Abstract
In order to achieve economic progress, the People’s Republic of China (PRC) is reevaluating and reforming many aspects of its legal order, including its legal relations with foreign entities. As part of its effort to instill confidence in foreign parties and increase the quality of its international commercial relations, China has recognized the need for the adoption of more reliable dispute resolution procedures. Prior to the “open policy,” there was no legal certainty that foreign arbitral awards would be recognized or enforced by the Chinese. On December 2, 1986, China took a step toward alleviating fears of foreign investors by joining the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 19581 (the Convention) which creates simple procedures for the recognition and enforce- ment of foreign arbitral awards.
China’s intent in joining the Convention is consistent with the Convention’s basic goal, which is to provide a favorable climate for international trade. As then Premier Zhao Ziyang explained to the Standing Committee of the National People’s Congress, “The ratifica- tion of the Convention… is aimed at meeting the demands of imple- menting the policy of opening China to economic cooperation with foreign countries and facilitating the country’s foreign trade.”
To achieve this goal, China is establishing a new regime for the recognition and enforcement of foreign arbitral awards. In order to understand the substance of this new system and how it differs from earlier practices, this note will first review the provisions of the Convention that will have the greatest influence on the enforcement of arbitrations to which China is a party. Second, this note will review China’s reasons for previously refusing to accept the Convention. Finally, this note will examine the procedures through which the Convention has been implemented, the changes in Chinese law neces- sitated by joining the Convention, and some of the problems China will face in implementing the Convention.