In this episode of the China Business Law Podcast, we're joined by Andy Han, a partner at Allbright Law, who shares his extensive experience in cross-border dispute resolution involving China. We discuss his background in M&A and FDI projects, and specifically focus on dispute resolution clauses in contracts between foreign companies and Chinese parties. Andy offers practical advice on choosing between litigation and arbitration, the enforceability of foreign arbitration awards in China, and how Chinese courts apply foreign laws.
Welcome to another episode of the China Business Law Podcast. In this episode, we are privileged to host Andy Han, a partner at Allbright Law with expertise in cross-border dispute resolution involving China. His insights offer a deep dive into the intricacies of navigating legal disputes in the region.
Andy Han brings over a decade of experience as an attorney in China, specializing in cross-border disputes and transactions such as M&A and Foreign Direct Investment (FDI) projects. His career journey provides him with a unique perspective on the challenges and resolutions in the legal landscape across borders, particularly during pivotal periods such as the COVID-19 pandemic.
During the COVID-19 pandemic, Andy aided foreign clients in navigating disputes arising from cross-border transactions, specifically the acquisition of medical supplies from China. He reflects on the spike in such disputes due to the urgent demand for medical products and the subsequent quality issues that arose.
His expertise is not limited to dispute resolution; Andy also emphasizes the importance of drafting robust contracts. He recommends clearly defining dispute resolution clauses within contracts, choosing between litigation or arbitration carefully, based on applicable laws and enforceability.
A significant part of cross-border contract negotiations involves deciding on dispute resolution mechanisms. In particular, Andy advises against including both litigation and arbitration in a single clause under Chinese law, as this can invalidate the litigation choice. Factors to consider include the nature of the dispute, cultural factors, and language.
For example, in cases with a foreign element, foreign arbitration centers in third countries like Singapore or Hong Kong might be preferred for neutrality. However, if the contract involves purely domestic issues, Chinese arbitration centers or courts are advisable.
Andy shares insights into the enforcement of arbitration awards within China. For domestic awards, enforcement is typically straightforward without the need for additional recognition processes. However, enforcing foreign arbitration awards can be more complex, often involving recognition by Chinese courts under the New York Convention.
Recent trends show improvement in the enforcement of foreign arbitral awards, with a success rate over 90% in certain scenarios. Yet, challenges remain, such as proper notification to respondents in defaults or exceeding the scope of the arbitration agreement.
Beyond addressing disputes, Andy stresses the importance of preventive measures. Conducting thorough background checks on potential business partners can preemptively mitigate risks. Additionally, recognizing fully foreign-owned enterprises in China as domestic companies can influence the governance and dispute resolution approaches.
The Chinese government is increasingly supportive of foreign arbitration centers establishing branches within China, facilitating a more integrated and accessible legal framework. This aligns with broader efforts to attract international business and enhance trust in China’s legal system.
Andy Han encourages foreign in-house counsel to carefully consider dispute resolution clauses during negotiations and remain proactive in preventing disputes. For further guidance, Andy can be reached through LinkedIn or his firm's contact details.
Timestamps
00:00 Introduction and Guest Welcome
00:15 Andy's Background in Cross-Border Dispute Resolution
01:59 Key Considerations in Cross-Border Contracts
03:26 Litigation vs. Arbitration in China
07:50 Enforcement of Arbitration Awards in China
18:49 Trends and Practical Advice for Foreign Companies
24:24 Final Thoughts and Contact Information