—— Panama N Shipping Co., Ltd. v. Jiangsu S Import & Export Co., Ltd.

Key Word：New York Convention; Recognition and enforcement; Foreign arbitral award; Grounds-for-refusal review; Enforcement settlement

Facts： 

On September 29, 2019, the applicant, Panama N Shipping Co., Ltd. (hereinafter “N Company”), as the shipowner, and the respondent, Jiangsu S Import & Export Co., Ltd. (hereinafter “S Company”), as the charterer, entered into a charter party. A dispute subsequently arose between N Company and S Company concerning this agreement, prompting N Company to initiate arbitration in London. On June 23, 2020, the arbitrator issued an arbitral award over the dispute concerning the charter party. On July 1, 2020, the arbitrator issued a memorandum of correction to the arbitral award, amending the date of the charter party in the original award. N Company then applied to recognize and enforce the arbitral awards before the Court.

Result：

After review, the Court held that, based on Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter “New York Convention”), the grounds for refusing recognition and enforcement of a foreign arbitral award mainly fall into two categories: (1) grounds that require the respondent to raise objections and provide supporting evidence, such as invalidity of the arbitration agreement or procedural defects; and (2) grounds that require courts’ ex officio reviews, including the arbitribility of the subject matter and whether the recognition or enforcement of the arbitral award would be contrary to the public policy of the country where recognition and enforcement is sought. In this case, S Company neither presented a defense nor conducted cross-examination, and it raised no objections regarding the validity of the arbitration agreement, the appointment of the arbitrator, the composition of the tribunal, or any procedural defects, or any grounds for refusal of recognition and enforcement. Despite of this, the Court held that, the dispute arose from the charter party amenable to arbitration, and the recognition and enforcement of would not contravene China’s public policy. Accordingly, the Court held that the foreign arbitral award should be recognized and enforced. During the enforcement procedure, N Company applied to add Che, the sole shareholder of S Company, as a judgment debtor. Through explaining the legal consequences and underlying causes of enforcement to Che, the Court facilitated a settlement agreement, enabling N Company to obtain timely compensation.  

Typical Significance：

This case exemplifies how maritime judiciary serves the Belt and Road Initiative. The applicant is a Panamanian company, and Panama was the first Latin American country to sign a memorandum of understanding on the Belt and Road Initiative. In accordance with Article Ⅴ of the New York Convention, the Court granted the application after its judicial review. This reflects the open judicial approach of Chinese courts in adhering to international convention obligations and safeguarding the international commercial order. During the enforcement proceeding, the Court adjusted the method of enforcement, and facilitated a settlement effectively and struck a balance between the parties, reflecting the commitment of Chinese courts to supporting the high-standard opening up.