Article: First CIETAC HK award enforced in mainland China

On 13 December 2016, the Nanjing Intermediate People’s Court of Jiangsu Province enforced an arbitral award made by the China International Economic and Trade Arbitration Commission Hong Kong Arbitration Center (“CIETAC HK”), making it the first CIETAC HK award to be enforced in mainland China.

The underlying arbitration proceedings in Hong Kong were commenced by Ennead Architects International LLP (“Ennead”), an American architecture firm, against Fuli Nanjing Dichan Kaifa Youxian Gongsi (“Fuli Nanjing”), a Chinese property developer, for unpaid design fees. The award was issued in favour of Ennead and required Fuli Nanjing to pay all of Ennead’s outstanding fees and interest, as well as the arbitration costs.

Ennead brought the enforcement proceedings in Nanjing in order to enforce the interest portion of the award, part of which had already been complied with by Fuli Nanjing.

Relying on the 1999 Arrangement Concerning Mutual Enforcement of Arbitral Awards between Mainland China and Hong Kong and further noting that the enforcement of the award would not contradict the public interests of mainland China, the Nanjing Court ruled to enforce the outstanding interest portion of the award.

Although Fuli Nanjing did not object to the enforcement of the award, this is a significant precedent confirming that Chinese courts are prepared to recognise and enforce the awards made by CIETAC HK. The ruling will also enhance Hong Kong’s position as one of the most preferred and comforting forums for resolution of China-related disputes with a nexus to Hong Kong, and is a welcome move for parties entering into cross-border transactions in general or seeking to enforce CIETAC HK awards in mainland China.

Note: CIETAC HK, which was established in 2012 as the first overseas sub-commission of the Chinese arbitral institution, began to accept and administer cases only since 1 January 2015 in accordance with the updated China International Economic and Trade Arbitration Commission Arbitration Rules 2015.