Possibility of Enforcing Interim Relief for Foreign Arbitration Proceedings in Mainland China-北京观韬律师事务所

Possibility of Enforcing Interim Relief for Foreign Arbitration Proceedings in Mainland China

2015-05-18

HOME > GUANTAO VIEWPOINT > 视点 > Possibility of Enforcing Interim Relief for Foreign Arbitration Proceedings in Mainland China

In foreign arbitration proceedings, the arbitral tribunal may issue interim awards or interim measures/orders in favor of an interested party. Foreign courts may also grant interim relief in aid of those arbitral cases. Nevertheless, whether such interim relief granted by a foreign tribunal or a foreign court may be recognized and enforced in mainland China is still an issue under debate.

Although China has acceded to the New York Convention on Recognition and Enforcement of International Arbitration Awards ("New York Convention"),pursuant to which arbitral awards in commercial disputes in any contracting state are generally enforceable in China, it is, nevertheless, quite difficult, to have interim relief for foreign arbitration proceedings recognized and enforced in China.As far as we know, there is no record of even one single successful attempt by an interested party seeking to enforce an interim award issued by a foreign arbitral tribunal in China. It is most likely that interim awards would not be recognized and enforced due to its provisional, procedural and non-final nature.

The New York Convention does not distinguish between “final” and “interim” awards when specifying which awards are recognizable and enforceable, neither do PRC legal authorities. However, in practice, PRC courts are generally reluctant to recognize or enforce foreign interim awards due to their non-final nature, and potential revocation or amendment.

As to an interim relief granted by a foreign court in aid of a foreign seated arbitration, it would also be difficult to have them recognized and enforced in China. When PRC court considers whether a foreign court order is enforceable on the basis of bilateral treaty or reciprocal enforcement,a “final judgement” would generally be a pre-condition. Interim relief issued by a foreign court in aid of an arbitral dispute is not a ‘final judgement’, and hence, is unlikely to be recognized and enforced by PRC court.

In conclusion, under current PRC legal system, it would be considerably difficult for interim relief granted in relation to foreign arbitrations to be recognized and enforced in mainland China. Based on our past practical experience, for a party in a foreign arbitration to attach the properties of its opponentwithin the territory of China, and to ensure the enforceability of the final foreign arbitral award in China in the future, as part of an overall strategy, that party may consider initiating a concurrent non-contract action in a competent PRC court, such as fraud, tort or bad faith actions etc., and apply to the same court or another competent PRC court for an asset preservation order.

Yang Weiguo Partner

Beijing Head Office

Add: 18/F, Tower B, Xinsheng Plaza, 5 Finance Street, Xicheng District, Beijing 100032, PRC

Tel: +86 10 6657 8066

Fax: +86 10 6657 8016

Email: yangwg@guantao.com

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