以下文章来源于中伦文德律师事务所 ，作者ZLWD

CIETAC Hong Kong Arbitration Centre for the First Time Transmits Application for Preservation of Property to Mainland People's Court Pursuant to the Arrangement Concerning Interim Measures

As one of the first qualified arbitration institutions under the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region (hereinafter referred to as "Hong Kong") (hereinafter referred to as "Arrangement Concerning Interim Measures"), The Hong Kong Branch of the China International Economic and Trade Arbitration Commission (Arbitration Centre) (hereinafter referred to as "CIETAC Hong Kong Arbitration Centre") has recently transmitted to the Mainland People's Court, pursuant to the Arrangement Concerning Interim Measures, the first application for preservation of property filed by the parties involved in a foreign arbitration case administered by CIETAC in accordance with the Arbitration Rules of CIETAC.

Mr Lin Dingguo, Senior Counsel, Secretary for Justice of the Hong Kong Government, said, "Since the implementation of the Preservation Arrangement in 2019, it has opened up a new route for applying for preservation measures to the Mainland courts, which has brought great convenience to Hong Kong arbitration parties. We are confident that the CIETAC Hong Kong Arbitration Centre will continue to make active use of the advantages of Hong Kong as the seat of arbitration under the Arrangement Concerning Interim Measures to provide professional and quality dispute resolution services to international arbitration parties."

Wang Hao Cheng, deputy Secretary General of CIETAC Hong Kong Arbitration Centre, said: "Even before the introduction of the Arrangement Concerning Interim Measures, the CIETAC Hong Kong Arbitration Centre has already had practical experience in the preservation of property. After the introduction of the Arrangement Concerning Interim Measures,, the CIETAC Hong Kong Arbitration Centre can transmit the preservation application to the relevant court for the parties in a fast and efficient manner in accordance with the Arrangement Concerning Interim Measures,. In this case, on the same day of receiving the materials of the application for property preservation, the CIETAC Hong Kong Arbitration Centre issued a Letter of Transmittal in accordance with the Arrangement Concerning Interim Measures, and transmitted the application for property preservation to the relevant Mainland People's Court."

Regulations on Promoting the Construction of International Commercial Arbitration Centre (Draft for Comments) in Shanghai Issued

Recently, the Shanghai Municipal Bureau of Justice ("SMJB") has solicited comments and suggestions from the municipal committee of CPPCC  on the "Regulations on Promoting the Construction of International Commercial Arbitration Center in Shanghai (Draft for Comments) (hereinafter referred to as the "Regulations (Draft for Comment)"). The Regulations (Draft for Comments) mainly clarify the following:

(1) the Shanghai Municipal People's Government shall provide financial support for the promotion of the construction of the International Commercial Arbitration Centre, which shall be used to support the development of the arbitration industry, support the cultivation of arbitration talents and arbitration innovation, promote the agglomeration of arbitration resources, and enhance the level of internationalisation of arbitration; (2) to provide high-quality and highly efficient judicial guarantees for the construction of the International Commercial Arbitration Centre; (3) to promote exchanges and cooperation in the field of international commercial arbitration and to organise international arbitration exchange activities such as the Shanghai International Arbitration Summit Forum; (4) to support the Shanghai Pilot Free Trade Zone and other areas such as the Lingang New Area and the Hongqiao International Central Business District to improve the spatial layout of arbitration in accordance with their respective functional positioning and development advantages.

National Arbitration Handling Cases Situation in 2022 Released

The Public Legal Service Administration of the Ministry of Justice (MJ) released the 2022 National Arbitration Handling Cases Situation. Overall, in 2022, 277 arbitration institutions nationwide handled a total of 475,173 cases, a year-on-year increase of 14.3%. The total subject matter of arbitration cases nationwide was 986 billion yuan, a year-on-year increase of 14.7%. Among them, the number of traditional commercial arbitration cases was 320,262, an increase of 19.1% year-on-year; 89 arbitration institutions handled 154,911 cases using online arbitration, an increase of 5.4% year-on-year.

In terms of the composition of the types of cases, financial cases accounted for the largest proportion, accounting for 37.5% of the total number of cases nationwide, followed by e-commerce, sale and purchase, real estate, construction engineering and property cases.

In terms of amount of subject matter of each type of cases, the top three in order are: 265.7 billion yuan for financial cases, accounting for 26.95% of the total amount of subject matter of cases nationwide; 169.7 billion yuan for construction engineering cases, accounting for 17.21%; and 118.3 billion yuan for equity transfer cases, accounting for 12%.

Regarding the handling of Hong Kong, Macao, Taiwan and foreign-related cases, a total of 72 arbitration institutions handled a total of 2,888 Hong Kong, Macao, Taiwan and foreign-related cases in 2022, representing an increase of 197 cases compared with 2021, with the total subject matter of foreign-related cases amounting to 119.9 billion yuan. The cases were mainly concentrated in eastern provinces and cities such as Beijing, Shanghai, Guangdong, Zhejiang and Fujian.

