CHINA Law and Practice Contributed by: Xing Nan (Nancy), AnJie Broad Law Firm
7. Designation, Compliance and Circumvention 7.1 Executive Body
C applied to the court for recognition and enforcement of an arbitration award made by the Singapore Inter - national Arbitration Centre Arbitration Tribunal. The respondent, Company D, requested that the court not recognise and enforce the arbitration award because the law firm to which the chief arbitrator belonged had been sanctioned by the Chinese government, result - ing in the arbitration award being unfair. Regarding the issue of whether the sanctions imposed by the Chinese government on the law firm to which the arbitrator belonged would affect the hearing of this case, the court believed that the sanctions were aimed at the law firm to which the chief arbitrator belonged and not at its arbitrator’s identity. This sanction was not within the scope of non-recognition as stipulated in the Convention on the Recognition and Enforce - ment of Foreign Arbitral Awards, was not related to the trial of this case, and there was no improper procedure. The issue of whether the recognition and enforcement of arbitration awards complied with the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Meas - ures was also not related to this case, and the choice of arbitration was the result of the autonomy of the parties in this case. The court ultimately held that the award made by the Singapore International Arbitration Centre in question did not fall under the circumstances of non-recognition and enforcement under Article 5 of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and should be recognised and enforced. Summary In conclusion, PRC courts tend to respect the autono - my of the contracting parties regarding the agreement of sanctions or export control terms on the condition that sanctions or export control terms do not fall within the jurisdiction of the PRC sanctions laws, including but not limited to the Law of the People’s Republic of China on Countering Foreign Sanctions, the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures, and the Export Control Law of the People’s Republic of China.
According to the Provisions on the List of Unreliable Entities, China has established a working mechanism with the participation of relevant departments of cen - tral state organs, responsible for organising and imple - menting the unreliable entity list system. The Office of the Working Mechanism is located in the competent commerce department of the State Council. According to the Law of the People’s Republic of China on Countering Foreign Sanctions, the relevant depart - ments of the State Council may decide to include individuals or organisations who directly or indirectly participate in the formulation, decision-making, and implementation of discriminatory restrictive measures as stipulated by this law in the list of countermeas - ures. The determination, suspension, modification or cancellation of the list of countermeasures, as well as countermeasures themselves, shall be announced by an order issued by the Ministry of Foreign Affairs or other relevant departments of the State Council. 7.2 Scope of Designation There are similar provisions in China specifying the indirect designation of persons as a result of them being “owned or controlled” by a directly designated person. According to the Law of the People’s Republic of China on Countering Foreign Sanctions, the rel - evant departments of the State Council may decide to take countermeasures against the following individu - als and organisations: • spouses and immediate family members of indi - viduals included in the list of countermeasures; • senior management personnel or actual controllers of organisations included in the list of counter - measures; • organisations where individuals listed on the countermeasures list serve as senior management personnel; • organisations that are actually controlled, or were established and operated by, individuals and organisations included in the countermeasures list; and
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