April 26, 2019 Practice Points

Federal Court in California Confirmed Chinese Arbitration Award

This decision is interesting because it effectively confirms a Chinese arbitration award, an unusual event in the United States.

By David Y. Loh

On April 7, 2019, Judge S. James Otero of the U.S. District Court for the Central District of California, Western Division issued a final judgment in the amount of roughly $12 million against a Chinese national residing in California. The case is Shanghai Cai Asset Management Co, Ltd. v. Jia Yueting, Civil Case No. 2:18-cv-10255.

This judgment arises from a petition filed by Shanghai Lan Cai Asset Management Co, Ltd. (SLC) for confirmation of an arbitration award issued by the Beijing Arbitration Commission.

In issuing the judgment, the presiding judge did not provide a well-reasoned decision to explain his reasoning. In fact, the judge simply adopted the proposed final judgment prepared by SLC’s counsel. As a result, we do not gain any insight into the court’s thinking as to why it issued the judgment.

Having said that, this decision is interesting because it effectively confirms a Chinese arbitration award. In the United States, we tend to question the impartiality of the Chinese legal system, and it is unusual to see Chinese arbitration awards or civil judgments being confirmed or enforced in the United States. By comparison, the undersigned is unaware of any U.S. arbitration award or civil judgment being enforced in a Chinese proceeding. Perhaps Chinese judges will, in the future, be more willing to consider enforcing a U.S. award or judgment.

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David Y. Loh is a member with Cozen O'Connor in New York City, New York.

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