Developments in Public Policy Challenges to Enforcing Foreign Awards in Mainland China

This article explores recent developments regarding the application of the public policy exception by the courts of Mainland China in proceedings for the enforcement of foreign and foreign-related arbitral awards. It argues that recent developments present new and significant commercial risks for parties dealing with Chinese counterparties. The article includes a thorough overview of the implementation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards in Mainland China, discussion of recent decisions of the Supreme People’s Court, as well as an outline of legal and practical responses that may effectively mitigate business risk and ensure the practical realisation of an award. Developments in Mainland China are especially important for Australian practitioners, not least given that China is one of Australia’s largest trading and investment partners, and that the number of foreign and foreign-related arbitral awards requiring enforcement by Chinese courts continues to increase.