Predictability of the “Public Policy” Stipulated in Article V of the New York Convention under the Judicial Practice in Mainland China
Date Issued
2014
Date
2014
Author(s)
Chen, Helena Hsi-Chia
Abstract
Although “public policy” is an uncertain legal concept, through researching relevant international conventions, articles of important scholars, relevant cases and reports published by International Law Association and conducting a comparative study on major countries’ legislations, one may still find that the international community has reached certain consensus about the core meaning of “public policy” stipulated in Article V(2)(b) of the New York Convention. Regarding the interpretation and application of “public policy” and “social and public interest” (a term similar to public policy) by the PRC courts, after a careful study of the relevant legislations in the mainland China and relevant PRC court cases available to the author, the author concludes that:
1. In terms of terminology, the traditional term used in PRC arbitration law was “social and public interest.” The term “public policy” came into play after the PRC’s accession to the New York Convention. Moreover, from the judicial interpretations issued by the Supreme People’s Court of the PRC (“SPC”), one may easily observe that SPC is rather vigilant in choosing the terms: it uses the term “public policy” when dealing with cases involving the New York Convention. By contrast, in cases involving enforcement of arbitral awards made in Hong Kong or Macau and in cases involving enforcement of awards made by Taiwanese arbitration institutions, the SPC uses the term “social and public interest.” In addition, the SPC uses the term “social and public interest” in cases involving revocation or non-enforcement of domestic arbitral awards or foreign-related arbitral awards. (For discussions about whether “social and public interest” is one of the grounds to revoke or refuse enforcement of domestic arbitral awards or foreign-related arbitral awards, please see: Chapter 3, Section 2, Para., 2 (2) of this Dissertation.)
2. A simple reading of the texts may suggest that “social and public interest” is broader than “public policy.” However, a careful analysis of relevant PRC courts’ jurisprudence reveals that the interpretation and application of “public policy” and “social and public interest” actually depend on the kind of cases in which the term is being applied to. For example, when interpreting and applying “social and public interest ” in cases involving enforcement of arbitral awards made in Hong Kong, the SPC actually adopts the same standard as when it is interpreting “public policy” under Article V(2)(b) of the New York Convention. As another example, the PRC courts tend to interpret the term “social and public interest” more broadly in cases involving non-enforcement of domestic arbitral awards than in cases involving non-enforcement of foreign-related arbitral awards.
3. “The Supreme People’s Court’s Provisions on the People’s Courts’ Recognition of Civil Judgments of the Relevant Courts of the Taiwan Region” is not a proper legal ground for the recognition and enforcement of arbitral awards made in Taiwan. A specific law to regulate the PRC courts’ recognition and enforcement of arbitral awards made in Taiwan is needed.
4. Early Chinese judicial practice indicated that the phenomenon of interpreting “social and public interest” so broadly was to protect local interest in the name of social and public interest. Later, the SPC announced provisions to centralize the jurisdiction of the following four types of cases in certain courts:
(1) cases regarding the validity of a foreign-related arbitral agreement;
(2) cases regarding non-enforcement of a foreign-related arbitral award;
(3) cases regarding revocation of a foreign-related arbitral award; and
(4) cases regarding recognition and enforcement of a foreign arbitral award.
The SPC has also adopted the so-call “Reporting System” and stipulated that if any of the above types of cases is reported to the SPC through the Reporting System, the case shall be reviewed by the Fourth Civil Tribunal of the SPC. The PRC judicial practice has proved that the above mechanism adopted by the SPC has been very helpful to unify the lower courts’ legal opinions and to eradicate local protectionism.
5. The PRC judicial practice has also demonstrated that, basically, the SPC’s interpretation and application of “public policy” under Article V(2)(b) of the New York Convention have been rather consistent with the majority views commonly shared in the international community.
6. A close scrutiny of the Hemofarm case (海慕法姆案) reveals that the SPC is very concerned with “the judicial sovereignty of the PRC and the jurisdiction of the PRC court.” In the Hemofarm case (海慕法姆案), the SPC reviewed the reasoning of the arbitral tribunal in its award and concluded that the arbitral award violated “the judicial sovereignty of the PRC and the jurisdiction of the PRC court.” The SPC’s particular concern about “the judicial sovereignty of the PRC and the jurisdiction of the PRC court” becomes even more evident if we read the SPC’s reply letter in the Hemofarm case (海慕法姆案) together with its reply letters in the Louis Dreyfus case (路易達孚案) and the Guangxia Culture case (廣夏文化案).
7. If we review the PRC courts’ reasoning in the Liupanshui case (六盤水案) and the Leaf Confectionery case (利夫糖果案) with the background knowledge of the distinction between domestic arbitration and foreign-related arbitration under the mainland China law regime, we can appreciate how the PRC court maintains the special legal framework of distinguishing domestic arbitration from foreign-related arbitration by interpreting and applying the concept of “public policy” in cases such as the Liupanshui case (六盤水案) and the Leaf Confectionery case (利夫糖果案). The interpretation and application of “public policy” under Article V(2)(b) of the New York Convention in such kind of cases are therefore flavored with Chinese characteristics.
Subjects
公共政策
公共秩序
社會公共利益
紐約公約
承認及執行外國仲裁判斷
Type
thesis
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