China designates court for recognition and enforcement of ICSID awards

On 9 July 2026, the International Centre for Settlement of Investment Disputes (ICSID) updated its list of Contracting States and Measures Taken by Them for the Purpose of the Convention, showing that China has designated the Beijing No. 4 Intermediate People’s Court as the competent domestic court for the recognition and enforcement of ICSID awards in China.

China ratified the ICSID Convention on 7 January 1993, and the Convention entered into force for China on 6 February 1993.  Article 54(2) of the ICSID Convention requires each contracting state to designate a competent court or other authority in its state for the recognition and enforcement of the ICSID awards.  Nevertheless, China had not designated any specific domestic court for the recognition and enforcement of ICSID awards until its recent designation of the Beijing No. 4 Intermediate People’s Court.

The newly designated competent court: Beijing No. 4 Intermediate People’s Court

Beijing No. 4 Intermediate People’s Court is one of the Chinese courts with substantial experience in hearing arbitration-related cases.  Since 2018, it has been designated as the competent court in Beijing to hear cases relating to the validity of arbitration agreements, applications to set aside arbitral awards, and applications for the recognition and enforcement of foreign arbitral awards.  According to a 2019 press release, between January 2015 and October 2019, Beijing No. 4 Intermediate People’s Court heard 1,278 arbitration-related judicial review cases, 242 of which concerned foreign-related awards.

Prior to the designation of Beijing No. 4 Intermediate People’s Court pursuant to Article 54(2) of the ICSID Convention, it was believed that the Chinese law framework concerning the recognition and enforcement of foreign arbitral awards might apply equally to ICSID awards.  Namely, a party seeking to recognise and enforce a foreign arbitral award in China may apply to the Intermediate People’s Court (IPC) either at the domicile of the party against whom enforcement is sought or the location of the property against which enforcement is sought; if the domicile of the counterparty or the location of property is not in China, the application may be submitted to the IPC either at the domicile of the applicant or the place with an appropriate connection with the dispute.  However, this was never tested, due to the absence of any precedent of recognising and enforcing ICSID awards in China.

China’s designation of Beijing No. 4 Intermediate People’s Court therefore provides a clear procedural path for those who may seek to recognise and enforce ICSID awards in China.  It does not, however, resolve all issues that may arise in future cases, including what procedures and tests will apply in such proceedings, and the question of sovereign immunity.

Remaining uncertainty on applicable procedures and requirements 

Chinese law does not provide any specific procedures for recognising and enforcing ICSID awards, so the general PRC provisions on the recognition and enforcement of foreign arbitral awards are likely to remain relevant, although this has yet to be tested.

Pursuant to Article 6 of the Provisions of the Supreme People's Court on Several Issues concerning Handling of Cases of Arbitration-Related Judicial Review (2017), the applicant in normal foreign arbitral award enforcement proceedings would generally be expected to submit the following documents:

• its written application, which will set out the basic information on the parties, and the main contents and effective date of the award, together with the specific claims and reasons for the proposed enforcement;
• an original or a certified copy of the arbitral award to be enforced (along with a certified Chinese translation, if the award is in a foreign language); 
• the applicant's relevant identification documents; and
• a power of attorney.

The court would then serve the application materials on the respondent and form a collegial panel to review the application, with the parties given an opportunity to present their positions.

There are also no specific Chinese law provisions on the requirements for the recognition and enforcement of ICSID awards.  Article 304 of the PRC Civil Procedure Law, however, provides that a court hearing an application for the recognition and enforcement of a foreign arbitral award must handle the application pursuant to the international treaties that China has entered into and ratified, or on the basis of the principle of reciprocity.  Article 54(1) of the ICSID Convention requires contracting states to recognise awards as binding and enforce their pecuniary obligations as if they were final judgments of a court in that state.  Therefore, to the extent the necessary procedures are complied with, there appear to be no grounds for refusing to recognise and enforce an ICSID award in China.  However, this remains to be tested.

