Supreme People Court Prior Reporting Rules for Domestic Arbitral Awards
Intermediate courts cannot invalidate domestic arbitral awards without higher court approval, with SPC review triggered by inter-provincial or public policy grounds.
Award Cancellation
Meaning
A judicial remedy exercised by intermediate people’s courts in China results in the invalidation of a binding arbitration decision. Applications for award cancellation must be submitted to the court in the locality where the arbitration commission is situated. Under the PRC Arbitration Law, this statutory procedure allows aggrieved parties to challenge the legal validity of an award based on specific statutory grounds.
The procedure only applies to awards made within the jurisdiction of the mainland court system.
Judicial Standard
Statutory review of domestic awards focuses on procedural matters such as the absence of a valid arbitration agreement or the tribunal exceeding its authorized mandate. Under current judicial practices, the courts rarely review the substantive merits of the dispute except when the award violates public policy. This distinction limits judicial intervention in commercial disputes.
Procedural Path
Filing a petition requires the applicant to submit the request within six months from the date of receiving the arbitral award. The court must render a ruling to cancel the award or dismiss the petition within two months of accepting the case. If the court finds that the award can be re-arbitrated, it may notify the tribunal to resume proceedings within a specified timeframe, which temporarily suspends the cancellation process.
Commercial Impact
Successful set-aside decisions restore the original positions of the parties, allowing them to initiate new arbitration proceedings or file lawsuits in court. This outcome prevents the enforcement of the cancelled obligations by judicial marshals.