The (ab)use of the public policy ground in the New York Convention in the judicial review of foreign arbitral awards: Recent developments in China

The ‘pro-arbitration’ approach is widely accepted in worldwide judicial practice in supporting the development of international commercial arbitration and in the application of the New York Convention. It has been promoted that the Chinese courts are making progresses in supporting the development of arbitration in China and adopting a ‘pro-arbitration’ approach generally. Nonetheless, in the last few years, the Chinese courts have refused the enforcement of foreign arbitral awards on the ground of public policy on various occasions, including the most recent Palmer Case in 2018 and the Gate Case in 2019. Moreover, on multiple occasions the Chinese courts dealt with the public policy issue when an award was made by a foreign tribunal while the arbitration agreement was declared invalid by the Chinese court––resulting in seemingly conflicting outcomes under identical circumstances. To address the concerns as to whether the Chinese judicial system really adopts a ‘pro-arbitration’ approach in dealing with these legal issues and concepts, this article examines a series of recent cases and evaluates the Chinese courts’ approach in applying the public policy ground and in deciding the validity of arbitration agreement in the context of the international consensus represented by the New York Convention, the UNCITRAL Model Law, the ILA Final Report on Public Policy. It further suggests possible reforms for China if a truly pro-arbitration approach is to be adopted.