Challenging and Enforcing Arbitration Awards: China

1. Must an award take any particular form?

China

Arbitral awards in China must adhere to the following requirements under articles 53 and 54 of the Arbitration Law of the People’s Republic of China (revised in 2017) (Arbitration Law):

• the award must be in writing;
• the tribunal must set forth in the award the arbitration claims, the matters in dispute, the grounds on which the award is given, the results of the award, the responsibility for the arbitration fees and the date of the award. The facts and reasons for the dispute need not be stated in the award if the parties so agree;
• the arbitral award shall be signed by the arbitrators and affixed with the seal of the arbitration institution. Arbitrators who hold dissenting opinions may choose not to sign the award;
• the Arbitration Law does not require the place of issuance to be stated in the award although, in practice, the place of issuance is generally included; and
• an original copy of the arbitral award shall be served by the arbitration institution on the parties concerned. In practice, an arbitral award is usually served directly to the party’s counsel by courier. However, an arbitral award is legally effective from the date on which the award is made; thus, receipt signatures are not required for an award to become effective (Arbitration Law, article 57).

2. Are there provisions governing modification, clarification or correction of an award? Are there provisions governing retractation or revision of an award? Under what circumstances may an award be retracted or revised (for fraud or other reasons)? What are the time limits?

China

Awards may be modified, clarified, or corrected under article 56 of the Arbitration Law and the arbitration rules of major Chinese arbitration institutions. An arbitral tribunal may take the following actions if any typographical, print or calculation error is discovered, or any error or omission of a similar nature, or when there is any matter that the tribunal has failed to decide in the award:

• make a supplement or correction on its own initiative within a reasonable time limit after issuing the award; or
• make a supplement or correction at the request of the party concerned within 30 days of receiving the award.

Any corrections or supplements to an award are considered an integral part of the original award.

Aside from these provisions, Chinese law does not stipulate other circumstances in which an arbitral tribunal may retract or materially revise an award it has rendered. In practice, these types of actions are exceedingly rare.

3. May an award be appealed to or set aside by the courts? What are the differences between appeals and applications to set aside awards?

China

Awards rendered are final and not appealable to courts of law (Arbitration Law, article 9). Awards are legally effective once rendered and the prevailing party may immediately apply for enforcement to a competent court.

During enforcement proceedings, parties against whom an award is rendered may under limited legal grounds request the court to set aside or refuse enforcement of the award.

4. Is there a time limit for applying for the setting aside of an arbitral award?

China

5. What kind of arbitral decision can be set aside in your jurisdiction? Can courts set aside partial or interim awards?

China

Courts may only set aside awards rendered with final effect on substantive issues in the dispute (which may be entitled as a final award, a partial award or an interlocutory award). Parties to an arbitration cannot apply to set aside the tribunal’s decisions or provisional measures as to procedural issues.

6. Which court has jurisdiction over an application for the setting aside of an arbitral award? Is there a specific court or chamber in place with specific sets of rules applicable to international arbitral awards?

China

The intermediate people’s court at the place of the arbitration institution has jurisdiction over applications to set aside arbitral awards (Arbitration Law, article 58).

It is noteworthy that the concept of a seat of arbitration is expressly recognised by the proposed revision of the PRC Arbitration Law (released by the Ministry of Justice of PRC on 30 July 2021 for public consultation). Article 77 of the proposed revision provides that it is the intermediate people’s court of the seat of arbitration that has jurisdiction over applications to set aside arbitral awards.

7. What documentation is required when applying for the setting aside of an arbitral award?

China

Based on our experience, parties are usually required to submit the following documents when applying to a Chinese court to set aside an arbitral award:

• an original copy of the application to set aside the arbitral award, with copies corresponding to the number of the appellees and one additional copy to the court. The application to set aside the arbitral award shall state basic information about the applicants and the appellees, the claims, and the facts and reasons on which the claim is based, with supporting exhibits attached;
• a set of the applicant’s identity documents. If the parties are to be represented by their legal counsel, a set of authorisation documents shall also be provided. If the applicant is an overseas entity, the identity materials and the power of attorney are subject to notarisation and authentication;
• a set of identity documents pertaining to the appellees (these are not subject to notarisation and authentication);
• a copy of the arbitral award. The original copy shall also be taken and be subject to verification when filing the case; and
• a copy of proof of the effectiveness of the arbitral award. Parties can apply to the arbitration institution to provide this proof.

8. If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with the application for the setting aside of an arbitral award? If yes, in what form must the translation be?

China

All documents submitted to Chinese courts in a language other than Chinese must be accompanied by a Chinese translation. No mandatory certification requirements exist for Chinese language translators and interpreters in this regard. However, in practice, parties seeking to set aside an award tend to select translators and interpreters who are recommended by the higher people’s courts in designated directories when the parties request international judicial assistance. Selecting a verified translator may ensure the effectiveness of the translation.

In addition, documents submitted to the court must be accompanied by a full translation, rather than an abstract or excerpt. Full translations can also prevent challenges from the courts or the opposing party.

9. What are the other practical requirements relating to the setting aside of an arbitral award? Are there any limitations on the language and length of the submissions and of the documentation filed by the parties?

China

Applicants must pay a case acceptance fee charged according to the ‘calculation standards for non-property cases’ pursuant to the ‘Reply of the Supreme People’s Court to Several Specific Issues concerning the Trial of Cases Involving the Application of Parties to Vacate Arbitration Awards’ (Fa Shi [1998] No. 16). As further clarified by various higher people’s courts, the acceptance fee for setting aside an award is usually 400 yuan.

Documents submitted to the court must be in Chinese or accompanied by a Chinese translation.

Applications are not subject to length limitations. In practice, the submission of lengthy documents is generally discouraged (eg, longer than 10 pages).

10. What are the different steps of the proceedings?

China

11. May an arbitral award be recognised or enforced pending the setting- aside proceedings in your jurisdiction? Do setting aside proceedings have suspensive effect? If not, which court has jurisdiction over an application to stay the enforcement of the award pending the setting aside proceedings, and what are the different steps of the proceedings?

China

In terms of domestic arbitral awards, setting-aside proceedings have suspensive effect in the competent Chinese court. If one party applies for enforcement of an award while another applies to set aside the award, the court handling enforcement will suspend the proceeding (Arbitration Law, article 64). Should an enforcement proceeding is suspended, courts would cease levying assets unless the applicant for enforcement posts valid and adequate security for the enforcement application. The enforcement proceeding will terminate if the award is set aside and will resume if the award is not set aside.

In terms of foreign arbitral awards, if one party applies to a Chinese court for recognition and enforcement of a foreign arbitral award while the opposing party applies for the cancellation of the award in a foreign court, the Chinese court has the discretion to decide whether to suspend the recognition and enforcement proceedings, according to article 6 of the New York Convention and article 83 of the Notice of the Supreme People’s Court on Promulgation of the Minutes of the Second National Work Conference for Foreign-related Commercial and Maritime Trials.

In practice, some courts have granted suspension, such as the Intermediate People’s Court of Zhengzhou (see (2017) Yu 01 Wai Xie Ren No. 6 Decision); however, some courts have also refused suspension, such as the Intermediate People’s Court of Shenzhen (see (2016) Yue 03 Min Chu No. 366 Judgment) and the 1st Intermediate People’s Court of Shanghai (see (2019) Hu 01 Xie Wai Ren No. 5(1) Decision).

12. What are the grounds on which an arbitral award may be set aside?

China

Domestic arbitral awards with foreign elements and those without foreign elements are treated differently.

Pursuant to article 58 of the Arbitration Law, the grounds to set aside a domestic arbitral award without foreign elements are as follows:

• there is no arbitration agreement between the parties;
• the matters of the award are beyond the extent of the arbitration agreement or not under the jurisdiction of the arbitration commission;
• the composition of the arbitral tribunal or the arbitration procedure is contrary to the legal procedure;
• the evidence on which the award is based is falsified;
• the other party has concealed evidence that is sufficient to affect the impartiality of the award;
• the arbitrator (or arbitrators) has demanded or accepted bribes, committed a corrupt act or perverted the law in making the arbitral award; or
• the award is contrary to the social and public interests.

According to article 70 of the Arbitration Law and article 281 of the Civil Procedure Law, the grounds to set aside a domestic arbitral award with foreign elements are as follows:

• the parties have neither included an arbitration clause in their contract nor subsequently reached a written arbitration agreement;
• the person against whom the application is made was not requested to appoint an arbitrator or take part in the arbitration proceedings, or the person was unable to state his or her opinions for reasons for which he or she is not responsible;
• the composition of the arbitration tribunal or the arbitration procedure did not conform with the rules of arbitration; or
• matters decided in the award exceed the scope of the arbitration agreement or are beyond the arbitral authority of the arbitration institution.

It is noteworthy that the proposed revision of the PRC Arbitration Law (released by the Ministry of Justice of PRC on 30 July 2021 for public consultation) provides a unified legal basis for setting aside arbitral awards with and without foreign elements. According to article 77 of the proposed revision, the grounds for setting aside an arbitral award, no matter if any foreign element is involved, are as follows:

• there was no arbitration agreement, or the arbitration agreement is invalid;
• the award contains decisions on matters beyond the scope of the arbitration agreement or the scope of arbitrable matters specified herein;
• the respondent was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was unable to present his or her case for other reasons for which he or she is not responsible;
• the composition of the arbitral tribunal or the arbitration procedure was not in accordance with legal procedure or the parties’ agreement, seriously infringing parties’ rights;
• was obtained through fraudulent conduct including malicious collusion and falsifying evidence;
• an arbitrator extorted or accepted bribes, engaged in malpractice for personal gain or perverted the law during the arbitral proceedings; and
• the award is in conflict with the public interest.

13. What is the effect of the decision on the setting-aside application in your jurisdiction? What challenges are available?

China

Court decisions on applications for setting aside an arbitral award are non-appealable and effective immediately on service to the parties (Provisions of the Supreme People’s Court on Several Issues Concerning the Hearing of Cases Involving the Judicial Review of Arbitration, article 20).

If an arbitral award is set aside, the parties may initiate another arbitration based on a new arbitration agreement on the subject matter or initiate litigation before a competent court.

It is noteworthy that, according to article 81 of the proposed revision of the PRC Arbitration Law (released by the Ministry of Justice of PRC on 30 July 2021 for public consultation),  a party is entitled to apply for reconsideration by a court at a higher level against a ruling to set aside an arbitral award within 10 days on its receipt of the ruling. The court shall give a decision within a month on its acceptance of the application for reconsideration.

