Along with their endeavors to put an end to sluggishness in the enforcement of court rulings, Chinese courts are making special efforts to guarantee that arbitral awards made by foreign arbitration institutions are carried out.
Li Jian, vice-president of the Second Civil Chamber of the Supreme People's Court, told China Daily that with "quite a mature system," the enforcement of arbitral awards has improved.
Chinese courts have, since 1995, introduced a prior reporting system under which the Supreme People's Court has the final say in deciding if an international arbitral award is valid or not. The reasons given include the violation of public interest and defects in procedure.
However, according to Li, only in very few cases has the Supreme People's Court vetoed an international arbitral award in the past 5 years.
"Because the enforcement of court rulings is still a major issue facing courts in China, the prior reporting system has demonstrated that we attach great importance to the enforcement of international arbitral awards," Li said.
At present, there are no permanent international arbitration institutions in China. However, it is not uncommon that in cases involving a Chinese party and a foreign party, the parties concerned choose an international arbitration institution in order to avoid possible bias.
In addition to the prior reporting system, the Supreme People's Court has in the past five years issued more than 20 judicial interpretations related to enforcing arbitral awards.
"These judicial interpretations have all judged in favour of the enforcement of arbitral awards," said Wang Shengchang, vice-chairman of the China International Economic and Trade Arbitration Commission.
China has acceded to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards. However, while a considerable number of court rulings fail to be carried out, the enforcement of arbitral awards, particularly those involving foreign parties, or made by foreign arbitration institutions, has become a major issue.
Recognizing the efforts China has made to turn the trend, Tao Jingzhou, managing partner of the Beijing office of Coudert Brothers, nevertheless said that there is still room for improvement.
"The enforcement of arbitral awards against Chinese companies is still a concern for foreign companies because of local protectionism and the involvement of state-owned enterprises," said Tao.
"While there has been more voluntary enforcement in coastal regions, a change in attitude is needed in the inland for a real improvement to be made in enforcing arbitral awards," he added.
(China Daily 06/05/2001)
