![China / 18 May 2010 / China, 中华人民共和国最高人民法院 (Supreme People’s Court) / Tianrui Hotel Investment Co., Ltd. v. Hangzhou Yiju Hotel Management Co., Ltd. / [2010] Min Si Ta Zi No. 18 ([2010] 民四他字第18号)](./images/case-law.png)
China / 18 May 2010 / China, 中华人民共和国最高人民法院 (Supreme People’s Court) / Tianrui Hotel Investment Co., Ltd. v. Hangzhou Yiju Hotel Management Co., Ltd. / [2010] Min Si Ta Zi No. 18 ([2010] 民四他字第18号)
| Country | China |
| Court | China, 中华人民共和国最高人民法院 (Supreme People’s Court) |
| Date | 18 May 2010 |
| Parties | Tianrui Hotel Investment Co., Ltd. v. Hangzhou Yiju Hotel Management Co., Ltd. |
| Case number | [2010] Min Si Ta Zi No. 18 ([2010] 民四他字第18号) |
| Applicable NYC Provisions | V | V(2)(b) |
| Source |
Guide on Foreign-related Commercial and Maritime Trial, pp. 94-99 (People's Court Press, Vol. 1, 2010). |
| Languages | English |
| Summary | Hangzhou Yiju Hotel Management Co., Ltd. (Yiju) entered into two agreements for the franchise of a hotel chain with Tianrui Hotel Investment Co., Ltd. (Tianrui). A related agreement was also entered into between Yiju and an affiliate of Tianrui, SuBoAiTe (Beijing) International Hotel Management Co., Ltd. (SuBoAiTe), which was registered in China. In the agreements between Yiju and Tianrui, any dispute between the parties was to be submitted for resolution by a sole-arbitrator according to the Arbitration Rules of the London Court of International Arbitration (LCIA). A dispute arose between the parties when Yiju failed to pay fees pursuant to the agreements. On 21 November 2007, Tianrui file an arbitration with the LCIA, which issued an award in favour of Tianrui on 5 December 2008. Tianrui then filed an application for enforcement of the award in accordance with Article 267 of the Civil Procedure Law of the People's Republic of China with the Hangzhou Intermediate People's Court. Yiju objected to the application on the basis that (i) the agreements concluded by Yiju with Tianrui and SuBoAiTe violated Chinese law as well as Chinese public policy, and (ii) the applicable arbitration agreement was invalid for failing to specify the arbitration institution and the place of arbitration. In addition, Yiju launched a separate action before the Hangzhou Intermediate People's Court against SuBoAiTe arguing that the agreement between the two of them was invalid. With respect to the application for enforcement, the Hangzhou Intermediate People's Court opined that the award should not be enforced according to Article V(2)(b) NYC since it would conflict with the court’s decision to invalidate the agreement between Yiju and SuBoAiTe in the separate action. The Hangzhou Intermediate People's Court reported its opinion to the Zhejiang Higher People's Court for review. The Zhejiang Higher People's Court confirmed that the award should not be enforced pursuant to Article V(2)(b) NYC. In particular, the court opined that Tianrui and SuBoAiTe had intentionally separated the agreements amongst the two of them in an effort to by-pass Chinese regulations on the admission of foreign companies in the franchise business in violation of Chinese public policy. The Zhejiang 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 the award should be recognised. In particular, the court opined that there was no ground for refusing recognition under Article V(2)(b) NYC since there had been no violation of Chinese public policy. The court also opined that the dispute between Yiju and SuBoAiTe arose under a different legal relationship and whether the conclusion of that dispute was consistent with the award in the present application was not a ground for refusal provided under Article V NYC. |
Attachment (2)
 Original Language Adobe Acrobat PDF |
Unofficial Translation Adobe Acrobat PDF |