14. Will courts take into consideration decisions rendered in relation to the same arbitral award in other jurisdictions or give effect to them (eg, in recognition or enforcement proceedings)?

China

Courts will refuse recognition and enforcement of an award if a party provides evidence proving that the foreign arbitral award has not come into force, has been set aside or has ceased to be enforced (Notice of the Supreme People’s Court on Promulgation of the Minutes of the Second National Work Conference for Foreign-related Commercial and Maritime Trials, Article 83).

15. What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?

China

In China, the legal authorities concerning recognition and enforcement of foreign arbitral awards include the New York Convention. As China is a contracting state to the Convention, if a foreign award was made in another contracting state, an application for recognition and enforcement will be subject to the Convention.

The following rules are applicable to applications for recognition and enforcement in mainland China of arbitral awards made in Hong Kong, Macao or Taiwan:

• For Hong Kong arbitral awards, applicable rules include the Arrangement of the Supreme People’s Court on the Reciprocal Enforcement of Arbitration Awards by Mainland China and the Hong Kong Special Administrative Region (2000), the Notice of the Supreme People’s Court on Issues Concerning the Enforcement of Hong Kong Arbitral Awards in the Mainland (2009), and the Supplemental Arrangement of the Supreme People’s Court on Reciprocal Enforcement of Arbitration Awards between the Mainland and the Hong Kong Special Administrative Region (2020).
• Macao arbitral awards are governed by the Arrangement of the Supreme People’s Court on Mutual Recognition and Enforcement of Arbitration Awards Between the Mainland and the Macao Special Administrative Region (2008).
• Taiwan arbitral awards are governed by the Provisions of the Supreme People’s Court on the Recognition and Enforcement of Arbitral Awards Issued in Taiwan (2015).

If an arbitral award was made in any other region, the people’s court will determine the recognition and enforcement of a foreign award based on the principle of reciprocity, pursuant to article 290 of Civil Procedure Law.

16. Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under article I(3) of the Convention?

China

China acceded to the 1958 New York Convention on 22 January 1987 (with entry into force on 22 April 1987) pursuant to the Decision of the Standing Committee of the National People’s Congress on the Accession of China to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted at the 18th meeting of the Standing Committee of the Sixth National People’s Congress on 2 December 1986. China has made reservations under Article I(3) concerning reciprocity and commercial relationships.

17. Is there a time limit for applying for the recognition and enforcement of an arbitral award?

China

Applications for recognition and enforcement of an arbitral award must be submitted within two years of the last day for performance stipulated in the award (Civil Procedure Law, article 246). If the award does not stipulate a time for performance, the two-year limit begins on the date the award takes effect. These rules apply to both domestic and foreign arbitral awards, although domestic awards require only enforcement whereas foreign awards require both recognition and enforcement.

18. Which court has jurisdiction over an application for recognition and enforcement of an arbitral award? Is there a specific court or chamber in place with specific sets of rules applicable to international arbitral awards?

China

For domestic arbitral awards, parties can directly apply for enforcement with the intermediate people’s court where the defendant resides or the assets are located. In certain exceptional cases, a competent intermediate people’s court may direct a district people’s court to exercise jurisdiction. Domestic arbitral awards do not first require recognition to be enforced.

For foreign arbitral awards, parties should apply for both recognition and enforcement. The competent court is the intermediate people’s court where the defendant resides or the assets are located. If neither the defendant nor the assets are located in mainland China, the applicant should simply apply for recognition of the award as follows:

• If the foreign arbitral award concerns litigation heard by a Chinese court (if it is a district people’s court), the competent court to hear the recognition of the foreign award is the intermediate people’s court above the district court, whereas if the court is itself an intermediate people’s court or higher, the court has jurisdiction over the recognition of the foreign award.
• If the foreign arbitral award concerns an arbitration heard by a domestic arbitral institution, the intermediate people’s court where the institution is located has jurisdiction over the recognition of the award.

19. What are the requirements for the court to have jurisdiction over an application for recognition and enforcement and for the application to be admissible? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?

China

A competent court that receives an application for recognition and enforcement must accept the application, so long as the defendant’s domicile or assets are located within the court’s jurisdiction. This applies to both domestic and foreign arbitral awards.

If the enforcement application is filed to the court where the assets are located, the applicant needs, as a minimum, to identify several assets to prove that the court is competent.

20. Are the recognition proceedings in your jurisdiction adversarial or ex parte? What are the different steps of the proceedings?

China

Recognition proceedings are adversarial. The defendant needs to be properly served and has the right to appear and in a limited manner contest recognition or enforcement.

Steps of the recognition proceedings

With respect to foreign arbitral awards, if one party applies to a court for recognition and enforcement of an award, the court will first decide on the application for recognition.

The basic proceedings for determining an application for recognition are as follows:

• the applicant files an application with the court (in practice a single application is filed for recognition and enforcement);
• the court accepts the application, and service of the application and exhibits to the defendant;
• the defendant is entitled (not obliged) to provide a written defence or exhibits, if any;
• the court constitutes a panel of judges that determines the date for a court hearing (there is usually only one court hearing); and
• the court will issue a decision after the court hearing.

The basic proceedings for the court hearing are as follows:

• the parties present their respective pleadings;
• the applicant produces evidential materials and the defendant submits comments thereon, and vice versa;
• the parties present their respective substantive opinions; and
• the parties present their respective closing statements.

