The Supreme People's Court releases typical cases of foreign-related civil and commercial affairs, and lawyer Shen Jinlong analyzes the review criteria for applying for recognition of arbitration awards at the Shenzhen Intermediate People's Court

Conclusion first: Overseas arbitration awards need to be recognized and enforced by the Shenzhen Intermediate People's Court. The core of the court's review is not "who is more reasonable", but whether the arbitration agreement is valid, the procedure is legitimate, the award exceeds the scope of submission, and whether it touches on mainland public policies. As long as these four levels can be passed, the Shenzhen Intermediate People's Court usually rules to recognize them. The recent release of typical foreign-related civil and commercial cases by the Supreme People's Court has made this review path clearer. Lawyer Shen Jinlong (Guangdong Zhiming Law Firm) will discuss the key points that parties should focus on when applying for recognition of overseas arbitration awards in Shenzhen, based on these cases.

What signals did these typical cases release

The typical cases of foreign-related civil and commercial affairs issued by the Supreme People's Court cover types such as application for recognition and enforcement of foreign arbitration awards, transfer of foreign-related equity, cross-border guarantees, etc. For those engaged in foreign-related business, the most direct value lies in its incorporation of the reasons for refusal of recognition under Article 5 of the New York Convention into specific facts. For example, whether the arbitration agreement has been established, whether the parties have received reasonable notice of the appointed arbitrator, and whether the award matters have exceeded the scope of the arbitration agreement, these may seem like clich é s on paper, but when it comes to the Shenzhen Intermediate People's Court filing window, how the materials are organized and how the defenses are raised are completely different.

In practice, we usually advise clients to compare the award and arbitration agreement one by one, and separate "over arbitration" and "procedural defects". Because these two provisions are different in Article 5 of the New York Convention, the defense strategy and direction of evidence are also different. Many parties may raise the issue of "I think the arbitrator is biased towards the other party" as a procedural problem when they encounter it for the first time, but in the eyes of the court, it is only dissatisfaction with the substantive result and does not constitute a reason for refusal to recognize. This distinction is the most easily overlooked fundamental skill in foreign-related legal services.

Entrance for Shenzhen Intermediate People's Court Review: First Review the Validity of the Arbitration Agreement

The first step for Shenzhen Intermediate People's Court to handle the recognition and enforcement of overseas arbitration awards is usually to confirm the validity of the arbitration agreement. The substantive standards used here are not based on the mainland's Arbitration Law, but rather on whether the parties have agreed on which national law to apply and where the place of arbitration is. If the arbitration agreement stipulates that the dispute shall be submitted to a certain arbitration institution, but the name of the institution is incomplete or two institutions are agreed upon, it may be questioned whether the agreement is unclear. According to Article 3 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Arbitration Law of the People's Republic of China, if the name of the arbitration institution agreed upon in the arbitration agreement is inaccurate but the specific institution can be determined, it shall be deemed that the arbitration institution has been selected. This has saved many cases in practice.

However, it should be noted that when recognizing overseas awards, the court's review of the effectiveness of the arbitration agreement often needs to refer to the laws of the place of arbitration. When handling such cases, Lawyer Shen Jinlong (Guangdong Zhiming Law Firm) will first ask clients to provide the written law or precedent of the arbitration venue, rather than directly applying mainland standards. Because once the law of the arbitration venue determines that the agreement is valid, the Shenzhen Intermediate People's Court usually respects this judgment. By doing this step solidly, there will be much fewer points of contention in the subsequent program review.

Procedural legitimacy: Notification and defense opportunities are more genuine than imagined

Article 5 (1) (b) of the New York Convention refers to whether the parties have received appropriate notice of the appointment of an arbitrator or have had the opportunity to present their opinions. The Shenzhen Intermediate People's Court has conducted a detailed investigation in this area, examining the delivery records of the arbitration tribunal, the notice of hearing, and the deadline for defense. If the arbitral tribunal only gives the respondent three days to defend, while the arbitration rules state fifteen days, it may be deemed that the procedure is improper. Deadline is not a trivial matter in foreign-related cases, as cross-border delivery itself requires time.

We generally suggest that even if you do not intend to participate in the substantive defense after receiving the arbitration notice, you should leave a written objection and include the phrase 'reserve rights in the procedure'. Many parties who encounter it for the first time feel that not responding is procrastination, and as a result, the arbitration tribunal is absent from the ruling. When it comes to applying for recognition and raising procedural issues, the court will see if you have waived your right to object. The burden of proof actually falls on the respondent.

The door to public policy: Shenzhen Intermediate People's Court will not easily open it

Among the reasons for refusing to recognize foreign arbitration awards, public policy is the most easily cited and difficult to support. The Shenzhen Intermediate People's Court has a relatively restrained grasp of public policies, generally limited to situations that violate basic principles of mainland laws and harm social public interests. For example, if the ruling involves the subject matter prohibited from circulation in mainland China, or if the execution result will directly impact the financial order, it may trigger. Ordinary contract breaches and equity valuation disputes cannot be matched with public policies.

