Mainland China’s integration into global commerce has necessitated a robust framework for recognizing and enforcing foreign arbitral awards. As a signatory to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), China offers a structured pathway for enforcing awards from other member states. Hong Kong awards, on the other hand due to the “one country, two systems” principle, are governed by a distinct bilateral arrangement. This article examines the legal frameworks for enforcing foreign arbitral awards in Mainland China.
Legal Framework: The New York Convention
China’s accession to the New York Convention in 1987 established a predictable pathway for enforcing foreign arbitral awards. Under Article IV of the Convention, parties seeking enforcement in Mainland China must submit:
- A duly authenticated original or certified copy of the award; and
- The original or certified copy of the arbitration agreement.
Research shows that nearly 70% of foreign arbitral awards for which enforcement has been sought in China have been duly recognized and enforced by now, demonstrating a favorable judicial attitude taken by the Chinese courts. Only around 17.5% of the applications have failed for different reasons.
Foreign arbitral awards seeking recognition and enforcement in Mainland China originate from approximately 21 countries, with the United Kingdom leading the way, followed closely by Singapore. The UK’s awards are primarily from its arbitration institutions and ad hoc tribunals, while Singapore’s are mostly from the Singapore International Arbitration Center (“SIAC”). The US, France, South Korea, and Russia also contribute a moderate number of awards, with notable contributions from the International Chamber of Commerce’s International Court of Arbitration.
Mainland Chinese courts may refuse enforcement only on limited grounds prescribed in the New York Convention, such as incapacity of the parties, invalidity of the arbitration agreement, violation of the due process principle, or violations of public policy.
Notably, China’s Supreme People’s Court (“SPC”) maintains a pre-reporting system, requiring lower courts to seek SPC’s approval before denying enforcement. This serves as a safeguard against inconsistent interpretations. The report and verification mechanism allows the SPC to guide lower courts properly to apply the grounds for non-recognition and enforcement, ensuring consistent judicial practices that uphold the New York Convention and foster a more arbitration-friendly judicial environment for recognizing and enforcing foreign arbitral awards in China.
Procedural Simplifications: The Apostille Convention
A landmark development is China’s accession to the Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents (the “Apostille Convention”) on 7 November 2023. For foreign awards (e.g., awards from SIAC) and related documents (e.g., arbitration agreements), the following are some of the streamlined recognition features:
- Simplified Authentication: Documents no longer require consular authentication. Instead, a single Apostille issued by the designated authority in the state of origin suffices.
- Faster Processing: This reduces authentication timelines from weeks to days, aligning with the New York Convention’s efficiency goals.
China-Singapore: Enforcement of SIAC Arbitral Awards
As global trade and investment between China and Singapore continue to flourish under initiatives like the Belt and Road, the enforcement of arbitral awards across jurisdictions has become a critical concern for businesses. Both China and Singapore are signatories to the New York Convention, providing a robust framework for cross-border award enforcement.
With the adoption of the Apostille convention, a SIAC award certified with an Apostille in Singapore can now be directly submitted to Chinese courts without additional notarization. In 2023, the Ningbo Intermediate People’s Court enforced a SIAC award, marking one of the latest precedents in China’s pro-arbitration shift. The court accepted Apostille-certified documents as satisfying New York Convention requirements and held that the award did not contravene Chinese public policy, despite involving cross-border payment disputes.
On 31 August 2018, the two countries also entered into a Memorandum of Guidance Between the Supreme People’s Court of the People’s Republic of China and the Supreme Court of Singapore on Recognition and Enforcement of Money Judgments in Commercial Cases to facilitate money judgments issued by the Singapore courts to be recognized and enforced in the Chinese courts (and vice-versa). While the primary focus is on court judgments, the principles outlined in the memorandum provide valuable insights into the broader framework of legal assistance, indirectly supporting the enforcement of arbitral awards.
China-Hong Kong SAR: Enforcement of HKIAC Arbitral Awards
The recognition and enforcement of Hong Kong International Arbitration Centre (the “HKIAC”) awards in Mainland China are governed by the Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region, which came into effect on 1 February 2000. The arrangement was further strengthened by the Supplemental Arrangement signed on 27 November 2020. Please find further details in our article here.
The applicant for enforcement should submit inter alia the following documents to the People’s Court in Mainland China (translated into Chinese):-
- an application for enforcement;
- the arbitral award; and
- the arbitration agreement.
With effect from June 2022, parties to sizeable international commercial arbitrations administered by the Hong Kong International Arbitration Centre (the “HKIAC”) can also apply directly to the China International Commercial Court (the “CICC”) for (i) preservation and mandatory measures covering preservation of property, evidence and conduct, and/or (ii) enforcement of arbitral awards in the mainland. The inclusion of HKIAC on the online “One-Stop” Platform the CICC further underscores the importance of HKIAC awards in Mainland China.
China’s enforcement regime for foreign awards has matured significantly, driven by the legal framework and deepened cross-jurisdictional connections such as the Belt and Road and Sino-Singapore ties. Hong Kong and Singapore, with their close ties to Mainland China, continue to enjoy a unique advantage as preferred venues for arbitration in disputes involving mainland parties or mainland assets.
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