Beijing Fourth Intermediate People's Court:

Entrusted Agent is not the Subject of the Contract and cannot be Found to have aConsent to Submit the Dispute to Arbitration

Legal Basis:

Arbitration Law

Article 20

Where the parties concerned have a differing opinion upon the validity of an arbitration agreement, a request may be made for an award to be made by the arbitration commission or a judgment made by the People's Court. Where one party requests an award to be made by the arbitration commission and the other party requests a judgment from the People's Court, it shall be judged by the People's Court.

Where the parties concerned have a differing opinion upon the validity of an arbitration agreement, this shall be raised before the arbitration tribunal commences the first hearing.

Case Description：

Beijing Urban Construction Installation Group Co.(hereinafter referred to as "Urban Construction Company") entered into the Labour Subcontracting Contract Version A of Beijing Municipal Housing Construction and Municipal Infrastructure Works (hereinafter referred to as the "Labour Subcontracting Contract") with CCCC Yuanda (Beijing) Construction Engineering Co., Ltd. (hereinafter referred to as "CCCC Yuanda Company") for the labour subcontracting of the Project 423 Mechanical and Electrical Installation Works - Temporary Power Engineering Project. As stated in the agreement of the first part of the contract, the labour offeror was Urban Construction Company and the labour contractor was CCCC Yuanda Company, with the special seal of the contract of Urban Construction Company and CCCC Yuanda Company stamped at the end; there was a signature of Mr. Jiang at the project manager of Urban Construction Company and a signature of Mr. Huang at the commissioning agent of CCCC Yuanda Company. Article 22.2 stipulates that the person in charge of the Contractor's performance of the Contract at the construction site shall be Mr. Huang, with the position of construction team leader, and the delegated authority shall be fully responsible for the work at the construction site. Article 22.4 stipulates that the person in charge of the collection of subcontract price assigned by the contractor shall be Mr. Huang, with the position of construction team leader. Article 32 Dispute Settlement stipulates that the offeror and the contractor, in the event of a dispute arising out of the performance of the contract, may settle the dispute on their own or request mediation by the relevant competent authority, and in the event that any of the parties is unwilling to settle the dispute by mediation or conciliation or if the mediation or conciliation fails to work out, the parties agree to adopt the first of the following ways to settle the dispute: (1) applying for arbitration at the Beijing Arbitration Commission, (2)applying for arbitration at【】Arbitration Commission, and (3) suing in the People's Court.
In January 2023, Mr. Huang, as the arbitration applicant, applied to the Beijing Arbitration Commission for arbitration of a dispute arising out of the Labour Subcontracting Contract, with Urban Construction Company and CCCC Yuanda as the arbitration respondents.

On March 17, 2023, the Urban Construction Company requested the Beijing Fourth Intermediate People's Court (hereinafter referred to as the "Court") to confirm that there was no arbitration agreement between the urban Construction Company and Mr. Huang. Urban Construction Company argued that Mr. Huang was the labour leader of CCCC Yuanda Company and also the contracted agent of the company, and was not a party to the contract from the beginning to the end. There was no arbitration agreement between Mr Huang and Urban Construction Company. The arbitration clause in the Labour Subcontract Contract entered into between Urban Construction Company and CCCC Yuanda Company only bound Urban Construction Company and CCCC Yuanda Company. Mr Huang was not a party to the said contract and had no right to apply for arbitration against the Company on the basis of the arbitration clause in the agreement.

Mr Huang claimed that although he was not a party to the contract, he was the actual constructor, and that he was not a company employee of CCCC Yuanda Company, but the person in charge of the project in question, who was attached to the name of CCCC Yuanda Company, and had the right to claim payment for the work from the offeror and the contractor in accordance with the provisions of the law. Therefore, Urban Construction Company's claim that Mr Huang had no contractual relationship with it and was not bound by the contract was not valid.

Court’s View:

Whether or not there is an arbitration agreement between the parties is a prerequisite for the Court to judge whether or not the arbitration agreement is valid, so whether or not there is an arbitration agreement also belongs to the scope of the Court's review of the validity of the arbitration agreement, therefore, the Court examined the application of the Urban Construction Company in accordance with the law. The Labour Subcontract Contract was signed between Urban Construction Company and CCCC Yuanda Company, and Mr. Huang signed the contract as an agent of CCCC Yuanda Company, and Mr. Huang was not the subject of the contract. Based on the existing evidence, it was not possible to conclude that there was an consent to submit the dispute to arbitration between Urban Construction Company and Mr. Huang. In accordance with the Provisions of the Supreme People's Court on Issues Concerning the Reporting of Cases Involving Judicial Review of Arbitration for Examination and Approval, and after the approval of the Beijing Higher People's Court, the court confirmed that there was no arbitration agreement between Urban Construction and Huang Zhongbao in respect of the Labour Subcontracting Contract.

