How to Navigate the Recognition and Enforcement of Foreign Arbitration Awards in China

In the intricate landscape of international business, a profound understanding of the recognition and enforcement process for foreign arbitration awards in China is indispensable. This in-depth guide delves into the legal foundations, nuanced application procedures, and crucial considerations for a meticulous approach.

I. Legal Basis for Recognition and Enforcement of Foreign Arbitration Awards

China's Civil Procedure Law serves as the cornerstone for recognizing and enforcing foreign arbitration awards. The law explicitly outlines that parties must apply to the competent People's Court for recognition and enforcement.

The court's evaluation is grounded in China's international treaties or the reciprocity principle. The New York Convention, adopted by China in 1986, amplifies the legal framework for recognizing foreign arbitral awards.

II. Application Procedure

Eligible Applicants: Any party involved in the foreign arbitration award, whether the prevailing or losing party, holds the right to apply for recognition and enforcement. The application is submitted directly to the Intermediate People's Court within the jurisdiction where the respondent resides or where their assets are situated.
Competent Court: Jurisdiction over recognition and enforcement lies with the Intermediate People's Court in the jurisdiction of the respondent's residence or the location of their assets.
Required Documentation: Applicants must compile a comprehensive set of documents, adhering to the provisions outlined in the Civil Procedure Law. This includes the arbitration award, the arbitration agreement, and any relevant contracts or evidence.
Application Fees: In accordance with the Regulations on Payment of Litigation Fees, fees for applying for recognition and enforcement are calculated based on the amount involved in the case.

III. Timeframe and Service

Application Deadline: The clock for applications starts ticking from the second day after the foreign arbitration award becomes effective. Applicants must submit their requests for recognition and enforcement within a strict two-year timeframe.
Domestic Service of Documents: Compliant with the Hague Service Convention, China prescribes various methods for effective document service, including central authority assistance, diplomatic channels, and consular delivery. Proper adherence to these procedures is vital for a legally sound recognition and enforcement process.

IV. Documents Required

Authorisation Documents (Notarised and Apostiled/legalized) and its translation;
The opponent's information (Company profile);
The Final Arbitration Award (Notarised and Apostiled/legalized) and its translation;
The Contract containing an arbitration clause (Notarised and Apostiled/legalized) and its translation;
Record of service of the Arbitration Award (Notarised and Apostiled/legalized) and its translation; and
Other docs that required by the Court.

V. Grounds for refusal of enforcement

There was not an effective arbitration agreement;
A party was not given proper notice of the appoint ment of the arbitrator or of the arbitration proceedings;
The award was made beyond the terms of reference of the tribunal;
The composition of the tribunal or the arbitral proce dure was not in accordance with the parties’ arbitration agreement or the laws where the arbitration took place;
The award has not yet become binding on the parties, or has been set aside or suspended by a competent author ity of the country in which, or under the law of which, that award was made;
The subject matter of the difference is not capable of settlement by arbitration under Chinese law; or
The recognition or enforcement of the award would be contrary to the public policy of China.

VI. Tactical Considerations

Proactive Application: Recognizing the trend of arbitration becoming more prevalent in international commerce, winning parties are advised to take the initiative. Applying promptly for recognition and enforcement post-arbitration empowers the successful party, preventing the losing side from preemptively challenging the award's recognition.
Legal Expertise: Given the intricacies involved, seeking legal counsel from experts in international arbitration and Chinese law is recommended. Tailored advice can address case-specific nuances and ensure a strategic and effective approach.

This guide serves as a beacon, illuminating the path through the complexities of recognizing and enforcing foreign arbitration awards in China. Empowering legal professionals and businesses, it encourages a proactive stance in safeguarding international legal agreements. For specific cases and to navigate the subtleties of your unique situation, it is imperative to consult legal experts who specialize in Chinese law.

Disclaimer: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter.