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International Commercial Arbitration, Awards Enforcement procedure in People Republic of ChinaVyacheslav, Tovyanskyy 28 July 2009 (has links)
Due to the globalization processes , international trade has increased dramatically, resulting in growing number of disputes between companies from different countries. Effective and convenient way both to prevent and solve the conflicts is international arbitration. But if failing party does not voluntarily accomplish the award, the other side must apply for a special international procedure - recognition and enforcement of the award. The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 is the main international treaty to instruct the process of enforcement of arbitral awards and arbitral awards may be refused only under certain grounds laid down in the Convention.
This paper is mainly focused on the award enforcement procedure in one of the biggest commercial markets of the world - China. According to the previous research, enforcement procedure in China has improved recently, however it still can not meet international standards.
In this paper we examine the procedure of enforcement first, moving from the available form of arbitration and process of choosing arbitration rules to behavior of the state as a part in the process. Then we introduce the article V of United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, as a most important document for practical implementation of enforcement.
In order to understand current situation in China, author thinks it is necessary to make a short review of historical development of arbitral award enforcement system and legal basis relevant to the main purpose of this research. Finally, we analyze the present legal situation in China within the mechanism of recognition and enforcement of arbitral awards and show what kind of problems exist when it comes to practical realization of enforcement in China.
Our analysis shows that the main problems with practical enforcement in China include: local protectionism and different understanding of the definition and purpose of Public Policy. These problems are also illustrated by practical cases, which happened between Chinese and international companies. Our conclusion shows that mentioned problems are not connected with international mechanism of arbitral awards, but with the complications of its implementation in China. Some of the problems can be solved if involving party prepares thoroughly for the process, but some of them can be solved if central and local government of China stops maintaining its policy of local protectionism.
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