In conclusion, in accordance with Articles 20 of the Arbitration Law of the People's Republic of China, the Court ruled that there is no arbitration agreement between Beijing Urban Construction Installation Group Co. and Mr. Huang with respect to the Labour Subcontracting Contract Version A of Beijing Municipal Housing Construction and Municipal Infrastructure Works. 

Supreme People's Court in Vietnam:

First-time Recognition and Enforcement of an Arbitration Award of China

Case Description：

In May 2018, a Chinese company engaged in the production of beverages and related foods in the field of biotechnology (hereinafter referred to as the "Applicant") entered into a Contract with a Vietnamese company engaged in the production and trade of food raw materials (hereinafter referred to as the "Respondent"), agreeing that the respondent would supply the Applicant with honey aloe fruit granules in accordance with the sample standards confirmed in writing by both parties. The Contract and its annexes clearly stipulated the subject matter, the price, the quality, the period of performance, the packaging and the acceptance criteria of the goods, and agreed that any disputes that arose should be submitted to arbitration at the Shanghai International Arbitration Centre. Article 11 of the Contract specifically agreed that if the seller did not respond within 15 days after the buyer raised quality objections, the seller would be deemed to have accepted all the buyer's requests. As the goods provided by the Respondent did not comply with the Contract, the Applicant sent a lawyer's letter to the Respondent in October 2018, but the Respondent did not reply. In view of this, the Applicant filed an arbitration with the Shanghai International Arbitration Centre (hereinafter referred to as the "Arbitration Tribunal"), requesting the Respondent to refund the purchase price and compensate for the damages.

Given that China and Vietnam are both contracting parties to the United Nations Convention on Contracts for the International Sale of Goods (hereinafter referred to as the "Convention"), and according to Articles 45.1 and 74 of the Convention, if the seller fails to fulfil its contractual obligations, the buyer may request the seller to compensate for the losses, including profits, suffered as a result of the seller's breach of the contract, the Arbitration Tribunal held that, in addition to the total payment for the goods, the insurance premium, shipping cost, tax and freight agency fee paid by the Applicant for this case belong to the reasonable loss of the Applicant. At the same time, according to the arbitration rules of Shanghai International Arbitration Centre applicable to this case, the Respondent shall bear all the arbitration fees paid by the Applicant for this case.

On 25 September 2020, the People's Court of Ho Chi Minh City ruled that the arbitral award made by the Shanghai International Arbitration Centre should be recognised and enforced in Vietnam under No. 1603/2020/QDST-KDTM (hereinafter referred to as the "First Instance Award"). On 7 October 2020, the Respondent appealed against the First Instance Award to the Higher People's Court of Ho Chi Minh City. The Ho Chi Minh City Higher People's Court issued Appeal Decision No. 39/2021/QD-PT (hereinafter referred to as the "Second Instance Award")., which overturned the First Instance Award of the Ho Chi Minh City People's Court and decided that the arbitral award rendered by the Arbitration Tribunal would not be recognised and enforced in accordance with the provisions of Articles 16 and 17 of the Mutual Legal Assistance Treaty of 1998.

On 22 September 2022, the President of the Supreme People's Court of Vietnam filed an ex officio protest against the Decision of Second Instance made by the Ho Chi Minh City High People's Court, requesting the Supreme People's Court of Vietnam (hereinafter referred to as the "Court") to review the Decision of Second Instance, to revoke the decision on the non-recognition and enforcement of the arbitral award made by the Arbitration Tribunal, and to uphold the First Instance Award of the Ho Chi Minh City People's Court.

Court’s View：

The Court held in the review proceedings that both Vietnam and China are parties to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as the "New York Convention"), and that the two countries have also signed the Treaty between the People's Republic of China and the Socialist Republic of Vietnam on Mutual Legal Assistance in Civil and Criminal Matters. In this case, the instruments and materials attached to the Application for Recognition and Enforcement of Foreign Arbitral Awards in Vietnam submitted by the Applicant are in compliance with Article 4 of the New York Convention and Article 453 of the Vietnamese Code of Civil Procedure (2015).
Request for Recognition and Enforcement of the Arbitration Award of the Arbitration Tribunal, it failed to submit evidence to prove that the arbitral award in question was not recognised and enforced as stipulated in Article 5 of the New York Convention and Article 453 of the Vietnamese Code of Civil Procedure (2015).

In summary, the Supreme People's Court of Vietnam, in accordance with the provisions of the Vietnamese Code of Civil Procedure (2015), decided to accept the protest filed by the President of the Supreme People's Court of Vietnam, to revoke the Second Instance Award rendered by the Higher People's Court of Ho Chi Minh City, and to uphold the Decision of the People's Court of Ho Chi Minh City on the Recognition and Enforcement of the Arbitral Award of the Shanghai International Arbitration Centre in Vietnam.