Arbitration in cross-border insolvency proceedings: the Chinese perspective

The approach to recognition and assistance in cross-border insolvency proceedings in China has tended to be restrictive. In contrast the approach of Chinese courts to foreign arbitrations has been different. Arbitration has been the favoured means of dispute resolution in China’s efforts to participate in world trade and the global economy after 1978. Accordingly, the arbitration legal system has advanced relatively quickly in line with international norms set out under the New York Convention. There are good prospects for recognition of foreign arbitral awards in China and arbitration is well integrated with China’s domestic insolvency system. In contrast, China’s attitude towards foreign insolvencies remains cautious, even in spite of an arrangement with Hong Kong Special Administrative Region. We consider how foreign arbitrations might fare in Chinese insolvencies. We also consider whether the openness to international arbitrations can ameliorate any aspects of the presently restrictive approach to cross-border insolvencies.