Enforcing Foreign Arbitral Awards in China

Introduction

An arbitration award against a Chinese counterparty is only as valuable as it is enforceable. China is a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention") and maintains a judicial framework that is, in principle, strongly pro-enforcement. A foreign arbitral award that satisfies the Convention's requirements will generally be recognized and enforced by Chinese courts.

Three preliminary points frame everything that follows:

• Accession and entry into force. China acceded to the New York Convention by a decision of the Standing Committee of the National People's Congress on 2 December 1986, and the Convention entered into force for China on 22 April 1987.
• Reciprocity reservation (互惠保留). Convention treatment is available only for awards made in the territory of another Contracting State. Awards made in non-Contracting States are instead considered under the Civil Procedure Law and the principle of reciprocity.
• Commercial reservation (商事保留). China applies the Convention only to disputes arising from "contractual or non-contractual commercial legal relationships" as defined under Chinese law — covering, for example, sale of goods, leasing, engineering contracting, processing, technology transfer, joint ventures, insurance, credit, agency, consulting, carriage, product liability and environmental damage. Disputes between a foreign investor and a host government are excluded.

If an award falls outside these reservations, recognition and enforcement may still be possible under the Civil Procedure Law, but the Convention route — with its narrow, exhaustive grounds for refusal — is by far the more favorable framework.

The Legal Framework at a Glance

Recognition and enforcement of a foreign arbitral award in China is governed by three layers of rules:

• The New York Convention (1958), as applied subject to China's two reservations.
• The Civil Procedure Law of the People's Republic of China (中华人民共和国民事诉讼法), as amended in 2023 and in force since 1 January 2024. Article 304 provides the general rule: a party seeking recognition and enforcement of a foreign arbitral award applies directly to the competent intermediate people's court, which handles the application in accordance with international treaties to which China is a party or the principle of reciprocity.
• The judicial interpretations and notices of the Supreme People's Court ("SPC"), in particular:
  • the SPC Notice on the Implementation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (法(经)发〔1987〕5号), which explains how the two reservations operate and identifies the competent courts;
  • the SPC Provisions on Several Issues Concerning the Reporting and Verification of Cases Involving Judicial Review of Arbitration (最高人民法院关于仲裁司法审查案件报核问题的有关规定, 法释〔2017〕21号, as amended in 2021), which establish the reporting/verification mechanism; and
  • the SPC Provisions on Several Issues Concerning the Trial of Cases Involving Judicial Review of Arbitration (最高人民法院关于审理仲裁司法审查案件若干问题的规定, 法释〔2017〕22号).

Applying for Recognition and Enforcement

Competent court

An application for recognition and enforcement is filed with the intermediate people's court (中级人民法院) at the place where the respondent (the award debtor) has its domicile or residence, or where its property is located. Where the respondent has no domicile or property in China, the applicant may apply to the intermediate court at the applicant's own domicile or at another place with an appropriate connection to the dispute. The application is made directly to the court; no separate proceeding in the seat of arbitration is required.

Where the respondent holds assets in more than one place, the applicant may generally choose the most convenient or promising forum, but should confirm in advance how the chosen court requires the "location of property" to be evidenced.

Time limit

The application must be brought within the statutory period for applying for enforcement, which is two years under the Civil Procedure Law (currently Article 250), as applied to foreign awards by the SPC's Interpretation on the Civil Procedure Law (Article 545). The period runs from the last day of the period for performance stated in the award; where the award provides for performance in installments, from the due date of the last installment; and where it specifies no period, from the date the award becomes effective. The period is subject to rules on suspension and interruption analogous to the limitation of action. Filing promptly is strongly advised, and the precise calculation should be confirmed against current law.

Required documents

The core documents, reflecting Article IV of the New York Convention, are:

• a written application stating the request for recognition and, where sought, enforcement;
• the duly authenticated original award, or a duly certified copy;
• the original arbitration agreement, or a duly certified copy;
• a Chinese translation of the award and the arbitration agreement, prepared by a qualified translator, where they are not already in Chinese;
• documents establishing the applicant's identity and capacity (for a company, its certificate of incorporation or equivalent), and a power of attorney where a lawyer or agent is instructed;
• evidence of jurisdiction, such as proof of the respondent's domicile or of the location of its property in China.

Foreign public documents (for example, certificates of incorporation or powers of attorney executed abroad) must be authenticated. Since China's accession to the Hague Apostille Convention took effect on 7 November 2023, an apostille is generally sufficient in place of consular legalization, but the requirements for the issuing jurisdiction should be confirmed.