Remaining challenge surrounding sovereign immunity

Greater uncertainty exists regarding the execution of ICSID awards in China, where the award debtor is a foreign state and issues of sovereign immunity arise.  Broadly speaking, sovereign immunity has two distinct aspects: (i) immunity from jurisdiction and (ii) immunity from execution.

Until the PRC Foreign State Immunity Law came into force on 1 January 2024 (reported here), China had long maintained a position of absolute immunity, under which foreign states were generally immune from both jurisdiction and execution before Chinese courts.  The PRC Foreign State Immunity Law marks a significant shift towards a restrictive immunity regime, introducing statutory exceptions under which foreign states may no longer be able to claim immunity.

In the investor-state arbitration context, Article 12 of the PRC Foreign State Immunity Law is particularly relevant.  It provides that where a dispute arising out of commercial activities between a foreign state and entities or individuals of another state has been submitted to arbitration under a written agreement, or an investment dispute has been submitted to arbitration pursuant to a foreign state's written consent, including through an international investment treaty, the foreign state will not be immune from the jurisdiction of Chinese courts in respect of certain arbitration-related judicial review matters.  These include applications for the recognition and enforcement of arbitral awards.  As a result, it should generally be difficult for a foreign state to rely on immunity from jurisdiction to resist recognition and enforcement of an ICSID award in China.  This is consistent with the position established by recent court decisions in other jurisdictions such as the United Kingdom (reported here) and Australia (reported here).    

However, immunity from execution remains a separate and potentially more difficult issue.  Article 13 of the PRC Foreign State Immunity Law provides that, as a general rule, a foreign state’s property in China is immune from judicial compulsory measures.  It also makes clear that a foreign state’s submission to the jurisdiction of Chinese courts does not, by itself, amount to a waiver of immunity from execution.

Article 14 of the PRC Foreign State Immunity Law then sets out limited circumstances in which foreign state property may be subject to execution measures.  These include where:

• the foreign state has expressly waived its immunity from execution by way of an international treaty, a written agreement or by submitting a written document to the PRC court; 
• the foreign state has segregated or designated certain properties for judicial execution measures; or
• judicial execution measures were imposed against properties of foreign states located in the territories of the PRC, used for commercial activities and related to the court proceedings, in order to enforce valid judgments or decisions of PRC courts.

Even where these requirements are potentially satisfied, Article 15 of the PRC Foreign State Immunity Law preserves immunity for certain categories of state property by deeming them not to be used for commercial activities.  These include:

• property used or intended to be used for official business of diplomatic missions, consulates, special missions, delegations to international organisations or delegations to international conferences, including bank deposits;
• military property, or property used or intended to be used for military purposes;
• property of the central bank of a foreign state or a regional economic integration organisation, or property of a financial regulatory body performing the functions of a central bank, including cash, bills, bank deposits, securities, foreign exchange reserve and gold reserve, as well as immovable property and other assets;
• property forming part of a foreign state’s cultural heritage or national archives, where not intended for sale; and
• objects of scientific, cultural or historical value that are used for exhibition and are not for sale, and other properties that a PRC court deems not to be used for commercial activities are also excepted from the scope of Article 14.

Comment

By enacting the PRC Foreign State Immunity Law in 2024 and designating Beijing No. 4 Intermediate People’s Court as the enforcing court in 2026, China has taken meaningful steps towards a more transparent and predictable framework for ICSID award recognition and enforcement.  However, uncertainties remain, particularly as to the domestic procedures and requirements that the Chinese court will apply in practice, and the extent to which execution immunity may continue to limit an award creditor’s ability to realise recovery against foreign state assets in China.  Award creditors may still face substantial execution-related hurdles, including identifying assets in China, establishing that those assets are used for commercial activities and connected with the proceedings, or demonstrating an effective waiver or designation of assets by the foreign state.

This article has been authored by Herbert Smith Freehills Kramer Kewei, a joint operation between Herbert Smith Freehills Kramer LLP and Shanghai Kewei Law Firm based in the Shanghai Free Trade Zone, which is exclusively responsible for any statements or commentary in relation to PRC law.