CHINA Law and Practice Contributed by: John Wang, Xu Jun, Song Jia and Zhao Yuxuan, Wang Jing & Co
6.2 Enforcement of Law and Arbitration Clauses Incorporated Into a Bill of Lading PRC courts rarely recognise the validity of law and arbitration clauses incorporated into a B/L. 6.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards The PRC joined the 1958 New York Convention in 1986. Civil Procedure Law is the domestic law that governs the recognition and enforcement of foreign arbitral awards. A foreign arbitral award needs to be notarised and legalised before being submitted to the PRC courts for recognition and enforcement. 6.4 Arrest of Vessels Subject to Foreign Arbitration or Jurisdiction The applicant is entitled to apply to the PRC courts for the arrest of a vessel in dispute that is subject to foreign arbitration or jurisdiction. This application shall be made before the applicant commences the arbitration/litigation proceeding. Once the arrest is granted, the applicant shall commence the arbitration/litigation proceeding within 30 days. 6.5 Domestic Arbitration Institutes The China Maritime Arbitration Commission (CMAC) and the China International Economic and Trade Arbitration Commission (CIETAC) spe - cialise in maritime claims. 6.6 Remedies Where Proceedings Are Commenced in Breach of Foreign Jurisdiction or Arbitration Clauses If the claimant commences proceedings before a PRC court in breach of foreign jurisdiction or arbitration clauses, the respondent is entitled to file a jurisdiction objection within the defence period to challenge the court’s jurisdiction. If the
court sustains the objection, it will dismiss the claimant’s action. In that case, the claimant shall bear the court fee, and there will be no further remedies available to the respondent/defendant. 7. Ship-Owners’ Income Tax Relief 7.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies A PRC-incorporated ship-owner is subject to corporate income tax on the worldwide income earned by its vessels and is subject to relief for any tax paid on the same income elsewhere, subject to conventions and treaties in relation to the avoidance of duplicate taxation. 8. Implications of Non- Performance, the IMO 2020, Trade Sanctions and the War in Ukraine 8.1 Force Majeure and Frustration Non-performance of a shipping contract due to the effects of the pandemic or the Ukraine war may be considered by PRC courts as force majeure or, in the context of Chinese law, hard - ship, provided that all statutory requirements have been satisfied. The Supreme Court has recently issued a judicial interpretation on con - tractual matters in the Civil Code, which provid - ed some guidance and clarifications with regard to hardship. The test for hardship is an unfore - seeable, unavoidable and insurmountable test. 8.2 Enforcement of the IMO 2020 Rule Relating to Limitation on the Sulphur Content of Fuel Oil As China is a contracting state to Annex VI of the MARPOL Convention, the 2020 sulphur content limit applies to China. The MSA has issued the Implementation Scheme of Global Marine Fuel
128 CHAMBERS.COM
Powered by FlippingBook