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How to enforce or challenge CIETAC awards in China

China International Economic and Trade Arbitration Commission(CIETAC) is a regional international arbitration institution. As an China international arbitration lawyer, I have entensive experience in handling cases with CIETAC, especially its South China branch which is located in Shenzhen. This article is to briefly introduct how to enforce and challenge CIETAC awards in China court.

The circumstances in which a CIETAC award may be set aside or enforcement refused are set out in paragraph 1 of article 260 of the CPL. They are that:
• the parties neither included an arbitration clause in their contractnor subsequently concluded a written arbitration agreement;
• the party against whom enforcement is sought was not asked to appoint an arbitrator or to participate in the arbitration proceedings or failed to state its case for reasons for which it cannot be held responsible;
• the composition of the arbitral tribunal or the arbitral proceedings did not conform with the relevant arbitration rules; and
• certain items of the award exceeded the scope of the arbitration agreement or were outside the jurisdiction of the arbitration institution.

Article 260 also provides that if a People’s Court decides that enforcement of the award would be against the social and public interest, it shall refuse the enforcement application. Although the relevant provisions of the Arbitration Law do not refer to refusing to enforce an award on the grounds of social and public interest, this probably remains a valid ground for refusing enforcement.


On its face, the application of article 260 depends on who gave the award (ie CIETAC) and not on whether the award concerns ‘international or foreign-related disputes’. In practice, the People’s Courts will not apply this article to domestic (as opposed to international or foreign-related) awards made by CIETAC. Instead, the People’s Courts will apply article 217 and review the award on its merits. Enforcing or Challenging Procedure Applications for enforcement of CIETAC foreign-related or CMAC arbitration awards should be made to the Intermediate People’s Court either in the place of domicile of the party against whom enforcement is sought, or in the place where that party has assets.

Applications should be submitted in writing accompanied by the original award. Applications for enforcement of CIETAC domestic awards should be made to the Basic Level People’s Court either in the place of domicile of the party against whom enforcement is sought, or in the place where that party has assets. Similarly, applications should be submitted in writing accompanied by the original award.

Article 261 prescribes that if an application for execution of an arbitration award is refused then the parties to the dispute may, in accordance with the written arbitration agreement, reapply for arbitration or institute legal proceedings in a People’s Court. The suggestion that the same dispute might be the subject of further arbitration proceedings would surely be untenable if enforcement of the award had been refused because the arbitration agreement between the parties was either defective or did not cover the dispute in question. This may explain the reference to the possibility of the parties settling their dispute through the courts, which plainly would not be ‘in accordance with the written arbitration agreement’ if that agreement were valid and applied to the relevant dispute.

Unfortunately this source of confusion has not been addressed by the Arbitration Law, article 9 of which is similar to article 261 in the relevant respect. Applications for the enforcement of both domestic and foreignrelated arbitration awards must be made within one year where one of the parties is a Chinese natural person and six months where both parties are legal persons. The time runs from the final date upon which, under the award, the losing party is obliged to comply with its terms. Further, two notices issued by the Supreme People’s Court in 1995 and 1998 respectively provide that an Intermediate People’s Court or a Higher People’s Court must follow an approval procedure when considering refusing to enforce a foreign-related arbitration award and/or to set aside a foreign-related arbitration award made in China.

As an experienced China litigation lawyer and arbitration attorney, I have been very glad to talk over international arbitration cases in China.

 

 
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I am a licensed China lawyer. Most clients are foreign nationals and companies. China Lawyer Blog have associates in Beijing, Shanghai, Tianjin, Guangzhou, Suzhou, Nanjing, Qingdao, Fuzhou, Hainan, Hefei, Wuhan, Xian, Changsha, Xiamen and Hangzhou. Learn More

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China Lawyer BLog AuthorPeter Zhu, an experienced China attorney licensed to practice law for more than ten years, the author of this China Lawyer blog, welcomes any enquiry or consultation related to Chinese law.