No easy answer for disputes without foreign elements arbitrated outside China

Based on our analysis in the previous issue, our conclusion was that the question of whether a dispute without a foreign element can be arbitrated abroad cannot be answered with a simple “yes” or “no”. Notwithstanding the fact that there is no barrier to a case being referred for foreign arbitration, there is nonetheless a great deal of uncertainty as to whether the award ultimately can be recognised and enforced in China. With respect to such cases, if it can be said that “I can guess the beginning” – such a case can be accepted and will be heard; but if “I can’t guess the ending” – there is no way to ensure that the award, after being rendered, will be recognised and enforced in China.

In the face of this situation, the author is of the opinion that each individual case should be dealt with based on its particular circumstances and enforcement should become the criterion for differentiating individual cases.

No domestic enforcement sought

Notwithstanding the fact that the ultimate objective in the majority of disputes is enforcement in China, there nonetheless remains in fact certain disputes that do not require enforcement, or coercive enforcement, or enforcement in China. There is nothing holding a party back from referring such a dispute for arbitration abroad.

Vincent Mu is a senior associate at Martin Hu & Partners