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It becomes more difficult for PRC courts to refuse to enforce arbitral awards


30 January 2018
The PRC Supreme People's Court promulgated on 26 December 2017 the Regulation on Issues regarding Arbitration Judicial Review and Required Approvals (the "New Regulation") which has been implemented as from 1 January 2018.
Before implementation of the New Regulation, a party to an arbitration case may apply to an Intermediate People's Court or a Special People's Court for enforcement of arbitral awards, and if the arbitral awards is granted by a PRC domestic arbitration institute for an arbitration case which is not foreign related or Hong Kong, Macao or Taiwan related, the court receiving such application may decide to enforce or refuse to enforce the arbitral awards without necessary to report to the superior court for approval. However, the New Regulation requires that if the court receiving the application for enforcement of the arbitral awards (which is not foreign related or Hong Kong, Macao or Taiwan related) intends to refuse the application, it shall not issue the ruling to refuse the application unless its intended refusal has been reported to and approved by the Higher People's Court; in addition, if the parties to the arbitration case are domiciled in different provincial administrative regions or intended refusal is based on the ground that the enforcement would violate the social and public interest, then the ruling to refuse the enforcement shall not be issued unless the intended refusal has been reported to and approved by the Supreme People's Court.
As for the foreign related or Hong Kong, Macao or Taiwan related arbitration cases, the New Regulation has not changed but restated the existing procedures for enforcement of the arbitral awards. Namely, a party to the foreign related or Hong Kong, Macao or Taiwan related arbitration case may apply to the Intermediate People's Court or the Special People's Court for enforcement of the arbitral awards; if the court receiving the application for enforcement intends to refuse the application, it is required to report the intended refusal to the Higher People's Court; and if the Higher People's Court also intends to refuse the enforcement, it is required to further report the same to the Supreme People's Court for approval. Only after an approval for refusing the enforcement is granted by the Supreme People's Court, then the court receiving the application may issue the ruling to refuse the enforcement.
The New Regulation of the Supreme People's Court is an important step which made the judicial review procedures for enforcement of two kinds of arbitral awards (either foreign, Hong Kong, Macao, Taiwan related, or non-related) tend to be consistent. On the whole, the New Regulation has made the PRC courts more difficult for refusing enforcement of arbitral awards, and has given people more confidence in selecting arbitration as the way for dispute resolution.

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Disclaimer
Any legal information contained in this newsletter is general in nature and laws and regulations are changing from time to time and compliance will always depend upon the particular circumstances. We have not attempted to give exhaustive descriptions of law or to give a legal opinion on specific legal issues. You should not rely on this newsletter as a legal advice for any particular purpose.

 

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