The much-debated Labour Dispute Mediation and Arbitration Law allows labour arbitration commissions to issue decisions which are immediately legally binding and which cannot be appealed in some cases. The fact that local labour arbitration commissions will allow workers to submit cases to arbitration for free is likely to result in more labour disputes being brought before the commissions.
China and Macau have signed an agreement to recognize awards made under their respective arbitration laws as being mutually legal and enforceable. A similar agreement is already in place between China and Hong Kong. The agreement applies to all arbitral awards made after December 20 1999.
Arbitration is the preferred method of dispute resolution for foreign investors in China. For a variety of reasons, foreign parties also prefer to arbitrate outside China. However, the first question confronting a party that wishes to arbitrate China-related disputes outside China is whether Chinese law allows the parties to do so. The answer, at least for now, is a qualified 'yes'.
Bilateral investment treaties are gaining recognition as sources of protection for foreign investors, as they allow investors to bring an arbitration claim directly against a host country. Historically, Chinese bilateral investment treaties have granted foreign investors limited rights of recourse through arbitration, but a new generation of treaties grants greater rights.
The Supreme People's Court has promulgated its long-awaited interpretation on arbitration law issues. The statement consolidates previous judicial interpretations, as well as providing additional guidance on two key issues: the validity of arbitration agreements and challenges to arbitral awards.
The Supreme People's Court issued its Interpretations on Certain Issues Relating to the Application of the Arbitration Law by the People's Courts (Draft for Approval), which are expected to be formally promulgated soon. The interpretations include a number of interpretations on the provisions of the Arbitration Law dealing with the validity of arbitration agreements.
China's new bilateral investment treaty with Germany offers a remarkably wide scope for aggrieved investors to pursue international arbitration when disputes arise with their host state. China has concluded more than 100 treaties of this sort, but most limit investor-state arbitration to very particular circumstances, such as disputes over the amount of compensation owing in confirmed cases of expropriation.
The new arbitration rules of the China International Economic and Trade Arbitration Commission (CIETAC) came into effect on May 1 2005. The new rules, which are more in line with accepted international practices, represent a leap forward in CIETAC's effort to establish itself as a global arbitration institution.
The China International Economic and Trade Arbitration Commissions (CIETAC) has established a new arbitration scheme which provides a faster and cheaper mechanism for resolving financial disputes than was previously available to parties under the standard CIETAC Arbitration Rules. The advantages include shorter procedural time limits and lower fees.
New Supreme People's Court provisions govern applications for the setting aside or enforcement of international arbitration awards, and cases concerning the validity of foreign-related arbitration clauses. They reflect the Chinese judiciary's desire to ensure that such cases are handled efficiently.
The Asian Domain Name Dispute Resolution Centre has been established in a joint venture between the leading Hong Kong and mainland Chinese arbitration institutions. It is one of only four globally that is authorized to arbitrate disputes relating to top-level domain names.
The Higher People's Court of Shanghai Municipality has issued an opinion clarifying some key aspects of the Arbitration Law. Among other things, it states that arbitration agreements may be concluded electronically, sets out who is bound by these agreements and confirms the act's definition of 'foreign-related arbitrations'.
In December 2000 the China International Economic and Trade Arbitration Commission set up a domain name dispute resolution centre in Beijing. The centre's mission is to provide a fast and low-cost forum for resolving disputes pursuant to established settlement procedures.
The new China International Economic and Trade Arbitration Commission (CIETAC) rules provide for welcome improvements to China's arbitration system. However, uncertainties remain regarding (i) the extent to which foreign nationals will be permitted to sit as arbitrators in domestic disputes handled by CIETAC, and (ii) how the courts will treat domestic awards rendered by CIETAC in the future.