含羞草社区

China’s arbitration landscape has made significant strides in development in the past year. Key initiatives include ongoing pilot programmes in cultivating world-class international arbitration institutions and strengthening development of several centres for international dispute resolution, especially arbitration.

Legislative reform is also advancing with proposed revision of the Arbitration Law. After several rounds of public consultation, with enactment due later in 2025, this is being hailed the most significant arbitration law modernisation in nearly three decades.

Additionally, the Shanghai International Commercial Court has been actively integrating with arbitration processes, offering judicial support in areas such as asset and evidence preservation, and the enforcement of interim measures.

Together, these reforms demonstrate mainland China’s commitment to modernising its arbitration framework, improving international competitiveness, and fostering a cohesive legal ecosystem that harmonises court and arbitral functions.

Cultivating institutions

A Resolution of the Third Plenary Session of the 20th Central Committee of the Communist Party of China – the highest level of policymaking – announced in July 2024 a decision to “cultivate world-class international arbitration institutions”.

With this policy as guidance, a state-driven strategy targets cultivating 22 domestic institutions into world-class institutions. These include the China International Economic and Trade Arbitration Commission (CIETAC), Shanghai International Economic and Trade Arbitration Commission (SHIAC), Beijing Arbitration Commission/Beijing International Arbitration Court (BAC/BIAC) and Shenzhen Court of International Arbitration (SCIA).

A Ministry of Justice symposium in July 2025 affirmed this ambition to leverage the Third Plenary Session’s directives merging Chinese legal characteristics with international standards. This comprehensive approach aims to develop truly world-class arbitration capabilities while maintaining Chinese characteristics, supporting the nation’s growing role in global commerce.

The strategy focuses on serving major national initiatives like the Greater Bay Area and Hainan Free Trade Port through specialised arbitration services. By combining institutional development with human capital investment and global engagement, China seeks to elevate its arbitration ecosystem to international standards while preserving its distinctive legal identity.

China has 285 arbitration institutions with more than 60,000 arbitrators, including more than 3,400 foreign professionals, according to official data from the Ministry of Justice.

In 2024 alone, these institutions handled 4,373 foreign-related cases with a total disputed value reaching RMB197.8 billion (USD27.2 billion), Xinhua News Agency has reported.

Leading institutions like CIETAC, BAC/BIAC and SCIA have established particularly strong reputations, each routinely administering cases exceeding RMB100 billion annually. The combination of institutional scale, strategic government support and increasing international engagement suggests the potential for further advancement in global standing.

Legislative reform

These impressive operational metrics are now being reinforced by foundational legal reforms, as China undertakes its most significant arbitration law modernisation in nearly three decades.

The proposed amendments to the Arbitration Law, unveiled for public consultation in late 2024, represent the first comprehensive overhaul since the law’s 1995 enactment. Though initially limiting its application to maritime disputes involving foreign elements, and commercial disputes among enterprises registered in China’s pilot free-trade zones, the revisions strategically address both domestic needs and international expectations by clarifying arbitration scopes, strengthening institutional governance, and formally recognising ad hoc arbitration.

The Shanghai Arbitration Association marked another significant advancement in China’s dispute resolution landscape by introducing its Rules for Ad Hoc Arbitration in August 2024.

The 58-article framework, structured across five chapters, provides comprehensive guidance covering the entire arbitration process, from initiation and tribunal formation to hearings, awards and expedited procedures.

A notable feature of the above-mentioned rules is the flexibility granted to parties in selecting the seat of arbitration. While parties may freely agree on any arbitral seat, in the absence of such agreement, or where the chosen seat is unclear, Shanghai will serve as the default seat.

To support the effective operation of ad hoc proceedings, the Shanghai Arbitration Association may act as the appointing authority or delegate this function to other recognised institutions. Eligible designated bodies include the Shanghai Arbitration Commission, Shanghai International Economic and Trade Arbitration Commission (SHIAC), China Maritime Arbitration Commission (Shanghai headquarters), World Intellectual Property Organisation Arbitration and Mediation Shanghai Centre, and the KCAB International Shanghai Office. Among these, the first three have already issued their own guidelines or rules specifically tailored to ad hoc arbitration.

In terms of arbitrator selection for ad hoc proceedings, the Shanghai Arbitration Association offers a “recommended panel of arbitrators for ad hoc arbitration” to assist parties in appointing qualified professionals. Alternatively, parties may also select arbitrators from the panels of any of the designated institutions authorised under the above-mentioned rules.

Parties are also free to appoint arbitrators outside these panels, provided that when the seat of arbitration is in mainland China, such appointees must meet the qualifications for arbitrators as stipulated under the Arbitration Law. This initiative reflects Shanghai’s ongoing effort to align with international arbitration practices while offering parties greater autonomy and procedural adaptability.

SHICC’s judicial support

These systemic improvements in arbitration infrastructure find their judicial counterpart in the newly established Shanghai International Commercial Court (SHICC). Launched in December 2024 under the Shanghai First Intermediate People’s Court, the SHICC represents a significant milestone in China’s judicial modernisation.

The SHICC was created to address the growing need for specialised handling of complex cross-border commercial cases as China’s economy continues to integrate with global markets, including judicial review of arbitration awards from leading international institutions.

At its core, the SHICC performs critical judicial functions through specialised divisions that handle the entire spectrum of international commercial disputes. This centralised jurisdiction covers everything from complex cross-border contract disputes to arbitration-related proceedings, including applications to set aside or enforce both domestic and foreign arbitral awards.

According to recent data released by the Shanghai High People’s Court, the SHICC’s bilingual (Chinese-English) proceedings and digital case management system reduce average case processing time to just 38 days, while maintaining a resounding 97.92% enforcement rate for international awards – setting new benchmarks for efficiency in Asia’s commercial litigation landscape.However, the SHICC’s development faces critical challenges that must be addressed to achieve its full potential as a truly international forum. Notably, the Judges Law mandates (mainland) Chinese nationality for judicial appointments, while the Law of the People’s Republic of China on Lawyers restricts foreign legal representation.

Consequently, all judges currently on the SHICC bench are mainland Chinese nationals, and foreign lawyers face restrictions in representing clients in mainland China’s courts. These limitations create perceptions of jurisdictional bias that may deter some international businesses from choosing Shanghai as their preferred dispute resolution venue.

The legislative pathway for overcoming these barriers may lie in article 84 of the Legislation Law, which empowers the National People’s Congress Standing Committee to authorise the Shanghai Municipal People’s Congress and its standing committee to formulate special regulations for the Pudong New Area and implement the same.

This “super legislative power” could theoretically empower Shanghai to pioneer operations of the SHICC, allowing for experimental judicial reforms that address its current limitations. For example, law provisions may be changed to allow non-mainland Chinese judges and lawyers to participate in SHICC litigation proceedings.

This would present a good opportunity for Hong Kong common law experts to bring their common law expertise and participate in mainland legal proceedings. In the long run, the experimental scope could be further expanded to other foreign jurisdictions.

Conclusion

While China has undoubtedly become a major arbitration market, the next challenge lies in transitioning from volume to influence – from being a participant to a standard setter. The ultimate measure of success will be whether international businesses increasingly select Chinese arbitration venues for disputes unrelated to China.