Going to China to arbitrate your international commercial disputes

China

Country:

  • Peoples Republic of China

Overview:

  • China is a pro-international arbitration and pro-enforcement country

China International Commercial Arbitration Legislation:

  • China has its own domestic legislation (lex arbitri) for the regulation of international commercial arbitration
  • The lex arbitri of China is the PRC Arbitration Law

UNCITRAL Model Law:

  • The PRC Arbitration Law was influenced by the Model Law. However, there are numerous points of difference. These differences include:
    • The PRC Arbitration Law applies to both domestic and international (“foreign-related” or “foreign element”) arbitrations;
    • Article 16 of the PRC Arbitration Law requires that an arbitration agreement must contain a “designated arbitration commission” (In respect to statutory criteria for arbitration commissions see Chapter II, Articles 10 to 15. In respect to further statutory criteria for foreign related arbitrations, see Chapter VII)). This requirement excludes ad hoc arbitrations (i.e. non-institutional arbitrations) in respect to domestic arbitrations and most likely international (i.e. foreign related) arbitrations (see Article 65);
    • Article 20 of the PRC Arbitration Law permits a party to an arbitration to apply to the Peoples Court to rule on challenges to an arbitration agreement, whereas an arbitral tribunal’s unrestricted competence to rule on its own jurisdiction is contained in Article 16 of the Model Law;
    • The default number of arbitrators is not the same (see Article 10 of the Model Law and Articles 30 and 32 of the PRC Arbitration Law);
    • Arbitration commissions (i.e. arbitration institutions) in China must belong to the China Arbitration Association (see Article 15 of the PRC Arbitration Law). There is no such requirement in the Model Law;
    • The chairman of a China arbitration commissions will decide challenges against arbitrators (see Article 35 of the PRC Arbitration Law). There is no such requirement in the Model Law;
    • Article 13 of the PRC Arbitration Law sets out a “righteous and upright” criteria for the appointment of arbitrators. There is no such requirement in the Model Law; and
    • Requests for interim measures in respect to property or evidence must first pass through the arbitration commission, which then submits the application to the peoples court (see Articles 28, 46 and 68 of the PRC Arbitration Law). The tribunal is the default decision maker under Article 17(1) of the Model Law.

UNCITRAL International Arbitrations Rules:

  • Pursuant to Article 15 of the PRC Arbitration Law the China Arbitration Commission shall formulate rules of arbitration in accordance with this PRC Arbitration Lawand the relevant provisions of the PRC Civil Procedure Law. This stipulation excludes the UNCITRAL Arbitration Rules. Article 75 permits arbitration commissions to formulate provisional rules of arbitration.
  • However, UNCITRAL is obviously not an arbitration commission established in accordance with Chapter II of the PRC Arbitration Law) and therefore, the UNCITRAL Arbitration Rules could not constitute provisional rules for the purpose of Article 75.

Enforcement of International Commercial Arbitration Awards:

  • China ratified the United Nations Conference on International Commercial Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards
  • China made two reservations. China will apply the Convention only:
    • To the recognition and enforcement of awards made in the territory of another contracting State; and
    • To differences arising out of legal relationships, whether contractual or not, that are considered commercial under China law.
  • China also extended these reservations to Hong Kong and the Macao Special Administrative Region of China

China International Commercial Arbitration Institutions (“Arbitration Commissions”):

China International Commercial Arbitration Venues

  • The above three arbitration commissions determine the applicable venues in accordance with Article 10 of the PRC Arbitration Law

China International Commercial Arbitration Rules:

Other International Commercial Arbitration Institutions:

  • The restriction in China in respect to foreign international arbitration institutions conducting international commercial arbitrations in China is contained in Article 15 of the PRC Arbitration Law. Article 15 requires that arbitration commissions (i.e. arbitration institutions) in China must belong to the China Arbitration Association

Other International Commercial Arbitration Rules:

  • Pursuant to Article 15 of the PRC Arbitration Law the China Arbitration Commission shall formulate rules of arbitration in accordance with this PRC Arbitration Lawand the relevant provisions of the PRC Civil Procedure Law. This stipulation excludes foreign international commercial arbitration rules (see also Article 75)

International Commercial Arbitration Guidelines:

  • There is no provision in any of the above three sets of arbitration commission rules that allows the use of foreign international commercial arbitration guidelines

Place (or seat) of arbitration:

  • The seat of arbitration must be in accordance with the above three arbitration commissions and also in accordance with Article 10 of the PRC Arbitration Law

Substantive Law:

  • The governing law is determined by Article 145 of the PRC General Principles of Civil Law, which permits the contracting parties to contracts involving foreign elements, to choose the substantive law. Otherwise, the law of the country of the closest connection to the contract shall be applied (see Article 145 of the PRC General Principles of Civil Lawand Article 126 of the PRC Contact Law)

Representation:

  • TBA

Useful Links and Comments:

  • TBA

New Zealand

Contact details

Telephone: 0508 899 721
Facsimile: 0508 899 723

Suite 25
Floor G
Panama House
22 Panama Street
Wellington 6011
New Zealand