Enforcement of default interest awards from foreign arbitral tribunals in China is possible if the arbitration rules give the tribunal discretion to award default interest, and a recent case demonstrates that Chinese courts will support such claims even in the absence of a specific contractual clause on the payment of default interest.
This allows you to identify exactly which company is the defendant.
If the arbitration rules empower the arbitral tribunal to award the default interest at its own discretion, such foreign arbitral awards may be enforced in China.
China’s Supreme People’s Court elaborated on how Chinese courts apply the New York Convention when handling cases involving the recognition and enforcement of foreign arbitral awards, in a conference summary issued in December 2021.
If you believe that the Chinese company does not comply with the NNN agreement, you may resolve the dispute via arbitration outside of China and enforce the arbitral award in China.
Can I initiate arbitration proceedings against Chinese companies in my country and then have the awards enforced in China? You probably don’t want to go to faraway China to sue a Chinese company, and you don’t want to agree in the contract to submit the dispute to an arbitration institution that you don’t know about.
For the recognition or enforcement of foreign arbitral awards in China, the average length of proceedings is 596 days, the court costs are no more than 1.35% of the amount in controversy or 500 CNY, and the attorney’s fees are, on average, 7.6% of the amount in controversy.