From: Ten Typical Enforcement Cases for Recognition and Enforcement of Extraterritorial Arbitral Awards and Court Judgments

[Information of the parties involved]

Applicant: AAA Consulting Co., Ltd., BBB Co., Ltd.

Respondant: CCC Club Co., Ltd.

Basic Information of the Case

AAA Consulting Co., Ltd. and BBB Co., Ltd. respectively signed an "Advisory Agreement" with CCC Club Co., Ltd., stipulating that AAA Consulting Co., Ltd. and BBB Co., Ltd. would provide relevant services to CCC Club Co., Ltd., and at the same time agreeing that if there is a dispute between the two parties in the performance of the agreement, the dispute should be submitted to the Hong Kong International Arbitration Centre for arbitration, and then the two parties have a dispute over the performance of the above agreement, CCC Club Co., Ltd. filed an arbitration with the Hong Kong International Arbitration Centre in accordance with the arbitration clause in the agreement. AAA Consulting Co., Ltd. and BBB Co., Ltd. filed counterclaims against CCC Club Co., Ltd., including the alleged amount due under the Consultancy Agreement and the damages for refusing to perform the Consultancy Agreement. After hearing, the Hong Kong International Arbitration Centre ruled that CCC Club Co., Ltd. constituted a breach of contract and should pay AAA Consulting Co., Ltd. and BBB Co., Ltd. invoiced fees, losses, attorney fees and expenses, arbitration fees and related interest. AAA Consulting Co., Ltd. and BBB Co., Ltd. applied to the Fourth Intermediate people's court of Beijing for recognition and enforcement of the arbitral award, and the court decided to recognize and enforce the arbitral award of the Hong Kong International Arbitration Centre after review.

During the execution process, the subject of the execution, CCC Club Co., Ltd., stated that due to the impact of the epidemic, the company's operating income has significantly decreased and is actively seeking solutions to financial difficulties in the face of debt. Therefore, they submitted an application for execution settlement to the court. After understanding the situation, the executing judge organized the parties multiple times through phone calls, cloud courts, and other means

On the one hand, they urged the person subjected to enforcement to actively repay, on the other hand, they also communicated with the person applying for enforcement to set aside a Grace period for the person subjected to enforcement, which ultimately led the parties to reach a voluntary implementation settlement agreement, which defined the amount of creditor's rights and the way of installment performance. After the settlement agreement was reached, the person subjected to execution finally paid all the corresponding amounts as scheduled. At this point, this case has been fulfilled through the execution of the settlement.

Enforcement Results

During the execution process, both parties voluntarily reach an execution settlement agreement to be performed in installments, and the person subjected to execution shall fulfill all obligations in accordance with the execution settlement agreement.

Typical significance

Arbitration is an internationally recognized method of resolving disputes through party autonomy, and is also one of the elements of China's market-oriented, legal, and international business environment. The recognition and enforcement of arbitration awards is one of the core issues of the international commercial arbitration system, which is related to whether disputes between the parties can be substantially resolved.

In this case, the court has always upheld the concept of good faith and civilized execution in the execution of the arbitration award, fully played the role of judicial agency, and found the balance point of the legitimate rights and interests of both parties to the maximum extent possible. It not only protects the legitimate creditor's rights and interests of the applicant for enforcement, but also prudently takes judicial enforcement measures against companies that are still operating actively and not maliciously evading repayment obligations due to the impact of the epidemic, To minimize the impact on the normal operation of the company, reserve space and time for the survival and development of the company, promote execution through reconciliation, promote harmony through reconciliation, and ultimately resolve all the contents determined by the arbitration award through phased performance. The execution of this case has received full recognition from both parties, assisted in the resolution of international commercial disputes, protected the legitimate rights and interests of domestic and foreign parties, and demonstrated the judicial attitude of the people's court in optimizing the market-oriented, legal, and international business environment.

Expert comments

This case is another typical case that achieves the concept of good faith and civilized execution in mainland China and implements the organic unity of the "Arrangement of the Supreme People's Court on Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region". In the execution of this case, the Beijing Fourth Intermediate People's Court accurately grasped the interests and demands of both parties, taking into account the willingness and actual difficulties of the executed person, actively organized negotiations between the parties, facilitated a reconciliation between the two parties, and urged the executed person to carry out the execution. This not only ensured the realization of the rights of the applicant for execution, but also reserved space and time for the survival and development of the executed person who was facing operational difficulties under the impact of the epidemic, The fundamental resolution of disputes between the parties has been fully recognized by both parties, reflecting the seriousness and warmth of the judiciary.