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don't use the right words, you may not get the region you want. Seek advice on exactly how to word it," says Leon. 4. For practical reasons, try to establish the seat of arbitration anywhere but in mainland China. Even Hong Kong is better. Stipulate that you want an adversarial approach be used because sometimes there is an option, as per the CIETAC rules. 5. Check all the rules for where you are able to stipulate the intentions of the parties and address each point in your contract. — AC courts have to report refusals of awards to the Supreme People's Court [the highest court], and so that means it will automatically go higher if your judgment is not enforced. good in theory but there are multiple problems with the process. Accord- ing to Leon, these include: The lower courts might simply refuse to report it and the parties have no remedy because it is an internal court process; the par- ties don't have the right to be heard at the higher court level; there are no timelines built in so your case can get stuck in the lower courts for years and a decision may never be rendered; and even if you get a decision recognizing the award, you then have to execute it and you can run into problems of pro- tectionism and the practical problem of obtaining the assets. Leon believes entering into a con- " That sounds tract with a foreign party is like getting married. The last think about while planning the details thing you want to is your divorce. "There is always some- one running into the office at 11:30 p.m. saying, 'we want to finish the contract by midnight. Can you give me an arbitration clause?' You don't know the background, you don't have time to think about it. If you're doing business in a place like China, you want to take more time. Try to do that before the last minute and you will probably wind up with a clause that will lower your risk to some degree. You'll be in a better posi- tion if you get into a dispute. thur, the track record of a Chinese court enforcing a judgment of a foreign court is even worse than the enforce- ment of an arbitration award. "They respect the courts even less than the arbitrators." So if enforcing an arbitra- tion award is uneven and enforcing a judgment even worse, why is China so popular as a trading partner? "Because they have stuff we want to buy, McArthur. Interestingly, according to McAr- " " says Paul M. Iacono, Q.C. Hon. Harvey Spiegel, Q.C. Helen L. Walt Charles A. Harnick, Q.C. Douglas F. Cutbush Margaret K. Rees Richard D. McLean, Q.C. John Beaucage Cindy Winer David L. Smith, C.A. Tony Baker To arrange a mediation, arbitration, appraisal or neutral evaluation please call our ADR Coordinator. Peter R. Braund Untitled-8 1 www.CANADIAN Lawyermag.com SEPTEMBER 2012 49 12-08-07 10:02 AM

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