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Enforcement in China of Foreign Arbitral Awards under the New York Convention 
– A Practical Overview and Some Tips to Maximize Chances of Recovery 
by Richard Kimber, Managing Partner of RHK Legal Shanghai. 
The attached flowchart is perhaps daunting to those legal practitioners who embark on enforcement applications of foreign arbitral awards in the Chinese court system but there are some practical tips to bear in mind through our firm’s and the writer’s 20 year involvement of Award enforcement in China. 
These tips apply equally to both document preparation as well as the actual enforcement steps of an foreign Award: 
 Ensure all documents evidencing service of arbitral notices and pleadings by professional couriers and express mail service companies are kept safe for future
submission to the Court – this is especially important for Awards where the Chinese Respondent has been served but has failed to formally reply to any notices or written timelines served by the arbitral forum and a default Award has been obtained. 
 Check and re-check the exact document list requirements of the Chinese court which has jurisdiction on enforcement – this will vary from court to court. 
 Confirm with the court whether it will accept notarised and legalized original language application documents or requires both the original language documents and their Chinese translations to be notarised and legalized – this requirement also can vary from court to court. 
 Remember that the Chinese court which has enforcement jurisdiction cannot formally reject an application for enforcement of a foreign arbitral award unless it has referred its pending refusal to a higher court for confirmation or guidance. 
 Involve the assigned judge in each step of the enforcement proceedings. Chinese culture dictates the judge will take an active role, not only in review of the application documents for enforcement, but as a mediator after he or she issues the court’s formal acceptance ruling of the enforcement application. 
(i) Foreign applicants should use this to their advantage, especially in the execution process over assets of the Chinese respondent. 
(ii) Often the judge will contact the Chinese Respondent to see if a settlement can be reached at the execution stage of proceedings to try and obtain a practical settlement which is acceptable to both sides and avoids a loss of face for the Chinese Respondent. 
(iii) The applicant can use this intervention by the judge, to ask for and obtain a structured payment agreement of the Award amount from the Respondent which also avoids a formal court sale of assets (and loss of face for Chinese company and ultimately the court, which wishes to avoid creating the situation of a losing party (ie, the respondent).
(iv) Where structured payments are agreed, usually with an agreed percentage deduction on the Award amount,( to give equivalent face to the Chinese Respondent), it is also important to involve the court officially in the mechanics of installment payments : eg 
Respondent bank account -- Court bank account --- Instructed lawyer bank account - Client bank account. 
The rationale is that this keeps the court involved in the enforcement process. Pressure is brought to bear on the Respondent to comply with the installment process by the judge and court directly, rather than the Applicant and the court maintains an involvement in the execution of the payment process.

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Enforcement in china of foreign arbitral awards under the new york convention

  • 1. Enforcement in China of Foreign Arbitral Awards under the New York Convention – A Practical Overview and Some Tips to Maximize Chances of Recovery by Richard Kimber, Managing Partner of RHK Legal Shanghai. The attached flowchart is perhaps daunting to those legal practitioners who embark on enforcement applications of foreign arbitral awards in the Chinese court system but there are some practical tips to bear in mind through our firm’s and the writer’s 20 year involvement of Award enforcement in China. These tips apply equally to both document preparation as well as the actual enforcement steps of an foreign Award:  Ensure all documents evidencing service of arbitral notices and pleadings by professional couriers and express mail service companies are kept safe for future
  • 2. submission to the Court – this is especially important for Awards where the Chinese Respondent has been served but has failed to formally reply to any notices or written timelines served by the arbitral forum and a default Award has been obtained.  Check and re-check the exact document list requirements of the Chinese court which has jurisdiction on enforcement – this will vary from court to court.  Confirm with the court whether it will accept notarised and legalized original language application documents or requires both the original language documents and their Chinese translations to be notarised and legalized – this requirement also can vary from court to court.  Remember that the Chinese court which has enforcement jurisdiction cannot formally reject an application for enforcement of a foreign arbitral award unless it has referred its pending refusal to a higher court for confirmation or guidance.  Involve the assigned judge in each step of the enforcement proceedings. Chinese culture dictates the judge will take an active role, not only in review of the application documents for enforcement, but as a mediator after he or she issues the court’s formal acceptance ruling of the enforcement application. (i) Foreign applicants should use this to their advantage, especially in the execution process over assets of the Chinese respondent. (ii) Often the judge will contact the Chinese Respondent to see if a settlement can be reached at the execution stage of proceedings to try and obtain a practical settlement which is acceptable to both sides and avoids a loss of face for the Chinese Respondent. (iii) The applicant can use this intervention by the judge, to ask for and obtain a structured payment agreement of the Award amount from the Respondent which also avoids a formal court sale of assets (and loss of face for Chinese company and ultimately the court, which wishes to avoid creating the situation of a losing party (ie, the respondent).
  • 3. (iv) Where structured payments are agreed, usually with an agreed percentage deduction on the Award amount,( to give equivalent face to the Chinese Respondent), it is also important to involve the court officially in the mechanics of installment payments : eg Respondent bank account -- Court bank account --- Instructed lawyer bank account - Client bank account. The rationale is that this keeps the court involved in the enforcement process. Pressure is brought to bear on the Respondent to comply with the installment process by the judge and court directly, rather than the Applicant and the court maintains an involvement in the execution of the payment process.