Notice Pertaining to the Application of the New York Convention (Text)

The Supreme People's Court's Notice Pertaining to the Application of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards to Which the PRC Has Acceded

(April 10, 1987)

High and intermediate people's courts, maritime courts, and railway transportation intermediate courts throughout the PRC:

It is decided at the 18th session of the 6th NPC Standing Committee on December 2, 1986 that the PRC will accede to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 10 June 1958 (hereinafter referred to as the "Convention" or "New York Convention 1958"), which will enter into force in and become binding on the PRC on April 22, 1987. All high and intermediate people's courts should promptly organize economic and civil judges, enforcement personnel, and other relevant personnel in studying this international Convention and apply it strictly and effectively. Several issues concerning the application of the Convention are hereby notified as follows:

I. According to the declaration of reciprocal reservation made by the PRC upon accession to the Convention, the Convention shall apply to awards made in the territories of other contracting States and sought to be recognized and enforced in the territory of the PRC. Where the Convention has provisions conflicting with the provisions of the Civil Procedure Law (Trial) of the PRC, the provisions of the Convention shall prevail.

Awards made in the territory of a non-contracting State and sought to be recognized and enforced by the courts of the PRC it shall be governed by the provisions of Article 204 of the Civil Procedure Law (Trial).

(Note: Article 204 of the Civil Procedure Law (Trial)

Article 204 A people's courts of the PRC shall review any confirmed decree or award to be enforced as requested by a foreign court in accordance with the applicable international treaty entered into or acceded to by the People's Republic of China or the principle of reciprocity, and make an order to recognize its validity and enforce it in accordance with the procedures stipulated in this Law if it holds that such decree or award does not violate the basic principles of the laws or the national or social interests of the People's Republic of China. Otherwise, such decree or award shall be returned to the foreign court.)

II. According to the declaration of commercial reservation made by the PRC upon accession to the Convention, the PRC shall only apply the Convention to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the PRC. The term "legal relationships, whether contractual or not, which are considered as commercial" refers to economic rights and obligations arising whether in contract, tort or otherwise according to the applicable laws and regulations, including but not limited to sale of goods, property leasing, engineering contracting, processing contracting, technology transfer, joint venture, cooperative operation, exploration and development of natural resources, insurance, credit, labor services, agency, consulting services, passenger and freight transportation by sea, civil aviation, railway and highway, and disputes arising from product liability, environmental pollution, or maritime accidents or over ownership, excluding disputes between foreign investors and host governments.

3. According to the provisions of Article 4 of the New York Convention 1958, a court of the PRC shall not recognize or enforce an award made in the territory of another contracting State unless applied for by a party to the award. An application for recognition and enforcement shall be accepted by the intermediate people's court of the PRC:

1. in the jurisdiction of the domicile or residence of the party against whom the award is invoked in the case of an individual;

2. in the jurisdiction of the principal office of the party against whom the award is invoked in the case of a legal entity; or

3. in the jurisdiction in which the property of the party against whom the award is invoked is located if he has no domicile, residence or principal office but has property in the territory of the PRC.

IV. Upon receipt of a party's application for recognition and enforcement of an award, the people's court of competent jurisdiction in the PRC shall review the application, and make an order to recognize its validity and enforce it in accordance with the procedures stipulated in the Civil Procedure Law (Trial) if it holds that such award does not fall under the circumstances specified in Article 5.1 or 5.2 of the New York Convention 1958, or make an order to reject the application and refuse to recognize and enforce the award if it holds that such award falls under the circumstances specified in Article 5.2 or if it is proven based on the evidence provided by the party against whom the award is invoked that one of the circumstances listed in Article 5.1 is present.

V. An award sought to be recognized and enforced by a court of the PRC shall be an award made in the territory of another contracting State after the entry into force of the New York Convention 1958 for the PRC. Such an application shall be filed within the time period for filing an application for enforcement stipulated in Article 169 of the Civil Procedure Law (Trial).

This Notice is hereby published for compliance.