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Review and Analysis of Case Law
Publication The following study of cases is based on 13 publicly available cases concluded in 2017. Out
Annual Report on of the 13 awards, one was denied recognition and enforcement in its entirety, and one was
Recognition and partially denied (with regard to the part exceeding the parties' submission to arbitration).
Enforcement of Foreign We will first briefly introduce the two cases, and then analyze the notable arguments
Arbitral Awards in China raised by respondents in other cases.
(2017) Time (when Applicant Respondent Institution Court Result
concluded) and Seat
Jurisdiction Feb 22, 2017 GS Global Shanghai Korean Shanghai Recognized
Corporation Zhenrong Commercial First
China Petroleum Arbitration Intermediate
Co. Ltd. Board, Seoul People's
Court
Bibliographic reference Feb 24, 2017 Sinwa Marine Dalian Sinwa Singapore Dalian Recognized
'Review and Analysis of Case Pte. Ltd. Ship International Intermediate
Law', in Wei Sun , Annual Materials Arbitration People's
Report on Recognition and Supply Co. Center, Court,
Enforcement of Foreign Ltd. Singapore Liaoning
Arbitral Awards in China Feb 27, 2017 Jaguar Energy China ICC Beijing Transferred
(2017), (Kluwer Law Guatemala Mechanical International Second to Zhengzhou
International 2018) pp. 17 - LLC and AEI New Energy Court of Intermediate Intermediate
26 Guatemala Corporation Arbitration, People's People's
Jaguar Ltd. (CMNC) Singapore Court Court, Henan
for lack of
competence
Mar 7, 2017 Louis Dreyfus Zhengzhou Zhengzhou Application
Company Asia Chaoge Intermediate Withdrawn
Pte. Ltd. Spinning Co. People's
Ltd. Court, Henan
Mar 23, 2017 Bank of Korea Shaanxi Korean Xianyang Recognized
Bluebird Commercial Intermediate
Biomass Arbitration People's
Power Board, Seoul Court, Shanxi
Generation
Co. Ltd.
May 15, 2017 CHENCO Do-Fluoride ICC Xinxiang Partially
Chemical Chemicals International Intermediate Denied
Engineering Co., Ltd. Court of People's
and Arbitration, Court, Henan
Consulting Switzerland
GMBH
May 23, 2017 Russian Zhejiang Wuyi Russian Jinhua Recognized
Season Ltd. Wanlong Door Chamber of Intermediate
Industry Co. Commerce People's
Ltd. International Court,
Court of Zhejiang
Commercial
Arbitration
Jun 23, 2017 China Chengdu Singapore Chengdu Recognized
Aviation Oil Xinhuaxin International Intermediate
(Singapore) Chemical Arbitration People's
Co. Ltd. Material Co. Center, Court
Ltd. Singapore
Jul 17, 2017 ADM Asia- Shandong The Grain and Rizhao Recognized
Pacific Yahe Feed Trade Intermediate
Trading Pte. Agriculture Association, People's
Ltd Co. Ltd. Singapore Court,
Shandong

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 Time (when Applicant Respondent Institution Court Result
concluded) and Seat
Aug 10, 2017 Noble Shanghai Singapore Shanghai Denied
Resources Xintai Co., International First
International Ltd. Arbitration Intermediate
Pte. Ltd. Center, People's
Singapore Court
Aug 24, 2017 Rex Qingdao Singapore Qingdao Recognized
Commodities Haiyunda International Intermediate
Pte. Ltd. Trade Co. Ltd. Arbitration People's
Center, Court,
Singapore Shandong
Sep 25, 2017 Oman Jiangsu Ad hoc, Wuhan Recognized
Shipping Rongsheng London Maritime
Company Heavy Court, Hubei
Industry Co.
Ltd.
Oct 14, 2017 Columbia Shandong Federation of Rizhao Recognized
Grain Trading Shenying Oils, Seeds & Intermediate
Inc. Coal Trading Fats People's
Co. Ltd. Associations Court,
Ltd (FOSFA), Shandong
London

