ICC refused to order arbitration award case study

Summary: July 11, 2008, Shandong Province, Jinan Intermediate People's Court accepted the Republic of Serbia hemofarmDD, MAG International Trade Company and charged to what Guo Shidengsula Media Limited (Sura what company) for recognition and enforcement of International Chamber of Commerce arbitration award case, the Supreme Court agreed to seek public order is refused recognition and enforcement of the first case aroused extensive attention. the case for further analysis, it has great theoretical and practical significance.

Keywords: Executive, ICC, Arbitration CLC: D915.7


1 case

December 22, 1995, hemofarmDD, MAG International Trade Company and Jinan Yongning Pharmaceutical Co., Ltd. (hereinafter referred to Yongning company) signed a <<Jinan - Haimufamu Pharmaceutical Co., Ltd. joint venture contract>> (the contract ), the establishment of Jinan - Haimufamu Pharmaceutical Limited (joint venture), the 58 of April 2004 when the arbitration clause, the company Saurer Why join the contract, the company shareholders.

August 6, 2002, January 17, 2003 and September 2004, the Jinan Intermediate Yongning company sued three joint venture companies, demanding the return of pArt of the rent and lease property, and eventually won .2004 September 3, Hemo-farm DD, MAG International Trade Company, as co-applicant company Saurer what to Court of Arbitration of International Chamber of Commerce filed an arbitration application, request the arbitral tribunal's award Yongning investment loss $ 10,764,514, and compensation for loss of profits of more than 2,000 million U.S. dollars, do not award joint venture China should pay the rent determined by the court, the ruling ordered the company to withdraw in China Yongning Court's claim, ruling Yongning asked people to apply for a Chinese company made by a court, especially in the first Lawsuit to make the property preservation ruling.

Arbitral tribunal's final award to three applicants Yongning pay damages of $ 6458708,4, compensation cost of litigation in Chinese courts and other costs of $ 9509,55 1270472,99 dollars, arbitration costs $ 295,000. After the ruling, the three applicants Jinan Intermediate People's Court to submit application for recognition and enforcement of arbitral awards, Yongning's request not recognized and enforced.


2 trials

Based on China and France to join <<Recognition and Enforcement of Foreign Arbitral Awards>> (also known as <<New York Convention>>), Shandong Jinan Intermediate People's Court and High Court review of that arbitration award shall be non-recognition and execution on the grounds that : (1) The case dealt with the dispute arbitration award beyond the scope of the arbitration agreement, (<<New York Convention>> Article 5, paragraph (c)), (2) The arbitral tribunal ruled that the Law can not be based on an arbitral award in China matters (<<New York Convention>> Article 5.2 (a)), (3) recognition and enforcement of the arbitration award violated public order in China, (<<New York Convention>> Article 2 (b) ).

Supreme Court (2008) Man u number four of his first word answer, that: (1) The case dealt with the dispute arbitration award beyond the scope of the arbitration agreement, (<<New York Convention>> Article 5, paragraph (c) ), (2) recognition and enforcement of the arbitration award violated public order in our country, (<<New York Convention>> Article 2 (b)) .3 Analysis
Mainly related to the case of foreign arbitral awards in China's recognition and enforcement issues. Based on domestic Law in this area are: December 2, 1986 <<on China's accession to <the Recognition and Enforcement of Foreign Arbitral Awards> decision>> ( hereinafter referred to as <<decide>>), April 10, 1987 Supreme Court <<on the implementation of China's accession to the (Recognition and Enforcement of Foreign Arbitral Awards) notification>> (the <<notify>>) and << Civil Law>> the relevant provisions of China <<Civil Law>> 267 provides: "foreign arbitration decision, you need to recognize and enforce the people's court's Republic of China, it shall report directly to the debtor by the parties or the domicile The property is located intermediate people's court, the people's court shall be in accordance with the PRC has signed or acceded to international treaties, or handled in accordance with the principle of reciprocity. "China's foreign concluded or acceded to the recognition and enforcement of arbitral awards in international treaties, 1958 year <<New York Convention>> is the most important one, of foreign arbitral awards in China for the main basis for recognition and enforcement of the provisions of the Convention.


