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( Source of the document: ICC Digital Library )
A. The Contracting State and the New York Convention
1. Name of Contracting State (also specify jurisdiction(s), if relevant)
Signatory country: People's Republic of China ('PRC').
Implementing jurisdiction: Mainland China.
Explanatory note: Unless expressly mentioned otherwise, the present Country Answer applies to neither the Special Administrative Region of Hong Kong nor the Special Administrative Region of Macau.
Although China resumed in 1997 its exercise of sovereignty over Hong Kong, the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China (the 'Basic Law'), as an instrument for the implementation of the 'one country-two systems' policy, and Article 31 of the Chinese Constitution prescribe that the capitalist system and way of life in Hong Kong shall remain unchanged for fifty years. It is also stipulated that the laws in Hong Kong, including the common law, law of equity, ordinances, subordinate legislations and customary law, shall be maintained. The prescription on arbitration is obviously part of the laws in Hong Kong and should remain unchanged after the changeover of sovereignty. As concerns the New York Convention, it is still applicable in Hong Kong, although based now on the PRC's ratification of the Convention.
(Sources: Basic Law of the Hong Kong Special Administrative Region of the PRC, 4 Apr. 1990 (in effect as of 1 July 1997); Constitution of the PRC, 4 Dec. 1982.)
As concerns Macau, the PRC resumed sovereignty with effect from 20 December 1999. The same principle of 'one country-two systems' applies according to the Basic Law of Macau, and the enforcement of foreign awards in Macau will be subject to the New York Convention on the basis of the PRC's ratification of the Convention.
(Source: Basic Law of Macau, 31 Mar. 1993, in effect as of 20 Dec. 1999.)
2. Date of entry into force of the New York Convention
PRC: 22 April 1987.
(Source: Supreme People's Court's Notice on the Implementation of China's Accession to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 Apr. 1987.)
3. Has any reservation been made under Art. I(3) of the New York Convention regarding:
Yes. The PRC has made a reciprocity reservation under the New York Convention, according to which the PRC will only apply the New York Convention to the recognition and enforcement of awards made in the territory of another Contracting State. Arbitral awards made in a non-Contracting State will be recognized and enforced according to the relevant provisions of the Civil Procedure Law.
(b) commercial relationships?
Yes. The PRC has made a 'commercial relationship' reservation under the New York Convention, according to which the PRC will apply the New York Convention only to disputes arising out of legal relationships, whether contractual or not, which are considered as 'commercial' under Chinese law.
The expression 'contractual and non-contractual commercial legal relations' used in the reservation made by China refers to 'economic rights and obligations arising from contracts, torts or in accordance with provisions of laws', e.g. technology transfer. The law does not provide a more specific definition of what is considered 'commercial' and what is not, and this is therefore left to the interpretation of the courts.
4. In addition to arbitral awards made in the territory of another State, the New York Convention (Art. I(1)) also applies to arbitral awards not considered as domestic awards in the State where recognition and enforcement are sought. Are there any awards rendered in your country that are not considered as domestic awards such that the New York Convention and the answers to this Questionnaire are applicable to them?
Yes. Awards rendered in China under the auspices of foreign/international arbitration institutions are sometimes considered as non-domestic awards, making their enforcement subject to the New York Convention. PRC law is silent on the legal status of such awards. There is ongoing debate over whether they should be considered as foreign awards or non-domestic awards. In 2009, an award rendered in Beijing by an ICC arbitral tribunal was recognized and enforced by a local court in accordance with the New York Convention and held to be a non-domestic award. In addition, Judge Yang Honglei, in the 4th Chamber of the Supreme People's Court, stated in a 2009 publication that an award made in China by a foreign arbitration institution should be considered foreign or non-domestic.
The enforcement of awards rendered in SAR Hong Kong, Taiwan and Macau are subject to the following bilateral agreements: (i) Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong Special Administrative Region, signed in June 1999 and effective as of 1 Feb. 2000 (supplemented by the Circular of the Supreme People's Court on Issues Concerning the Enforcement of Hong Kong Arbitration Awards in Mainland China, promulgated and effective on 30 Dec. 2009, which confirms that ad hoc arbitration awards rendered in Hong Kong and arbitral awards made in Hong Kong by the ICC and other foreign arbitration institutions may be enforced in Mainland China in accordance with the Arrangement); (ii) Supreme People's Court's Provisions on the People's Courts' Recognition of Civil Judgments Made by Courts in Taiwan Region, promulgated on 15 Jan. 1998 and effective from 26 May 1998 (which is also applicable to arbitral awards according to Art. 19 of the Provisions); (iii) Arrangement concerning Mutual Recognition and Enforcement of Arbitral Awards between the Special Administrative Region of Macau and the Mainland, signed on 30 Oct. 2007.
