Scope of and Measures for Preservation of Property in International Arbitration in China

Scope of and Measures for Preservation of Property in International Arbitration in China

       Scope of Preservation and Enforcement

According to the Civil Procedure Law of the People's Republic of China, an order for preservation and an enforcement action must be limited to the extent of the petition or the property or part of the property related to the case. It means that a petition for preservation of property or enforcement of a decree or an award must clearly state the property or amount of money to be covered under an order for preservation or enforcement, and an action of preservation or enforcement must be limited to the extent of the petition and order. If the scope of the petition is excessively higher or more than the liabilities of the other party, the party seeking preservation or enforcement may be liable for compensation according to law. For example, he may lose the right to claim the security he paid be filing a petition for preservation or enforcement.

        Preservation Measures

The Civil Procedure Law stipulates that an order for preservation of property shall be enforced by sealing up, seizing, freezing, or otherwise as specified by law. After a people's court has preserved any property, it shall promptly notify the person whose property has been preserved. Such measures are aimed at protecting the lawful rights of both the party seeking preservation and the other party.

Any property that has been sealed up or frozen shall not be sealed up or frozen for a second time.  

Cancellation upon Provision of Security

In a property dispute case, the people's court shall make an order to cancel the preservation measure if the party against whom the petition is filed provides a security.

Where a petition for preservation of property is filed at fault, the petitioner shall compensate the owner of the property for the losses incurred thereby.