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From: Reinstein,
Ellen S.
To: judgejiang@china.com
Sent: Friday,
November 12, 2004 6:17 AM
Subject: Questions
about enforcement of arbitration awards
Hello, Judge Jiang.
This is Ellen Reinstein, hopefully you remember me - I spoke with
you on the phone about a week ago. Mo Zhang tried to arrange a
meeting, but we were both traveling at the time. I hope this e-mail
finds you well. I arrived from China and have just adjusted to the
jet lag.
I had an opportunity
to look at your website, and it is very informative indeed!
Congratulations on such an accomplishment. If I hear of any
colleagues who are studying intellectual property and its
application in China, I will definitely refer them to your website.
I have just a few
questions related to the enforcement of arbitration awards, and I
was hoping you might provide some insight. I understand you are
very busy, please do not feel compelled to provide long answers, but
your response would certainly be useful.
1. I am aware that a
court in China that refuses to enforce a foreign arbitration award
must provide a reason for the refusal to enforce. (the 1995 Notice
requirement) That case would then be reviewed by a higher court,
and this process continues until the case has reached the Supreme
People's Court. Here is my question: Has this process happened? If
so, how often? What was the result -- did the SPC enforce or refuse
to enforce the award? If you have any examples, or related SPC
court decisions, that would be extremely helpful.
2. I am aware that
the SPC handed down an interpretation in December 2003 requiring
enforcement of all foreign arbitral awards to take place at specific
Intermediate Peoples Courts designated by the SPC. Do you believe
this has helped or will help in improving a foreign party's chances
of enforcement or in fighting local protectionism? Do you have any
specific examples?
3. Do judges ever
sanction non-compliant parties for not paying a damages award? Or
do judges hold non-compliant parties in contempt? If so, how
successful do you believe this method to be in ensuring the payment
of a damages award? Do you have any examples of this happening?
4. Is there a written
ethical standard or code for judges in China? If so, could I get a
copy, or could you refer me to a publication that might have a copy
of this? If there is no written ethical code, do you believe this
might be useful?
Thank you so much for
your assistance, Judge Jiang. I am hopeful this exchange of
information will be very useful for advancing the economies and the
rule of law in both of our countries in the future. Please let me
know if any of my questions are unclear, or if you have any
questions or comments for me.
Yours sincerely,
Ellen Reinstein
Dear Ellen Reinstein,
I am so happy to
receive your mail again. I am sorry that I wrote you late because of
busy and tight schedule. Furthermore my chamber is in charge of
handling IP cases. No.4 civil division of the Supreme Court is in
charge of the field that you mentioned. I have transferred your
questions to Judge Zhang jin xian of No. 4 and would like to give
his e-mail address to you then you could discuss these issues with
him directly. Perhaps he will answer your question at first.
You could write me
again and I enjoy your mail and thinking.
Regards,
Judge jiang zhipei
www.chinaiprlaw.com
Judge zhang's e-mail
address:
zhangjinxian1955@sina.com
Dear Ellen Reinstein,
How are you! I am sorry that I reply
your E-mail so late. I¡¯d like to answer your questions in your
E-mail.
1. In order to guarantee foreign
arbitration awards to be enforced in China, the SPC made the 1995
Notice according to 1958 New York Convention. In fact, most of the
foreign arbitration awards were enforced in the Intermediate
People¡¯s Courts of China without asking higher courts for
instructions. Only several cases of them reach the SPC by this
process per year. The SPC gave different answer for different the
foreign arbitration awards. For example, Beijing No.1 Intermediate
People¡¯s Court held the 158 arbitration award made by London Sugar
Association on August 6, 2001 should be refused to recognize and
enforce because the award run counter to public policy of China.
That case then be reviewed by Beijing Higher People¡¯s Court, and
this process continues until the case has reached the SPC. The SPC
held the action of China Sugar & Wine Group Company (a party of the
award) to go in for futures transaction abroad was invalid according
to Chinese law, but this action is not equal to violating public
policy of China. The London award should be recognizes and enforce.
The SPC gave Beijing Higher People¡¯s Court an answer as above on
July 1, 2003.
Another example is as follows: Gerald
Metals Inc. (GMI) U.S. applied for recognition of an arbitration
award of London to Anhui Province Higher People¡¯s Court on.
GMI(buyer) and Wuhu Smeltery, Anhui, China(seller) made a copper
cathode sale contract. In which there was an arbitration clause that
dispute should be arbitrated in London according to the Metals
Exchange of London Rules. GMI as a claimant submitted an arbitral
application to the London Arbitration Tribunal on Dec.7 2001 in
which respondents were Wuhu Smeltery and Wuhu Hengxin Copper Group
Company Ltd. The Arbitration Tribunal held the claimant paid for the
goods. The respondent violated the contract and caused losses to the
claimant. The Arbitration Tribunal made an award against the
respondents May 23, 2002 according to ¡°British Arbitration Act,
1996¡±. The higher People¡¯s court held the arbitration award went
beyond the scope of the arbitration clause and the whole award
should refuse to recognize. That case then is reviewed by the SPC.
The SPC held the arbitration award
went beyond the scope of the arbitration clause. But the arbitration
award could be separated into the part to have the right to
arbitrate and the part to go beyond the scope of the arbitration
award. The part to have the right to arbitrate should be recognized.
2. The SPC made an interpretation in
December 2001 and handed down it in February 2002 authorizing
specific Intermediate People¡¯s Courts to exercise jurisdiction over
the cases relative foreign parties (concentration of jurisdiction),
including enforcement of all foreign arbitral awards. I believe this
have improved our legal environment. Obstruction of outside to
judicial has deduced obviously. For example, some specific
Intermediate People¡¯s Courts in Guangdong province tried 10 cases
relative foreign parties from 2002 to 2004 and contrary parties were
local governments. As a result, no person disturbed the trial of the
courts.
3. According to article 102 item 6 of
The Civil Litigation Procedure Law, if the party that lost the case
defies enforcement of a valid decision or a valid ruling, the court
have right to sanction non-complaint party, including not paying a
damages award. For example, a party transfers his property
illegally. But if the party has no property, the party will be not
punished. In fact, many parties are punished per year in China.
4. The Judges Law of P.R.C.
stipulates ethical standard for judges. But it is Chinese version.
If you need a Chinese copy, I can refer you.
Best wishes!
Yours sincerely,
Zhang jinxian
Judge of the SPC |