The practice of arbitration in China (Fr)

The practice of arbitration in China has experienced in recent years a
very rapid development. The purpose of this article is to present the
main innovations in these Rules, particularly in terms of appointment
referees.

I - The new CIETAC regulations

The main Chinese arbitration institution - the CIETAC (China international economic and trade arbitration commission) - adopted on January 11, 2005 a new arbitration regulation which entered into force on May 1 of the same year. The essential innovation of this New Regulation is to allow the parties to choose arbitrators outside the official list or "panel" published by the CIETAC. Under the influence of the old regulations, the choice of the parties was restricted to some seven hundred names registered on the CIETAC list. This limitation was one of the main criticisms leveled against the Chinese arbitral institution. Under the new regulations, the appointment of arbitrators outside the official list may apply to any arbitrator comprising an arbitral tribunal: to an arbitrator ruling alone or to the two co-arbitrators chosen by each of the parties, as well as to the arbitrator president of the arbitral tribunal, appointed by mutual agreement of the parties or, failing this, by the president of CIETAC.

As a result, the parties now have the possibility to appoint arbitrators
outside the panel, subject to confirmation by the president of the
CIETAC. Although the criteria for confirmation are not stated, this
procedure seems justifiable insofar as it makes it possible to verify
the suitability of the arbitrator so appointed. It should be noted that a procedure for
confirmation of the arbitrators is also provided for by the arbitration rules of the
CCI. On the other hand, the New Regulation does not specify the modalities by
which the parties can agree to choose arbitrators outside
the CIETAC list. In the absence of contrary provisions, it therefore seems
allowed to provide for this possibility from the arbitration clause before birth
litigation.

One point that deserves to be raised is that CIETAC is very open to foreign arbitrators, since on the list of arbitrators, we find that a third of the arbitrators are of nationality other than Chinese. Article 13 of China's Arbitration Law provides that arbitrators must meet one of the following qualifications:
(1) have practiced arbitration for a minimum period of eight years;
(2) have been a lawyer for a minimum of eight years;
(3) have been a judge for a minimum period of eight years;
(4) have had a very high level of teaching or legal research;
(5) have legal knowledge, professional practice in the field of economic and commercial relations, professional activity at a very high level and be considered as such in professional circles.

II - Arbitrations before the ICC

Chinese law allows the use of foreign arbitration institutions to
disputes with a foreign element. When the place of such arbitration is
located abroad, the arbitration clause and the corresponding awards are
protected by the New York Convention, to which China is a party, which
strictly limits the cases of their questioning by the courts.
On the other hand, when the place of arbitration is China, the arbitration clause and
the corresponding award are not covered by the New Convention
York and their validity is then assessed exclusively with regard to domestic law.
Chinese.

Article 161 of the Chinese Arbitration Law stipulates that the mention of an “arbitration commission chosen by the parties” in an arbitration clause is a condition of its validity. In this regard, in order to mitigate the risk of seeing it "canceled on the grounds of an insufficiently explicit reference to the arbitration institution chosen", the CCI decided to adapt its standard clause for arbitrations taking place in China. This new wording is as follows: "All disputes arising from or in connection with this contract will be submitted to the International Court of Arbitration of the International Chamber of Commerce and will be decided according to the Arbitration Rules of the Chamber of Commerce international by one or more arbitrators appointed in accordance with these regulations. However, it appears that section 16 of China's arbitration law is often interpreted as requiring the mention of an arbitration board registered in China, which is not the case with any foreign arbitral institution. It follows that a risk of cancellation by the Chinese courts hangs over the clauses providing for arbitration in China in accordance with the rules of a foreign arbitral institution. As for the ICC, it is not clear until now whether a clause providing for arbitration in China according to the ICC arbitration rules and designating the International Court of Arbitration of the ICC as the competent arbitration commission would be valid in Chinese law. This uncertainty can cause problems in practice in negotiating an arbitration clause in a contract between a Chinese party and a non-Chinese party, if the Chinese party requires that the seat of arbitration be in China and the another party refuses to submit to a Chinese arbitration board.

A solution was proposed in a conference devoted to arbitration in
China, organized by AIA (Association for International Arbitration) at
month of March 2009 in Brussels, it consists in designating Hong Kong as the place
of arbitration due to its status of Special Administrative Region and the
Chinese arbitration law not applicable. Arbitral awards
rendered in Hong Kong are not considered as sentences
foreigners in China. There is an agreement, which works well in practice, between
China and Hong Kong of February 2, 2000 which provides for the execution in China of
awards rendered in Hong Kong and vice versa under very strict conditions.
similar to those of the New York Convention.

CONCLUSION

In recent years, disputes involving a Chinese party bringing before
CCI have increased considerably, although the proportion is not
very important compared to arbitrations administered by the ICC, but
the evolution is remarkable.

According to ICC statistics, about 60% of ICC arbitration awards to be executed in China are spontaneously executed by the Chinese side. The enforcement problem is no longer a major problem in China.

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1. Article 16 of the Chinese Arbitration Law:
An arbitration agreement shall include the arbitration clauses provided in the contract and any other written form of agreement concluded before or after the disputes providing for submission to arbitration. The following contents shall be included in an arbitration agreement: the expression of the parties' wish to submit to arbitration; the matters to be arbitrated; and the Arbitration Commission selected by the parties.
- the expression of the parties' wish to submit to arbitration;
- the matters to be arbitrated; and
- the Arbitration Commission selected by the parties.