CHINA Law and Practice Contributed by: Paul Zhou and Leslie Shen, SGLA Law Firm
11.2 Excluding/Expanding the Scope of Appeal The parties cannot exclude the mandatory grounds for setting aside by agreement. The 2025 Arbitration Law expressly prohibits any agreement from waiving the right to apply for setting aside, providing that such a waiver agreement is invalid as it is contrary to public policy. However, the parties may agree to expand the scope of court review in limited circumstances, sub - ject to the requirement that the expanded scope does not violate mandatory provisions of the law or public policy. In practice, Chinese courts do not give effect to agreements that purport to contract out of the setting-aside regime, ensuring minimum procedural safeguards and the integrity of the arbitral process. 11.3 Standard of Judicial Review The court reviews setting-aside applications on the basis of the grounds set out in Article 71 of the 2025 Arbitration Law. The review is generally conducted on the record, and the court does not rehear the dispute on the merits. The 2025 Arbitration Law narrows the scope of judicial review, particularly in relation to the public policy ground, to align with the pro-enforce - ment trend. The SPC has consistently held that “pub - lic policy” should be narrowly construed and applied only when the award violates fundamental legal princi - ples or the essential interests of the state or the public. The standard of review is deferential to the tribunal’s factual findings and legal rulings, and the court may interfere only when a clear and expressly provided ground for setting aside is demonstrated. China has been a contracting state to the New York Convention since 22 April 1987. Chinese courts rec - ognise and enforce foreign arbitral awards made in the territory of another contracting state, subject to the grounds for refusal set out in Article V of the Conven - tion. The 2025 Arbitration Law reaffirms China’s com - mitment to the Convention. According to SPC sta - tistics, Chinese courts have refused enforcement of foreign arbitral awards in less than 10% of cases since 2020, demonstrating a consistently pro-enforcement attitude. The SPC’s reporting system requires lower 12. Enforcement of an Award 12.1 New York Convention
period under the pre-2025 Arbitration Law. The grounds for setting aside are: (i) there is no arbitration agreement; (ii) the matters adjudicated fall outside the scope of the arbitration agreement or the arbitration institution lacks jurisdiction; (iii) the composition of the arbitral tribunal or the arbitral proceedings violated statutory procedures; (iv) the evidence relied upon in the award is forged; (v) the opposing party concealed evidence that could have affected the fairness of the award; and/or (vi) an arbitrator solicited or accepted bribes, acted in collusion with a party or rendered an unjust award during the arbitration proceedings. In addition, the court shall set aside an award that con - travenes the public interest. These grounds are sub - stantially unchanged from the 1994 Arbitration Law. If the court finds that one or more of the grounds for setting aside are established, it may: (i) set aside the award in whole or in part; or (ii) remand the case to the arbitral tribunal for re-arbitration (a mechanism previ - ously provided under Article 61 of the 1994 Arbitration Law and now under Article 74 of the 2025 Arbitration Law). The remand procedure allows the tribunal to correct errors without invalidating the entire award, thereby promoting procedural efficiency and reducing costs. The court’s setting-aside decision is subject to appeal to the Higher People’s Court within the time - frame prescribed by the Civil Procedure Law. Statistical analysis of setting-aside decisions in 2025, based on published court decisions, indicates that Chinese courts set aside arbitral awards in approxi - mately 3.2% of cases where an application is filed. This rate has remained relatively stable over the past five years (ranging from 2.8% to 3.5%), suggesting that the setting-aside mechanism serves as a genu - ine but limited safeguard rather than a routine avenue for re-litigating the merits. The most common ground for setting aside in 2025 was “violation of arbitration procedure” (accounting for 44.7% of successful appli - cations), followed by “forged evidence” (21.3%) and “arbitrator misconduct” (18.5%). Applications based on “no valid arbitration agreement” accounted for 15.5% of successful settings-aside.
250 CHAMBERS.COM
Powered by FlippingBook