parties. In the absence of agreement on the governing law for the arbitration agreement, it is considered to be the parties』 implicit intention to have the substantive law also binding the arbitration agreement in a number of cases. [1]However, based on the principle of independence and separability, the validity of the arbitration agreement and its governing law are independent of the main contract. Article 5.1 (a) of the New York Convention thus adopts the view of the law of the seat of arbitration, which clearly stipulates that the arbitration agreement shall be reviewed 「under the law of the country where the award was made」 if there is no 「indication」 to the governing law of the arbitration agreement between the parties.

Except for the situation where the arbitration agreement is ruled invalid, if the parties fail to reach a consensus on the arbitration agreement, the court may also invoke Article 5.1 (a) of the New York Convention to refuse the recognition and enforcement. In the Singapore Yideman Asian Co Pte Ltd v. Wuxi Huaxin Cocoa Food Corp[2] case, although the Supreme People's Court did not expressly invoke Article 5.1 (a) of the New York Convention in the reply, it pointed out that 「reaching consensus on dispute resolution through arbitration」 is 「the premise for the independent validity of the arbitration clause or arbitration agreement」. Such reason was also applied in the subsequent Allenberg Cotton Co Ltd v. Jiangsu Nijiaxiang Group Co Ltd[3] case, in which the court held that 「the conclusion of the arbitration agreement is the premise of the validity of the arbitration agreement」, while 「the mutual intention on having dispute resolved through arbitration between the parties is the premise of the conclusion of the arbitration agreement」. Although the court pointed out that the failure to conclude arbitration agreement does not conform to the arbitral condition under Article 2 of the New York Convention, the court could only invoke Article 5 of the Convention to refuse recognition and enforcement of foreign arbitral awards. Therefore, in the case at hand, the Court decided not to recognize and enforce the arbitral award made by International Cotton Association in accordance with Article 5.1 (a) of the New York Convention. It is worth noting that, among the 12 cases that Chinese court refused to recognize and enforce under Article 5.1 (a) of the New York Convention, there are 7 cases in which the failure to reach arbitration agreements were resulted from the unauthorized agency or fraudulent conduct of relevant personnel.

B. Party Not Given Proper Notice

Article 5.1 (b) of the New York Convention has often been invoked by Chinese courts to refuse recognition of foreign arbitral awards. As a due process clause, Article 5.1 (b) is an important provision to protect the parties' fair defense rights.

Whether the parties have been properly notified is a very practical issue, which generally include arbitration, appointment of arbitrators, composition of arbitration tribunals, hearings, close of evidence, and service of arbitral awards. Article 5.1 (b) of the New York Convention does not designate the issuer of the notice. In civil law countries, notices are mostly issued by arbitration commissions or arbitral tribunals, while in common law countries, notices are often issued by the arbitration claimant to the respondent. In practice, China does not of course deny foreign courts' service methods, but adopts the 「effective」 standard to review whether the parties have been given proper notice. Cosmos Marine Managements S.A. v. Tianjin Kaiqiang Trading Ltd.[4] case refers to an arbitration award made by a London arbitrator. According to Article 14.4 of the 1996 English Arbitration Act, if the arbitrator needs to be appointed by the parties, the notice of arbitration procedure and the appointment of the arbitrator may be served by one party to the other party. However, the claimant Cosmos Marine Managements S.A. failed to provide the confirmation of receipt of the email by Tianjin Kaiqiang Trading Ltd., or other evidence that Tianjin Kaiqiang Trading Ltd. has received the email, thus failed to prove that the respondent has been given proper notice of the appointment of arbitrators and arbitration procedures, and was refused recognition and enforcement of the arbitral award as a result.In addition to failing to provide evidence that the respondent has been properly notified when the claimant is the subject of the notification, the arbitration commission or arbitration tribunal may also have omissions as the subject of the notification. For instance, in the Aiduoladuo (Mongolia) Co. Ltd. v. Zhejiang Zhancheng Construction Group Co. Ltd.[5] case, the Mongolian National Arbitration Court failed to deliver the express mail including 「resolution procedures and arbitration hearing date」 to Zhejiang Zhancheng Construction Group Co. Ltd., resulting in its failure to present the case, thus the Chinese court finally ruled not to recognize and execute the arbitral award.

