In a recent case involving the enforcement of a foreign arbitral award, the Shanghai Maritime Court confirmed its jurisdiction over an offshore company respondent with its principal place of business in China (see Oriental Prime Shipping Co. Limited v. Hong Glory International Shipping Company Limited (2020)) .
Recognizing and Enforcing Foreign Arbitral Awards in China
In December 2022, Beijing Fourth Intermediate People’s Court reported its work on foreign court judgment/arbitral awards enforcement cases. Since 2018, the court has accepted 332 cases, with the total amount in controversy reaching more than CNY 5 billion (approx. USD 740 million).
China’s Supreme People’s Court elaborated on how Chinese courts apply the New York Convention when handling cases involving the recognition and enforcement of foreign arbitral awards, in a conference summary issued in December 2021.
Can I initiate arbitration proceedings against Chinese companies in my country and then have the awards enforced in China? You probably don’t want to go to faraway China to sue a Chinese company, and you don’t want to agree in the contract to submit the dispute to an arbitration institution that you don’t know about.
Building the arbitration credibility and the opening-up of arbitration sector in Shanghai and Beijing FTZs are highlights of China's latest arbitration policies.
China's arbitration policies have been increasing since 2015, and the arbitration is gradually gaining widespread attention. We need to understand why this is happening.
The survey (2019-2020) shows that court fees in most courts are charged per case basis (either 400 CNY or 500 CNY), rather than in proportion to the subject matter amount, which is undoubtedly good news for those wishing to enforce foreign arbitral awards.
To enforce a foreign arbitral award in China, the average length of proceedings is 596 days, the court costs are no more than 1.35% of the amount in controversy or 500 CNY, and the attorney's fees are, on average, 7.6% of the amount in controversy.
In 2019, the Chinese courts have heard a total of 30 cases concerning the recognition and enforcement of foreign arbitral awards.
When it comes to the stage of recognition and enforcement, limitation period is a decisive factor but can be easily ignored by the winning parties.