China / 01 July 2003 / China, 中华人民共和国最高人民法院 (Supreme People’s Court) / ED & F Man (Hong Kong) Co., Ltd. v. China National Sugar & Wines Group Corp. / [2003] Min Si Ta Zi No. 3 ([2003] 民四他字第3号)
Country | China |
Court | China, 中华人民共和国最高人民法院 (Supreme People’s Court) |
Date | 01 July 2003 |
Parties | ED & F Man (Hong Kong) Co., Ltd. v. China National Sugar & Wines Group Corp. |
Case number | [2003] Min Si Ta Zi No. 3 ([2003] 民四他字第3号) |
Applicable NYC Provisions | V | V(2)(b) | V(2)(a) | V(1)(b) | V(1)(a) |
Source |
Guide on Foreign-related Commercial and Maritime Trial, pp. 12-17 (People's Court Press, Vol. 1, 2004). |
Languages | English |
Summary | On 14 December 1994, ED & F Man (Hong Kong) Co., Ltd. (ED & F Man) and China National Sugar & Wines Group Corp. (China Sugar Corp.) entered into a futures contract where ED & F Man would sell raw sugar to China Sugar Corp. The parties' agreement provided that all disputes arising from the contract were to be settled by arbitration under the rules of the London Sugar Association (LSA). A dispute arose between the parties and ED & F Man filed for an arbitration with the LSA. An award was rendered in ED & F Man’s favour on 6 August 2001. ED & F Man then filed an application for recognition and enforcement before the Beijing No. 1 Intermediate People's Court on 22 January 2002. China Sugar Corp. challenged the application arguing, inter alia, that the award should be refused recognition and enforcement according to Articles V(1)(a)-V(1)(b) and V(2)(a)-V(2)(b) NYC and Chinese law. In particular, China Sugar Corp. argued, among other things, that: (i) it did not have legal capacity under Chinese law to enter into the arbitration agreement; (2) pursuant to Article V(2) NYC the award should not be recognised since the subject-matter of the dispute was not capable of settlement by arbitration under Chinese law because the futures agreement was in violation of Chinese compulsory law; (3) the award went beyond the scope of the submission to arbitration; (4) it was unable to argue its case adequately since the arbitral tribunal failed to conduct a thorough investigation of the alleged fraudulent conduct on the part of ED & F Man; and (5) recognition and enforcement of the award would be contrary to Chinese public policy. The Beijing Higher People's Court opined that the award should be refused recognition and enforcement under Article V(2)(b) NYC since the parties' future transaction contract violated Chinese rules concerning the prohibition of unlawful offshore future transactions and therefore was contrary to Chinese public policy. The Beijing Higher People's Court reported its opinion to the Supreme People’s Court (最高人民法院) for review in accordance with the Notice of the Supreme People's Court on the Adjudication of the Relevant Issues About Foreign-related Arbitration and Foreign Arbitral Matters by the People's Court. The Supreme People's Court opined that there was no ground for refusing recognition or enforcement under the NYC. In particular, the court considered that there was no basis for refusal under Articles V(1) and V(2) NYC because, among other things, even if there had been a violation of a compulsory Chinese law that does not equate to contravening Chinese public policy. Accordingly, the court opined that the award should be recognised and enforced according to Article V NYC and Article 269 of the Civil Procedure Law of the People's Republic of China. |
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Attachment (2)
![]() Original Language Adobe Acrobat PDF |
![]() Unofficial Translation Adobe Acrobat PDF |