If the court grants the application for recognition, the court should make such a decision within two months of accepting the application. The decision is final and is not subject to appeal.

However, if the court denies an application for recognition of a foreign award, the court denying the application should report the denial to the higher people’s court (Provisions of the Supreme People’s Court on Issues Concerning the Reporting and Examination of Cases Involving the Judicial Review of Arbitration, article 2). If the higher people’s court takes the position that the application should be granted, the court will directly return its opinions to the intermediate people’s court, whereas if the higher people’s court agrees with the intermediate people’s court’s denial of the application, it should, in turn, report the denial to the Supreme People’s Court. Only once the Supreme People’s Court agrees to deny the application for recognition and return its decision, level by level, to the intermediate people’s court, can the intermediate court issue the decision denying the application for recognition of the foreign award.

A domestic arbitral award becomes binding upon issuance and needs no recognition before being enforced in front of a Chinese court.

21. What documentation is required to obtain recognition?

China

Based on our experience, applicants for recognition of a foreign arbitral award need to submit the following documents to a Chinese court:

• application for recognition of the foreign arbitral award, which specifies basic information about the applicant and the defendant, the main contents and the effective date of the arbitral award, and the claims and reasons for the application;
• documents that certify identity documents;
• power of attorney for the applicant. If the applicant is an overseas company or individual, the power of attorney needs to be notarised and certified;
• documents certifying the defendant’s qualifications; and
• a notarised and authenticated original copy of the foreign arbitral award and a certified copy.

A domestic arbitral award becomes binding upon issuance and needs no recognition before being enforced in front of a Chinese court.

22. If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition? If yes, in what form must the translation be?

China

All documents submitted to the courts in a language other than Chinese must be accompanied by a Chinese translation.

No mandatory certification requirements exist for Chinese language translators and interpreters in this regard. However, in practice, parties seeking recognition of an award tend to select translators and interpreters who are recommended by the higher people’s courts in designated directories. Selecting a verified translator may ensure the effectiveness of the translation.

In addition, documents submitted to the court must be accompanied by a full translation, rather than an abstract or excerpt. Full translations can also prevent challenges from the courts or the opposing party.

23. What are the other practical requirements relating to recognition and enforcement? Are there any limitations on the language and length of the submissions and of the documentation filed by the parties?

China

Pursuant to Measures for the Payment of Legal Costs, applicants need to pay an application fee of 500 yuan to apply for the recognition of an arbitral award, which should eventually be borne by the losing party.

For enforcement proceedings,court fees are based on the amount subject to enforcement. Specifically, the rates of fees for each enforcement proceeding are as follows:

• between 50 yuan and 500 yuan, if the enforcement involves no amount of money or value;
• 50 yuan if the enforcement involves an amount not greater than 10,000 yuan;
• 1.5 per cent of an amount in excess of 10,000 yuan but less than 500,000 yuan;
• 1 per cent of an amount in excess of 500,000 yuan but less than 5 million yuan;
• 0.5 per cent of an amount in excess of 5 million yuan but less than 10 million yuan; and
• 0.1 per cent of any amount that exceeds 10 million yuan.

All documents submitted to the courts must be written in Chinese or accompanied by a Chinese translation. Courts do not prescribe limitations for the length of applications for recognition and enforcement. In practice, documents submitted to a court should be as concise as possible; the submission of lengthy documents is generally discouraged.

24. Do courts recognise and enforce partial or interim awards?

China

All arbitral awards, whether final, interim or partial, can be applied to the courts for recognition and enforcement, provided that the award is rendered with final effect on substantive issues in the case.

In principle, the courts will not recognise or enforce an interim decision or interim measure on procedural issues rendered by an overseas arbitral tribunal.

However, it should be noted that parties to eligible arbitration proceedings in Hong Kong may apply directly to a court in mainland China for property preservation, evidence preservation and conduct preservation, according to the Arrangement of the Supreme People’s Court Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region (effective as of 1 October 2019, Fa Shi [2019] No. 14). Eligible arbitration proceedings must be seated in Hong Kong and be administered by an arbitration institution jointly chosen by the Supreme People’s Court and the Department of Justice of the Hong Kong Special Administrative Region Government.

These jointly chosen arbitration institutions currently include the Hong Kong International Arbitration Centre, the Hong Kong Arbitration Centre of the China International Economic and Trade Arbitration Commission, the Asian Affairs Office of the International Chamber of Commerce, the CMAC Hong Kong Arbitration Centre, the Shenzhen Court International Arbitration, and the eBRAM International Online Dispute Resolution Centre.

25. What are the grounds on which an arbitral award may be refused recognition? Are the grounds applied by the courts different from those provided under article V of the New York Convention?

China

The grounds for refusing recognition of a foreign arbitral award in China are those provided under article V of the New York Convention. The courts will decide whether to recognise a foreign arbitral award by referring to the New York Convention (primarily article V).

