China – How Mainland Recognizes And Enforces The Hong Kong Arbitration Awards.

Among Hong Kong and the Mainland, the arbitration structures vary greatly. A majority of the international arbitrations in Mainland are administered through the Chinese arbitration institutions. Once a Mainland seated ICC arbitration caused a substantial debate about whether a foreign institution on the Mainland could administer international arbitrations in the Mainland. Eventually, the Supreme People’s Court had to settle this case.

It is extremely rare that institutions outside Mainland that administer international arbitration choose Mainland China as the seat of arbitration and makes awards as per the applicable arbitrations law in the People’s Republic of China.
 

On the other hand, Hong Kong arbitration proceedings vary. They can be either institutional or ad hoc. Either a Hong Kong arbitration institution or even an overseas institution may administer them. Consequently, it is imperative that the identity of the Hong Kong arbitral award under the Arrangement should first be inferred.
 

As per the preface of the Arrangement, a Hong Kong award means an award made in Hong Kong in accordance with the Arbitration Ordinance. This means that for an award to qualify as a Hong Kong award:
 

• Hong Kong should be the seat of arbitration; and
   

• the award should be made in compliance with the Arbitration Ordinance.
   

With regard to the first criterion, as per the rules of the main institutions and common principles, notwithstanding whether the hearing actually took place or the award was signed, the award is always be deemed to be made at its seat. Consequently, only such awards are enforceable under the Arrangement when the seat is in Hong Kong. These awards may be given by a tribunal constituted by a local institution in Hong Kong such as HKIAC or an overseas institution or by an ad hoc tribunal.
 

As per the Supreme People’s Court [Fajing(1999) No.143, the Supreme People’s Court], instead of the law applicable in the Mainland, the law of the seat will determine the effectiveness of ad-hoc arbitration agreements.
 

In order to enforce an Hong Kong arbitral award, an application should be filed to the Intermediate People’s  Court where the respondent is domiciled or where the property of the respondent is situated. In the case of the jurisdiction of different courts due to domicile and the property being in different places, the application should be made only with one of the courts.
 

In the event the enforcement is required in both Mainland and Hong Kong, applications should not be filed simultaneously. If the enforcement by the court of one place is not sufficient for satisfying the liabilities, then the applicant may apply to the court of the other place for the balance liabilities.
 

As per the Arrangement, applications should be made according to the provisions of the Civil Procedural Law of PRC within two years from the expiry of the period that the liabilities must be discharged, or, in the absence of that period, from the effectiveness of the legal instrument.
 

The respondents or any other interested parties can raise written oppositions to the enforcement. During the enforcement proceedings, a settlement can be reached by the parties, and the court may seize, freeze, transfer, or sell off the assets of the respondent.