Enforcement of Foreign Awards in China: 5 Mistakes You Should Avoid

Enforcement of Foreign Awards in China: 5 Mistakes You Should Avoid

May 15, 2018

Since 1987, the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards (recognized as “New York Convention”) has the strength of law in China, which has perceived and implemented many foreign arbitral awards.

However, when you have a long and costly arbitration finally wrapped up with an arbitral honor against a PRC party in favor of you, the last thing you could ever anticipate is to spend another (averagely) 21 months before a Chinese court and your Chinese lawyer continues coming to you with new demands of records and different things.

This can be avoided if more attentions are paid to the below five common mistakes.

Mistake 1: Go to the court where the property of the defendant is found

This is a common beginner’s slipup. It is in fact what is given by the fine prints of the PRC Civil Procedural Law and also the practice in the developed coastal areas. In any case, that isn’t the situation for different parts of the large country, where the legal framework internally designated a couple of courts to manage foreign related issues. For instance, in a central China region with 18 delegate courts, no one but 3 can manage foreign related issues.

Mistake 2: Get translation from a “good” interpreter.

As most “to-go” Chinese lawyers for foreigners are situated in current modern cities like Shanghai and Beijing, they ordinarily work with nearby translators. However, in practice, it is an undocumented practice that each court has its own translator interpreter in its own city that are just disclosed after checking with the court.

Mistake 3: ” Duly authenticated original award or a duly certified copy thereof “produced in the “place of arbitration “

With regards to the nationality of the award, even the PRC Supreme People’s Court has been swinging between the “seat of the arbitration institution” and the “place of arbitration”, since the Chinese judicial system considers arbitral awards being rendered by the organization. Despite the fact that it has been enhancing, there are a still part of confusions in the minds of judges at the lower courts. If legalized in the “wrong” Chinese Embassy, the applicant needs to re-legitimize the records

Mistake 4: “There is no corruption ” or “there are numerous corruptions ” or “Guangxi is decisive”

Corruption might not be uncommon China, but rather severely fought because of late crusade of the Chinese authorities. Like anyplace else on the planet, “Guanxi” (connections) may play an important part in everything. However, such possible and remaining practices can’t prevail the observance of the lawfulness and the procedures accommodated in important laws and regulations.

Mistake 5: “Mission accomplished”

Getting a positive award, an ideal SPC’s reply, a court decision perceiving the award, or even a decision to authorize the award is never mission accomplished. As the traditionally faced serious challenges in upholding judicial decisions, there have been the “difficult enforcement” (执行难). As indicated by the SPC Report on Enforcement Work (2016), in 40% – half of the cases there are no property for authorization, which implies in those cases the enforcement proceedings don’t permit a realization of the decisions in the award. Another obstacle is made of the immense caseload that PRC courts must deal with. In this way, a productive attorney in China might keep up the spirit until the end of the proper enforcement of the proceedings procedures and should do her/his best endeavor to help the court to discover the property of the respondent to enable the courts to spare time from the ” finding property work” and to focus on the realization.

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