For arbitral awards rendered in Hong Kong, Macao and Taiwan, the Chinese courts will decide whether to recognise the awards in accordance with arrangements reached between mainland China and Hong Kong, Macao and Taiwan. The grounds adopted in these arrangements are very similar to those under the New York Convention. Those arrangements include the following:

• Hong Kong arbitral awards are governed by the Arrangement of the Supreme People’s Court on the Reciprocal Enforcement of Arbitration Awards by Mainland China and the Hong Kong Special Administrative Region (2000), the Notice of the Supreme People’s Court on Issues Concerning the Enforcement of Hong Kong Arbitral Awards in the Mainland (2009), and the Supplemental Arrangement of the Supreme People’s Court on Reciprocal Enforcement of Arbitration Awards between the Mainland and the Hong Kong Special Administrative Region (2020).
• Macao arbitral awards are governed by the Arrangement of the Supreme People’s Court on Mutual Recognition and Enforcement of Arbitration Awards Between the Mainland and the Macao Special Administrative Region (2008).
• Taiwan arbitral awards are governed by the Provisions of the Supreme People’s Court on Recognition and Enforcement of Arbitral Awards Issued in Taiwan (2015).

26. What is the effect of a decision recognising an arbitral award in your jurisdiction?

China

A court decision recognising an arbitral award becomes effective once it is served on the parties to the case (Provisions of the Supreme People’s Court on Several Issues concerning the Hearing of Cases Involving the Judicial Review of Arbitration, article 20). The parties to the case may not apply for a reconsideration, lodge an appeal, or apply for a retrial in respect of the decision.

27. What challenges are available against a decision refusing recognition in your jurisdiction?

China

Decisions refusing to recognise an arbitral award are final. The parties to the case may not apply for reconsideration, lodge an appeal, or apply for a retrial in respect of the ruling.

28. What are the effects of annulment proceedings at the seat of the arbitration on recognition or enforcement proceedings in your jurisdiction?

China

In judicial practice, depending on the circumstances, Chinese courts have suspended recognition proceedings in light of pending foreign annulment proceedings and have also refused to do so.

29. If the courts adjourn the recognition or enforcement proceedings pending annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security?

China

The applicant to a suspended recognition or enforcement proceeding is entitled to request the court to order the defendant to post appropriate security, according to article 6 of the New York Convention and article 7 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Handling of Cases by the People’s Courts to Enforce Arbitration Awards. The courts generally require the enforcement amount to be fully secured.

30. Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If an arbitral award is set aside after the decision recognising the award has been issued, what challenges are available?

China

31. What is the procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction? If the extrajudicial and judicial documents are drafted in a language other than the official language of your jurisdiction, is it necessary to serve these documents with a translation?

China

It is the court or arbitration institution that serves judicial documents rather than the parties to the dispute. The parties themselves are ordinarily for the service of extrajudicial documents. Personal delivery is the most common means for courts and arbitration institutions to deliver judicial documents, but documents may be served by express mail if personal delivery proves difficult. Courts and arbitration institutions also recommend electronic means such as email and text messages for the service of judicial documents other than judgments, rulings and mediation statements.

Judicial documents should be directly served on the addressee. If the addressee is a legal person, the legal person’s legal representative or an individual the legal person has so designated should sign for and accept the documents. If the addressee has appointed an agent, the agent may sign for and accept the documents. If the addressee is a foreign company and has a representative office in China, the documents may be served on the representative office.

Courts require that Chinese be used in adjudicating foreign-related civil cases (Civil Procedure Law, article 262). Judicial documents submitted to courts are required to be in Chinese. Documents drafted in a language other than Chinese are required to be accompanied by a Chinese translation. Parties seeking recognition of an arbitral award may select a translator from among those listed in directories designated by the higher people’s courts to translate such documents or to certify a translation.

32. What is the procedure for service of extrajudicial and judicial documents to a defendant outside your jurisdiction? Is it necessary to serve these documents with a translation in the language of this jurisdiction? Is your jurisdiction a party to the 1965 Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Service Convention)? Is your jurisdiction a party to other treaties on the same subject matter?

China

China is a party to the 1965 Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Service Convention). The Hague Service Convention became effective for China as of 1 January 1992. Generally, service of judicial documents to addressees outside China is subject to the provisions of the Hague Service Convention and relevant bilateral judicial assistance agreements.

If an addressee has no domicile or service cannot otherwise be completed in China and service outside China is necessary, courts will usually review whether a judicial assistance agreement exists between China and the addressee’s country of residence  (Civil Procedure Law,  article 274). If a judicial assistance agreement does exist, the court may effect service in the manner specified in the agreement.

If an agreement does not exist, the court may then review whether the country where the addressee is located is a member state of the Hague Service Convention; if so, the court may effect service in the manner specified in the Hague Service Convention.

Furthermore, courts may choose to serve documents by mail if so permitted in accordance with the laws of the country in which the addressee is located. In such cases, if the acknowledgment of service is not returned within three months of the date of mailing and service can be certified by evidence, the documents will be deemed to have been served on the expiry of the three-month period.

Service by public announcement is permitted when service has been unsuccessful by any of the foregoing means. In such cases, documents shall be deemed served three months after the release date of the announcement.

When serving addressees located outside China, judicial documents in Chinese are ordinarily accompanied by a translation in the official language of the addressee’s country or region.

The foregoing service methods apply only for Chinese courts to serve documents to addressees located outside China.

Service in arbitration proceedings can be effected via diverse means without having to consider the Hague Service Convention or judicial assistance agreements between states. International courier is the most commonly used means for the service of documents in arbitration proceedings.

33. Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction? Are there any databases or publicly available registers providing information on award debtors’ interests in other companies?

