Key point:

The composition of the arbitration tribunal does not comply with the arbitration agreement, which falls under the provision of Article 5, Paragraph 1 (d) of the New York Convention that foreign arbitral awards should not be recognized or enforced.

Basic Case Fact:

AA Company in the United States and BB Company in Zhejiang signed a "License Agreement", which stipulates that any disputes arising from or related to the License Agreement that cannot be resolved through negotiation shall be submitted to the Singapore International Arbitration Center for arbitration in Singapore in accordance with the then effective International Chamber of Commerce arbitration rules. After the signing of the License Agreement, disputes arose between the two parties during the performance process. In August 2006, AA Company of the United States submitted the above dispute to the International Court of Arbitration of the International Chamber of Commerce for arbitration, and Zhejiang BB Company raised an objection to the jurisdiction. The case was referred to the Singapore International Arbitration Center for arbitration. After the arbitration proceedings were initiated, the Singapore International Arbitration Center formed an arbitration tribunal in accordance with the Singapore International Arbitration Center Arbitration Rules (1997) to hear the case and make an award. In 2011, AA Company of the United States applied to the Hangzhou Intermediate People's Court for recognition and enforcement of the arbitration award No. 087 of 2006 made by the Singapore International Arbitration Center.

Result:

After examination, the Hangzhou Intermediate People's Court believes that China and Singapore are both contracting parties to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as the New York Convention) and should review whether the arbitration award in question can be recognized and enforced in accordance with the provisions of the New York Convention. According to the License Agreement signed by both parties, the arbitration tribunal shall be composed in accordance with the Arbitration Rules of the International Chamber of Commerce. The chief arbitrator of the arbitration tribunal in this case is nominated by one arbitrator in accordance with the Arbitration Rules of the Singapore International Arbitration Center (1997), and the other arbitrator is elected without opposition. This method of formation does not comply with the provisions of the arbitration agreement. Zhejiang BB Company clearly raised objections in the arbitration proceedings and did not waive its right to object. The composition of the arbitration tribunal in this case is inconsistent with the provisions of the arbitration agreement. According to Article 5, Paragraph 1 (d) of the New York Convention, the arbitration award in question should not be recognized or enforced in accordance with the provisions of "... (d) if the composition of the arbitration agency or the arbitration procedure is inconsistent with the agreement between the parties, or if there is no agreement and it is inconsistent with the law of the country where the arbitration is located;...". Based on this, with the approval of the Supreme People's Court, the Hangzhou Intermediate People's Court has ruled to reject the application of AA Company in the United States and not recognize and enforce the arbitration award.

Typical significance:

This case is the first in Zhejiang Province to refuse recognition and enforcement of foreign arbitration awards. The arbitration award involved in the case was the first application of the International Chamber of Commerce arbitration rules by the Singapore International Arbitration Center, an internationally renowned arbitration institution, and received high international attention. China is a contracting party to the New York Convention and has an obligation to recognize and enforce arbitration awards in accordance with the Convention with other contracting parties. The recognition and enforcement of foreign arbitral awards made in another contracting state of the New York Convention shall be strictly reviewed by the people's court in accordance with the provisions of the New York Convention. In the case of situations stipulated in Article 5, paragraphs 1 and 2 of the New York Convention, recognition and enforcement shall be refused. The arbitration award involved in the case does not comply with the arbitration rules agreed upon by the parties, and the selection of arbitrators may affect the fairness of the arbitration. This case accurately applies the relevant provisions of the New York Convention, and does not recognize or enforce the arbitration award involved, safeguarding the legitimate rights and interests of the parties in accordance with the law.