CIETAC’S EXPANDING ROLE IN GLOBAL COMMERCIAL ARBITRATION: THE CROSS-BOARDER RECOGNITION OF A LANDMARK AWARD

From the vantage point of 2025, the arbitral awards issued by the China International Economic and Trade Arbitration Commission (“CIETAC”) in April 2019 stands out as a significant development in the international enforcement of Chinese arbitral decisions. The case involved a high-profile dispute stemming from a share acquisition transaction between a Cayman Islands entity (the“Investor”) and a well-known Chinese businesswoman (The“Founder”) along with companies under her control. The award’s subsequent recognition and enforcement by courts in Hong Kong, Singapore and United States highlight its broader legal relevance and cross-border implications.

A. Dispute Background

In October 2013, the Investor and the Founder entered into a share purchase agreement (the“SPA”). Under the SPA, the Investor and its affiliated companies acquired 86.2% of a company (the “Subject Company”) owned by the Founder. The Subject Company was the holding entity of a renowned upscale Chinese restaurant chain that the Founder had founded and developed.

Following the acquisition,the Subject Company and its Chinese subsidiaries experienced a significant decline in its financial performance. After conducting internal investigations, the Investor and its affiliated group companies initiated arbitration before CIETAC, alleging that the Founders had made fraudulent and negligent representations in connection with the SPA. CIETAC found for the Investor in their claim for negligent representation and awarded the Investor USD 142 million(the“Arbitral Awards”)¹.

B. Recognition by the High Court of Hong Kong

On 29 July 2019, the High Court of Hong Kong （“HCHK ”） granted leave to the Investor to enforce the Arbitral Awards in Hong Kong (the “Enforcement Orders”), which provided that the respondents (the Founder together with her companies) may apply to set aside the Enforcement Orders within 14 days of service of the Enforcement Orders on them.

On 15 November 2019, the Founder and her companies filed a summons to set aside the Enforcement Orders and alternatively requested a stay pending an application to the supervisory court in Mainland China to annul the Awards.

In response, the Investor applied for a “Hadkinson order”²that the Founder and her companies ’ summons not be heard until the Founder has purged her contempt of court by complying with both the injunction and the order to give full disclosure of her assets.

The Court found that the Founder’s conduct throughout the prior proceedings to be lacking in candor and characterized the submitted evidence“incredulous and unreliable”. As a result, the Court granted the Hadkinson order considering the Founder’s wilful and continuous breaches of the injunctions and in contempt of court.

Despite of granting Hadkinson order, the Court agreed to adjourn the Respondents’ summons to set aside the enforcement order in respect of the award on the condition that the Respondents pay into court security of 40% of the total sum of the Arbitral Awards, plus costs of the summons on the indemnity basis.

The Founder and her companies also challenged to the composition of the Tribunal and the validity of the Arbitral Awards, arguing that they had not been able to agree jointly to appoint an arbitrator, but were instead forced to appoint one under protest, and that this rendered the arbitration clause “ inoperative ” under the CIETAC Rules. They therefore reserved their rights to challenge the tribunal’s jurisdiction.

The court rejected this argument, holding that the respondents interests were aligned and that there failure to appoint arbitrators jointly lacked justification. It referred Article 32 of the PRC Arbitration Law, which allows the chairman of the arbitration commission to appoint arbitrators when parties fail to do so. The Court found no prejudice from CIETAC’s appointment process and affirmed the validity of the Aibitral Awards³ .

C. Enforcement by the High Court of Singapore

Following recognition by HCHK, the Investor registered the HK Judgments in Singapore (the “SG Registration Order”) and then filed Summonses against the Founder. There summonses sought the appointment of receivers over a bank account held by a British Virgin Islands entity (the “Trust Funds Company”), which was established under the instructions of the Founder pursuant to a trust arrangement.

The central issue before the General Division of High Court of Singapore was whether the moneys in the bank accounts of the Trust Funds Company were beneficially owned by the Founder. On 2 November 2022, the court concluded that the Founder had retained beneficiary ownership and accordingly (Judgement:[2022] SGHC 278)⁴.

On 25 January 2023 the Founder appealed, contending that the court had wrongfully assumed beneficial ownership without considering whether the moneys were held in a trust for the benefit of her son and his descendants.

However, on 27 June 2023, the Appellate Division of the High Court dismissed the appeal, holding that the evidence demonstrated an intention by the Founder to retain ownership and control, and not give the moneys to the Trust Funds Company (Judgement: [2023] SGHC(A) 22)⁵ .