China

There are several database companies in China that provide fee-based services, including Qcc.com and TianYanCha.com. Once registered, database users can search for primary information regarding companies registered in China, including information about shareholders, key senior executives, external investments (eg, investment in shares of other companies), litigation, intellectual property rights and credit reports.

In Chinese litigation, lawyers may also apply to the court for an investigation order that can be used to investigate an award debtor’s assets.

34. Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?

China

35. What kinds of assets can be attached within your jurisdiction?

China

A wide range of award debtor assets can be sealed, distrained or frozen by the court, including movable assets, real properties registered in the name of the debtor, specific movable assets, and other property rights (tangible or intangible assets) (Provisions of the Supreme People’s Court on the Sealing up, Distraining and Freezing of Properties by the People’s Courts in Civil Enforcement (revised in 2020), article 2).

36. Are interim measures against assets available in your jurisdiction?

China

In litigation proceedings, parties may apply to the court for interim measures, including property preservation, evidence preservation and conduct preservation.

In arbitration proceedings, parties may apply for interim measures with the arbitration institution (Arbitration Law, articles 28 and 46), which will refer the application to the competent court pursuant to the relevant provisions of the Civil Procedural Law. An application for property preservation will generally be approved by the court so long as the applicant posts appropriate security. In practice, opinions diverge between courts in different regions as to whether conduct preservation can be applied for in arbitration procedures.

Parties to eligible arbitration proceedings in Hong Kong may apply directly to a court in mainland China for property preservation, evidence preservation and conduct preservation, according to the Arrangement of the Supreme People’s Court Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region (effective as of 1 October 2019, Fa Shi [2019] No. 14). Eligible arbitration proceedings must be seated in Hong Kong and be administered by an arbitration institution jointly chosen by the Supreme People’s Court and the Department of Justice of the Hong Kong Special Administrative Region Government.

These jointly chosen arbitration institutions currently include the Hong Kong International Arbitration Centre, the Hong Kong Arbitration Centre of the China International Economic and Trade Arbitration Commission, the Asian Affairs Office of the International Chamber of Commerce, the CMAC Hong Kong Arbitration Centre, the Shenzhen Court International Arbitration and the eBRAM International Online Dispute Resolution Centre.

37. What is the procedure to apply interim measures against assets in your jurisdiction?

China

On receipt of an application, the court will contact the applicant and examine the application materials. The court will require the applicant to post security if the application is for asset preservation. Permissible forms of security include cash, letters of guarantee issued by the applicant or a third party, letters of guarantee issued by an insurance company, and independent letters of guarantee issued by a financial institution.

The court will make a ruling on interim measures if it approves the application, and the internal enforcement department of the court will be responsible for a specific implementation of the interim measures. Courts generally do not contact the party subject to the interim measures before ruling on and implementing interim measures.

The court will inform both parties in writing after interim measures are implemented.

38. What is the procedure for interim measures against immovable property within your jurisdiction?

China

Finally, the term of preservation for immovable property may not exceed three years. An application for renewal of the preservation term is required to be submitted to the court seven days before expiry of the preservation term.

39. What is the procedure for interim measures against movable property within your jurisdiction?

China

First, the court needs to confirm the ownership of movable property (including special movable property such as motor vehicles, aircraft, machinery and equipment, etc) by:

• verifying the ownership with the respondent or the third person who possesses the movable property; and
• obtaining confirmation in accordance with a valid legal instrument.

Next, the court will issue a preservation order and confirm the amount subject to preservation, which will not exceed the amount owed by the respondent. Subsequently, the court will take the following preservation measures:

• With regard to registered special movable properties (vehicles, ships, aircraft, machines and equipment), rulings on interim measures and notices of assistance in execution shall be served to the registration authorities (administrative departments of vehicles, maritime and civil aviation, credit information centres, etc) and the relevant authorities will cooperate and immediately carry out the procedures for suspension of the change of registration.
• With regard to unregistered motor vehicles, the engine numbers need to be recorded on the list of distrained items. If the owner of a motor vehicle requests to register ownership of the motor vehicle during the period of distrainment, the court will permit the request and accordingly handle the distrained registration on time.
• If the court does not hold the sealed or distrained property, it may designate the person subject to preservation to do so (the person may be allowed to continue using the property if its continued use would not significantly affect its value). If it is inappropriate for the person subject to preservation to hold the property, it may be entrusted to a third party or to the applicant (such holders cannot use the property).

Finally, the term of sealing or distrainment may not exceed two years. To extend the term, the parties concerned need to apply to the court for renewal seven days before expiry of the preservation term.

40. What is the procedure for interim measures against intangible property within your jurisdiction?

China

• be registered in the name of the respondent;
• the third party under which name the intellectual property is registered confirms in writing that trademarks and patents belong to the respondent; and
• confirmation in accordance with a valid legal instrument.

Copyrights (property right thereof) available for interim measures must satisfy the following two conditions:

• the work has been published (this condition does not apply to unpublished inventions and unpublished works); and
• the respondent is the author of the work.

