In the globalized economy of 2025, international arbitration is a cornerstone for resolving cross-border disputes. Understanding how to secure recognition and enforcement of foreign arbitral awards is critical for businesses and legal professionals navigating disputes involving China. As a signatory to the New York Convention since 1987, China offers a robust framework, achieving a 91% success rate in enforcement cases from 2012–2022. This guide breaks down the legal basis, procedural steps, grounds for refusal, and recent trends to help you succeed.
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What is a foreign arbitral award?
A foreign arbitral award is a decision issued by an arbitral tribunal conducted outside the jurisdiction where enforcement is sought—in this case, outside China. In other words, awards made by foreign arbitration institutions in China are NOT foreign arbitral awards.
For any arbitral awards made in Hong Kong, Macao, or Taiwan, the enforcement of such awards is governed by the reciprocal arrangements between mainland China and these territories, rather than the New York Convention. Therefore, such arbitral awards are NOT considered foreign arbitral awards under the Chinese legal system.
Legal Framework for Foreign Arbitral Awards in China
China’s process for recognizing and enforcing foreign arbitral awards combines international treaties with domestic laws to ensure alignment with global standards.
The New York Convention: China’s Role
China joined the 1958 New York Convention on January 22, 1987, effective April 22, 1987, applying it to awards from other contracting states. China adopted two reservations:
- Reciprocity: Applies ONLY to awards from Convention signatories.
- Commercial Scope: Limited to commercial disputes, whether contractual or not, EXCLUDING non-commercial matters like family disputes, except disputes between foreign investors and the host government.
Domestic Laws and SPC Guidance
Article 290 of the Civil Procedure Law (CPL) integrates the New York Convention, prioritizing treaties over conflicting domestic laws. The Supreme People’s Court (SPC) further clarifies enforcement through:
- 1987 Notice (Fafa [1987] No. 5): Sets jurisdiction, examination standards, and aligns with Article V of the Convention.
- 1995 Notice (Fafa [1995] No. 18): Requires courts to report refusals to higher courts and the SPC, promoting a pro-enforcement bias.
How to Enforce a Foreign Arbitral Award in China
Enforcing an award in China follows a clear process through a court, combining recognition and enforcement in one application.
Step 1: Choose the Right Court
File at the Intermediate People’s Court where:
- The respondent resides or is domiciled.
- The respondent’s principal business office is located.
- The respondent’s property is situated (if no domicile/business exists).
Step 2: Submit Required Documents
Include:
- Original or certified copy of the arbitral award.
- Original or certified arbitration agreement.
- Applicant’s identification documents.
- Notarized Chinese translations for foreign-language documents.
Courts focus on procedural validity, not the award’s merits.
Step 3: Meet Time Limits
Applications must be filed within TWO years from:
- The award’s specified performance deadline.
- The award’s effective date (if no deadline is specified).
Step 4: Understand the Process
- Filing: Submit documents; the court notifies the respondent.
- Defense: Respondents may challenge based on New York Convention Article V grounds.
- Ruling: If approved, the Civil Division recognizes, and the Enforcement Division executes. Refusals require SPC review.
- Interim Measures: Courts may freeze and auction assets.
Timeline: 46% of cases resolve within 180 days.
Grounds for Refusal of Enforcement
Chinese courts strictly adhere to Article V of the New York Convention for refusals. Grounds include:
- Invalid Arbitration Agreement: Due to incapacity or illegality.
- Due Process Issues: Improper notice or inability to present a case.
- Excess of Authority: Award exceeds agreement scope or involves non-arbitrable matters.
- Procedural Irregularities: Improper tribunal composition.
- Non-Binding Award: Set aside or suspended at the seat.
- Public Policy: Violates Chinese public policy or non-arbitrable issues (this ground will be examined by the court, no matter whether the respondent cites it).
From 2001–2022, only 43 of 243 cases were refused, primarily for procedural issues.
Trends in Arbitration Enforcement
Recent data highlights China’s pro-enforcement stance:
- Success Rate: 91% of 203 applications (2012–2022) were fully recognized.
- Geographical Distribution of Applicants: The three largest sources of applicants were Singapore, the US, and Korea.
- Sources of Arbitral Awards: The three sources with the highest number of awards were the Singapore International Arbitration Centre (SIAC), the International Cotton Association (ICA), and the International Chamber of Commerce (ICC).
- Regional Focus: Shandong and Jiangsu courts handle most cases.
- Proposed Reforms: The 2024 Arbitration Law draft shortens set-aside timelines to three months and enhances service flexibility.
Tips for Successful Enforcement in China
- Verify Jurisdiction: Ensure the correct court based on the respondent’s location or assets.
- Prepare Documents: Include certified translations to avoid delays.
- Anticipate Challenges: Address potential Article V objections proactively.
- Engage Local Experts: Legal counsel familiar with SPC reporting can streamline the process.
Frequently Asked Questions (FAQs)
1. What is the deadline for applying to recognize and enforce a foreign arbitral award in China?
Answer: The application must be filed within TWO YEARS from:
- The last day of the performance period specified in the award, or
- The effective date of the award (i.e., the receiving date) if no performance period is stated.
2. What are the costs associated with applying for recognition and enforcement?
Answer: Court fees for the recognition and enforcement of judgments vary depending on the case value but typically range from 1% to 2% of the claimed amount. These fees must generally be paid in advance, although it is possible to request a refund from the defendants. Try the court fee calculator here.
Additional costs may include translation fees, notarization fees, attorney fees, and travel expenses for attending hearings.
3. Can a court’s decision on recognition and enforcement be appealed?
Answer: Yes, decisions by the Intermediate People’s Court can be appealed to the High People’s Court within 10 days for Chinese parties or 30 days for foreign parties. Refusals to enforce require SPC review, reinforcing the pro-enforcement stance.
4. Can interim measures (e.g., asset freezing) be requested before enforcement?
Answer: No, only the case tried by the arbitral institution in China is allowed to do that.
Conclusion: Your Path to Enforcement Success
China’s pro-enforcement framework, rooted in the New York Convention and reinforced by SPC oversight, offers a reliable path for enforcing foreign arbitral awards. With a 91% success rate and ongoing reforms in 2025, applicants can navigate this process confidently. Stay updated on changes like the 2024 Arbitration Law and consult local experts for complex cases.
Further Reading
Explore the New York Convention website or SPC’s Guidance for deeper insights.
Read more about how to draft a valid arbitration agreement.
