A Chinese parent can choose Chinese or Indian law and a neutral arbitration seat, such as Hong Kong or Singapore, for shareholder, supply and licence agreements. India notified China, Hong Kong and Macao as New York Convention territories on 19 March 2012, so a qualifying award made there can be enforced in India as a foreign award, on narrow grounds. Court judgments travel less well: mainland China is not among the territories whose decrees Indian courts execute directly, and Chinese courts recognise foreign judgments only on reciprocity, so arbitration is the safer route.
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Key facts
| Enforcement of awards in India | Foreign awards under Part II of the Arbitration and Conciliation Act, 1996; India notified China, Hong Kong and Macao for the New York Convention on 19 March 2012, for awards made from that date |
|---|---|
| Enforcement of Indian awards in China | China is a New York Convention state; awards made in India are enforced through the Chinese courts under the Convention, with limited grounds for refusal |
| Judgments | Mainland China is not on the list of reciprocating territories under Section 44A of the Code of Civil Procedure, as far as we can confirm; a Chinese judgment would need a fresh suit in India. Confirm the current list with counsel |
| Seat | Neutral seats such as Singapore and Hong Kong are common; CIETAC, HKIAC, SIAC and ICC rules are used |
| Stamp duty | An unstamped agreement cannot be used as evidence until stamped and any penalty is paid |
| Mandatory law | FEMA, the Companies Act, Press Note 3 conditions and sector rules apply whatever the governing law |
| Investment protection | Check whether any investment treaty covers your investment; India terminated many older treaties from 2016 and 2017 |
Choosing law and seat
| Choice | Typical position | Points to check |
|---|---|---|
| Governing law of the shareholder agreement | Indian law for local enforcement; a neutral law is possible | FEMA pricing, the Companies Act and Press Note 3 conditions apply anyway; some options and restrictions need care under Indian law |
| Supply and licence agreements | Chinese law is common for China-side supply; Indian law for local sales | Customs value, transfer pricing and stamp duty |
| Seat | Singapore or Hong Kong; sometimes India | The seat decides the supervisory courts; Indian courts can still grant interim relief where the Act allows |
| Rules | CIETAC, HKIAC, SIAC or ICC | Name the institution exactly; state the number of arbitrators and the language |
| Government approvals | Make approval-related covenants explicit | Conditions attached to the Press Note 3 approval should be reflected in the agreement |
Enforcing an arbitral award in India
- Obtain the award and a certified copy of the arbitration agreement, with certified English translations if needed.
- File an enforcement petition before the High Court with jurisdiction over the debtor's assets.
- The court checks the formal requirements and the narrow grounds in Section 48 of the Act, which include public policy.
- If satisfied, the award is deemed a decree of the court and is executed as a decree.
- Plan for payment: remittance of proceeds needs the right route through an authorised dealer bank.
Court judgments between India and China
Indian courts can execute decrees of listed reciprocating territories directly under Section 44A of the Code of Civil Procedure. As far as we can confirm, mainland China is not on that list, so a Chinese judgment would be evidence in a fresh Indian suit, subject to the tests in Section 13 of the Code and the limitation period. Recognition of an Indian judgment in China depends on the Chinese rules and on proof of reciprocity, which has been difficult in practice. This is why most joint venture and shareholder agreements choose arbitration. Check the current list and the Chinese position with counsel before relying on any court route.
Stamp duty and signing
- Stamp duty is state-based and depends on the instrument and the amount.
- An unstamped agreement is not void, but it cannot be used as evidence until stamped and any penalty is paid. Stamp before signing where possible.
- Use e-stamping where available.
- Authorise signatories by board resolution of the Indian subsidiary and keep a record of the date and place of signing.
- For Chinese signatories, use the company seal and the legal representative's signature as Chinese practice requires, and keep both in the signing record.
Investment protection
India terminated many older bilateral investment treaties in 2016 and 2017. Whether any treaty still protects a particular Chinese investment in India must be checked on the facts, and the answer should not be assumed. A well-drafted shareholder agreement with a neutral seat, clear covenants on approvals and clean FEMA reporting is the practical protection.
Drafting points for Chinese parents
- Name the institution and the seat precisely; ambiguity invites litigation about the clause.
- Use a tiered clause with negotiation first, then arbitration, with a short fuse.
- State the governing law of the arbitration agreement itself.
- Say who bears costs, the language, the number of arbitrators and the confidentiality terms.
- Add an Indian address for service on the subsidiary and a process agent.
- Describe the Chinese party exactly as in the business licence and the approval.
Official sources
Check the rules at the primary sources: Income Tax Department (India), Reserve Bank of India, Ministry of Corporate Affairs, MOFCOM (China), SAFE (China) and the Ministry of External Affairs (India).
Frequently asked questions
Can a Hong Kong or Singapore arbitral award be enforced in India?
A foreign award from a notified New York Convention territory can be enforced in India under Part II of the Arbitration and Conciliation Act, 1996, on narrow grounds. Awards made in China, Hong Kong and Macao are covered by a 19 March 2012 notification.
Can a Chinese court judgment be enforced directly in India?
As far as we can confirm, no. Mainland China is not on India's list of reciprocating territories, so a Chinese judgment would be evidence in a fresh suit. Confirm with counsel.
Can an Indian judgment be enforced in China?
Recognition depends on Chinese procedure rules and reciprocity, which has been hard to show in practice. Arbitration avoids the problem.
Is an unstamped contract valid in India?
It is not void, but it cannot be used as evidence until stamped and any penalty is paid.
Does Indian law still apply if my contract is governed by Chinese law?
Mandatory Indian laws such as FEMA, the Companies Act and the Press Note 3 conditions still apply to the Indian subsidiary and the investment.
Is there an investment treaty protecting Chinese investors in India?
It must be checked on the facts. India terminated many older treaties from 2016 and 2017, so do not assume protection.
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Last updated 26 October 2026. General information only, not legal or tax advice. Indian and Chinese rules change often; confirm current requirements before acting.