1 Noble Resources International Pte. Ltd. v. Shanghai Xintai Co., Ltd. (2017)
Shanghai. (“Noble Resources”) (Denied)
Noble Resources International Pte. Ltd. (“Noble Resources”) applied to enforce an SIAC
award against Shanghai Xintai Co., Ltd. (“Xintai”) before the Shanghai First Intermediate
People's Court.
Background: The parties entered into an iron ore sales contract with an arbitration clause
referring disputes to SIAC arbitration under the then applicable arbitration rules, with a
three-arbitrator tribunal. Noble Resources initiated arbitration and applied to conduct
the arbitration under the Expedited Rules (“EP Rules”) in accordance with the then
effective 2013 version Fifth Edition Arbitration Rules. Based on the amount in dispute, SIAC
confirmed that the EP Rules would apply. According to the EP Rules, the arbitration will be
conducted with a sole arbitrator unless the SIAC President determines otherwise. Despite
P 20 of Xintai's strong objection, SIAC decided that the arbitration should be conducted by a
P 21 sole arbitrator. In the failure of the parties' agreement on the sole arbitrator, the SIAC
President appointed the sole arbitrator.
Before the court, Xintai argued that the arbitration proceeding was not in accordance with
the parties' agreement on three arbitrators in the arbitration clause. Besides, SIAC totally
disregarded its request to have a three-arbitrator tribunal, which deprived its right to
present the case.
Court decision: The court confirmed SIAC's application of the EP Rules. However, it pointed
out that the EP Rules did not exclude the possibility of a three-arbitrator tribunal. And the
EP Rules did not authorize the SIAC President to apply the sole-arbitrator rule in case the
parties have agreed otherwise. In this case, the arbitration agreement clearly provided
that the arbitral tribunal should be composed of three arbitrators and Xintai also
explicitly objected to the application of the sole-arbitrator rule. Therefore, the
constitution of the tribunal was contradictory to the parties' agreements and the award
should be refused recognition and enforcement as provided in Article V(1)(iv) of the
Convention.
This decision is directly contradictory to the Singaporean judicial practice. In AQZ v ARA
(2015) SGHC 49, the parties had agreed in their arbitration agreement to have a three-
arbitrator tribunal. However, the arbitration was conducted under the EP Rules of the 2010
SIAC Arbitration Rules, and accordingly, by a sole arbitrator. (11) Nevertheless, the court
held that this was not a procedural non-compliance with the parties' agreement, because
a reference to a certain set of arbitration rules means that all the arbitration rules are the
parties' agreements, and the rule providing for a sole arbitrator supersedes the parties'
separate agreement on three arbitrators. Besides, the court held that the party seeking to
set side based on this procedural defect was not procedurally prejudiced.
Compared to the Singaporean judgment, the PRC court puts more emphasis on party
autonomy, holding that the parties' special agreement on a procedural matter is superior
P 21 to that provided in the arbitration rules. Therefore, a strict compliance with the arbitration
P 22 agreement is suggested. In addition, an indispensable factor in Noble Resources is that
Xintai expressed its objection to the application of the sole-arbitrator rule during the
arbitration proceeding, which saves its objection from being barred by the rule of estoppel
at the recognition and enforcement stage.

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 2 CHENCO Chemical Engineering and Consulting GMBH v. Do-Fluoride Chemicals
Co., Ltd. (2017) Xinxiang, Henan. (“CHENCO”) (Partially Denied)
CHENCO Chemical Engineering and Consulting GMBH (“CHENCO”) applied to enforce an ICC
award (18046/JHN/GFG) against Do-Fluoride Chemicals Co., Ltd. (“Do-Fluoride”) before the
Xinxiang Intermediate People's Court.
Background: The dispute arose out of a technology authorization contract between
CHENCO and Do-Fluoride. CHENCO claimed that Do-Fluoride had breached the contract by
using technologies which were beyond the scope of authorization under the contract.
CHENCO requested the tribunal to grant an injunction on Do-Fluoride's use of those
unauthorized technologies, penalties for such unauthorized use as well as interests. The
tribunal granted an injunction on Do-Fluoride's use of CHENCO's technologies, as well as
the relevant penalties. Do-Fluoride argued that the tribunal had exceeded its jurisdiction
by granting an injunction on Do-Fluoride's use of all CHENCO's technologies rather than
unauthorized technologies. Therefore, recognition and enforcement should be denied.
Court decision: The court held that CHENCO only claimed injunction on the use of
unauthorized technologies, but the tribunal granted injunction on the use of all of
CHENCO's technologies without distinguishing those authorized or unauthorized, which
constituted a relief outside the submission to arbitration as set forth in Article V(1)(iii) of
the Convention. As a result, the penalties for the use of those technologies also exceeded
CHENCO's submission to arbitration. However, the relief which was beyond the submission
to arbitration could be separated from the remaining part of the award, so the recognition
and enforcement of the award should only be partially denied.
P 22 This case is similar to one of the situations stipulated in Article 14 of the Beijing Opinion,
P 23 i.e. the award contains findings or reliefs outside the scope of claims and reliefs
requested by the claimant or the counter-claimant. It suggests that the ground of
exceeding the submission to arbitration or the tribunal's authority not only refers to scope
of the arbitration agreement (subject matter jurisdiction) and the parties to the arbitration
agreement (personal jurisdiction), but also the scope of the specific reliefs requested and
pleaded by the parties.