B. National sources of law
5. What specific sources of law are applicable to recognition and enforcement of foreign awards (e.g. statutes, regulations, codes, directives, other legal instruments)?
PRC: (i) Arbitration Law of the PRC, adopted at the Ninth Meeting of the Standing Committee of the Eighth National People's Congress on 31 Aug. 1994, promulgated by Order No. 31 of the President of the People's Republic of China on 31 Aug. 1994 and effective as of 1 Sept. 1995; (ii) Civil Procedure Law of the PRC, adopted on 9 Apr. 1991 at the Fourth Session of the 7th National People's Congress, revised by the 30th Session of the Standing Committee of the 10th National People's Congress on 31 Aug. 2012 and effective as of 1 Jan. 2013; (iii) Contract Law of the PRC adopted at the 2nd Session of the 9th National People's Congress on 15 Mar. 1999 and effective from 1 Oct. 1999; (iv) other laws of the National People's Congress or its Standing Committee, which include specific provisions on arbitration; and (v) judicial interpretations, regulations, opinions and notices issued by the Supreme People's Court ('SPC').
C. Limitation periods (time limits)
(a) Is there a limitation period (time limit) applicable to the commencement of legal proceedings for recognition and enforcement of foreign awards?
(b) If yes, what is the applicable limitation period (time limit) and when does it start running?
PRC: The time limit to file a request for recognition and enforcement of an arbitral award is 2 years for both individual persons and legal entities. This time limit runs from the last day of the period specified in the award/judgment for its performance. If no period of performance is specified, the time limit is calculated from the day when the award takes effect.
(Source: Civil Procedure Law (2012) Art. 239.)
D. National courts and court proceedings
7. What authority or court has jurisdiction over recognition and enforcement of foreign awards?
PRC: The competent court is the Intermediate People's Court at the domicile of the party against whom enforcement is requested or at the place where the property subject to enforcement is located.
(Sources: Civil Procedure Law (2012), Art. 273; see also SPC Judicial Interpretations, 8 Sept. 2006, Art. 12.)
8. What requirements, if any, must be met for the authority or court to accept jurisdiction over recognition and enforcement of foreign awards (e.g. domicile or assets of respondent in the jurisdiction, etc.)?
PRC: For a court to accept jurisdiction, either the domicile (of natural persons) or the principal place of business (of legal entities), or the property (at which enforcement is directed) of the respondent, must be located within that court's jurisdiction. As a general rule, a party initiating enforcement proceedings may resort to a competent court either at the place where the defendant is domiciled or the place where the property to which enforcement applies is located. However, a court will become competent if it has ordered measures to preserve property and the party that has obtained such measures may not bring an enforcement application in any other court in China.
(Source: Civil Procedure Law (2012), Art. 273.)
9. Is the first decision granting or denying recognition and enforcement obtained through ex parte or inter partes proceedings?
PRC: The first decision is obtained through inter partes proceedings.
(Source: Civil Procedure Law (2012), Art. 237.)
(a) Is the first decision granting or denying recognition and enforcement subject to any form of appeal or recourse?
PRC: No appeal is possible against the Intermediate People's Court's decision granting enforcement.
The situation is slightly more complex when it comes to decisions refusing enforcement of a foreign award. Although there is no formal means of appeal, the Intermediate People's Court must consult the Higher People's Court before making such a decision. If the Higher People's Court is also of the opinion that enforcement should be refused, it must consult the Supreme People's Court. Only with the agreement of the Supreme People's Court may the Intermediate People's Court issue a decision refusing enforcement of the arbitral award. This is the so-called 'prior-reporting system'.
(Source: SPC Notice on Prior Reporting System of 28 Aug. 1995.)
(b) How many levels of appeal or recourse are available against this decision?
PRC: Not applicable. See answer to Q.10(a).
11. What is the earliest stage in legal proceedings for enforcement of foreign arbitral awards at which a party can obtain execution against assets (i.e. party actually obtains possession of assets as opposed to simply freezing assets)?