In addition, there is another circumstance worth noting in practice, that is, if there are changes in the notified matters, whether additional notice is required. Among the 7 cases in which Chinese courts cited Article 5.1 (b) of the New York Convention to refuse recognition and enforcement, there exist relevant facts in 3 cases. In the Hong Kong Dongfeng Shipping Co., Ltd. v. Shenyang Sinotrans Group Corp[6] case, the claimant Hong Kong Dongfeng Shipping Co., Ltd. failed to provide written evidence of noticing the respondent regarding the additional appointment of arbitrators, the court thus ruled not to recognize and enforce. Therefore, if changes in circumstances or facts lead to changes in the composition of arbitral tribunal, hearing date and so on, the arbitration documents that have been properly notified will be invalid. In order to protect the other party’s right to present the case, the arbitral tribunal or one party shall serve separately, otherwise it would be regarded as violation of due process.

C. Deciding Beyond the Scope

「Party autonomy」 is the core and cornerstone of the entire international commercial arbitration system.[7] In international commercial arbitration, the power of arbitrators directly and exclusively comes from the parties, whether from the arbitration agreement or request. Therefore, in accordance with Article 5.1 (c) of the New York Convention, the court will determine whether the foreign arbitral tribunal 「decide beyond the scope」 from two aspects, namely, the terms of the arbitration agreement and the scope of the submission to arbitration. Among the 10 cases where Article 5.1 (c) of the New York Convention was applied, except for 2 cases that the tribunal decided exceeding the arbitration request submitted by the applicant, the remaining cases were ruled refusing recognition and enforcement for deciding beyond the scope of the arbitration agreement.

As far as the arbitration request submitted by the applicant is concerned, based on the principle of 「minimum judicial intervention」, unless the arbitral award is clearly beyond the scope of submission to arbitration, the court would generally not interfere with the recognition and enforcement of a foreign arbitral award on the grounds of exceeding the arbitration request.[8] In Chenco Chemical Engineering and Consulting GMBH v. Duofluoroduo Chemical Co. Ltd[9] case, the arbitration submitted by Chenco to International Commercial Arbitration Court is to request Duofluoroduo to stop using 「unauthorized」 Chenco technology and to pay liquidated damages arising from the use of 「unauthorized」 technology. However, Item (414) of the Final Award of the International Commercial Arbitration Court stated that 「as long as the company continues to use Chenco technology」, it shall pay monthly fine, and Item (415) ruled that 「Duofluoroduo shall not use Chenco technology」 until it has paid off the payment under Item (414). The content of the above arbitral award did not emphasize 「unauthorized」 Chenco technology, which included not only unauthorized technology but also authorized technology, obviously exceeding the arbitration request submitted by Chenco. Therefore, the court ruled that the part of the award exceeding the arbitration request shall not be recognized and enforced.

As far as the scope of the arbitration agreement is concerned, in practice, the parties generally adopt all-inclusive expressions such as 「disputes arising from this contract」 or 「all disputes related to this contract」. As long as the parties do not specifically agree on which disputes could or could not be submitted to arbitration, the arbitral tribunal would generally adopt the widest possible interpretation method for the extension of the arbitration agreement, to expand the application of its own jurisdiction. Normally, the court would also respect the jurisdiction of the arbitral tribunal.[10] Therefore, the refusal of recognition and enforcement on the grounds of deciding beyond the scope is often not because the court rules that the arbitral award is beyond the scope of the arbitration agreement, but because in the presence of multiple parties, there exists no effective arbitration among some of the parties.

Among the 10 cases which were ruled as deciding beyond the scope in China, 80% of the cases can be summed up as: the party not bound by the arbitration agreement involved in the case were listed as the arbitration respondent and ruled to bear responsibility. Among them, 7 cases involved three or more applicants or respondents, 3 arbitral awards involved the joint venture company established by the claimants or the respondents, and in 1 case the non-party was ruled to assume the responsibility of guarantee[11]. In Jess Smith & Sons Cotton. LLC v. Wuxi Natural Textile Industry Co. Ltd et al.[12] case, Jess Smith Company and Natural Textile Company signed the PME-10032 cotton sales contract. This contract has undergone five revisions, and the buyer’s name was originally Natural Textile Company. In the fourth revision on May 11, 2012, the buyer’s name was changed to Green Fiber Company, and both Natural Textile Company and Green Fiber Company as the parties to the contract bear joint and several liabilities, but there existed neither signature and seal of Natural Textile Company nor of Green Fiber Company in this contract. After Jess Smith Company filed an arbitration application to the International Cotton Association for Contract PME-10032, the International Cotton Association ruled that Natural Textile Company and Green Fiber Company as the buyer shall jointly pay the seller Jess Smith Company corresponding expenses. The Chinese court held that, first of all, Natural Textile Company and Green Fiber Company are two companies with independent legal personality, even taking into consideration the fact that their legal representatives and vice presidents overlap, and that Green Fiber Company issues the credit for the order of Natural Textile Company, they could not be proved to be actually the same enterprise; secondly, there was no signature of Green Fiber Company in the contract where Green Fiber Company was stated as the buyer on May 11, 2011, thus this contract could not be regarded as established. Therefore, under the situation that there was no effective contract between Jess Smith Company and Green Fiber Company, there was no effective arbitration agreement or arbitration clause between the two parties.

