Ensuring efficient coordination between arbitration and enforcement

Editor's note:

Shanghai authorities have officially launched the nation's first foreign-related judicial documentary series, "Foreigners Tell Stories: A Rule-of-Law Business Environment." This highly anticipated sequel builds on the success of its first season, which garnered worldwide attention. The second season delves deeper into Shanghai's ambitious "Five Centers" initiative.

Alejo Fernandez Parral, an Argentine national who works both at the Shanghai International Arbitration Center (SHIAC) and the Shanghai Commercial Mediation Center, has been impressed by the city's efficiency and professionalism in arbitration and court enforcement.

In routine work, Parral often needs to tackle issues of enforcement of awards as brought up by affected parties.

"Thanks to Shanghai's arbitration property preservation regime and the court's robust enforcement, the rights of prevailing parties are effectively safeguarded, I have full confidence in local arbitration and judicial enforcement," he remarked.

In 2024, to strengthen arbitration-court coordination and safeguard the legal rights of prevailing parties, the Shanghai First Intermediate People's Court, through a memorandum of cooperation with SHIAC and the Shanghai Arbitration Commission (SHAC), spelled out details of procedural coordination.

In a cross-border arbitration case involving the transfer of intellectual property rights to a foreign company, the arbitration tribunal failed to notify the foreign firm to participate in the proceedings.

In light of the memorandum, Parral explained to presiding judges that under arbitration rules, third parties not bound by the arbitration agreement cannot, as a rule, be added as the affected parties.

However, where the third parties are entitled to certain rights, their absence in no way prejudices their entitlements. The court agreed with this interpretation.

Therefore, during the enforcement, the court managed to contact the foreign company in question and solicited its opinions, which was conducive to swift enforcement. This case exemplified the close cooperation and information sharing between relevant arbitration institutions and courts.

Parral stresses the importance of information transparency between arbitral bodies and courts, because both share the same goal: facilitating enforcement, and bolstering the credibility of arbitration.

"Shanghai excels in this regard, providing a sound environment for developing international arbitration," he observed.

Today, Shanghai has already become one of Chinese cities boasting the most arbitration institutions, as a gateway for the entry of international mediation, and for the globalization of Chinese arbitration.

Parral believes that, on the one hand, the city's arbitration-court synergy and open ecosystem have led to a first-rate pro-business environment. On the other, the city, famed for its "enforcement-friendliness," continues to be be attractive to multinationals, which prefer to choose the city for arbitration and litigation.

As a foreign arbitrator, Parral remains optimistic about the city's future.

"I will continue to coordinate between arbitration and judicial enforcement in Shanghai, doing my bit in making the city a destination of choice in settling cross-border commercial disputes," he said.