PRC: After receiving the application for enforcement, the execution officer sends a notice to the execution debtor, ordering execution within the specified time limit. This notice is sent after the inter partes hearing mentioned above in Q.9 and the People's Court's decision to grant enforcement. A person who has failed to perform voluntarily within the time limit will be compelled to perform. Thus, execution against assets may be obtained only after the expiry of the aforementioned time limit.
(Source: Civil Procedure Law (2012), Art. 240.)
In cases of urgency, the People's Court may order preliminary execution at a party's request. Urgent circumstances include: (1) an immediate need to stop infringement and remove obstacles to execution; (2) an immediate need to stop some act; (3) an immediate need to return money for the purchase of raw materials and production tools; and (4) urgent need of insurance compensation to resume production or business operations.
(Source: Civil Procedure Law (2012), Art. 106(3); Opinions of the Supreme People's Court on Some Issues Concerning the Application of the Civil Procedure Law, Article 107, issued on 14 July 1992. )
Besides urgent circumstances, the only other situations in which preliminary execution may be granted do not apply to arbitration (e.g. claims for alimony, support for children or elderly dependents, pensions for the disabled or a deceased's family, expenses for medical care, wages).
(Source: Civil Procedure Law (2012), Art. 106.)
E. Evidence required
(a) What evidence must be supplied for recognition and enforcement of foreign awards (e.g. arbitral award, contract containing arbitration clause, affidavits, witness statements, etc.)?
PRC: When filing a request for recognition or enforcement of a foreign arbitral award, the party should submit the following evidence: (i) application for enforcement, which should state the names of the parties and the legal basis for enforcement; it is further necessary to indicate the name and quantity of the property against which enforcement is directed and the place where it is located and the financial situation of the party against whom enforcement is requested; (ii) documents identifying the applicant (for natural persons, a certified copy of the person's passport should be sufficient; for legal entities, a certified copy of the entity's certificate of incorporation is required); (iii) an original or a notarized and certified copy of the arbitral award; (iv) an original or a notarized and certified copy of the arbitration agreement or the contract containing the arbitration clause; and (v) a certified Chinese translation of the award and the arbitration agreement.
(Source: Regulations of the Supreme People's Court for Certain Issues Concerning Enforcement by the People's Court (for Trial Implementation) issued on 8 July 1998.)
(b) Is it necessary to provide the entire document or only certain parts (e.g. entire contract or only arbitration clause)?
PRC: It is necessary to supply (i) the award in its entirety and (ii) the relevant pages of the document containing the arbitration clause.
(Source: Regulations of the Supreme People's Court for Certain Issues Concerning Enforcement by the People's Court (for Trial Implementation), issued on 8 July 1998.)
(c) Are originals or duly certified copies required?
PRC: The following are required: (i) an original or a certified and notarized copy of the award must be filed; and (ii) an original or a certified and notarized copy of the arbitration clause.
(d) How many originals or duly certified copies are required?
PRC: The following are required: (i) one original or one certified and notarized copy of the award (where a certified and notarized copy of the award is submitted, the court may request to see (but not keep) the original); (ii) one original or one certified and notarized copy of the arbitration agreement (where a certified and notarized copy of the arbitration agreement is submitted, the court may request to see (but not keep) the original).
(e) Does the authority or court keep the originals that are filed?
PRC: The court will keep certified and notarized copies, but not the originals.
(Source: no specific legal provision.)
(a) Is it necessary to provide a translation of the documents supplied?
(Source: Regulations of the Supreme People's Court for Certain Issues Concerning Enforcement by the People's Court (for Trial Implementation), issued on 8 July 1998, Arts. 20 and 21. Although these two articles only expressly mention the award and the application for enforcement, in practice all documents submitted to the court with the application need to be translated into Chinese.)
(b) If yes, into what language?
(Source: Regulations of the Supreme People's Court for Certain Issues Concerning Enforcement by the People's Court (for Trial Implementation), issued on 8 July 1998, Arts. 20 and 21. Although, these two articles expressly mention only the award and the application for enforcement, in practice all documents submitted to the court with the application need to be translated into Chinese.)
(c) Is it necessary for the translations to be certified and, if yes, by whom (official or sworn translator, diplomatic or consular agent (of which country?) or some other person)?
PRC: Yes. The translation must be certified by an official or sworn translator or by a diplomatic or consular agent and authenticated by the Chinese Consulate or Embassy in the country in which the award was rendered or notarized by a Chinese notarial agency.
