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李恒律师
李恒律师
广东-深圳
主办律师

ChineseLegalCaseReview

国际仲裁2014-12-31|人阅读

Chinese Legal Case Review

Jan. 1st, 2015

                              深圳涉外律师--李恒律师撰写

Though China is a not a common law country, judgments decreed by the China Supreme Court are widely respected and have persuasive authority, especially those published in the Supreme Court Gazette. This edition of the Chinese Legal Case Review reports the most recent decisions regarding cases with international interest and other influential cases approved by The China Supreme Court.

Editor: Henry Li, attorney at law of Beijing Yingke Law Firm

Jeffrey S. Firestone, US lawyer living in China

The Supreme Court Upholds Enforcement of an International Arbitration Award against a Swedish Company after Time Limit

On Sept. 18th, 2006 the CIETAC (China International Economic and Trade Arbitration Commission) entered an Arbitration Award to Shanghai Jingwei Machinary Company (herein after Jingwei Co.) against RETECH Aktiengesellschaft (herein after Retech) , a company registered in Sweden, regarding a breach of a purchase agreement.

Jingwei Co. applied for enforcement of the award at the Lenzburg court in Sweden on Aug.27th, 2007. The application was rejected by the Lenzburg court technically finding that the translation of the Arbitration Award lacked qualified verification required by the point two of Article Four of the New York Convention.

Jingwei Co. re-applied after retranslation and verification by the Swedish consulate in Shanghai. On Mar.17th, 2009 and Aug.31st, 2010, Lenzburg court rejected the reapplication finding that the translation of Arbitration award did not strictly meet requirements of point two of Article Four of the New York Convention.

On July 30th, 2008, Jingwei Co. discovered that Retech had placed some machinery in a fair in Shanghai for exhibition. Jingwei Co. applied to the First Shanghai Intermediary Court for enforcement of the arbitration award. The same day, the Shanghai court seized the machinery of Retech and approved the application of enforcement. Retech raised a challenge against the Court’s action by claiming that Jingwei Co.’s application for enforcement at the Shanghai Court should not be accepted because the application to the Shanghai court by Jingwei Co. was made after the statute of limitations of enforcement application, which was one year. The time for the arbitration award, had expired. The Shanghai High Court reviewed the challenge and refused.

It reasoned:

1. The Chinese Court began to have jurisdiction for the enforcement as of the date when it was discovered that Retech had property in China.

The Civil Procedure Law of the P.R.C provides that any relevant party shall apply for enforcement at a foreign competent court where the defendant or any of its property is not in territory of China. If no property of Retech is China; the Chinese court has no jurisdiction over the case for enforcement. The enforcement period began when Retech was found to have placed property in China.

2. There is no problem of double enforcement. The principle of theNew York Convention shall allow enforcement of arbitration award in any nation of the treaty as long as the award fulfills the basic terms of the convention. The convention is for purpose of efficient enforcement of arbitration awards among its parties, and does not prohibit application of enforcement at different nations of the treaty. Retech is able to provide evidence of fulfillment of its obligation as set in the award to avoid double enforcement or over enforcement.

3. The statute of limitations of enforcement application shall commence when the Chinese court obtains jurisdiction. Though the Civil Procedure Law of the P.R.C provides that the staute of limitation starts from the end of an obligation performance period ordered by a judgment or from the date when a judgment comes into force; in cases where no enforcement performance period is possible for the judgment; then the statute of limitation only starts when the P.R.C court obtains competent jurisdiction. The Chinese court’s jurisdiction is the base and precondition for the exercise of Jingwei Co.’s right of enforcement application. Where the Chinese court has no jurisdiction, Jingwei Co. cannot make an enforcement application at a Chinese court. Therefore it caused no delay in exercising its enforcement application right until it found assets in the Court’s jurisdiction to attach.

Note: the staute of limitations of enforcement application provided by the Civil Procedure Law of the P.R.C has been changed to two years.

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