Meta Description:China is a key jurisdiction for enforcing international arbitral awards. This guide explains when and how foreign arbitral awards can be enforced in China, common challenges, and practical steps for overseas companies.
Why China Matters for Enforcement of Arbitral Awards
For many international contracts involving Chinese parties, arbitration is chosen precisely because China is a signatory to the New York Convention and has a generally supportive attitude toward arbitration. If you have obtained a favorable arbitral award abroad but need to reach assets in mainland China, understanding the local enforcement regime is essential.
Legal Basis: New York Convention and Chinese Law
China acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) with certain reservations:
- It applies only to commercial disputes; and
- It applies on a reciprocity basis, i.e., to awards made in the territory of another contracting state.
Chinese law, including the Civil Procedure Law and Arbitration Law, provides further rules on recognition and enforcement of both domestic and foreign‑related awards.
What Counts as a “Foreign” Arbitral Award?
In this context, foreign arbitral awards usually mean:
- Awards rendered outside mainland China, whether by institutional or ad hoc tribunals; or
- In some cases, awards rendered in Hong Kong, Macau, or Taiwan under specific arrangements.
Different regimes apply to Hong Kong, Macau, and Taiwan awards, so it is important to identify the exact seat of arbitration.
Grounds for Refusal of Enforcement
Chinese courts may refuse enforcement on grounds largely aligned with the New York Convention, including:
- Invalid arbitration agreement
- Lack of proper notice or opportunity to present the case
- Award deals with matters beyond the scope submitted to arbitration
- Composition of the tribunal or procedure not in accordance with the agreement or law of the seat
- Award not yet binding or has been set aside at the seat
- Enforcement would violate China’s public policy
These grounds are interpreted relatively narrowly in practice, but careful preparation is still necessary.
Procedural Steps to Enforce a Foreign Arbitral Award in China
Step 1: Preliminary Strategy and Asset Location
As with judgments, first confirm:
- The award is final and binding
- The debtor has identifiable assets in China
- There are no ongoing set‑aside or annulment proceedings at the seat
An early asset tracing exercise in China can help determine whether enforcement is cost‑effective and where to file.
Step 2: Preparing Application Materials
Typical documents required include:
- Application for recognition and enforcement
- Original or certified copy of the arbitral award
- Original arbitration agreement or certified copy
- Evidence that the award is final and binding under the law of the seat
- Certified Chinese translations of all key documents
Authentication, notarization, and legalization steps should be carefully planned to avoid delays.
Step 3: Filing with the Competent Chinese Court
Applications are usually filed with the Intermediate People’s Court where:
- The debtor is domiciled or habitually resides; or
- Major assets to be enforced against are located.
In some cases, specialized courts (e.g., maritime courts) may have jurisdiction depending on the subject matter.
Step 4: Review by the Court and Internal Reporting Mechanism
China has a reporting system for cases involving refusal to recognize or enforce foreign arbitral awards. Lower courts must report intended refusals up the judicial hierarchy, which is designed to ensure a more consistent and cautious approach.This mechanism means that while outright refusal is relatively rare, the review process can take time and requires well‑prepared submissions.
Step 5: Enforcement Measures
Once the award is recognized, enforcement proceeds much like enforcement of a domestic judgment:
- Freezing bank accounts and receivables
- Attaching and auctioning property
- Restricting high‑value spending and travel of individuals in charge of the debtor company
- Pursuing equity and other assets
Effective enforcement often depends on prompt applications for property preservation and continuous monitoring of the debtor’s asset movements.
Common Practical Issues and How to Mitigate Them
- Time and limitation issues: Be mindful of limitation periods for applying for enforcement in China and at the seat.
- Parallel proceedings: If set‑aside proceedings are ongoing at the seat, Chinese courts may suspend their review.
- Corporate structure complexity: Debtors may shift assets across affiliated entities. Local investigative work is often necessary.
- Evidence of proper notice: Keep clear records of all procedural communications and delivery of documents during the arbitration.
How Our Team Supports Enforcement of Foreign Awards in China
We assist overseas award creditors and their counsel by:
- Assessing enforcement prospects and potential obstacles under Chinese law
- Conducting discreet asset and corporate structure investigations
- Preparing and filing applications for recognition and enforcement with Chinese courts
- Applying for and coordinating property preservation measures
- Working with foreign law firms to ensure consistent global enforcement strategy
If you have obtained an arbitral award and need to pursue assets in China, you can reach out to our cross‑border dispute team for a tailored assessment.