Attempts to enforce an arbitration award against a Chinese company can be time-consuming, costly and frustrating. Several American and other “western” companies can testify to that.
This is the story of a small US trading company (“Seller”), specialised in doing business with China, who successfully arbitrated against a Chinese company (“Buyer”), owned by the local government in Tianjin. Tianjin has a population of over four million people, a large port, and is located two hours by car from Beijing.
Seller had sold construction steel to Buyer in 1993. The sales contract provided for arbitration in Stockholm under the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce. Buyer did not pay for the steel, and Seller initiated arbitration proceedings in August of 1994. The main hearing was held in Stockholm in October the year after. Both parties were represented by counsel throughout the proceedings.
The tribunal rendered its award in December of 1995, and therein ordered Buyer to pay the full purchase price, with interest, and all costs of the arbitration. At that time, the award was worth well over US $4,000,000.