布兰特伍德工业有限公司 [Brentwood Industries, Inc. (U.S.A)] v. 广东阀安龙机械成套设备工程有限公司

At a glance

Parties

Brentwood Industries, Inc. (U.S.A) v. 广东阀安龙机械成套设备工程有限公司 (Fa'anlong), 广州市正启贸易有限公司 (Zhengqi) and 广东省环境工程装备总公司 (Environmental Engineering Equipment)

Case no.

(2015)穗中法民四初字第62号

Court

Guangzhou Intermediate People's Court, Guangdong (广东省广州市中级人民法院)

Underlying award(s)

ICC International Court of Arbitration, Case No. 18929/CYK, Final Award of 17 March 2014 by sole arbitrator Jane Willems, seat Guangzhou, China

Forum and rules

Application to recognise and enforce under the New York Convention; arbitration under the 2012 ICC Rules

Treaty

New York Convention 1958 (relied on by the applicant); contract clause, Article 16 of Contract No. LD4QGNJ-1

Court

徐玉宝 (presiding judge), 王汇文, 饶志平

Sector

Wastewater treatment equipment supply

Outcome

Review terminated. An ICC award made in mainland China is a Chinese foreign-related award, not a foreign award, so the New York Convention does not apply. The applicant may file a separate application for enforcement.

Amount

The award granted USD 1,319,670 contract price, plus storage, insurance and other costs, interest at 1.92% a year from 1 September 2010, USD 70,500 arbitration costs, and legal fees of USD 138,950.50, USD 14,015.57 and RMB 250,000. The court refunded the RMB 500 application fee.

The dispute

On 13 April 2010, in Guangzhou, Brentwood Industries (seller), Zhengqi (buyer and import agent) and Fa'anlong (principal) signed a contract. Under it Brentwood was to supply 24 sets of chain-and-flight sludge scrapers for USD 1,319,670 CIF. The equipment was for Phase IV of the Guangzhou Liede wastewater treatment plant. Fa'anlong had bought the equipment on behalf of Environmental Engineering Equipment, which held the main supply contract with the plant's end user. Fa'anlong did not pay. Brentwood started ICC arbitration against all three companies, seated at the project location, Guangzhou. A sole arbitrator ordered Fa'anlong and Environmental Engineering Equipment to pay jointly or severally. Brentwood then asked the Guangzhou court to recognise and enforce the award under the New York Convention, or, in the alternative, as a Hong Kong award under the Mainland–Hong Kong Arrangement. Fa'anlong and Environmental Engineering Equipment argued three things: an ICC award made in China is not a Convention award, given China's reciprocity reservation; the award bound a non-party end user; and the award went beyond the arbitration agreement (Article V(1)(b) and (c)). Environmental Engineering Equipment also argued that it had never agreed to arbitrate and was not a party to the contract.

Key holdings

1. The arbitration clause in Article 16 provides for ICC arbitration at the project location, Guangzhou. The court had already held this clause valid in ruling (2011)穗中法仲异字第11号 of 22 February 2012. p. 12–13
2. An award made by a foreign arbitral institution with its seat in mainland China can be treated as a Chinese foreign-related arbitral award (中国涉外仲裁裁决). It is not a foreign award. If the award debtors do not comply, the creditor may apply for enforcement, by analogy with Article 273 of the Civil Procedure Law, to the intermediate court where the debtors are domiciled or hold property. p. 13
3. Brentwood based its application on the New York Convention or the Mainland–Hong Kong Arrangement. That legal basis was wrong. The court explained this several times, but Brentwood refused to correct it and must bear the consequences. The case therefore could not proceed as one for recognition and enforcement of a foreign award, and the court terminated its review without ruling on the Article V objections. p. 13
4. After termination Brentwood may file a separate application for enforcement. The court refunded the RMB 500 application fee, and its ruling is final. p. 13

Procedural history

1. 13 April 2010Contract No. LD4QGNJ-1 and a Supplementary Agreement are signed in Guangzhou.
2. 16 December 2010Brentwood sues in the Guangzhou Intermediate People's Court. Because of the arbitration agreement, the court refuses to accept the case.
3. 22 February 2012On Brentwood's application of 9 May 2011, the Guangzhou court holds the arbitration clause valid ((2011)穗中法仲异字第11号).
4. 31 August 2012Brentwood files its request for arbitration with the ICC Secretariat against the three companies.
5. 10 January 2013The ICC Court appoints Jane Willems as sole arbitrator under Article 13(3) of the 2012 Rules. The Terms of Reference are signed in Guangzhou on 3 April 2013.
6. 21 June 2013Hearing; all parties attend.
7. 17 March 2014Final Award in ICC Case No. 18929/CYK, seat Guangzhou.
8. 13 April 2015The Guangzhou Intermediate People's Court registers Brentwood's application for recognition and enforcement.
9. 6 August 2020The court terminates its review: the New York Convention basis is wrong, and Brentwood may apply separately for enforcement.

Tribunal, counsel and experts

Decided by

• Jane Willems Sole arbitrator — appointed by the institution (underlying ICC award; award not among published documents)

For the claimant

广东安华理达律师事务所

For the respondent

广东经纶律师事务所 · 广东同益律师事务所

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Keywords

• New York Convention
• nationality of award
• seat of arbitration
• ICC arbitration in mainland China
• foreign-related arbitral award
• reciprocity reservation
• non-domestic award
• Article V(1)(b)
• Article V(1)(c)
• excess of mandate
• non-signatory
• Civil Procedure Law Article 273
• termination of review
• Mainland–Hong Kong Arrangement
• wastewater treatment equipment
• Liede wastewater plant

Summary generated with AI from the published documents — refer to the award for the authoritative text.