3 Other Grounds Raised

(1) No Proper Service of Notices and Documents
In 6 out of the 13 cases, the respondents argued that they had not been properly served of
notices or documents of the arbitration proceeding, and thus were deprived of the right to
present their cases. None of these arguments succeeded.
Chinese companies tend to refuse to participate in the arbitration, and in the end, argue
that its procedural rights are deprived. It is suggested that foreign applicants keep good
record of the services during the arbitration, and make sure that deliveries are not only
made to the address of the Chinese companies provided in the contract, but also to their
registered office publicly available.
(2) Non-Existence of Arbitration Agreement
In 2 out of the 13 cases, the respondent argued that there was no arbitration agreement
between the parties. In Sinwa Marine Pte. Ltd. v. Dalian Sinwa Ship Materials Supply Co. Ltd.
(2017) Dalian, Liaoning (“Sinwa”), the respondent argued that there was no arbitration
agreement because the contract was only concluded in English, and the respondent was
never aware of the contents of it, including the arbitration clause. This argument was surly
rejected by the court. The court pointed out that it was the respondent's duty to
understand the contents of the contract, and the respondent was barred to argue as such
after attending the arbitration.
It is also worth noting that in GS Global Corporation v. Shanghai Zhenrong Petroleum Co. Ltd.
P 23 (2017) Shanghai, (“GS Global”), the Shanghai First Intermediate People's Court recognized
P 24 that an arbitration agreement concluded through email satisfies the “writing”
requirement set forth in Article II of the Convention. This is the first case in China in which
the court came to such a conclusion with regard to a foreign arbitral award.
(3) Procedural Non-Compliance
In CHENCO, the respondent also argued that arbitration procedure was not in accordance
with the parties' agreements because: a) one evidence material submitted by the
applicant was not in English as required by the arbitration agreement; b) the tribunal
failed to properly apply the Swiss Civil Code, which was the governing law of the underlying
contract. The court held that: a) the evidence not submitted in English was indeed a
departure from the parties' agreement, but the respondent had not raised such objection
during the arbitration proceeding, and therefore was barred from raising it at the
enforcement stage; b) how the governing law was applied was a substantive issue.
In GS Global, the parties did not explicitly agree on the number of arbitrators, and the
Korean Commercial Arbitration Board (“KCAB”) proceeded to appoint a sole arbitrator. The
respondent alleged that according to the Korean Arbitration Law, failing agreement
between the parties, the default number of arbitrators should be three, therefore the

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 constitution of the tribunal in that arbitration was non-compliant. The court held that,
KCAB appointed the sole arbitrator according to its arbitration rules, which was deemed to
be the parties' agreement when they referred the dispute to KCAB. As a result, the
constitution of the tribunal was in accordance with the parties' agreement. Besides, the
court also pointed out that the respondent had not raised such objection during the
arbitration proceeding at all.
(4) Violation of Public Policy
In 3 out of the 13 cases, the respondent raised the ground of public policy to resist
recognition and enforcement. In Sinwa, the alleged violation of public policy was that the
tribunal ordered the respondent to stop using a registered trademark and transfer its title
to the applicant, but the application of the applicant to invalidate the trademark under
the use of the respondent had already been rejected by the PRC trademark administration.
Therefore, the award was contradictory to the administrative adjudication and violated
P 24 the public policy of China. The court held that these two decisions dealt with different
P 25 disputes. The award did not make any determination on the validity of the trademark,
which was the subject of the administrative adjudication. Consequently, there was no
violation of public policy.
In GS Global, the respondent argued that the amount of liquidated damages granted by the
tribunal in the award was far higher than the actual loss of the applicant, so recognition
and enforcement of the award would violate the public policy that liquidated damage is
meant to compensate the actual loss. The court rejected this argument based on that the
amount of liquidated damages is an issue of merits, which was outside the scope of court
review. In two other cases, the respondent also alleged that the award was obviously unfair
or wrong in the determination of damages, and these arguments were directly rejected by
the court.
In China Aviation Oil (Singapore) Co. Ltd. v. Chengdu Xinhuaxin Chemical Material Co. Ltd.
(2017) Chengdu, Sichuan, the respondent argued that the underlying transaction was a
fictitious transaction without substance, and violated the PRC regulations on foreign
exchange control, so recognition and enforcement of the award would be contrary to the
public policy of China. The court appropriately followed the decision in Jacobson, holding
that a violation of the administrative regulations, whether mandatory or not, was not
necessarily a violation of the public policy of China. The court confirmed that a violation of
public policy would only occur when fundamental legal principles or the public security of
China are harmed or threatened.
(5) Ambiguity of the Contents of the Award
As mentioned above, the Beijing Opinion provides that ambiguity of the rights and
obligations set forth in the award may lead to that the application be preliminarily
dismissed. In practice, this ground is also often raised by the respondent.
In CHENCO, the respondent argued that the reliefs granted by the tribunal were not
definite and enforceable. In Sinwa, the respondent also argued that the subject and object
of the performance obligation set forth in the award were ambiguous. The courts in the two
cases held that whether the award was capable of being performed is not a ground
available in the New York Convention to deny recognition and enforcement of a foreign
arbitral award.
P 25
P 26 That said, foreign applicants should be mindful that how the reliefs are granted in the
award may still affect the actual enforcement of assets or other ways through which their
interests can be achieved.
P 26

References
11) The 2010 EP Rules are the same as the 2013 version with regard to the number of
arbitrators. Namely, the arbitration will be conducted with a sole arbitrator unless the
SIAC President determines otherwise.

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© 2019 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.

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