In addition, the application of Article 5.1 (c) of the New York Convention also involves the issue of whether the arbitral award is separable, which means that if the part of arbitral award beyond the scope of the arbitration agreement or the arbitration request submitted by the applicant cannot be separated from that is not, the whole award would be refused recognition and enforcement. Therefore, under the circumstance that there is no effective arbitration agreement between some of the parties in cases involving more than three parties, Chinese court would cite Article 5.1 (c) of the New York Convention on the grounds of 「deciding beyond the scope」, rather than Article 5.1 (a) on the ground of 「no valid arbitration agreement」 to refuse recognition and enforcement, so as to ensure the recognition and enforcement of the part of award that the arbitral tribunal can decide under the condition that the arbitral award is separable, showing respect for foreign arbitral award to the largest extent.[13] In practice, naturally there are cases in which the whole arbitral award is not recognized and enforced due to deciding beyond the scope and inseparable arbitration matters. Still in Jess Smith & Sons Cotton. LLC v. Wuxi Natural Textile Industry Co. Ltd et al.[14] case, the arbitral tribunal ruled that Natural Textile Company and Green Fiber Company shall bear joint and several liability, namely, the tribunal failed to distinguish the responsibilities of the two companies. Therefore, the court was also unable to distinguish between the part of award decided by the tribunal, thus ruled not to recognize and enforce the whole award. Therefore, if the arbitral tribunal does not distinguish the distribution of responsibilities among multiple respondents in the award, it is not uncommon that the whole award is refused recognition and enforcement once there exists 「deciding beyond the scope」.

D. Composition or procedure of the arbitration discrepancy

In practice, the composition or procedure of the arbitration not conforming to the arbitration agreement or the law of the seat of arbitration under Article 5.1 (d) of the New York Convention is often cited by Chinese courts as the ground for refusing recognition and enforcement. Noble Resources International Pte. Ltd. v. Shanghai Xintai International Trade Co. Ltd.[15] case is the latest practice in Chinese court applying Article 5.1 (d) of the New York Convention to refuse recognition and enforcement of foreign arbitral award.

In this case, Article 16.1 of the arbitration clause between Noble Company and Xintai Company clearly stated that 「disputes and claims shall be submitted to Singapore for arbitration in accordance with the effective Arbitration Rules of SIAC, with the arbitration tribunal composed of three (3) arbitrators. composition". Although SIAC applies the 「expedited procedure」 in accordance with the request of Noble Company, its Arbitration Rules (the 5th edition of 2013) does not exclude the parties from applying the 「expedited procedure」 while obtaining three arbitrators in accordance with the arbitration clause. Therefore, under the circumstance that the arbitration clause stipulated the composition of the arbitration tribunal of three arbitrators and that Xintai Company was expressly opposed to sole arbitrator, SIAC still decided to adopt the composition of sole arbitrator under Article 5.2 of its Arbitration Rules (the 5th edition of 2013), which violated the arbitration clause between the parties, constituting the situation that the composition or procedure of the arbitration does not conform to the arbitration agreement or the law of the seat of arbitration under Article 5.1 (d) of the New York Convention.

In addition, the court in the case also clearly stated that 「party autonomy is the cornerstone of the operation of the arbitration system, and the composition of the arbitral tribunal forms one of the basic procedural rules of arbitration.」 Therefore, whether when arbitral institutions exercise their power to determine the composition or procedure of the arbitration, or when Chinese courts review the recognition and enforcement of foreign arbitral awards, they should explain and apply the arbitration rules based on fully respecting the part autonomy.

Although there have been cases in which the respondent has requested the Chinese court to refuse recognition and enforcement of foreign arbitral awards based on Article 5.1 (e) of the New York Convention, there has not yet been Chinese judicial practice that refuses to recognize and enforce foreign arbitral awards on this ground.

