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Juha Lassila

"Public policy" and the enforcement of foreign arbitration awards in China - Lexology - 0 views

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china law arbitration

shared by Juha Lassila on 21 Dec 10 - No Cached
  • Case Study 1: Morality
  • This concert, however, was suspended when Chinese authorities asserted that the performance included heavy metal music that had not been approved by the Ministry of Culture of China
  • the arbitration tribunal awarded damages to the performers
  • ...12 more annotations...
  • the SPC concluded the performance did in fact violate China’s social public interest and, as such, the performers had breached the contract.
  • Case Study 2: Mandatory Administrative Regulations
  • Japanese company alleged the SOE was contractually obligated to pay back certain debt
  • SOE challenged the award in a Chinese court, arguing the award violated Chinese public policy because the repayment of the foreign debt to the Japanese company had not been approved by the State Administration on Foreign Exchange and this approval was compulsory. The lower court agreed and refused to enforce the award.
  • The SPC therefore reversed the lower court’s decision, ruling that the award could not be vacated on public policy grounds.
  • Case Study 3: Sovereignty of the Chinese Courts
  • a Chinese company and three foreign companies executed a contract to form a joint venture.
  • When a dispute subsequently arose between the Chinese company and the joint venture entity, the Chinese company commenced a lawsuit against the joint venture entity in the Chinese courts, which ruled in favour of the Chinese company and ordered the assets of the joint venture be impounded.
  • foreign tribunal held that the Chinese company had breached the joint venture contract by petitioning a Chinese court to impound the joint venture assets, and awarded damages to the foreign parties.
  • When the Chinese company did not pay these damages, the foreign parties brought suit in China, seeking enforcement of the arbitral award.
  • The Chinese court, however, held that the arbitration clause in the joint venture contract only covered disputes between the contracting parties and, therefore, did not cover the dispute between the Chinese party and the joint venture entity (which was not a party to the contract).
  • While no one can ever guarantee a foreign arbitral award will be enforced in China, the climate is better than many think.
  • Juha Lassila on 21 Dec 10
     
    "While no one can ever guarantee a foreign arbitral award will be enforced in China, the climate is better than many think."
Juha Lassila

Law on laws governing civil relations involving foreign elements - Lexology - 0 views

www.lexology.com/...detail.aspx

china law contract IPR labor

shared by Juha Lassila on 23 Dec 10 - No Cached
  • The Law covers civil and commercial relationships involving foreign natural persons and legal persons in a number of fields, including marriage, inheritance, property rights, general contractual obligations, labour law, tort and intellectual property rights. The Law clarifies the rules on the applicable laws governing civil disputes in several areas where PRC laws are currently silent, including acts of agency, trusts, arbitration, pledges of rights, labour contracts, and product liability.
  • This means that, for example, all shareholder agreements in relation to say a two-party wholly foreign-owned enterprise would have to be governed by PRC law.
  • The current PRC laws require that several types of contracts which relate to foreign investment in China such as Sino-foreign equity joint venture contracts, contracts for purchase of equity interests or assets of a domestic enterprise by foreign investors[6] must be governed by PRC Law.
  • ...5 more annotations...
  • The Law also states that where the parties have chosen a foreign governing law, the court or the arbitration tribunal should investigate and determine the applicable foreign laws, presumably through expert testimony (as in the past). Where the parties select foreign governing laws by agreement, it is the parties' responsibility to provide copies of the selected foreign governing law
  • In addition, the Law expands to tort and property rights in movables the scope of areas where, in the context of a so-called foreign-related contract ("涉外合同"), the parties are free to choose their own governing law.
  • In particular, the Law stipulates two important general principles for determining the application of governing laws for foreign-related civil disputes: party autonomy and closest connection
  • However, the Law is not designed to radically change the current rules of conflicts of laws in China. The requirements to apply mandatory Chinese laws which are provided by other laws are maintained under the Law
  • The rules of conflicts of laws stipulated under other civil or commercial laws, which are not covered by the Law, also remain unchanged.
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