CHINA Law and Practice Contributed by: Paul Zhou and Leslie Shen, SGLA Law Firm
courts to report to the SPC before refusing enforce - ment of a foreign-related award, ensuring uniformity and correctness across different jurisdictions. Upon acceding to the Convention in 1987, China made two reservations: the reciprocity reservation and the commercial reservation. A significant development is the shift from the “institution standard” to the “seat standard” for determining award nationality. Under the seat standard (adopted in recent SPC guidance), an ICC arbitration seated in Beijing is treated as a Chinese award subject to Chinese law, not a foreign award. This shift aligns Chinese practice with inter - national norms. 12.2 Enforcement Procedure To enforce an arbitral award, the prevailing party applies to the Intermediate People’s Court at the place where the respondent is domiciled or where the respondent’s property is located. The application must be filed within two years of the award becom - ing effective. The court examines the application and enforces the award unless it falls within the grounds for refusal set out in the law. For foreign awards under the New York Convention, the court applies Article V of the Convention. For domestic awards, the court applies Article 76 of the 2025 Arbitration Law, which mirrors the setting-aside grounds. The burden of proof rests on the party resisting enforcement to establish a ground for refusal. The “reporting system” ( baoshizhidu ) merits particu - lar attention in the context of enforcement. Under this system, where an Intermediate People’s Court intends to refuse enforcement of a foreign-related arbitral award (whether made in China or abroad), it must report its proposed refusal to the Higher Peo - ple’s Court of the relevant province. If the Higher Peo - ple’s Court agrees with the proposed refusal, it must further report to the SPC for final determination. This centralised review mechanism is designed to ensure that refusals of enforcement are limited to cases that genuinely satisfy the statutory grounds, and to prevent local protectionism from undermining the enforceabil - ity of arbitral awards. In applying the Convention, the SPC has consist - ently reaffirmed in its judicial interpretations, replies
and reported cases that: (i) the “more favourable law” principle applies in determining whether to enforce a foreign award; (ii) the court shall not review the merits of the award; and (iii) the “public policy” defence shall be strictly construed and applied only in exceptional circumstances. The SPC consistently adopts a narrow approach to the “public policy” exception. In its judicial practice, the SPC has consistently reaffirmed that public policy is limited to situations violating fundamental principles of Chinese law, national sovereignty or public secu - rity. A mere violation of mandatory provisions does not constitute a public policy breach. The centralised reporting system further reinforces this pro-enforce - ment approach. 12.3 Approach of the Courts Chinese courts have adopted an increasingly pro- enforcement approach in recent years. The SPC has issued multiple judicial interpretations and guiding opinions to ensure consistent and correct applica - tion of the New York Convention and the Arbitration Law. The 2025 Arbitration Law’s alignment with inter - national standards is expected to further improve enforcement outcomes. In a notable 2022 case, the SPC overturned a lower court’s refusal to enforce a SIAC award, reaffirming that procedural errors in the arbitration do not justify refusal of enforcement unless they violate due process or public policy. This line of authority reinforces the finality and enforceability of arbitral awards in China. For domestic awards, the court examines the appli - cation on the basis of Article 76 of the 2025 Arbitra - tion Law. The grounds for refusing enforcement of a domestic award are essentially the same as the set - ting-aside grounds. If the award has already been set aside by the competent court, the enforcement court will refuse enforcement. If a setting-aside application is pending before the competent court, the enforce - ment court may stay enforcement. The 2025 Arbitra - tion Law provides that the court must decide on an enforcement application within six months of accept - ing the application, promoting timely enforcement.
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