Meaning
Administrative review mechanisms within the Chinese judicial hierarchy require lower courts to obtain approval from higher tribunals before refusing to enforce or invalidating foreign-related arbitral awards. This supervisory framework, established by the Supreme People’s Court, ensures that local protectionism does not undermine international treaty commitments or domestic arbitration laws. The procedure must be completed before any formal ruling of non-enforcement is issued.
Judicial Supervision
The process mandates that if an intermediate people’s court intends to reject an application to enforce a foreign award, it must first submit its draft ruling to the high people’s court of its province. Under the Prior Reporting System SPC, if the high court agrees with the refusal, the matter must then be reported to the Supreme People’s Court for a final determination. This multi-tiered review prevents unauthorized or erroneous decisions by local judges.
Procedural Chain
Each level of review requires the submitting court to prepare a detailed report outlining the factual background and the legal grounds for the proposed refusal. While the Prior Reporting System SPC is underway, the enforcement proceedings are effectively suspended. This structured reporting chain ensures that the highest judicial authority has the opportunity to review the case.
Systemic Consistency
This system is designed to provide foreign investors with a predictable legal environment by centralizing the power to invalidate foreign-related awards. The application of the Prior Reporting System SPC has significantly reduced the rate of refusal for foreign arbitral awards in China.
