Business law

As the builder, Daewoo Shipbuilding & Marine Engineering Co., Ltd. (hereinafter referred to as “Daewoo Shipbuilding Co.”) concluded a shipbuilding contract with Jelephant Corporation as the buyer. They stipulated that any dispute arising from the contract should be submitted to a London arbitration institution for resolution in accordance with the Arbitration Act 1996. Afterwards, Daewoo Shipbuilding Company concluded an agreement on the modification of the subjects of the contract with Jelephant Corporation, Celephant Inc. and the buyer was changed to Celephant Inc. Daewoo Shipbuilding Company also concluded a supplementary agreement with Celephant Inc. and Cduckling Corporation, according to which Cduckling Corporation would assume some payment obligations. Both agreements stipulated that any dispute arising from the agreements should be subject to arbitration in accordance with the arbitration clause of the aforesaid shipbuilding contract. Afterwards, since Daewoo Shipbuilding Company did not receive the shipbuilding payment, it initiated an arbitration in London against Celephant Inc. and Cduckling Corporation. The sole arbitrator designated by Daewoo Shipbuilding Company issued an arbitral award, which supported claims of Daewoo Shipbuilding Company. Daewoo Shipbuilding Company filed an application with the Qingdao Maritime Court for recognition of the arbitral award.

[Adjudication]

The Qingdao Maritime Court held that: The Chinese version of the arbitral award translated by a qualified translator of a Chinese translation company and submitted by Daewoo Shipbuilding Company satisfied the formal requirements as prescribed in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as the “New York Convention”); both the agreement on the modification of the subjects of the contract and the supplementary agreement involved were expressly stipulated and incorporated into the arbitration agreement and they were subject to arbitration in London by applying the British law. In this way, an effective arbitration agreement was reached in writing; the procedures for appointing the sole arbitrator and the procedures for service of arbitration conformed to the provisions of the Arbitration Act 1996; the recognition or enforcement of the arbitral award involved did not contravene the Chinese public order or the Chinese laws. In conclusion, the arbitral award rendered by the London arbitration institution did not fall under any circumstance where its recognition should be refused as prescribed in the New York Convention.

[Significance]

A case concerning an application for recognition and enforcement of a foreign maritime arbitral award should be examined in accordance with the provisions of the Chinese laws, the international treaties where China has concluded or participated in or by following the principle of reciprocity. The New York Convention is the most important international convention in the international arbitration field. It has set an international standard for recognition and enforcement of a foreign arbitral award and is recognized by most countries. As one of the contracting countries of the New York Convention, the Chinese courts have always attached great importance to its application in China, fully respected the autonomy of the parties', provided efficient and convenient judicial environment for recognition and enforcement of foreign arbitral awards, and created a favorable legal environment for the multi-resolution of disputes. The examination of this case has accurately grasped the tenet and spirit of the New York Convention and properly interpreted and applied the provisions of the New York Convention. The ruling that the foreign maritime arbitral award should be recognized has reflected the judicial concepts of giving support to international maritime arbitration and appropriate supervision and it is an active attempt and useful exploration to the interpretation and application of the New York Convention. In addition, the law of the place of arbitration, namely, the Arbitration Act 1996, was applicable to this case and such issues as the effect of the arbitration agreement and the legality of the composition of the arbitral tribunal were determined. This case is of some guiding significance for investigation and application of foreign laws in the trial of foreign-related commercial and maritime cases.