In Water Solutions (Hong Kong) Limited v. Hongbo Home Appliances (Shenzhen) Co. Ltd.[16] case, after comprehensively analyzing factors such as the possibility of supporting the respondent’s application for withdrawal by the US court, whether the respondent could provide evidence to prove that its application for withdrawal would be supported, and so on based on the facts of the case, the Chinese court finally ruled recognition and enforcement of the arbitral award, reflecting both the flexible application of discretion and the promotion of foreign arbitral award enforcement efficiency by Chinese court.

F. Matter not capable of settlement by arbitration

According to Article 5.2 (a) of the New York Convention, if the subject matter of the dispute is not capable of settlement by arbitration under Chinese law, the Chinese court may refuse to recognize and enforce the arbitral award. So far, there exists only one case that the Chinese court refused to recognize and enforce foreign arbitral award on this ground.

The Supreme People’s Court pointed out in the (2009) Min Sita Zi No. 33 Reply[17] that, in the case at hand, claimant Wu Chunying as the legal heir of her deceased husband, claimed her contract rights to the Mongolian Arbitration Tribunal in accordance with the arbitration clause in the contract involved. If the arbitral award did not involve inheritance matters, it could be recognized and enforced. However, the main content of the arbitral award was to confirm Wu Chunying's legal heir status and the resultant investment property right, rather than dealing with commercial disputes of the company such as continued operation or cancellation. Since Article 3 of the Arbitration Law of the People's Republic of China stipulates that inheritance matter is not capable of settlement by arbitration, the Chinese court refused the recognition and enforcement of the arbitral award at hand in accordance with Article 5.2 (a) of the New York Convention.

G. Public Policy Reservation

The meaning, scope and specific content of 「public policy」 are not clearly stipulated in Article 5.2 (b) of the New York Convention. For this reason, such public policy reservation clause gives the courts of various contracting States discretion and serves as a "safety valve" for reviewing whether to recognize and enforce foreign arbitral awards, which also explains why the New York Convention is widely accepted by countries around the world.[18] However, due to the vagueness and controversy of 「public policy」 itself, it often raises the concern regarding expansive interpretation for nationalism or national interests. Although Article 5.2 (b) of the New York Convention clearly defines public policy as 「the public policy of that country」, more and more countries have positioned it as 「international public policy」 and limited its scope of application strictly in recent years.[19]

In correspondence with the international trend of restrictive interpretation and  application of Article 5.2 (b) of the New York Convention, although it is often cited by the parties as the reason for non-recognition and enforcement, China has always maintained cautious regarding public policy reservation clause. Among the 38 cases where Chinese courts refused to recognize and enforce foreign arbitral awards, only 3 cases were due to public policy reservation reason.

Chinese courts usually adopt negative expressions for not applying public policy reservation clause, for instance, 「violation of Chinese mandatory legal provisions does not necessarily lead to violation of Chinese public policy」[20], 「whether the substantive outcome of the arbitration is fair and reasonable cannot be regarded as the standard for determining whether the recognition and enforcement of arbitral award violates Chinese public policy」[21], and the violation of the 「management provisions in the mandatory norms of administrative regulations」 of China does not constitute violation of public interests[22].

In the 3 cases where Chinese courts revoked public policy reservation clause for refusing recognition and enforcement, the basic fact is that the foreign arbitral award conflicted with the effective ruling or judgment made by the Chinese court. Taking Wicor Holding AG v. Taizhou Hope Investment Co. Ltd.[23] case as an example, under the situation where the arbitration clause involved had been ruled invalid by Jiangsu Higher People's Court due another dispute, the International Commercial Arbitration Court made the arbitral award on the premise that the arbitration clause involved was valid. Therefore, the Chinese court held that 「enforcement of the arbitral award in Mainland would conflict with the effective ruling of the people's court, violating the public interest of Mainland」, and ruled that the arbitral award involved shall not be enforced in accordance with Article 7, paragraph 3 of the Mainland-Hong Kong Arrangement.

Through the analysis of 194 cases of application for recognition and enforcement of foreign arbitral awards accepted by Chinese courts in the past 20 years, especially the 38 cases where the recognition and enforcement of foreign arbitral awards were refused, it could be concluded that the reasons Chinese courts cited to refuse recognition and enforcement often come from Article 5.1 (a), (c), (d) and (b) of the New York Convention, the most common of which is 「no valid arbitration agreement」, followed by "deciding beyond the scope」 and 「composition or procedures of the arbitration discrepancy」, and then 「party not given proper notice」. The remaining three reasons, namely, 「award not binding」 under Article 5.1 (e), 「matter not capable of settlement by arbitration」 under Article 5.2 (a) and 「public policy reservation」 under Article 5.2 (b) were rarely cited, which invoke relatively small risk.