3,1 whether the case applies to <<New York Convention>>
China's accession in 1986 <<New York Convention>> made a "reciprocity reservation" and "commercial reservation", that is only on the basis of reciprocity in the territory of another State Party to the recognition and enforcement of arbitral awards application of the Convention, only identified as belonging to China's law on contractual and non-contractual commercial legal disputes arising from the relationship to apply the Convention, according to <<notify>> the provisions of "contractual and non-contractual commercial legal relationship" refers to a contract, tort or according to relevant laws and regulations arising from the economic rights and obligations.

Arbitration awards made abroad in France, France <<New York Convention>> party line "reciprocity reservation" requirement, but whether the "commercial reservation" requirement? That the two sides of the dispute is not a "contractual and non-contractual commercial legal relationship to dispute "mean? this case, the reason why the joint applicants filed to the International Chamber of Commerce arbitration, because they believe that: (1) Yongning company refused based on Article 58 of the joint venture contract (arbitration clause) is required to solve together with its joint venture contract between the applicant related disputes in the courts of China and maintain proceedings in violation of the applicant's contract of common law obligations and China, (2) Yongning filed the first lawsuit, the application property preservation and enforcement, leading to a joint venture ultimately can not maintain normal operations and joint ventures substantially lower value, we can see the case the parties dispute the main points: (1) Yongning court's joint venture in China is not the joint venture contract, breach of Article 58 (2) Yongning filed the first lawsuit and apply for property preservation and measures of behavior is not a violation of the common interests of the applicant's investment constitutes a breach of contract. two issues are of non-compliance, that is Both sides said the implementation of the joint venture contract dispute took place, is because the economy arising from the joint venture contract on the rights and obligations arising from the controversy, in line with <<notify>> the "contractual and non-contractual commercial legal relationship" definition, In our country "commercial reservation" within the scope, so the case can be based on <<New York Convention>> to handle.

Links to free download http://www.hi138.com 3,2 arbitration award deals with whether the dispute is beyond the scope of arbitration agreement
Article 58 of the joint venture contract agreement: Where the implementation of this contract took place or with all disputes relating to this contract, both sides should be resolved through friendly consultations, if the consultation does not resolve, should be submitted to the Paris Court of Arbitration of International Chamber of Commerce, according to the will of the arbitration proceedings Provisional Rules for arbitration. As mentioned above, the parties dispute in this case there are two main performance of the contract are related to joint problems. is because the implementation of the joint venture contract dispute occurred, apparently in the 58 range of the arbitration agreement.

Important to note here is that companies and joint ventures Yongning dispute between the applicant and co-submitted to arbitration is different, the two belong to different legal relationship the former leasing of property disputes, the parties are joint venture and Yongning company, which dispute is the implementation of the joint venture contract, the parties are Hereofarm DD, MAG International Trade Company, Ltd. and Yongning Sura what media company with the former than the latter, the parties and controversy have been changed, and the original is completely different. The former joint venture in the joint venture is not a party to the contract, the arbitration agreement can not be bound by it and lease disputes Yongning company, whose party is a joint venture contract between the parties, the joint applicants can, of course they Yongning Company between the implementation of the joint venture contract to arbitration in accordance with the contract 58. not because the joint venture is not a party to the contractual joint venture, joint ventures and Yongning lease dispute between the companies is not within the scope of the arbitration agreement, and will co-applicant and Yongning Company execution of the contract dispute between the exclusion of arbitration agreements in the outside.