Grounds for Refusal

The grounds on which a Chinese court may refuse recognition and enforcement correspond in substance to Article V of the New York Convention. They are exhaustive and are interpreted narrowly. They fall into two groups.

Grounds that must be proved by the respondent (Article V(1))

These grounds are not examined by the court of its own motion; the party opposing enforcement must raise and prove them:

• Invalidity or incapacity of the arbitration agreement. A party to the agreement lacked capacity, or the agreement is invalid under the law to which the parties subjected it (or, failing any indication, under the law of the country where the award was made).
• Lack of proper notice or inability to present a case. The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the proceedings, or was otherwise unable to present its case.
• Excess of authority. The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission.
• Irregular composition or procedure. The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the parties' agreement or, failing agreement, with the law of the country where the arbitration took place.
• Award not yet binding, or set aside or suspended. The award has not become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made.

Grounds the court may consider on its own motion (Article V(2))

• Non-arbitrability. The subject matter is not capable of settlement by arbitration under Chinese law. Under the Arbitration Law of the PRC, disputes over marriage, adoption, guardianship, maintenance and succession, and administrative disputes that must be handled by administrative organs, are not arbitrable. For ordinary commercial awards this ground rarely arises.
• Violation of public policy. Recognition or enforcement would be contrary to the public policy (公共政策) of China. Chinese courts construe "public policy" restrictively, reserving it for awards that would offend fundamental principles of Chinese law or basic social and public interests; it is very rarely upheld.

A useful asymmetry for award holders: the Article V(1) grounds carry the respondent's burden of proof, the court may not raise them on its own, and Chinese courts apply a pro-recognition presumption in doubtful cases.

The Reporting/Verification Mechanism: A Safeguard for Award Holders

One of the most important structural protections for an award creditor is China's internal reporting/verification mechanism (报核制度).

If a competent court is inclined to refuse recognition or enforcement of a foreign arbitral award, it may not simply render that decision. Under the SPC Provisions on the Reporting and Verification of Cases Involving Judicial Review of Arbitration (法释〔2017〕21号), the court must report the case to the higher people's court in its region; if that higher court agrees with the proposed refusal, it must in turn report to the SPC; and only after the SPC has reviewed the matter may the court issue its ruling in accordance with the SPC's opinion.

In practice this means that:

• a refusal cannot be decided unilaterally by a local court;
• the SPC acts as a final gatekeeper and has, over the years, consistently applied a pro-enforcement, pro-arbitration approach; and
• the risk of a valid foreign award being refused on spurious or parochial grounds is materially reduced.

The mechanism originated in an internal notice (the SPC's 1995 Notice, 法发〔1995〕18号) and was elevated into formal judicial interpretation in 2017. It applies specifically to "negative" outcomes, including a proposed refusal to recognize and enforce a foreign arbitral award.

Practical Tips for Award Holders

• Act early to protect assets. The most common reason an award fails to produce a recovery is not refusal of recognition but dissipation of assets. Consider applying for property preservation (asset freezing) against the respondent's bank accounts, real property, equity or receivables in connection with the proceedings. Courts typically require the applicant to provide security (担保). Asset preservation can be decisive, but its availability and scope should be confirmed with counsel under current rules.
• Choose the forum carefully. Where the respondent has assets in more than one location, weigh the speed, experience and local practice of the candidate intermediate courts. Confirm in advance how the chosen court requires the location of property to be evidenced.
• Mind the clock. The two-year limitation period is a hard constraint. Do not wait for negotiations to conclude before filing; a protective filing can often be made while commercial discussions continue.
• Prepare documents and translations properly. Deficiencies in the award, the arbitration agreement or their Chinese translations are the most common procedural stumbling blocks. Use qualified translators, ensure copies are properly certified or authenticated, and arrange apostille or legalization of foreign corporate documents in line with current requirements.
• Understand the enforcement phase. Recognition is the gateway; enforcement is the mechanism. Once the award is recognized, it is enforced through the ordinary civil enforcement procedure against the respondent's assets in China. If the respondent has no assets in China, recognition alone may still be valuable — for example, as a basis for later enforcement if assets appear, or in related proceedings.

How Tianni Law Firm Can Help

Tianni Law Firm (江苏天倪律师事务所), based in Nanjing, Jiangsu, advises foreign and domestic clients on cross-border arbitration and on the recognition and enforcement of foreign arbitral awards before Chinese courts. The firm's work in this area includes assessing enforceability at the outset, identifying and protecting attachable assets, preparing and authenticating the necessary documents, selecting the appropriate forum, and representing clients through recognition, reporting-verification and enforcement proceedings.