Originally from World Arbitration and Mediation Review

The Enforcement of Arbitral Awards in China
by
Szu-chien “Stephen” Yau∗
I. Introduction
One of the most significant aspects in the development of China’s
legal system is the acceptance of arbitration as a viable method of
resolving international commercial disputes. The China International
Economic and Trade Arbitration Commission (CIETAC), the principal
organization handling commercial arbitration in China, is one of the
busiest arbitral institutions in the world. In 2003, CIETAC administered
709 arbitration cases, of which 287 cases involved domestic disputes and
422 involved foreign parties. In 2004, CIETAC handled 462 foreignrelated
arbitration cases. As a comparison, the International Chamber of
Commerce received 580 requests for arbitration in 2003. For a country
whose legal system was virtually unknown to most of the developed world
thirty years ago, it is not a small achievement for China to have become
one of the centers for international commercial arbitration.
The number of arbitration cases, however, does not necessarily
indicate that China has established a solid and reliable legal environment
for the resolution of international commercial disputes. According to a
survey conducted in 1997 by the Arbitration Research Institute of the
China Chamber of International Commerce, about 23% of CIETAC
awards and 29% of foreign awards were not enforced. Problems of
enforcing foreign and foreign-related arbitral awards in China are often
quoted in news media and trade journals, and foreign companies continue
to be discouraged by the uncertainty of the enforceability of arbitral
awards. Nothing frustrates parties more than to discover, after winning a
costly arbitration, that the arbitral award cannot be collected.
This article will address two questions about the enforcement of
arbitral awards in China. First, what is the current legal environment for
the enforcement of international arbitral awards in China? Second, what
are the problems involved in the enforcement of arbitral awards? The
discussion is divided into four sections. Section Two describes the
institutional framework of international commercial arbitration in China,
including a description of the major arbitration institutions and the
Chinese court system. Section Three focuses upon the regulatory
framework for the enforcement of arbitral awards. Different types of