3,3 arbitral tribunal ruled according to our laws can not resolve the matter through arbitration award
China <<Arbitration Law>> states: "the principal of equality of citizens, legal persons and other organizations, the contract disputes and other property rights disputes can be arbitration." Award from the International Chamber of Commerce can see the arbitral tribunal is mainly aimed at The two parties disputed points were identified: (1) Yongning filed the first lawsuit and apply for a violation of the preservation of property investment in the common interests of the applicant, constitute a breach of contract, (2) Yongning land lease litigation filed constitutes a joint venture contract breach Article 58. Yongning companies and Hemofarm DD, MAG International Trade Company, Ltd Sura what the media is the subject of equality, arbitration of disputes is a joint venture contract dispute, the arbitral tribunal to prosecute the company is a joint venture of Yongning and apply for breach of contract action is the preservation of property has been identified. the case and did not rule according to our laws can not be resolved through arbitration award matters here also need to clear the following two questions:
3,3,1 Court of China joint venture contract between the leasing company and Yongning jurisdiction disputes
Although the tribunal held that the company and joint venture Yongning lease dispute between the joint venture contract should be based on Article 58 of the International Chamber of Commerce Arbitration Court settled by arbitration, related to the question of the jurisdiction of our courts, but here we must be clear, <<New York Convention>> listed in the Recognition and Enforcement of Foreign Arbitral Awards of the review are limited to procedural matters conditions, States courts can not award the entities of foreign matter under review. Yongning joint applicant with the identification of the dispute between the company depends on the company Yongning and joint-venture leasing company if the dispute between the definition of jurisdiction, that is, Yongning companies and joint ventures of jurisdiction disputes between joint applicants and Yongning relative to the dispute between the companies is physical matter, even if the courts of that the arbitral tribunal findings of fact on this is wrong, not the <<New York Convention>> refused recognition and enforcement within.

3,3,2 arbitral tribunal compensation Wing Ning's co-applicants in the Chinese court litigation costs
Case of an arbitral award compensation Wing Ning's co-applicants in China, costs $ 9,509.55 in court proceedings, but this is not the joint venture contract and the cost of litigation between the companies Yongning to redefine the subject is not now and Yongning joint venture company, but the joint applicants and Yongning company, because the arbitral tribunal considers the joint venture sued Yongning and apply for the preservation of property in violation of the joint venture contract, it ruled that it damages the joint applicants because of its breach of contract and cost of litigation costs. This is directly ruled Yongning companies and joint ventures between the cost of litigation is completely different. that the tribunal can not be re-assigned Yongning joint venture between the company and litigation costs, which ruled China's arbitration law does not matter.


3,4 recognition and enforcement of the arbitral award is in violation of public order in China
"Public order" in the Anglo-American law that "public policy", in German called "reservations", which refers to a state court in accordance with its conflict rules should apply foreign law, its application with the vital interests of the State of , the basic policy, the basic concept of moral or legal conflict with the fundamental principles of its application to the exclusion of a reservation system. This system has a "safety valve" effect, is universally recognized by the international community a condition of national legislation and relevant international treaties, without exception have been clearly defined. China 1986 issued by the <<Civil Code>> the first time in private international law provides a comprehensive system of public order reservation.

Yongning companies and joint ventures in litigation, the joint venture to challenge the jurisdiction of the court, advocates the joint venture contract lease dispute should be based on Article 58 of the ICC agreed to submit to arbitration. Jinan Intermediate People's Court review of that Yongning company disputes the complaint leasing of assets and joint venture disputes arising out of use while the joint venture contract is bound by the arbitration clause of the joint venture investors, investment in the joint venture is not the main, this case does not apply in the arbitration clause in the joint venture contract, so the court rejected the joint venture objection to the jurisdiction, but the International Chamber of Commerce arbitration tribunal but then Yongning with jurisdiction over disputes between the joint venture has been re-trial and found that: "to bring the land lease contract action is a violation of the joint venture, as the controversial section of the joint venture contract should be based on 58 submitted to the ICC Court of Arbitration by arbitration. "Although the Yongning companies and joint ventures under the jurisdiction of the dispute between the applicant and issues relative to the common Yongning dispute between the companies is physical matter, in accordance with the <<New York Convention>> recognition and enforcement of foreign arbitral awards can not be reviewed, but if the recognition and enforcement of the arbitration award, not only denied the Chinese courts sentence of the res judicata effect, and severely damaged the jurisdiction of the courts in China and China's judicial sovereignty. Moreover, the arbitration award can not be review of foreign jurisdictions, basically a national consensus and requested the implementation of a health res judicata effect of enforcement is the court decision or arbitral award of inconsistent rulings. has violated "the basic principles of procedure." Therefore, the arbitration award shall be grounds for refusing recognition and enforcement of public order.


References
[1] See the case and the trial _J], People's Court Daily .2008, (7)
[2] Han Depei, a new theory of private international law [M], Wuhan: Wuhan University Press, 1997
[3] Han Depei, private international law [M], Beijing: Higher Education and University Press, 2000 Links to free download http://www.hi138.com