(Source: Regulations of the Supreme People's Court for Certain Issues Concerning Enforcement by the People's Court (for Trial Implementation), issued on 8 July 1998, Art. 21.)
(d) Is it necessary to provide a full translation of the documents or only a translation of certain parts (e.g. entire award or only part setting forth the decisions; entire contract or only arbitration clause)?
PRC: The applicant must in principle provide translations of the relevant parts of the documents submitted. Thus, a full translation of the award is necessary, but a translation of just the arbitration agreement, as opposed to the full contract, may be sufficient.
F. Stay of enforcement
(a) Can the authority or court stay legal proceedings for recognition and enforcement pending the outcome of an application to set aside or suspend the foreign award before the competent authority referred to in Art. V(1)(e) of the New York Convention?
(Sources: SPC Judicial Interpretations, 8 Sept. 2006, Art. 25; New York Convention, Art. V(I)(e).)
(b) On what other grounds, if any, can the authority or court stay legal proceedings for recognition and enforcement (e.g. forum non conveniens)?
PRC: If the person subject to execution provides security, the People's Court may suspend and defer the time limit for execution, subject to the consent of the person who has applied for execution.
(Source: Civil Procedure Law, Art. 208.)
Further, at the request of the parties or other interested persons, the People's Court may decide to suspend the execution in any of the following circumstances:
(i) the measure ordered or the execution procedure violates the law;
(ii) the ownership of the property at which execution is directed is in dispute; or
(iii) the party against whom the execution is directed has a right of set-off against the applicant.
The People's Court may, on its own motion, decide to suspend execution in any of the following circumstances:
(i) a Superior People's Court has already accepted the execution dispute and is handling the case;
(ii) the People's Court finds the legal document upon which the execution is based to be erroneous, and the case is being reviewed in judicial review proceeding.
(Source: Provisions of the Supreme People's Court on Some Issues concerning the Correct Application of the Measures for Suspension of Execution, 28 Sept. 2002, Arts. 3 and 7.)
The People's Court shall order suspension of execution in any of the following circumstances:
(i) the applicant indicates that the execution may be postponed;
(ii) a person not involved in the case raises a justified objection to the purpose of the execution;
(iii) a party that is a natural person dies and it is necessary to wait for an heir to inherit the rights of the deceased or to succeed to the deceased's obligations;
(iv) a party that is a legal entity or other organization ceases to exist and the person succeeding to its rights and obligations has not been determined; or
(v) other circumstances in which the People's Court considers that execution should be suspended (e.g. the applicant withdraws its application for enforcement upon the revocation of the judgment to be enforced, the defendant in the enforcement proceedings dies and there is no successor to the deceased's obligations).
Execution is resumed when the circumstances that caused the suspension disappear.
(N.B.: The above provisions regarding suspension can apply only after execution proceedings have been initiated: the People's Court cannot stay recognition/enforcement at an earlier stage, since there is no legal basis for this.)
(Source: Civil Procedure Law (2012), Art. 256.)
(c) Is the granting of a stay of legal proceedings for recognition and enforcement conditional on the provision of security?
PRC: Not necessarily. If one of the circumstances of Art. 232 of the Civil Procedure Law (see Q.14(b) above) occurs, recognition/enforcement proceedings will be suspended without any need to provide security. If none of these circumstances occurs, the court will consent to a suspension of the proceedings only if the person against whom enforcement is directed provides sufficient security.
(Source: Civil Procedure Law (2012), Art. 231.)
(a) Do the documents filed in legal proceedings for recognition and enforcement form part of the public record? If yes, can any steps be taken to preserve the confidentiality of such documents?
PRC: No. They form part of the court record only, which is not accessible by the public.
(b) If there are hearings on recognition and enforcement, are such hearings confidential? If not, can steps be taken to maintain the confidentiality of the legal proceedings?
PRC: Hearings in China are usually public, except for (i) cases involving State secrets, personal privacy and other matters determined by law; (ii) divorce cases and cases involving commercial secrets may be kept confidential, upon the parties' request. Thus, if the judge convenes a hearing on the enforcement of an award, it is advisable expressly to request hearings in camera.
(Source: Civil Procedure Law (2012), Art. 134.)
(c) Are judgments on recognition and enforcement published? If yes, can steps be taken to remove the names of the parties or avoid publication of confidential information (such as business or State secrets)?
PRC: Decisions on recognition and enforcement are usually not published. However, the most important decisions, in particular those of the Supreme People's Court, are usually published either on the internet, in legal reviews, or in collections of court cases.