Next, the court will deliver its ruling on the interim measures to the respondent and the applicant, and deliver a notice of assistance in enforcement to the relevant registration departments. Subsequently, the court will implement the following preservation measures:

• If necessary, the court may order the respondent to submit the certificate of property right or use right to the court for preservation.
• The court will notify the relevant competent authorities or operators either by mail or in person to seal intellectual property and to cease the registration of transfer of property rights. These authorities include the Trademark Office of the China National Intellectual Property Administration, the Patent Office of the China National Intellectual Property Administration, the copyright registration authority of computer software, operators of network domain names, among others. Competent authorities or operators are prohibited from altering authorship and other particulars in relation to the property and must suspend examination and approval procedures for distrained patent application rights.

Finally, the term for the preservation of the intellectual property may not exceed three years (the preservation term of a patent right must not exceed six months). To extend the term, the parties concerned need to apply to the court for renewal seven days before expiry of the preservation term.

41. What is the procedure to attach assets in your jurisdiction?

China

After a court accepts an application for enforcement, the court will serve an enforcement notice on the party whose assets are subject to enforcement. In the notice, the court will urge the party to perform the obligations as determined in the arbitral award (or other valid legal instruments, such as a judgment or notarised debt instrument) and warn that the party’s failure to make prompt payment will result in late performance interest or a late fee of 0.175 per cent per day.

Once the enforcement procedures have started, the preservation measures adopted during litigation or arbitration will be converted automatically into measures to seal, distrain or freeze property in the course of enforcement. The period will be calculated continuously and there is no need for the enforcement court to issue a new ruling.

Regarding the enforcement procedure, the court will first take measures to seal, distrain or freeze the property subject to enforcement before the actual disposal of the assets. Then, the court will dispose of movable and immovable property by auction or sale. For bank deposits and other types of property that can be directly deducted or transferred, the court may directly issue a deduction or transfer order and transfer the same to the court’s account and then distribute the same to the applicant.

For a defendant who refuses to obey valid legal instruments, the court may also adopt or notify other authorities to adopt punitive measures, such as restrictions on travelling overseas and excessive and unnecessary consumption (eg, purchasing real estate, paying high insurance premiums, taking China Railway Highspeed trains, as specified in article 3 of the Several Provisions of the Supreme People’s Court on Restriction of High-value Consumption of Enforcees), naming the person on a credit record blacklist, publicly announcing the non-performance via media, among other sanctions.

42. What is the procedure for enforcement measures against immovable property within your jurisdiction?

China

As a general rule, when a court disposes of immovable property that has been sealed, distrained or frozen, the court must dispose of the property via auction, unless otherwise stipulated.

Procedure for enforcement measures

Appraisal

In most cases, the first step in the enforcement process is to randomly select an appraisal institution to ascertain the value of the property. Usually, the institution is selected through the court’s online lottery system from a directory that the higher people’s court creates and routinely updates.

However, no appraisal is required if the value of the property is relatively low or is easily determined by other means.

Auction

The court will further randomly select and entrust an auction institution to conduct the auction. The court must supervise the auction unless otherwise provided.

Before the auction, the court will set the appraisal price as the benchmark(reserve) price for the first auction. If no appraisal is made, the benchmark price will be determined by considering the market price and consulting with the relevant parties.

If the first auction is unsuccessful, a second auction will be held. The benchmark price could be lowered at the court’s discretion, but must not be lower than 80 per cent of the previous benchmark price.

If the second auction is unsuccessful, the court can request the opinions of the award creditor and other creditors as to whether any of them wish to take the property in satisfaction of debts owed at an agreed price. If no creditor takes the property or if the property cannot otherwise be used to satisfy the award debt, a third auction will be held within 60 days.

If the third auction is also unsuccessful and the award creditor or other creditors refuse to accept the property, or in the event that the property cannot otherwise be used to satisfy the award debt, the court must issue a public announcement for sale within seven days of the date of conclusion of the third auction. If no buyer is willing to buy the property at the benchmark price of the third auction within 60 days of the date of the announcement, and neither the enforcement applicant nor any other creditor is willing to take the property in satisfaction of the award debt, the seal or freeze measures must be released and the property will be returned to the award debtor.

If the auction or satisfaction of the award debt is successful, the ownership of the property will be transferred to the bidder at the time of the successful auction or when the court delivers to the award creditor and other creditors a ruling on the satisfaction of the debt. The auction proceeds will then be transferred to the award creditor and other creditors according to the nature of the amounts owed.

43. What is the procedure for enforcement measures against movable property within your jurisdiction?

China

44. What is the procedure for enforcement measures against intangible property within your jurisdiction?

China

45. Are there specific rules applicable to the attachment of assets held by banks? Is it possible to attach in your jurisdiction sums deposited in bank accounts opened in a branch or subsidiary of a foreign bank located in your jurisdiction or abroad? Is it possible to attach in your jurisdiction the bank accounts opened in a branch or subsidiary of a domestic bank located abroad?

China

Attatchments against bank accounts in PRC are subject to provisions mainly in judicial interpreations and normative documents issued by the Supreme People’s Court, such as Provisions of the Supreme People's Court on Several Issues Concerning Enforcement by the People's Courts (for Trial Implementation)(Fa Shi [1998] No. 15, revised in 2020) and Notice of the Supreme People’s Court and the People’s Bank of China Concerning Regulation of Enforcement by People’s Courts and Assistance for Enforcement by Financial Institutions (Fa Fa [2000] No. 21).

Courts have the authority to attach bank accounts opened in China, regardless of whether the bank account is opened with a domestic bank or a foreign bank.

