Enforcement

Abstract

AbstractIn China, if the losing party does not take the initiative to satisfy an effective court judgment, arbitral award and other legal documents, the winning party may apply to the court for enforcement. Then the court may deduct the deposit and/or auction the property of the losing party and use the money/proceeds obtained therefrom to repay the winning party. However, this enforcement power is exclusively vested in the court, and the winning party cannot seize and/or dispose of the property of the losing party on its own. Due to the large number of enforcement cases, the difficulty in tracking down enforceable property and the insufficient punishment against dishonest judgment debtors, China has been plagued by the “difficulty in enforcement” for a long time. In China, the main reason for the “difficulty in enforcement” is that it is difficult to track down the enforceable property of the party subject to enforcement. In order to resolve this problem, Chinese courts have vigorously promoted the information system interconnection between different government departments, which has greatly improved the efficiency of tracking down and/or freezing the property of the party subject to enforcement through the information network system. Another reason for the “difficulty in enforcement” is that it is difficult to sell off non-cash properties. Chinese courts have carried out judicial auctions through the Internet, which has greatly improved the deal closing rate and increased the transaction price of the property auctioned, and greatly improved the possibility of the applicant being compensated. Other than the above approaches, Chinese courts may also impose various restrictions and punishments on dishonest judgment debtors. There are various restrictions and punishments and the implementation thereof depends on the interconnection of different information network systems. If the circumstances in which the party subject to enforcement evades or resists enforcement are serious, the Chinese court may also hold it criminally responsible. In addition, being a contracting state to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as the “New York Convention”), China has been holding a quite friendly attitude towards the recognition and enforcement of foreign arbitral awards. In practice, most foreign arbitral awards can be recognized and enforced in China. Compared with the recognition and enforcement of foreign arbitral awards, there are more requirements and preconditions for the recognition and enforcement of foreign court judgments. Nevertheless, China is now relaxing these requirements and preconditions, and more and more foreign court judgments are being recognized and enforced. With continuous efforts of relevant departments, the enforcement conducted by Chinese courts is getting increasingly effective. We firmly believe that Chinese courts can further improve the enforcement effectiveness as day goes by.