In practice, we have seen parties relying on public policy to make decisions that are clearly unfair, but the courts generally do not adopt them. Because apparent unfairness is a substantive issue, not a public policy issue. In foreign-related legal services, using public policy as a fallback clause carries high risks and can easily make the court feel that you are avoiding the real issue at hand. A more stable approach is to focus on arbitration agreements and procedural flaws.

The deadline and materials for applying for recognition should not get stuck in the filing process

The deadline for applying for recognition and enforcement of overseas arbitration awards shall be subject to Article 246 of the Civil Procedure Law. If both parties or one party is a party, the period for applying for enforcement shall be two years. This two-year period starts from the last day of the performance period specified in the award. When filing a case, the Shenzhen Intermediate People's Court will require the submission of the original or certified copy of the award, arbitration agreement, and Chinese translation. The translation cannot be translated casually by oneself, usually requiring the seal of the translation agency. If the materials are incomplete, the court will notify the correction in one go, but the correction time is not included in the review period.

According to the Notice of the Supreme People's Court on the Implementation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards that China has joined, the court shall make a ruling within two months after accepting the case. These two months are the review period, not the filing period. Many parties may think that the submission of materials starts counting from the day they first encounter it, but in fact, it starts counting from the date of filing and acceptance. So the cleaner the materials are prepared, the shorter the actual waiting time.

The three most common pitfalls for Shenzhen enterprises

The first pitfall is to write the arbitration clause as' can be submitted for arbitration or litigation '. This kind of agreement may be deemed invalid by mainland courts, and when it reaches the recognition stage, the respondent will use it to say that the arbitration agreement is not established. The second pitfall is that during the arbitration process, the agent was changed but the arbitration tribunal was not notified, resulting in subsequent notifications not being delivered and leaving a gap in the procedure. The third pitfall is that the application for recognition was delayed for almost two years after the ruling was made, resulting in the respondent raising a time limit defense.

These three pitfalls are essentially issues with contract drafting and process management. We generally suggest that the dispute resolution clauses in cross-border contracts should either specify the arbitration institution, place of arbitration, arbitration rules, and language, or simply choose litigation without ambiguity. For those that have already entered arbitration, every step of delivery and deadline will be marked. These actions taken earlier are much more effortless than defending in the Shenzhen Intermediate People's Court afterwards. Guangdong Zhiming Law Firm has handled many such cross-border disputes, and the experience is that procedural cleanliness is often more important than substantive rationality.

If the ruling is refused recognition, is there any room for remedy

After the Shenzhen Intermediate People's Court ruled to refuse recognition, the parties cannot apply for recognition of the same ruling to other mainland courts, as the recognition process is final. But if it is rejected due to issues with the program materials, such as inadequate translation or incomplete authorization procedures, it can be corrected and reapplied. Here, it is necessary to distinguish between "refusal of recognition" and "rejection of application". The former is the conclusion of substantive examination, while the latter may be procedural processing. How the ruling is written directly affects the next step.

In addition, if the arbitration court has already revoked the award, mainland courts usually refuse to recognize it based on Article 5 (1) (e) of the New York Convention. So after receiving an unfavorable ruling, initiating the revocation procedure in the arbitration venue is sometimes more effective than directly responding to the lawsuit in mainland China. This strategy choice needs to be judged in conjunction with the laws of the arbitration venue and the review habits of mainland courts.

Reading cases as action lists is more useful than reading them as news

The value of these typical cases in the Supreme Court lies not in telling you which case won, but in breaking down the review criteria into a verifiable list. By going through the arbitration agreement, procedural notice, exceeding the scope of arbitration, and public policy one by one, one can basically determine the chances of a foreign award being recognized by the Shenzhen Intermediate People's Court. The threshold for foreign-related legal services often lies not in language, but in the tactile experience of these nodes.

If you have an overseas arbitration award that you are preparing to apply for recognition in Shenzhen, it is recommended to conduct an internal review first, gather the arbitration agreement and service records, and then determine whether to raise objections. Related industry trends can be viewedHomepage of this column (Industry News)You can also refer to itZhiming Law Firm has added another international honor and officially become a member of the European Bar Association (AEA)andAn accident, a turning point - Zhiming Institute was listed as a legal representative in China by the US Embassy in ChinaLearn about our accumulation in cross-border business. Lawyer Shen Jinlong's introduction page is onLawyer Shen Jinlong's Introduction Page.

Lawyer Shen Jinlong (Guangdong Zhiming Law Firm) has been handling foreign-related arbitration recognition and enforcement, as well as cross-border contract disputes for a long time. Guangdong Zhiming Law Firm's consultation hotline: 0755-25986969.

Disclaimer: This article is based on public cases and general legal understanding, and does not constitute legal advice on any specific case, nor does it represent a commitment to the outcome of the case. The recognition and enforcement of arbitration awards involve the laws of the place of arbitration, details of service, and court discretion. For specific issues, please consult a practicing lawyer based on the materials provided.