- Elgar Asian Commercial Law and Practice series
Chapter 7: RECOGNITION AND ENFORCEMENT OF ARBITRAL AWARDS IN CHINESE COURTS
Recognition and enforcement of foreign judgments is a traditional difficulty in international society. The difficulty exists not only in China but also in many other countries in the world. Comparatively, arbitration provides an alternative way out. Arbitration can provide a relatively neutral and effective forum for the resolution of transnational commercial disputes. It is based on the parties’ consent and cooperation, and many losing parties simply enforce the awards voluntarily. However, when the losing party fails to perform promptly, arbitrators lack the necessary authority to enforce their awards. The prevailing party thus has to turn to the courts for help. Which national court may or should be seized to recognize and enforce the arbitral award? This depends on the individual case and the choice of the prevailing party. Normally the place of arbitration is chosen by the parties, it may be a place with which they have no objective connection. The place of enforcement is usually the place where the defaulting party’s assets are located. It would be useless, for instance, to obtain an enforcement order in Chinese courts for seizure and sale of the defaulting party’s goods and chattels located outside the PRC. Nor would it be useful to secure an order for the attachment of the defaulting party’s bank accounts in China, if these accounts turn out to be overdrawn. This is the reason why an international award needs to be recognized and enforced in a foreign country constantly, not merely in the country in which the arbitral award was made.
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