In many jurisdictions, when it comes to international arbitration proceedings, an arbitral tribunal has the power to issue orders to grant interim measures. However, under Chinese law, an arbitral tribunal does not have such power and all it can do is to transfer parties’ application for interim measures to competent courts. Besides, while courts in some jurisdictions are willing to enforce an interim order issued by a foreign-seated tribunal, Chinese courts are more reluctant to do so. However, some updates have been seen recently and this article will give a brief summary in this regard.
Under Chinese law, if necessary, parties can apply for property preservation. Parties can apply for preservation before or during the arbitration proceedings. It shall be noted that if the applicant fails to apply for arbitration within 30 days from the adoption of preservation measures by the competent Court, the competent Court shall discharge the preservation. (Article 101 of the Civil Procedure Law).
Where a party applies for property preservation, the arbitration commission (i.e. arbitration institution) shall submit the application to a competent court. Where there is a wrongful application, the claimant shall compensate the respondent for losses incurred during the property preservation procedures. (Article 28 of the Arbitration Law).
In Chinese mainland arbitrations, if the party makes an application for property preservation, which is submitted to a competent court by the arbitration institution, the local court (the courts of the first instance) of the domicile of the respondent or the locality of the properties shall decide the case and enforce the property preservation order. (Article 11 of the Provisions of the Supreme People’s Court on Several Issues Concerning Judicial Enforcement by the People’s Courts (for Trial Implementation))
In foreign-related arbitrations, if the party makes an application for property preservation, which is submitted to a competent court by the arbitration institution, the intermediate people's court of the domicile of the respondent or the locality of the properties for which preservation is applied shall decide the case and enforce the property preservation order. (Article 12 of the Provisions of the Supreme People’s Court on Several Issues Concerning Judicial Enforcement by the People’s Courts (for Trial Implementation))
Under Chinese law, where evidence is vulnerable to being destroyed or lost and would be difficult to recover, the parties may apply for the preservation of the evidence.
In Chinese mainland arbitrations, where a party applies for evidence preservation, the arbitration commission shall submit the application to a competent court of the locality of the evidence. (Article 46 of the Arbitration Law)
In foreign-related arbitrations, the foreign-related arbitration commission shall submit the application to a competent intermediate court of the locality of the evidence. (Article 68 of the Arbitration Law)
Other Interim Measures
There is no specific provision of interim measures except for property preservation and evidence preservation under Chinese law. If parties apply for property or evidence preservation in accordance with Chinese law, arbitration commissions shall submit the application to a competent court which has the jurisdiction (the arbitral tribunal has no power to make the decision).
Meanwhile, an arbitral tribunal can make decisions pursuant to the specific rules made by the arbitration commission regarding those interim measures that are not provided in the law. However, such decisions have been extremely rarely seen in the real practice.
Recent support to interim measures from the China International Commercial Court
As for interim measures ordered by foreign-seated tribunals, very rare case has been seen that such measures have been recognized and enforced by Chinese mainland courts. Therefore, the prevailing view is that although mainland courts may have discretion in supporting such interim measures, they are more reluctant to do so.
However, some support has been seen in this regard from the China International Commercial Court. On 1 July 2018, the Regulation on Several Issues regarding the Establishment of China International Commercial Court came into effect. Under article 11 of the regulation stipulates that the Supreme People’s Court chooses a group of qualified international commercial arbitration institutions while article 14 further states that if parties choose arbitration administrated by the selected international commercial arbitration institutions selected according to Article 11, they may apply to the International Commercial Court for evidence, property or injunction (behaviour preservation) before or after the commencement of the arbitration proceedings.
These provisions show the support from the China International Commercial Court regarding recognition and enforcement of interim measures issued in the proceedings of international arbitration under Chinese law. Therefore, one could expect that a certain type of interim measures issued in foreign arbitration proceedings may be enforced in China in the near future.