International Arbitral Awards : A Study of Enforcement in China

The increase in international trade creates a growing number of disputes between parties from different countries. International arbitration is the most preferred mechanism to solve disputes in international trade. If the failing party does not voluntarily comply with the award, the successful party must apply for recognition and enforcement of the award in order to obtain the remedies. Since China is one of the major business markets in the world, several of the companies committed to arbitral procedures are likely to have assets in China. This means that, if a party fails to honour an award, an enforcement procedure may begin within a Chinese court. The enforcement procedures in China are said to be insufficient and not to comply with international standards. International conventions and treaties provide for a high level of security in the recognition and enforcement procedure of the arbitral award. The most used and important instrument for recognition and enforcement is the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, to which China as well as Sweden are Contracting States. According to the Convention, an international arbitral award may only be refused under certain grounds laid down in the Convention. An analysis of the legal situation in China confirms that there are problems associated with the enforcement of arbitral awards. These problems are not, however, connected with the concept of international arbitral awards, but rather with the entire judicial system in China. Even though an enforcing party can do little to overcome these problems, certain measures can be taken in order to ease the enforcement procedure