A Beijing court ruling ordering enforcement of a Stockholm arbitral award has raised hopes the mainland is moving towards greater compliance with its international treaty obligations. The ruling, which was handed down on November 17 and made public recently, was one of the few reported instances where an application for enforcement of a foreign arbitral award has been granted by a Chinese court pursuant to the New York Convention, Baker & McKenzie attorney Michael Moser said. The New York Convention, which the mainland entered in 1987, provides that an arbitral award made in one member country will be enforced in the courts of all member countries without review of the case's substantive matters. A Stockholm arbitrator ruled in April 1995 that China Huayang Trading Corp was to pay compensation of more than US$2 million to Swiss company Food Industries Planning and Servicing (FIPS) over a dispute involving the sale and purchase of a turn-key food processing plant. In September 1995, FIPS applied to the Beijing Intermediate People's Court for an order of enforcement. After more than two years of review, the court determined that grounds existed for enforcement of the award. 'The real concern is to what extent China has been complying with its obligations under the New York Convention,' Mr Moser said. 'It has been a matter of great controversy.' China has been criticised for its lack of compliance with the convention's provisions. Mr Moser said protectionism, corruption and procedural hurdles were cited as significant barriers to the enforcement of foreign arbitral awards in China.
