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

[Information of the parties involved]

Application executor: AA Investment Co., Ltd.

Executed by: BB Engineering Construction Co., Ltd.

Basic Information of the Case

AA Investment Co., Ltd. has signed a contract with BB Engineering Construction Co., Ltd. and BB Engineering Construction Co., Ltd. Overseas Company, stipulating that AA Investment Co., Ltd. will assist BB Engineering Construction Co., Ltd. and BB Engineering Construction Co., Ltd. Overseas Company in expanding their business in a certain country and reach a settlement with a certain company regarding related project issues. BB Engineering Construction Co., Ltd. and BB Engineering Construction Co., Ltd. Overseas Company shall pay a commission to AA Investment Co., Ltd. at a certain proportion of the final settlement fee, and agree that any disputes arising from this shall be resolved by the Swiss Chamber of Commerce Arbitration. During the performance of the contract, due to the breach of contract by BB Engineering Construction Co., Ltd. and BB Engineering Construction Co., Ltd. overseas companies, AA Investment Co., Ltd. submitted the dispute to the Swiss Chamber of Commerce for arbitration. After the hearing, the Swiss Chamber of Commerce Arbitration Court made an arbitration award, awarding BB Engineering Construction Co., Ltd. and BB Engineering Construction Co., Ltd. overseas companies to pay AA Investment Co., Ltd. over 30 million US dollars and the fees incurred in the arbitration. BB Engineering Construction Co., Ltd. and BB Engineering Construction Co., Ltd. Overseas Company appealed against the arbitration award to the Federal Supreme Court of Switzerland, requesting the court to declare the arbitration award invalid. After hearing, the Federal Supreme Court of Switzerland rejected the appeals of BB Engineering Construction Co., Ltd. and the overseas companies of BB Engineering Construction Co., Ltd. Later, AA Investment Co., Ltd. applied to the Fourth Intermediate people's court of Beijing for recognition and enforcement of the arbitral award made by the Arbitration Court of the Swiss Chamber of Commerce. During the review process, BB Engineering Construction Co., Ltd. filed a defense claim that AA Investment Co., Ltd.'s application did not comply with the provisions of the New York Convention. After examination, the court found that BB Engineering Construction Co., Ltd.'s defense claim could not be established, and ruled to recognize and enforce the arbitration award made by the Swiss Chamber of Commerce Arbitration.

In the process of implementation, the Fourth Intermediate people's court of Beijing served legal documents such as the notice of implementation and the order of reporting property to the person subjected to enforcement according to law, but BB Engineering Construction Co., Ltd., the person subjected to enforcement, considered that the amount of performance made by the arbitration award against him was unknown, and according to the provisions of Swiss law, he only assumed part of the liability, not joint and several liability, so he raised an objection to enforcement. In response to the undisputed portion of the arbitration award, BB Engineering Construction Co., Ltd. voluntarily paid over 14 million yuan to the court based on the foreign exchange rate on that day. For the disputed parts, BB Engineering Construction Co., Ltd. provided sufficient bank deposit guarantees and requested suspension of execution. With the consent of the applicant for enforcement, the Fourth Intermediate people's court of Beijing froze the bank deposit guaranteed by BB Engineering Construction Co., Ltd. according to law, and the case was suspended.

Enforcement Results

This case focuses on the undisputed part of the arbitration award, which was voluntarily fulfilled by the person being executed. The court returned the case amount to the applicant for execution. For the disputed part, the subsequent execution method needs to be determined after the disputed arbitration award matters are resolved. The case is suspended in accordance with the law after freezing the guaranteed bank deposits.

Typical significance

In international judicial assistance cases, there is a dispute between the parties regarding the understanding of the enforcement basis for extraterritorial arbitration awards, court judgments, etc., and different situations should be distinguished and handled in the enforcement procedure after recognition. In this case, how to understand the dispute between the two parties in terms of the type of responsibility that should be borne has been submitted to the court on the basis of expert argumentation in accordance with Swiss law, but the dispute cannot be resolved in the implementation procedure, nor can it be judged on the relevant dispute issues in accordance with China's Substantive law. The purpose of international judicial assistance is to ensure that arbitral awards and court judgments from outside the territory of China are executed within the territory of China without violating Chinese laws and public interests. During the execution process, for the undisputed parts, the court should first carry out the execution,

For the disputed part of the arbitration award that is unclear, if the parties raise objections to the execution and request a suspension of execution, the court may require the parties who raise objections to provide sufficient guarantees. With the consent of the applicant for enforcement, the suspension of execution procedure can be applied, and the execution can be resumed after the disputed arbitration award is resolved. The handling method of this case provides a solution for the handling of such cases.

Expert comments

This case is a typical case of how to handle disputes between the parties during the execution process regarding some parts of the extraterritorial effective arbitration award as the basis for execution. In the event of disputes between the parties regarding the basis of enforcement, the Beijing Fourth Intermediate People's Court actively enforced the undisputed part, ensuring the legitimate interests of the applicant to the greatest extent possible; For the part in dispute, on the one hand, the authorities that need to make decisions on the content related to Substantive law will be clarified; on the other hand, the rights of the respondent under China's Procedural law will be protected, such as applying for objection to enforcement, providing security and applying for suspension of enforcement procedures, which effectively balances the interests of the applicant and the subject, and shows the professional, rigorous and fair international image of the Chinese courts.