International Construction Law Review
CHINESE ARBITRATION REQUIREMENTS—A TRAP FOR FIDIC-ICC ARBITRATION?
DR GÖTZ-SEBASTIAN HÖK
Partner, Dr Hök, Stieglmeier & Collegen, Berlin
All the FIDIC Conditions contain a combined adjudication and arbitration clause. Thus the parties to a FIDIC contract can refer a dispute to the Disputes Board (DB) and, in the event of dissatisfaction with the DB decision or recommendation, may further refer the dispute to an arbitral tribunal. Once a party to a FIDIC contract has obtained an arbitral award it may request a national court to declare the award enforceable or to have it registered. But care has to be taken in doing so. In a recent case decided in Germany the following happened.
A dispute arose from a FIDIC Green Book contract in China. The contractor referred the dispute to ICC arbitration according to clause 15.3 of the Green Book. He finally obtained an ICC award by virtue of which the employer was held liable to pay €500,000 to the contractor. However, the employer continued to refuse payment. As a consequence the contractor applied to the Berlin Court of Appeal1
for a writ of execution or, literally translated, he submitted a motion to declare the arbitral award executable in accordance with sections 1060 (1), 1061, and 1062 of the German Code of Civil Procedure. (Section 1062 deals with procedural issues.) The relevant sections read as follows:
Section 1060 (1): “Forced execution shall only take place in the event that the arbitral decision has been declared executable.”
Section 1061 (1): “Recognition and execution of foreign arbitral decisions shall be according to the Treaty of July 10, 1958 on the Recognition and Execution of Foreign Arbitral decisions …”
The court rejected the application—what went wrong?
Prior to making the application in Germany the contractor had brought an action for the determination of the validity of the arbitration clause before a Chinese court. The Chinese court had rejected the application as it considered that the arbitration clause was invalid. The Chinese court held that, according to Chinese law, the parties had to specify the specific “arbitration commission” (Züblin International GmbH (Germany)
v. Wuxi Woke General Engineering Rubber Co Ltd
,2
The parties had failed to do so and the
1 18 May 2006, 20 SCH 13/04.
2 Supreme People’s Court of the People’s Republic of China, not published.
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Chinese Arbitration Requirements
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