Intermediate People's Court of Cangzhou, Hebei Civil Ruling

(2015)Cangmintezi No.13, 27 November 2015

Petitioner: Guangyong Li

Attorney: Ding Zhang5 Associate from Zhonghao Law Firm，Beijing

Respondent: Yanshanxian Yonghui Steel Pipe Co., Ltd.

Legal representative: Shulan Liu, the Company’s Chairman of the Board

Attorney: Renbiao Liu, the Company’s Foreign Trade Manager

The Petitioner, Guangyong Li, filed an application for the recognition and enforcement of a foreign arbitral award. After accepting the case, the Intermediate People’s Court of Cangzhou，Hebei (“IPC of Cangzhou”) formed a panel to review the application in accordance with law; up to present, this case has been completed.

The Petitioner Guangyong Li submitted that, in March 2012, the Petitioner and the Respondent had signed a contract, under which the Respondent shall provide 200 metric tons of N-80 and 52 metric tons of P-110 of seamless steel pipe products in accordance with American Petroleum Institute (‘‘APF”)’s standards and shall deliver twice separately. On May 17, 2012 and August 10, 2012, the Petitioner paid purchase price of ₩392, 308,330 and ₩10, 984,947 to the Respondent respectively. However, according to the reports issued on September 12, 2012 and September 24, 2012 4 by an inspection agency in South Korea, the products provided by the Respondent did not reach the API’s standards of tensile strength and yield strength, and ruptured during the installation process. Due to the serious quality problems, on October 5, 2012, the Petitioner sent a notice of claim/fault report as well as the arbitration clause to the Respondent in order to resolve the dispute; however, the parties did not reach a consensus on compensation. Therefore, on March 27, 2014, the petitioner filed a request for arbitration to the Korean Commercial Arbitration Board (“KCAB”) in accordance with the arbitration clause. On February 2, 2015, the KCAB rendered arbitral award No. 14113-0014. However, the Respondent refused to perform its obligations under the arbitral award. Hence, in accordance with the Civil Procedure Law of the PRC and other relevant provisions, the Petitioner filed an application to the IPC of Cangzhou to recognize and enforce the KCAB's No. 14113-0014 arbitral award, and claimed that the Respondent shall bear the cost of this application.

The Respondent recognized the issues raised by the Petitioner in the application and did not submit any defence.

The Petitioner submitted the following evidence: (1) (2015) - 8212 notice of claim and the translation of the arbitration clause between the parties; (2) (2015) - 8213 KCAB arbitral award No. 14113-0014; (3) (2015) — 8210 the Petitioner’s passport; (4) (2015)- 8211 business license; (5) (2015) - 8185 the Petitioner’s identification; and (6) (2015) - 13573 receipt of the delivery of the arbitral award (confirmation).

The Respondent recognized all the evidence above and did not submit any other evidence.

Upon review, the arbitral award was rendered in Seoul, South Korea. Therefore, the award is a foreign arbitral award. Pursuant to Article 283 of Civil Procedure Law of the PRC, which provides that “[i]f an award made by a foreign arbitral institution requires the recognition and enforcement by a people’s court of the PRC，the party concerned shall directly apply to the intermediate people’s court of the place where the party subjected to enforcement has his domicile or where his property is located. The people's court shall deal with the matter in accordance with the international treaties concluded or acceded to by the PRC or with the principle of reciprocity”, the application filed by the Petitioner has legal ground because the PRC and the Republic of Korea are contracting states to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as “the New York Convention”). Based on the above articles, as well as Article 3 of the Notice of the Supreme Peopled Court on Implementation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Acceded to by China (Fa (Jing) Fa (1987) No. 5), the IPC of Cangzhou has jurisdiction over the application and has the jurisdiction to review it under the New York Convention.

First, according to Article 5 of the SPC’s notice, the application for recognition and enforcement of the arbitral award shall be put forward within the executing period stipulated under the Civil Procedure Law of the PRC. Article 239 of the Civil Procedure Law of the PRC provides that the time-limit for an application for execution shall be two years. The relevant arbitral award was rendered on 2 February 2015; the Petitioner received the arbitral award on 9 February 2015 and the Respondent rejected the receipt of the arbitral award on 5 February 2015. Therefore, it was in line with the prescribed time limit for the Petitioner to apply for recognition and enforcement of the arbitral award on 15 October 2015.

Second, Article IV of the New York Convention provides that the party applying for recognition and enforcement of arbitral awards shall, at the time of application, submit the following evidence: (1) The duly authenticated original award or a duly certified copy thereof; (2) The original agreement referred to in Article II or a duly certified copy thereof; (3) If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent. The Petitioner, Guangyong Li, has submitted the original arbitral award and the Chinese translation thereof as well as the original notice for claim/fault report and the Chinese translation thereof containing the arbitration clause, all of which are certified by the consular of the Embassy of the PRC in the Republic of Korea and therefore are in line with Article IV of the New York Convention.

Third, according to Article V of the New York Convention, recognition and enforcement of the arbitral award may be refused only if the party against whom it is invoked proves the existence of the grounds exhaustively listed in Article V (l) or that the enforcing court finds the existence of the grounds exhaustively listed in Article V (2) of the New York Convention. In the case at issue, the Respondent did not raise any objections to the arbitral award. Additionally, upon review, the IPC of Cangzhou held that neither of the grounds under Article V (2) of the New York Convention existed.

The IPC of Cangzhou upheld the Petitioner Guangyong Li’s application for the following reasons: (1) the petitioner applied for recognition and enforcement of the arbitral award within the prescribed time limit, (2) the evidence submitted was in line with Article IV of the New York Convention, and (3) the non-recognition grounds under Article V of the New York Convention did not exist. Therefore, in accordance with Article IV and Article V of the New York Convention, Article 3, Article 4, and Article 5 of the SPC’s notice, as well as Article 239 and Article 283 of the Civil Procedure Law of the PRC, the court ruled as follows:

(1)Recognize and enforce the KCAB’s arbitral award rendered on February 2, 2015(No.14113-0014, arbitral seat: Seoul Korea).

(2)The Respondent, Yanshanxia Yonghui Steel Pipe Co., Ltd., shall bear the cost of the application, RMB 400.

(3)This Civil Ruling is final. 

Presiding Judge: Mei Zhang

Judge: Junge Ji

Judge: Baoguang Gao

27 November 2015

Clerk: Chang Wang

Related Links:
李光永与盐山县永惠钢管有限公司申请承认和执行外国仲裁裁决民事裁定书

*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.