The Supreme People's Court (SPC) has confirmed that 'ad
hoc' arbitral awards made in Hong Kong are enforceable in
'Ad hoc' arbitration is arbitration proceedings which do
not involve an arbitration institution or commission. This can be
compared with 'institutional arbitration' where the rules
of an institution (such as CIETAC or the ICC) govern the
PRC law does not permit 'ad hoc' arbitration. An award
from an 'ad hoc' arbitration which has the seat of the
arbitration in the Mainland will not be enforceable in the
Mainland. Instead, all arbitrations in the Mainland must be
governed by the rules of an arbitration institution or
Generally, Chinese courts are required to enforce awards from
foreign 'ad hoc' arbitrations in accordance with the New
York Convention or, in the case of awards made in Hong Kong, the
"Memorandum of Understanding on the Arrangement concerning
Mutual Enforcement of Arbitral Awards between the Mainland and the
Hong Kong Special Administrative Region" (the
Given that PRC law does not permit 'ad hoc' arbitration,
there has been some doubt as to whether ad hoc' arbitral awards
made in Hong Kong would be covered by the Arrangement, and
therefore enforceable in the Mainland.
Clarification By SPC
On 25 October 2007, the SPC confirmed that 'ad hoc'
arbitral awards made in Hong Kong are enforceable in the Mainland.
This clarification was in response to a query from the Secretary of
Justice for the HKSAR. The effect of the clarification is that
Chinese courts can enforce or refuse to enforce such awards on the
grounds set out in the Arrangement.
Implications Of The Clarification
The clarification that 'ad hoc' arbitral awards made in
Hong Kong are enforceable in the Mainland provides further
certainty for parties wishing to use arbitration in Hong Kong as
the basis for resolving disputes. This will ensure that Hong Kong
remains a potentially attractive venue for conducting foreign
arbitrations where one party is based in the Mainland, regardless
of whether 'ad hoc' or 'institutional' arbitration
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Parties have agreed on the resolution themselves, so it is often more practical for their own particular circumstances.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).