At present, the courts have formed a cooperation with the China Banking and Insurance Regulatory Commission and local banking and insurance administrative departments to establish a national network to assist with online enquiries and attachments.

The judges in charge of taking preservation or enforcement measures are empowered to:

• enquire about the ownership and status of bank accounts; and
• take corresponding measures against an award debtor’s bank accounts through the national network, such as freezing, releasing, extending the freeze period, deducting and transferring funds, and other financial products.

The effectiveness of handling a case online is the same as the effectiveness of handling the case in person.

The statutory period for freezing bank funds cannot exceed one year, although this period is eligible for renewal.

There are certain types of bank account not subject to attachment, including but not limited to the financial institutions’ deposit account opened at the People’s Bank of China, deposits of enterprises whose bankruptcy petitions have been accepted by the court, state treasury funds, and deposits of military and armed police forces.

As for bank accounts opened outside China, courts have no enforcement jurisdiction even if the bank is a subsidiary of a Chinese bank. Applicants need to consult a local attorney and file an application with a local court where the account was opened if attachment measures are available under the local law.

46. Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?

China

There are no domestic, codified rules that specifically govern recognition and enforcement of arbitral awards against foreign states. Thus, Chinese courts may apply the general rules on recognition and enforcement as provided in article 266 of Civil Procedural Law, and general sovereign immunity principles.

China signed the ICSID Convention in 1990, which entered into force in 1993. As a member state, China is, in principle, obliged to recognise and enforce ICSID awards, as provided by Chapter 6, section 4 of the Convention.

China has also acceded to several bilateral investment treaties. Many of these have clauses requiring parties to submit all disputes to ICSID arbitration, that awards rendered are final and binding, and that the parties undertake to execute the award.

However, in practice, Chinese courts have yet to encounter any investment arbitration cases that apply the above provisions. China has not designated ‘a competent court or other authorities’ to receive the copy of the award in accordance with article 54(2) of the ICSID Convention. As a result, the status of implementation of these rules remains unclear.

47. What is the procedure for service of extrajudicial and judicial documents to a foreign state? Is it necessary to serve extrajudicial and judicial documents with a translation in the language of the foreign state?

China

Chinese courts do not accept enforcement cases against foreign states. Therefore, no procedures exist for service of extrajudicial and judicial documents to foreign states.

48. May a foreign state invoke sovereign immunity (immunity from jurisdiction) to object to the recognition or enforcement of arbitral awards?

China

49. May award creditors apply interim measures against assets owned by a sovereign state?

China

China has no legal basis for taking interim measures against assets owned by a sovereign state. Relatedly, Chinese courts can rarely accept applications or cases against a foreign state. When a plaintiff brings a civil lawsuit before a Chinese court against a defendant who enjoys privileges and immunities in China (such as a sovereign state), the court needs to undertake a reporting process before accepting the case. Trial courts can register such cases only once all the higher-level courts, up to the Supreme People’s Court, have agreed to accept the case. This process is set forth in the Circular of the Supreme People’s Court on Issues Concerning the Acceptance and Hearing of Civil Cases Involving Privileges and

Immunities by People’s Courts (Fa [2007] No. 69).

50. Are assets belonging to a foreign state immune from enforcement in your jurisdiction? Are there exceptions to immunity?

China

China adheres to the ‘absolute immunity’ principle when dealing with judicial jurisdiction and enforcement jurisdiction against a foreign state. This means the courts do not have jurisdiction over, and will not handle, cases in which a foreign state is a defendant or award debtor. Furthermore, China will not accept foreign courts’ jurisdiction over cases in which China is named as a defendant or cases against Chinese assets.

China has not stipulated national laws on state immunity, so there are no detailed provisions on state immunity and its exceptions.

In terms of international conventions, although China signed the United Nations Convention on Jurisdictional Immunities of States and Their Property on 14 September 2005, the Convention has yet to come into force.

51. Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? What are the requirements of waiver?

China

To date, there is no general legal basis or any practical cases involving immunity and waiver by a foreign state.

At present, only the central bank of a foreign state can claim an exemption of property from judicial compulsory measures such as property preservation and enforcement. The exceptions to waiver of immunity include the following:

• the central bank of a foreign state, or the government to which it belongs, may explicitly waive immunity in written form; and
• the central bank of a foreign state, or the government to which it belongs, has designated property used specifically for property preservation and enforcement.

The legal basis for this is the Law of the People’s Republic of China on Immunity of the Property of Foreign Central Banks from Compulsory Judicial Measures (effective as of 25 October 2005).

52. Is it possible for a creditor of an award rendered against a foreign state to attach the assets held by an alter ego of the foreign state within your jurisdiction?

China

Under Chinese corporate law, there is a legal theory of piercing the corporate veil where a corporate personality is mixed with its shareholder. For example, when a shareholder tries to evade the payment of debts by abusing the company’s independent status as a legal person or its limited liability status, thereby seriously damaging the interests of the company’s creditors, the shareholder may be held jointly and severally liable for the debts of the company (Company Law, article 20). To meet the burden of proof, some basic criteria include whether the company has an independent expression of intent and independent interests, and whether the finances and property of the company are independent of those of its shareholders.

China has not promulgated clear legislation regarding the theory of piercing the corporate veil or the theory of alter ego involving a foreign state. No instances have been found in practice regarding trial cases, preservation or enforcement.