In theory, the court may remove the names of the parties, where it considers this appropriate, before publishing a judgment. However, no specific procedure is in place for this purpose.
H. Other issues
16. When, if ever, can a party obtain recognition and enforcement of interim or partial foreign awards?
PRC: Only final awards may be recognized and enforced. Partial awards may be recognized and enforced provided they are final. It is unlikely that China will recognize and enforce an interim arbitral award ordering measures to preserve assets or evidence or ordering a party to take or refrain from certain actions, as such an award is inherently temporary and may be subsequently revoked by the tribunal, so cannot be considered final.
(Source: New York Convention, Art. V(1)(e).)
17. When, if ever, can a party obtain recognition and enforcement of non-monetary relief in foreign arbitral awards (e.g. order requiring a party to deliver up share certificates or other property)?
PRC: As a general rule, it is possible to obtain recognition and enforcement in China of foreign awards granting non-monetary relief.
(Source: Regulations of the Supreme People's Court for Certain Issues Concerning Enforcement by the People's Court (for Trial Implementation), issued on 8 July 1998, Arts. 57-60.)
18. When, if ever, can a party obtain recognition and enforcement of only part of the relief granted in foreign awards?
PRC: Chinese legislation does not specify whether a party may obtain recognition and enforcement of only part of the relief granted in a foreign award, and jurisprudence has not addressed this question directly. However, where part of the award deals with a dispute not contemplated by or not falling within the terms of the arbitration agreement, or if the award contains decisions on matters beyond the scope of the agreement, and such irregular provisions can be severed from the remainder of the award, then the court may recognize and enforce only the remainder of the award.
(Source: Supreme People's Court Judicial Interpretations, 8 Sept. 2006, Art. 19 (per analogy).)
19. When, if ever, can a party obtain recognition and enforcement of foreign awards which have been set aside by the competent authority referred to in Art. V(1)(e) of the New York Convention?
PRC: Chinese legislation does not specify whether a foreign award which has been set aside by a competent authority may nonetheless be recognized and enforced in China, and there is no case law addressing the issue directly. However, given the attitude of the courts when applying the New York Convention, it is to be expected that they will interpret the 'may' of Art. V as a 'shall' and refuse enforcement whenever any of the grounds listed in Art. V(I) exist, including where a foreign award has been set aside in its country of origin. A proposed draft for an SPC Interpretation in 2003 reflects the attitude of Chinese courts on this issue: it states that where a foreign arbitration award has not yet become effective, or has been revoked, or the termination of the enforcement proceedings of such award has been ordered, the People's Court shall deny recognition or enforcement of such an award upon a party's request. However, this Interpretation has not as yet been officially issued by the SPC and so provides only informal guidance.
20. Are there any other procedural or practical requirements relating to recognition and enforcement of foreign awards which are worth mentioning (e.g. unusually high court costs, filing fees, stamp duties, obligation to post security as a condition for seeking recognition and enforcement, obligation to identify the assets that will be the object of enforcement, etc.)?
PRC: It is unclear how the courts will treat an award rendered by a Chinese arbitration institution, where the place of arbitration is abroad (including in Hong Kong or Macau). It is not clear whether such award will be considered 'foreign-related' and thus subject to the Arbitration Law and the Civil Procedure Law, or 'foreign' and therefore subject to the New York Convention. It may be hoped that the courts will consider the place of arbitration as the relevant criteria for determining the nationality of the award. At the time of writing, no such awards exist as Chinese arbitration commissions have not yet established branches overseas, and awards issued by the headquarters of Chinese arbitration commissions are always deemed to have been issued in China (as CIETAC has now set up an office in Hong Kong, the question can be expected to arise in the near future).
Despite the case referred to in Q. 4 above, it is still unclear how the courts will treat an award from a foreign arbitration institution, where the place of arbitration is in China. It is to be expected that such an award will not be recognized on grounds of a violation of Chinese law, which implicitly allows only Chinese arbitration institutions to conduct arbitration in China.
A further issue in enforcement proceedings is the location of assets. Before proceeding with enforcement, the court will require the applicant to provide information on the location of the assets against which enforcement is directed and the general financial situation of the defendant. Locating assets in China, including identifying relevant bank accounts, is difficult and time-consuming. Given the short time allowed for initiating enforcement proceedings, it is advisable to take steps to locate the defendant's assets at a very early stage.
Christina Wang, Meng Xiao