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Recognition and enforcement of foreign arbitration awards in Mainland China
Mainland China has been a significant and active player in the global shipping market for years. It is now one of the top shipping nations scoring high on numbers of shipowners, operators, charterers and other supporting parties. It is rare that someone in shipping does not come across a Chinese counterparty.
When business thrives, disputes come along. A favourable arbitral award from outside Mainland China however does not mean that the fight is over. If the losing party refuses to honour the award, recognition and enforcement of the award is always a key to a successful recovery of claims.
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Last year, the Hong Kong Government and China’s Supreme Court agreed to an arrangement which makes it possible for parties to arbitral proceedings in Hong Kong to obtain interim orders (akin to interim injunctions) from courts in Mainland China. The formal name of the policy is “The Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region.”
This arrangement makes Hong Kong the only foreign seat of arbitration where parties can seek interim relief directly from Mainland Chinese courts. As such, it gives Hong Kong a unique competitive edge over other arbitral seats where one party is based in Mainland China. Before the arrangement was implemented, no formal mechanism existed to allow Mainland Chinese courts to grant interim relief in support of a foreignseated arbitration. The reverse situa
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The advantages enjoyed by Hong Kong as a center for arbitration of commercial disputes involving parties in Mainland China have been further enhanced by new measures to strengthen the cross-border recognition and enforcement of such awards. On November 27, 2020, the Supreme People’s Court of China and the government of the Hong Kong Special Administrative Region (the “
HKSAR”) signed a Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the HKSAR (the “
Supplemental Arrangement”).
As its name implies, the Supplemental Arrangement adds to and improves upon an earlier document called the Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region (the “
In summary
Rights holders have traditionally turned to court litigation to protect IP rights such as patents, copyrights, trademarks and trade secrets – or to enforce IP licensing agreements. This brings certain challenges, such as a public forum, unfamiliar laws and procedures, judges with varying IP law expertise, concern for national interests, and the risk that a judgment cannot be enforced in other jurisdictions. Arbitration offers an alternative mechanism and has a number of advantages, including confidentiality, a neutral forum or a single forum, the ability to select arbitrators with technical expertise, symmetrical risk for licensors, and cross-border enforceability of arbitral awards. This chapter considers the viability and desirability of arbitration as a means of resolving cross-border IP and IP-related disputes with a focus on Asia.