Cross-Border US-Asia · Memo

Getting Paid From Asia: Arbitration vs. Enforcement Reality

The hard question on a US-Asia commercial deal is not what the contract says but whether the US service provider can actually collect when the customer breaches. I will walk through the enforcement reality across the major Asian jurisdictions.

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) is the single most important treaty for cross-border commercial collection. Over one hundred sixty jurisdictions are signatories, including all the major economies in Asia. An arbitral award rendered under the convention in one signatory jurisdiction is enforceable against assets in any other signatory jurisdiction, subject to limited refusal grounds.

The Hague Convention on Choice of Court Agreements (2005) provides a parallel framework for court judgments rendered under exclusive choice-of-court agreements. The Hague Convention's membership is smaller, and its application in Asia is currently limited. Mainland China, Japan, Korea, Singapore, India, Indonesia, Thailand, Vietnam, and the Philippines are not currently parties (as of the date of this memo). Counsel should confirm the current status of the convention before relying on a court-jurisdiction clause for enforcement.

The arbitration enforcement reality

For US service providers seeking to enforce against Asian customers, arbitration in a New York Convention jurisdiction is the realistic path. The convention's refusal grounds at Article V are narrow: incapacity of a party, invalidity of the arbitration agreement, failure of due process, exceeding the scope of the agreement, improper composition of the tribunal, the award not yet binding, the dispute not arbitrable under local law, or the award contrary to local public policy.

Practically, the public-policy ground is the most frequently invoked. National courts in Asia have generally taken a narrow reading of public policy, particularly the Singapore courts, the Hong Kong courts (pre-2020 and to a meaningful degree still), the Japanese courts, and the Korean courts. The Chinese courts have historically been more skeptical, though the trend through 2020-2025 has been toward greater enforcement of foreign awards.

The practical timeline for enforcement of a SIAC or HKIAC arbitral award in most Asian jurisdictions is six to eighteen months from filing the enforcement application. The cost is meaningful but proportionate. The enforcement against local assets (bank accounts, real estate, equipment, intellectual property) is mechanically supported by local court procedures.

Jurisdiction-specific notes

• Singapore. The most enforcement-friendly jurisdiction in Asia for commercial awards. The Singapore International Arbitration Act and the courts' Construction-Arbitration List provide a structured enforcement path. Awards from any New York Convention jurisdiction are routinely enforced.
• Hong Kong. Historically a strong enforcement jurisdiction. The Arbitration Ordinance (Cap. 609) is well-developed. Political developments since 2020 have introduced some uncertainty for matters that touch politically sensitive subjects; commercial enforcement remains generally reliable but counsel should consider the matter's profile.
• Japan. The Japanese Arbitration Act of 2003, modeled on the UNCITRAL Model Law, supports enforcement. The Japanese courts have been measured but generally cooperative. Cultural and procedural factors can lengthen the timeline.
• Korea. The Arbitration Act, also modeled on the UNCITRAL Model Law, supports enforcement. The Korean courts have been generally pro-enforcement.
• Mainland China. Enforcement of foreign awards in China has improved through the 2010s and 2020s but remains less predictable than in the other major Asian jurisdictions. The Supreme People's Court's reporting system (under which lower courts must seek SPC approval to refuse enforcement of a foreign award) has improved consistency. Enforcement against state-owned entities can be more difficult than against private parties.
• Taiwan. The Arbitration Act supports enforcement. Practical enforcement is generally reliable for commercial matters.

The court-judgment alternative

For US service providers without an arbitration clause, the enforcement of a US court judgment in Asia is more complicated. The mechanics depend on the customer's jurisdiction.

• Singapore. The Reciprocal Enforcement of Commonwealth Judgments Act and the Reciprocal Enforcement of Foreign Judgments Act provide enforcement paths for certain jurisdictions. The US is not currently a designated reciprocating country for the federal statute. Common law enforcement of US judgments is available but more procedurally complex.
• Hong Kong. Common law enforcement of US judgments is available. The Foreign Judgments (Reciprocal Enforcement) Ordinance applies to certain jurisdictions but not currently to the US.
• Japan. Enforcement of US judgments is theoretically available under Article 118 of the Code of Civil Procedure, but the reciprocity requirement and the public-policy analysis can produce uneven results.
• Korea. Enforcement of US judgments requires a separate judicial proceeding and reciprocity analysis.
• Mainland China. Enforcement of US court judgments has historically been very limited. The 2023 amendments to the Civil Procedure Law and recent reciprocity decisions (Spar Shipping AS v. Grand China Logistics in 2017, and subsequent cases) have improved the picture but enforcement remains uneven.

For most US service providers facing meaningful exposure to Asian customers, the arbitration path is meaningfully better than the court-judgment path. The drafting consequence: if collection from an Asian counterparty is foreseeable, the contract should provide for arbitration.

The asset-tracing question

Enforcement requires assets to enforce against. The US service provider's investigation should identify, before signing, what assets are in jurisdictions where enforcement is realistic. For a customer with substantial Singapore operations, the analysis is straightforward. For a customer with operations distributed across multiple Asian jurisdictions (some enforcement-friendly, some not), the analysis is more complicated.

The drafting moves that support enforcement:

1. Require the customer to maintain a designated assets account or operating account in a New York Convention jurisdiction with reasonable assets.
2. Obtain personal guarantees from the customer's principals where the customer's institutional assets are uncertain. Personal guarantees can be enforced against personal assets in jurisdictions where the principal resides.
3. Require advance payment, escrow, or letter of credit for substantial obligations, particularly for new customers.
4. Include termination rights tied to payment defaults, with prompt termination on non-payment beyond a defined cure period.
5. Consider trade credit insurance for substantial accounts; the insurer's underwriting will independently assess the customer's collection risk.

The pre-litigation phase

Before invoking arbitration, the pre-litigation phase often produces resolution. The Asian commercial culture frequently emphasizes relationship preservation and negotiated resolution. A US service provider that proceeds directly to formal arbitration without exhausting commercial negotiation may damage the relationship more than the contractual breach warranted. For matters where the customer's business is otherwise valuable, a structured negotiation (perhaps with a mediator from a respected commercial body) can produce outcomes that the arbitration would not. For matters where the customer has stopped responding or has shown bad faith, arbitration is the appropriate next step.

The currency and remittance question

One operational point that counsel should not overlook. Even where an arbitral award has been entered and the customer has assets, the remittance of payment from the customer's jurisdiction to the US may be subject to currency-control rules. Some Asian jurisdictions (notably mainland China, India, Indonesia, and Vietnam) restrict cross-border currency transfers above defined thresholds. The award may be locally enforceable but the proceeds may be locally trapped.

The drafting move: contracts with customers in currency-restricted jurisdictions should specify the currency of payment, the bank routing, and the customer's responsibility for obtaining any required regulatory approvals for outbound remittance. The customer's failure to obtain approvals should be a contractual breach independent of the underlying payment obligation.

What I would not assume

The enforcement reality varies by matter. The arbitration framework is reliable for commercial disputes between private parties in major Asian jurisdictions. The framework is less reliable for disputes involving state-owned entities, politically sensitive subjects, or jurisdictions with weaker rule-of-law records. Outcomes depend on the customer's specific assets, the matter's character, and the enforcement court's posture. Counsel advising on cross-border collection should walk the enforcement path before signing, not after the customer has stopped paying.

Sergei Tokmakov, Esq., CA Bar #279869. This memo is attorney commentary on legal questions and is not legal advice. Reading it does not create an attorney-client relationship. Past matter outcomes depend on facts and the responding party; nothing here is a prediction of result.