D. Confirmation by the United States District Court for the Southern District of New York (“SDNY”)

In April 2020, the Investor moved in a miscellaneous proceeding in SDNY for an ex parte order of attachment of an apartment located in New York (the “Apartment”) in aid of the arbitration proceedings. The title of the apartment in question was held by a New York company which the Investor alleged at the time that was owned or controlled by the Founders.

Judge Andrew Carter from SDNY granted the petition on 8 May 2020 and confirmed the attachment order on 13 July 2020.

Subsequently, on 9 April 2021, the Investor filed a petition to confirm the Arbitral Awards under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”)⁶ and sought for the entry of a judgment against the Founders in an amount equal to and capped by the proceeds from a sale of the Apartment.

The Founders opposed the petition and argued under Article V of the New York Convention that CIETAC failed to properly appoint the arbitral tribunal as required under Article 27(3) of the 2012 CIETAC Rules. Judge Lewis A. Kaplan rejected there objections, finding the tribunal’s composition and CIETAC’s procedures to be valid and fair. On 10 February 2023, the Court granted the Investor’s petition and confirmed the Arbitral Awards⁷.

E. Conclusion: CIETAC’S growing global significance

Since its establishment, CIETAC has evolved into one of the world’s five leading arbitration institutions. Known for its procedural integrity, professional competence, and high-quality awards, CIETAC commands growing respect among international businesses and legal systems alike.

Since its establishment, CIETAC has evolved into one of the world’s premier arbitration institutions. Known for its procedural integrity, professional expertise, and high-quality awards, CIETAC commands growing respect among international businesses and legal systems alike.

The Arbitral Awards discussed in this article, upheld in Hong Kong, Singapore, and the United States, serves as a benchmark for CIETAC’s enforceability on the global stage. These decisions illustrate the confidence that judicial systems in diverse jurisdictions place in CIETAC’s arbitration framework.

As China continues to promote the Belt and Road Initiative (BRI), CIETAC is uniquely positioned to facilitate cross-border dispute resolution in regions with complex or fragmented legal environments —including Central Asia, Africa, Latin America, and the Middle East. In these jurisdictions, where overlapping legal traditions often complicate commercial litigation, CIETAC offers a neutral, efficient, and credible alternative.

Given these strengths, Chinese legal practitioners should consider including CIETAC arbitration clauses in international contracts. Doing so can provide greater certainty in dispute resolution, particularly for transactions involving Chinese parties or Belt and Road countries.

CIETAC’s growing influence is also reflected in global legal databases such as Jus Mundi, where its decisions and procedures are frequently cited and analyzed. Such recognition underscores its increasing stature as a trusted forum for international commercial arbitration.

In conclusion, as China deepens its engagement with the global economy, CIETAC’s role will continue to expand—bolstering the international rule of law and contributing to a more predictable and balanced global arbitration landscape.

[Editor in charge: Beijing Matrix Law Firm Consultant Feng Yanan]

Reference documents：

1.Full text of the CIETAC arbitral award available at：https://jusmundi.com/en/document/decision/en-la-dolce-vita-fine-dining-group-holdings-limi ted-v-zhang-lan-and-grand-lan-holdings-group-bvi-limited-partial-award-on-liability-and-qu. antum-sunday-28th-april-2019#decision_15669.

2.A Hadkinson order is a case management order of last resort which is available in specific circumstances when a party is in contempt, which means that the court has discretion to refuse to hear, or to impose conditions on, a person who is in contempt and has not purged their contempt.

3.Full text of “the Decision of the Court of First Instance of the High Court of Hong Kong

[2020] HKCFI 622”available at: https://jusmundi.com/en/document/decision/en-la-dolce-vita-fine-dining-group-holdings-limited-v-zhang-lan-and-grand-lan-holdings-group-bvi-limited-decision-of-the-hong-kong-court-of-first-instance-2020-hkcfi-622-thursday-23rd-april-2020#decision15676.

4.Full text of “Judgment of the High Court of the Republic of Singapore [2022] SGHC 278” available at https://www.elitigation.sg/gd/s/2022 SGHC_278.

5.Full text of “Judgement of the Appellate Division of the High Court of the Republic of Singapore [2023] SGHC(A) 22” available at: https://www.elitigation.sg/gd/s/2023 SGHCA_22.

6.The Convention has been recognized in the US. Federal Arbitration Act at 9 U.S.C. § § 201-208.

7.Full text of “the Order of the United States District Court for the Southern District of New York [21-cv-3071 LAK]” available at:“ https://www.newyorkconvention.org/media/uploads/pdf/4/2/4225_usa-la-dolce-vita.pdf.