In order to guarantee the efficiency of recognition and enforcement of foreign arbitral awards in China, the parties involved in Chinese-foreign trade and investment need to minimize the risk of being denied recognition and enforcement in two stages.

First of all, in the stage of contract conclusion, as far as the main contract is concerned, the parties ought to confirm matters such as the identity of the negotiator of the commercial contract, the scope of authorization, the completeness of the signature and so on. Only by paying due attention to relevant details, could the risk of invalidity of the main contract and the resultant invalidity of the arbitration agreement be minimized. With respect to the arbitration agreement, the parties could clearly agree on matters including the seat of arbitration, arbitration rules, the governing law of the arbitration agreement, the composition of the arbitral tribunal and so on. On the premise that the parties have reasonable anticipation of relevant rules and laws, they could fully express their opinions and establish such claims during the conclusion of the arbitration agreement, which also provides reliable basis for the composition and procedure of arbitration in accordance with party autonomy in the event of arbitration. 

Secondly, during the arbitration proceedings, for one thing, Chinese-foreign trade and investment always involve multiple transaction parties and joint venture companies established between the parties. In the case that the relevant arbitration agreement does not bind all parties of the transaction, once arbitration occurs, it is very easy to produce 「deciding beyond the scope」 problem. In particular, if the arbitral tribunal does not distinguish the distribution of responsibilities among multiple respondents in the award, the result is often that the whole award is refused to be recognized and enforced. Therefore, the parties to the arbitration should clarify whether there is a valid arbitration agreement between the parties and the scope of the arbitration agreement.

For another, as for the due process clause, if the claimant is determined to be the subject of notification in accordance with the arbitration rules, the claimant shall confirm that the respondent has been properly notified and preserve relevant evidence, in order to prevent the respondent from opposing the recognition and enforcement of the arbitral award for unable to present his case. Moreover, once there is a change in the arbitration matter, one party or the arbitration tribunal needs to notify separately to guarantee the right to present of the other party.

In international trade and investment disputes, for claimants in international arbitration, they may not be able to obtain damages simply by winning the arbitration, while the enforcement of award is the ultimate goal. Only by grasping the details that may resulting in the seven circumstances under Article 5 of the New York Convention in the two stages of contract conclusion and arbitration, can the parties better prevent the legal risks of international commercial arbitration and safeguard their own commercial interests.

Bibliography:

[1] Gary B. Born, International Commercial Arbitration (Second Edition), Kluwer Law International 2014, 「Chapter 5: Formation, Validity and Legality of International Arbitration Agreements」, pp. 636-942.

[2] Singapore Yideman Asian Co (Asia) Pte Ltd v. Wuxi Huaxin Cocoa Food Corp, Supreme People’s Court, China, (2001) Min Si Ta Zi No. 43.

[3] Allenberg Cotton Co Ltd v. Jiangsu Nijiaxiang Group Co Ltd, Wuxi Intermediate People's Court of Jiangsu Province, China, (2013) Xi Shang Wai Zhong Shen Zi No. 009.

[4] Cosmos Marine Managements S.A. v. Tianjin Kaiqiang Trading Ltd., Supreme People’s Court, China, (2006) Min Si Ta Zi No. 34.

[5] Aiduoladuo (Mongolia) Co. Ltd. v. Zhejiang Zhancheng Construction Group Co. Ltd., Shaoxing Intermediate People's Court of Zhejiang Province, China, (2009) Shao Zhe Min Que Zi No. 1.

[6] Hong Kong Dongfeng Shipping Co., Ltd. v. Shenyang Sinotrans Group Corp, Supreme People’s Court, China, (2006) Min Si Ta Zi No. 12.

[7] 丁立柏,王崢:《論國際商事仲裁制度中的意思自治原則》,載《重慶大學學報(社會科學版)》2006年第1期,第82頁。

[8] 狄建慶,姚強:《國際商事仲裁裁決「超裁」的司法認定——對申請承認及執行外國仲裁裁決糾紛案的評析》,載《天津法學》2016年第3期,第101頁。

[9] Chenco Chemical Engineering and Consulting GMBH v. Duofluoroduo Chemical Co. Ltd, Xinxiang Intermediate People's Court of Henan Province, China, (2015)Xin Zhong Min San Chu Zi No. 53.

