Helena H.C. Chen

Partner

Pinsent Masons LLP

Nov. 23, 2015

Arbitration in China– A Brief

Report on Recent Developments

Helena H.C. Chen

helena.chen@pinsentmasons.com • Qualified in Taiwan, mainland China and New York State

• Ph.D., Peking University (China) ; Ph.D., National Taiwan

University

• FCIArb; Listed on the panels of arbitrators of CIETAC, SIAC,

KLRCA, KCAB, ACICA, SHIAC, SCIA, BAC, CAA, LCIA-

MIAC Arbitration Centre etc

• Member of the SIAC Users Council

• listed on the panel of mediators of CCPIT/CCOIC Mediation

Center; Associate Mediator of SMC

• Vice-chair of the Dispute Mediation Center of CAA

• Recommended Experts of the Construction Dispute Board

(DB) of Beijing Arbitration Commission

• named to the International Who’s Who of Construction

Lawyers for four consecutive years from 2011

Overview

PRC Arbitration Law (effective from 1995)

Arbitration Commissions: 235

National Caseload (1995-2014): 919,814

Disputed Amount (1995-2014): 1,408.9 billion RMB

Brief Introduction to Arbitration in China

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

110000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

37,304

48,339

60,844 61,475 65,377

74,811 78,923

88,473 96,378

104,257

113,660

Annual Caseload of Arbitration Commissions in Mainland China

4

Brief Introduction to Arbitration in China

0

50

100

150

200

250

300

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

51.5 65.4

72.5 75.3 95.7 96.1 93.2

113.3

135.1

164.6

265.5

Total Amount in Dispute Handled by Arbitration Commissions in Mainland China (in billions of RMB,

by year)

61

%

5

Brief Introduction to Arbitration in China

0

200

400

600

800

1000

1200

1400

1600

1800

2009 2010 2011 2012 2013 2014

1567

1219

1413 1521 1596

1785

Annual Caseload of Foreign-Related Arbitration in Mainland China

6

CIETAC- number of cases

CIETAC: Disputed Amount

Foreign-related v Domestic (Dual Track System)

Foreign awards

• Foreign-related arbitration: an

arbitration involves “foreign elements”:

One of the parties is foreign

the subject matter of the dispute is

located outside of China or

the facts establishing, amending,

or terminating the parties

relationship occur outside of the

PRC

• Domestic arbitration (ie no foreign

elements)

Foreign-related v Domestic

• If no other foreign

elements: domestic

arbitration

• If no other foreign

elements: foreign-

related arbitration

PRC

Foreign Parent Co.

Subsidiary/WFOE PRC

Foreign Headquarter

Branch office

Foreign-related vs Domestic

Foreign-related

arbitration

Domestic arbitration

• Foreign arbitration

institutions

V X

• Rules of foreign

arbitration institutions

or UNCITRAL

Arbitration Rules

V X

• Foreign Seat of

arbitration

V X

• Reporting System V X

Foreign-related vs Domestic

Foreign-related

arbitration

Domestic arbitration

• Foreign law as the

governing law for

matters concerning the

validity of an

arbitration agreement

V X

• Foreign law as the

governing law of the

substantive contract

V

(unless otherwise

required by law)

X

• Grounds for annulment

or non-enforcement of

awards

Fake evidence;

concealed evidence that

may affect the

impartiality of an award

Foreign arbitration institution to

administer arbitration cases in PRC?

• In a case with foreign elements, can parties agree to an

foreign arbitration institution and the place of arbitration

in PRC?

– Longlide case

– “Any dispute arising from or in connection with this

contract shall be submitted to arbitration by the

International Chamber of Commerce (‘ICC’) Court of

Arbitration [sic] according to its arbitration rules, by

one or more arbitrators. The place of jurisdiction shall

be Shanghai, China. The arbitration shall be

conducted in English.”

Longlide case

• Longlide case (2013/3/25)

– SPC: The clause is valid: it contained all of the

elements required by Article 16 of PRC Arbitration

Law for a valid arbitration clause, namely:

• (i) an express intention to arbitrate,

• (ii) the matters to be submitted to arbitration and

• (iii) a designated arbitration institution/commission

(仲裁委员会).

• Do it signal a possible opening-up of the mainland

Chinese arbitration market to foreign institutions?

Longlide case

• Remaining issues:

– How to enforce the award?

• Domestic award?

• Foreign award? Non-domestic award?

– Interim measures

• Would a PRC court accept an application

forwarded by a foreign arbitration institution?

– Does a PRC court have jurisdiction to vacate the

arbitral award?

• “the court located at the place of the arbitration

commission”

• Foreign-related arbitral award?

Foreign Arb

Institutes

入 駐

2015/11/19 HKIAC Shanghai Rep Office

Recent Developments

• New Rules

– CMAC Arbitration Rules (2015/1/1)

– CIETAC Arbitration Rules (2015/1/1)

– SHIAC Arbitration Rules (2015/1/1)

– BAC Arbitration Rules (2015/4/1)

• Arbitration Rules 2015: Aligning

BAC with International Best

Practices, China Law, Vol. 112

CIETAC Split- 2012

CIETAC-Shanghai

SHIAC/上海国际仲裁中心

CIETAC-South China

SCIA/深圳国际仲裁院

SPC’s Reply Letter, 2015/7/17

• http://www.out-

law.com/en/articles/201

5/september/chinese-

arbitration-adapts-to-

international-market--/

Pinsent Masons LLP is a limited liability partnership registered in England & Wales (registered number: OC333653) authorised and regulated by

the Solicitors Regulation Authority, and by the appropriate regulatory body in the other jurisdictions in which it operates. The word ‘partner’, used in

relation to the LLP, refers to a member of the LLP or an employee or consultant of the LLP or any affiliated firm of equivalent standing. A list of the

members of the LLP, and of those non-members who are designated as partners, is displayed at the LLP’s registered office: 30 Crown Place,

London EC2A 4ES, United Kingdom. We use 'Pinsent Masons' to refer to Pinsent Masons LLP, its subsidiaries and any affiliates which it or its

partners operate as separate businesses for regulatory or other reasons. Reference to 'Pinsent Masons' is to Pinsent Masons LLP and/or one or

more of those subsidiaries or affiliates as the context requires. © Pinsent Masons LLP 2015

For a full list of our locations around the globe please visit our websites:

www.pinsentmasons.com www.Out-Law.com