Latest updates

Fraud claims in letter of guarantee not subject to arbitration clause in underlying contract
  • China
  • 17 October 2019

An independent letter of guarantee involves a legal relationship between the applicant, the issuer and the beneficiary. Without an arbitration clause in a letter of guarantee, it is unclear whether the arbitration clause in the underlying contract can also bind the issuer. A recent Supreme People's Court ruling provides a clear answer to this question.

Does an invalid arbitration clause equal no arbitration clause?
  • China
  • 25 July 2019

The Fushun Intermediate People's Court recently ruled that, although an arbitration clause was invalid on the grounds that it allowed disputes to be resolved through arbitration or litigation, the award issued by the arbitration commission was final and binding as the company had failed to challenge the validity of the arbitration clause or the arbitration commission's jurisdiction over the dispute within the mandatory timeframe.

Mainland China and Hong Kong agree mutual interim measures to aid arbitral proceedings
  • China
  • 16 May 2019

Mainland China and Hong Kong recently signed the Arrangement Concerning Mutual Assistance in Court-Ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region. Historically, it has been impossible for parties to arbitral proceedings with a seat outside mainland China to obtain interim measures from mainland courts. This situation will change completely after the arrangement comes into force.

Are recordings made without counterparty's consent admissible as evidence in arbitration?
  • China
  • 21 March 2019

It has long been disputed whether video or audio recordings can be admitted as evidence in arbitration where they are made without the counterparty's consent. Although the general attitude in this regard has become more relaxed, such private video and audio recordings are not an effective form of evidence, as the counterparty may dispute them for many reasons. Thus, in order for recordings to be accepted as evidence, a number of factors should be considered.

Effects of unauthorised agency on arbitration agreements
  • China
  • 18 October 2018

The Changsha Intermediate Court recently ruled on whether the arbitration clause in a share transfer agreement had a binding effect on the petitioner – who was a controlling shareholder of a public company – and a company to which he had intended to transfer his shares. The validity of the arbitration clause hinged on whether a director of the public company who had signed the share transfer agreement on the petitioner's behalf could express the petitioner's intention to arbitrate.

Arbitration clause not binding on insurer by way of subrogation
  • China
  • 14 October 2010

It is generally accepted that when a claim or a debt is assigned, the arbitration agreement attached thereto is also assigned. However, the Supreme People's Court has opined that an arbitration clause contained in a contract for carriage of goods by sea was not binding on an insurer that stepped into the shoes of the insured consignee by way of subrogation.

When is a dispute an inheritance dispute?
  • China
  • 05 August 2010

The Supreme People's Court recently issued a direction that an arbitral award should be refused recognition and enforcement as the arbitration concerned an inheritance dispute and was therefore not arbitrable. However, a request for a declaration of title to a 50% equity share in a company by way of succession could be characterized as a commercial matter.

Award by truncated tribunal refused recognition and enforcement
  • China
  • 27 May 2010

The Supreme People's Court has upheld the Chinese courts' first decision on an arbitral award issued by a truncated tribunal. Recognition and enforcement were refused in accordance with Article V(1)(d) of the New York Convention. However, Chinese arbitration law and practice do not absolutely reject an arbitral award issued by a truncated tribunal.

Overview (March 2010)
  • China
  • 25 March 2010

Including: international arbitration versus domestic arbitration; institutional and ad hoc arbitration; legal representation; commencement of proceedings; appointment of arbitrators; expansion of application and defence - further pleadings; hearing; rules of evidence; post-hearing pleadings; preservative measures; awards; enforcement of foreign arbitration award.

Foreign arbitral award refused recognition and enforcement on public policy grounds
  • China
  • 04 February 2010

For the first time since China acceded to the New York Convention in 1987, a foreign arbitration award has been refused recognition and enforcement in China on public policy grounds. Although the court apparently intended to set a precedent on these grounds, the case leaves open a number of significant questions.

New Legislation Expands Labour Arbitration Commissions' Powers
  • China
  • 28 February 2008

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.

Agreement with Macau Facilitates Mutual Recognition of Arbitral Awards
  • China
  • 14 February 2008

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.

Arbitrating China-Related Disputes Outside China
  • China
  • 04 October 2007

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 Offer Scope for Investors' Arbitration Claims
  • China
  • 13 September 2007

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.

Overview (March 2007)
  • China
  • 22 March 2007

Including: Scope; Place or Seat; Governing Law; Institutional or Ad Hoc Arbitration; Language; Unilateral, Asymmetrical and Sole Option Clauses; Interim Relief.

Supreme People's Court: Validity of Agreements and Challenges to Awards
  • China
  • 21 September 2006

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.

Supreme Court Interpretations on Arbitration Agreements
  • China
  • 08 June 2006

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.

Wide Scope for Arbitration in New Bilateral Investment Treaty
  • China
  • 16 March 2006

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.

CIETAC's New Arbitration Rules
  • China
  • 12 May 2005

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.

New CIETAC Rules for Arbitrating Financial Disputes
  • China
  • 11 December 2003

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.