Nanjing Maritime Court upholds HK arbitration in cross-border shipbuilding dispute

Ships involved in the dispute. [Photo provided to chinadaily.com.cn]

The Supreme People's Court of China released a list of exemplary maritime cases for 2025 ahead of the Day of the Seafarer on June 25, among which is a landmark ruling by the Nanjing Maritime Court in Nanjing, East China's Jiangsu province, on a case involving a cross-border shipbuilding contract dispute between a Philippine shipping company and a shipbuilder in Nantong, Jiangsu province.

In August 2022, the parties to the case agreed to have their dispute arbitrated by the Hong Kong International Arbitration Center (HKIAC). Following a dispute over trial voyage expenses, the HKIAC ruled in September 2025 that both parties should cooperate to complete the ship trials and delivery, and ordered the shipbuilder to pay a delay penalty of $1,165,000.

The Philippine company sought recognition and enforcement of the HKIAC award in Nanjing. However, the shipbuilder refused to enforce the ruling, citing that its creditors had filed for bankruptcy liquidation and that it was in the bankruptcy review stage.

The case was brought before the Nanjing Maritime Court, which ruled in the first instance that recognizing and enforcing the arbitration award is a separate process from the shipbuilder's bankruptcy, emphasizing its procedural independence.

The court confirmed the award's enforceability and dismissed claims of procedural impropriety and public interest violations.

This decision reflects China's commitment to upholding the principle of equal protection for both domestic and foreign parties in its maritime adjudication, as well as supporting Hong Kong arbitration and enhancing its role as a key legal and dispute-resolution hub in the Asia-Pacific region.