[10] 狄建慶,姚強:《國際商事仲裁裁決「超裁」的司法認定——對申請承認及執行外國仲裁裁決糾紛案的評析》,載《天津法學》2016年第3期,第101頁。

[11] Spliethoff's Bevrachtingskantoor B. V.  v. Shandong (China) Electronics Import and Export Corp et al., Supreme People’s Court, China, (2015) Min Si Ta Zi No. 48.

[12] Jess Smith & Sons Cotton. LLC v. Wuxi Natural Textile Industry Co. Ltd et al., Wuxi Intermediate People's Court of Jiangsu Province, China, (2013) Xi Shang Wai Zhong Shen Zi No. 007.

[13] 王好:《外國仲裁裁決司法審查中「超裁」認定的實證分析》,載《法律適用》2019年第4期,第118頁。

[14] See footnote 12.

[15] Noble Resources International Pte. Ltd. v. Shanghai Xintai International Trade Co. Ltd., the First Intermediate People's Court of Shanghai, China, (2016) Hu 01 Xie Wai Ren No. 1.

[16] Water Solutions (Hong Kong) Limited v. Hongbo Home Appliances (Shenzhen) Co. Ltd., Shenzhen Intermediate People's Court of Guandong Province, China, (2018) Yue 03 Zhi No. 1815.

[17] Reply of the Supreme People's Court to the request for instructions on the non-recognition and enforcement of the arbitration award of the Mongolian National Arbitration Tribunal, Supreme People’s Court, China, (2009) Min Si Ta Zi No. 33.

[18] 鄒挺謙:《公共政政策在國際商事仲裁裁決承認與執行中的運用》,載《人民法治》2019年第14期,第89頁。

[19] Id.

[20] ED&F Mans (Hong Kong) Co., Ltd. v. China Sugar & Liquor Group Corp, Supreme People’s Court, China, (2003) Min Si Ta Zi No. 3.

[21] Reply of the Supreme People's Court to the request for instructions from GRD Minproc Ltd.'s application for recognition and enforcement of the Arbitral Award of Stockholm Chamber of Commerce (Sweden), Supreme People’s Court, China, (2008) Min Si Ta Zi No. 48.

[22] Tianrui Hotel Investment Co. Ltd. v. Hangzhou E-House Hotel Management Co. Ltd., Supreme People’s Court, China, (2010) Min Si Ta Zi No. 18.

[23] Wicor Holding AG v. Taizhou Hope Investment Co. Ltd., Supreme People’s Court, China, (2016) Min Si Ta Zi No. 8.

本微信文章僅為交流之目的,不代表德和衡律師事務所的法律意見或對法律的解讀,任何僅僅依照本文的全部或部分內容而做出的作為或不作為決定及因此造成的後果由行為人自行負責,如果您需要法律意見或其他專家意見,應當向具有相關資格的專業人士尋求專業的法律幫助。

杜  越

上海市律師協會國際貿易業務研究委員會委員、

德衡律師集團合伙人、北京德和衡(上海)律師事務所副主任 

杜越律師畢業於香港中文大學,曾在全球知名美國律師事務所工作,擅長國際商事仲裁、國際貿易合規、國際金融等。杜越律師曾先後為麥格納集團(Magna)、美國國民油井華高公司(NOV)、德國費森尤斯公司(Fresenius Medical Care)、阿克蘇諾貝爾公司(AkzoNobel)、聯想集團(Lenovo)、SMC株式會社、喜達屋(Starwood)集團、中核集團、中交集團、華強集團、安鋼集團、網易集團等世界五百強和大型企業提供優質法律服務,在ICC國際商會仲裁庭、SIAC、HKIAC、CIETAC、SHIAC、SCIA等國內外知名仲裁機構均有豐富的國際仲裁經驗,同時,在法制出版社出版了《國際商事仲裁實務》一書,法律專業服務獲得了業內客戶的一致好評。

聯繫郵箱:duyue@deheng.com

手機號:13681774509

貢  正

北京德和衡(上海)律師事務所國際貿易與海關團隊助理,本科就讀於上海財經大學國際金融法專業,研究生就讀於上海交通大學凱原法學院法科特班,對國際貿易與金融、國際仲裁等國際法律領域有較多研究,致力於為客戶提供優質、全方位的國際業務法律服務。

