China: New developments to impact international arbitration in China

Last Updated: 24 April 2019
Article by Maarten Roos and Yang Limeng

Traditionally, many foreign companies have preferred to resolve disputes with Chinese counterparts through arbitration outside of China. Some arguments to choose for international arbitration:

  • Arbitration outside China may be deemed more reliable than litigation or arbitration within China.
  • Under the Convention for the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) to which China is a member, arbitral awards reached in most countries can be recognized and enforced in China.

There are a number of counter-arguments, which have further gained in force over the years. For example:

  • Litigation and arbitration in China now have a good reputation, especially in the big cities such as Shanghai, Beijing and Guangzhou.
  • Litigation or arbitration in China allows preliminary injunctions such as the freezing of the defendant's assets, which may be crucial not only for the enforcement of the final judgment or award but can also help to pressure the defendant into a mediated settlement;
  • While the law establishes a relatively short deadline for recognition and enforcement of an international arbitration award in China, in practice this is generally a very long and arduous process that can take many years.

A recent legal development in China should provide international companies with additional considerations. The Supreme People's Court (China's highest court, SPC) has issued two new provisions, both effective from 1 January 2018:

  • SPC Provisions on Several Issues relating to the Trial of Cases Involving Judicial Review of Arbitration (Chinese: 最高人民法院关于审理仲裁司法审查案件若干问题的规定) (the "SPC Trial Provisions")
  • SPC Provisions on Issues relating to the Reporting and Review of Cases Involving Judicial Review of Arbitration (Chinese:关于仲裁司法审查案件报核问题的有关规定) (the "SPC Reporting and Review Provisions")

Jurisdiction, Procedures and Applicable Law

The SPC Trial Provisions deal mainly with two issues:

  • The SPC Provisions on Implementing Convention on the Recognition and Enforcement of Foreign Arbitral Awards Entered by China effective from 1987 (Chinese: 最高人民法院关于执行我国加入的《承认及执行外国仲裁裁决公约》的通知) establishes that an application for recognition and enforcement of a foreign arbitration award should be made at the Intermediate People's Court where either the person subject to the enforcement or its property is located. The SPC Trial Provisions provide that if neither the person subject to the enforcement nor its property are in China but the award relates to a case decided by a Chinese court or domestic arbitration institution, then the application for recognition and enforcement can be made in that Chinese court, or at the Intermediate People's Court where that domestic arbitration institution is located.
  • An international arbitration award does not need to be notarized / legalized before it is submitted to a Chinese court for recognition and enforcement. Note that many courts already did not require such notarization / legalization, though the practice was not uniform. With more certainty, this should save the applicant both time and cost.
  • When a Chinese court reviews a case for recognition of an international arbitration award through the New York Convention, it should refer to the law that the parties have agreed to apply to determine the validity of the arbitration agreement; but if no such agreement was reached, then the law of the jurisdiction where the arbitration is held or where the arbitration institution is located shall apply to determine the validity of the arbitration agreement; if the law of the jurisdiction where the arbitration is held conflicts with the law where the arbitration institution is located, the law that affirms the validity of the arbitration agreement shall apply.

System of Reviewing Arbitral Awards

In the SPC Provisions on Issues in the People's Courts' Handling of Foreign-related Arbitrations and Foreign Arbitrations effective in 1995 (Chinese: 最高人民法院关于人民法院处理与涉外仲裁及外国仲裁事项有关问题的通知), China introduced a review system whereby a Chinese court's decision to deny recognition of a foreign arbitration award must be confirmed by the next higher court, the Higher People's Court (at provincial level); and if the Higher People's Court agrees with the decision to refuse, then the Supreme People's Court must be asked for approval. This system was introduced to make it more difficult for Chinese courts to reject foreign arbitral awards without legal grounds.

The SPC Review and Reporting Provisions extend this system to domestic arbitral awards. The final decision for a refusal to enforce a domestic arbitration award must be made by the Higher People's Court, or by the Supreme People's Court if (i) the parties to the dispute are domiciled in different provinces, or (ii) the refusal to enforce is based on reasons that public interests are violated.

This move could make the system more reliable, by taking away the final authority of individual Chinese courts to reject an enforcement. But it also has another consequence: it could hugely increase the workload of China's higher courts, including the Supreme People's Courts. The workload of Chinese judges is already very high; and so this could have a further negative impact on the time needed for a company to get its award enforced - whether the arbitration award is international or domestic.


Above all, it is a good sign that the Supreme People's Court continues to take initiatives to improve China's system for enforcement of judgments and arbitral awards. All commercial players in China, including international companies operating in China or with Chinese counterparts, benefit from improvements to China's legal system.

At the same time, developments cannot please everyone, and when it comes to the recognition and enforcement of foreign arbitral awards, the new provisions described in this article could have a negative impact as well. The process to get a foreign arbitration award recognized in China is already complex and subject to uncertainty; by adding to the burden of China's courts, these rules could have the unintended effect of hurting rather than helping this process.

The SPC Review and Reporting Provisions do offer more security for arbitral awards that were issued by domestic arbitration institutes. This may encourage even more international companies to turn towards domestic arbitration institutions with an international reputation, such as the SHIAC in Shanghai and the CIETAC in Beijing already enjoy a good reputation.

At the same time, the fact is that more and more international companies prefer to work directly with the courts, and these provisions are unlikely to slow this trend, let alone stop or reverse it. Chinese courts have gained so much in expertise and especially in the larger cities have become very adept at adjudicating disputes, in an efficient and cost-effective way.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions