Meaning
Temporary judicial remedies issued by international arbitration panels protect the assets or legal rights of a party before the final resolution of a dispute. Foreign arbitral injunctions represent the interim orders that command a counterparty to cease specific actions or preserve disputed property outside the tribunal’s home jurisdiction. In mainland China, the enforcement of these foreign orders is restricted because domestic courts possess the exclusive statutory authority to issue injunctions and order asset freezes.
This creates a split between the international legal obligations of the parties and the practical enforcement tools available on the ground.
Judicial Monopolization
The PRC Civil Procedure Law and the Arbitration Law reserve the power to freeze assets, seize property, or command specific behaviors to the domestic people’s courts. Consequently, a foreign arbitral injunction is not directly enforceable by Chinese judicial bailiffs, as the courts do not recognize the coercive power of foreign private tribunals. If a party receives an injunction from a tribunal seated in London or Singapore, they cannot simply present it to a Chinese court for execution.
The party must instead file a fresh application for interim relief directly with the intermediate people’s court where the assets are located. This requirement means the domestic court will independently evaluate the merits of the request according to Chinese legal standards, effectively conducting a separate review of the circumstances before granting any relief.
Bilateral Treaty
Specific exceptions to this limitation exist under bilateral arrangements, most notably between mainland China and Hong Kong. Under this special arrangement, parties to arbitrations in Hong Kong can apply to mainland courts for interim measures. This bilateral treaty bypasses the traditional prohibition on foreign arbitral assistance.
However, this path is not available for arbitrations seated in other jurisdictions, which must still rely on the standard domestic court procedures.
Tactical Protection
Filing parallel interim applications in Chinese courts remains the primary method to secure assets while the international arbitration is ongoing. Foreign parties must act quickly to prepare the necessary notarized and apostilled documents to satisfy the strict evidentiary requirements of Chinese courts. The court will often require the applicant to provide a financial guarantee or counter-security to cover any potential losses the Chinese counterparty might suffer if the injunction is later found to be unjustified.
This security can take the form of a cash deposit or a bond issued by an approved Chinese financial institution.