德衡律師集團高級合伙人

國際貿易業務中心副總監

國際貿易專業委員會主任

相關焦點

  • 【承認及執行外國仲裁裁決公約】英文版
    1958年5月20日至6月10日,在紐約聯合國總部舉行的為期三周的聯合國國際商事仲裁會議上審議並通過了《承認及執行外國仲裁裁決公約》(也稱《紐約公約
  • 中國法院又雙叒出手!新仲1.3億美元裁決恐被不予執行 | 萬邦仲裁
    1、已撤銷仲裁裁決在仲裁地以外的承認與執行:香港樣本已撤銷仲裁裁決在仲裁地以外能否得到承認與執行,一直是理論界和實務界持續爭論的問題。自2016年4月20日海牙地區法院撤銷尤科斯與俄羅斯聯邦共和國500億美元的仲裁裁決後,這一問題的重要性愈加凸顯,爭論更加激烈。本案實際上也觸及這一問題,是這一問題的最新香港樣板。
  • 20180725仲裁早新聞:1958年《承認及執行外國仲裁裁決公約》(UNCITRAL中英文對照版本)
    Convention on the Recognition and Enforcement of Foreign Arbitral Awards承認及執行外國仲裁裁決公約  (1958年6月10日訂於紐約)
  • 大數據 | 哪些新加坡法院生效判決在中國得到承認和執行
    1997年4月28日,中國和新加坡籤署了《中華人民共和國和新加坡關於民事和商事司法協助的條約》,協助的範圍包括:(一)送達司法文書;(二)調查取證;(三)承認與執行仲裁裁決;(四)相互提供締約雙方有關民事和商事的法律及民事和商事訴訟方面司法實踐的資料。上述司法協助條約不包括商事判決的承認與執行。
  • 一裁:新加坡法院駁回中國公司關於撤銷約1.3億美元仲裁裁決的申請丨CNARB 中國仲裁
    、資本市場、房地產、建設工程、高科技和仲裁司法審查。電話:0755-8246 9969郵箱:info@yipartners.com新加坡法院駁回中國公司關於撤銷約1.3億美元仲裁裁決的申請 據悉,2008年3月,China Machine New Energy Corporation(「CMNC」)作為承包人與
  • CIETAC涉福建光電企業裁決獲臺灣地區法院認可|萬邦仲裁
    2020年 4 月 15 日,臺灣新竹地方法院 作出109 年陸仲許字第 1 號民事裁定,對中國國際經濟貿易仲裁委員會(2019)中國貿仲京裁字第1745號裁決書予以認可。本案申請人為福建兆元光電有限公司,被申請人為捷毅系統股份有限公司。
  • 20190319仲裁早新聞:瑞典仲裁法中文翻譯(下)(SFS 1999:116)--2019年3月1日生效
    受此類協議約束的裁決,可以根據適用於外國裁決的規則在瑞典得到承認和執行。Recognition and Enforcement of Foreign Awards, etc.除非第54條至第60條另有規定,基於仲裁協議作出的裁決應當在瑞典得到承認和執行。
  • 20190423仲裁早新聞:仲裁當事人提出的第68條和第69條異議得到英國法院支持 (英國高等法院案例)
    Kesha Patel [2019] EWHC 298 (Ch)一案中(判決請見:閱讀原文),仲裁當事人根據《英國仲裁法》第68條和第69條,向英國法院提出上訴,主張仲裁員在適用法律上存在錯誤,以及在仲裁程序存在嚴重不規範,對此,英國法院作出認定:本案仲裁員在認定合夥協議是否變更問題上存在法律適用上的錯誤,以及在仲裁程序中存在嚴重不規範
  • 【焦點】國際泳聯將執行對孫楊的仲裁結果,孫楊代理律師聲明將「換人」上訴
    在2月28日國際體育仲裁法庭公布了對孫楊禁賽八年的仲裁結果後,國際泳聯2月29日表示將執行這一仲裁結果。
  • 最新判決 | 集佳成功代理法國民商事判決在中國的承認與執行案件
    2016年1月6日,申請人肖萊公司、特力股份有限公司申請承認和執行法蘭西波比尼商事法庭2011F01203號民事判決一案於浙江省金華市中級人民法院立案。集佳律師接受委託,作為兩申請人的共同委託訴訟代理人代理此案。
  • 新加坡國際仲裁中心2015年北京會議-11月3日
    會議將聚焦國際仲裁在解決跨境糾紛和投資保護領域的應用,並向公司法律顧問、律師提供關於國際仲裁特別是與中國有關的國際仲裁的最新發展的知識和見解,具體包括:——公司法律顧問在面臨國際商事糾紛以及投資者-東道國糾紛時可加以利用的有效工具——關於工程仲裁的多個熱門話題——關於SIAC快速仲裁程序和緊急仲裁員程序的內部視角和經驗——普通法和民法法系在仲裁程序管理上的區別
  • 20190305仲裁早新聞:當事人因輕率提出第68條異議被法院命令支付補償性訴訟費 (英國高等法院案例)
    作為公司的小額股東,DUF與KS發生股東糾紛,DUF將爭議提交仲裁,其仲裁庭成員(包括首席仲裁員)由倫敦國際仲裁院(LCIA Court)選任。 2018年3月21日,關於雙方責任認定,仲裁庭作出有利於仲裁申請人DUF的第一份裁決。根據該裁決,KS應當以仲裁庭確定的價格收購由DUF持有的公司股份。
  • 人物 | 連強 坐在審判臺上的執行法官
    一筆筆往來帳目,一頁頁銀行流水,一個個公司法人或者實控人的工商登記記錄……關係到幾千萬元的歸屬、一個企業的生死和數個小區居民的供暖的爭議焦點,很可能就隱藏在浩如煙海的一摞摞案卷中某一個非常不起眼的小角落裡。客觀事實與法律事實並不一定每次都能高度統一:即使它真的發生過,如果沒有確鑿的證據證明它發生過,在法律上,它就是沒發生過。
  • 日本法院判處陰道數據發布者五十嵐惠罰款40萬日元
    東京高等法院維持了以前法院對Igarashi的判處,該藝術家被下令罰款40萬日元(3700美元)。  據3D虎了解,Igarashi的案例自2014年開始,當時現年45歲的藝術家因為傳播她的陰道3D模型以支持她的3D列印陰道藝術項目而被捕。該藝術家此舉的目的是打破日本女性生殖器的禁忌。3D列印陰道是一個重要的陰道病例,因為它直接顯示了日本極端的審查制度。
  • 公證案例 | 公證提存 破解法院訴訟執行難題
    為進一步發揮典型示範作用,現遴選發布涉及公證參與執行、庭前調查、調解、送達等方面的5個典型案例。今天,為大家介紹「公證提存 破解法院訴訟執行難題」方面的典型案例。重慶市A投資公司是B房地產開發公司的全資股東。2015年3月,B房地產開發公司委託C建築公司負責開發江北區某房地產項目。
  • 海牙國際法庭仲裁支持南海爭端的菲律賓,法庭的15位法官身份曝光,院長原來是他
    仲裁庭同意受理馬尼拉提出的15項意見中的7項,特別是黃巖島和美濟礁等能否像中國主張的那樣視為島嶼。疑問:海牙國際法庭有權做出裁決嗎?簡介:國際法院縮寫為ICJ,是聯合國六大主要機構之一和最主要的司法機關,是主權國家政府間的民事司法裁判機構,根據《國際法院規約》於1946年2月成立,位於荷蘭海牙。
  • 周榕督導合肥法院執行工作
    市中院黨組成員、副院長程洛發、黨組成員、執行局長翟純參會以及市中院執行局、城區六家基層法院相關負責人員參加了座談。各院匯報了「江淮風暴」執行攻堅戰「秋季行動」開展情況,分析了存在的問題,總結了工作中湧現的亮點。翟純就全市推進執行輔助事務集約化建設、執行團隊建設和執行流程再造情況進行了匯報。
  • 未籤署合同中的仲裁條款效力問題: 新加坡高院BCY v BCZ [2016] SGHC 249案述評 | 德恆研究
    對此,(1)2003年發布的《最高人民法院關於人民法院處理涉外仲裁及外國仲裁案件的若干規定》(徵求意見稿)第十九條也規定:「人民法院應當審查有關當事人間是否就該仲裁條款達成了合意。未達成任何合意的,該仲裁條款無效」。
  • 外國法院如何判斷不可抗力?英國法院這樣說…… | 萬邦仲裁
    對此,包括全國人大法工委、各地法院在內的權威機構,以及各業內方家均就不可抗力的構成及新冠疫情是否構成不可抗力作了比較全面、綜合的論述。本文無意重複不可抗力的相關理論、構成以及一般原則,而旨在通過英國法院的一起案例說明現實的多樣性和複雜性。Classic Maritime Inc v.