THE MANY ADVANTAGES of arbitration – expedition, cost-effectiveness, confidentiality and finality – require little introduction, but for the seven leading arbitration institutions in China’s legal market featured in this series, good is not good enough.
These institutions are striving not just to out-compete one another for a larger share of the market; they are also making every effort to advance international arbitration, especially in China, as a viable and desirable means for dispute resolution that caters to users around the world.
In this exclusive series, the leading institutions demonstrate their various specialties and philosophies that help them stay on top of their game.
Some resort to time-honoured mechanisms like ad hoc arbitration and scrutiny of arbitral awards. Some look to institution-wide agendas like enhancing credibility or international participation. Some are seizing the opportunities of favourable policies, aiming to brand entire cities and districts into arbitration hubs. Still others ponder the billion-dollar question: What makes arbitration institutions “first rate” anyway?
- Beijing targets status as international arbitration hub
Jiang Lili – BAC/BIAC - Credibility: the bedrock of China’s arbitration going global
Wang Chengjie – CIETAC - Ad hoc arbitration advancing China’s dispute settlement ecosystem
Li Hu – CMAC - New boundaries for Hong Kong law and arbitration
Joanne Lau & Zhang Xi – HKIAC - How scrutiny bullet-proofs arbitral awards
Donna Huang & Zhang Ran – ICC - Key roles of foreign practitioners in south China arbitration
Liu Xiaochun – SCIA - Fresh context for arbitral institution recognition
Wang Weijun – SHIAC
* The articles are arranged in alphabetical order by the abbreviated name of institutions
Beijing targets status as international arbitration hub
The status of “international arbitration hub” describes macrostructure designed to foster international arbitration and dispute resolution within specific sectors. Such hubs congregate top-tier professionals, activities and institutions from the dispute resolution field within a sustainable operational model, service facilities and institutional environment.
Essentially, they serve as a platform for the formation, refinement and application of international rules by aggregating various international resources for resolving disputes, whether related to trade, investment, borders or energy.
By clustering global governance talent, rules and expertise in the process of dispute resolution, they also enhance the international influence and competitiveness of their region.
As a bridge connecting business activities worldwide, an international arbitration hub in effect represents and creates a law-based and market-oriented international business environment.
With their global service capabilities and infrastructure, such hubs are these days becoming essential platforms for international commercial exchanges, as well as a key indicator of a sound international business environment.
So far, so good
Beijing is positioned to build an international commercial arbitration hub that “serves the city as a centre of both international technology innovation and international exchange”.
In the past two years, the city has made significant progress towards this development, completing 57 specific tasks across 22 areas in the reformation of its arbitration system and mechanism.
In terms of infrastructure enhancement, the Beijing International Dispute Resolution Centre (BIDRC) was officially established in August 2024 as a platform for development of this international arbitration hub.
Beijing is also providing institutional and legal support for constructing an international arbitration hub through local legislation, with the Regulations for the Construction of Beijing International Commercial Arbitration Hub (Draft) released for public comment in September 2024. Its first review will be at the 13th meeting of the 16th Beijing Municipal People’s Congress Standing Committee in November 2025.
In terms of arbitration institutions, the Beijing Arbitration Commission/Beijing International Arbitration Centre (BAC/BIAC) completed its reform in 2023, establishing an international committee and modern legal entity governance mechanism.
Aligning with the ultimate target of creating an arbitration hub of international standing, the BAC/BIAC subsequently officially changed its name to Beijing Arbitration Commission/Beijing International Arbitration Court in 2024, for development under global branding for “Arbitration in Beijing”.
In aggregating international dispute resolution resources, Beijing hosted the 8th Asia Pacific Regional Arbitration Group Conference in 2023, during which the BAC/BIAC was elected for the rotating presidency.
The capital also hosted the World Arbitration Update Conference and other international arbitration-related events, and in addition, the Beijing representative office of the Hong Kong International Arbitration Centre was inaugurated in 2024.
Meanwhile, demonstrating the vitality of Beijing’s international arbitration, the number and value of international arbitration cases managed by institutions in Beijing are on the rise, with a growing diversity of countries and jurisdictions involved.
Core elements
Advanced arbitration legal systems and judicial support are foundational for construction of the hub. A fair and enlightened judicial environment provides critical support for growth of the arbitration industry.
Beijing benefits from its status as the capital, receiving strong support from national and local legislative, judicial and law enforcement authorities. It has nearly 70 years of experience in modern international arbitration with a solid foundation for absorbing advanced domestic and international arbitration legal systems, and excellent international arbitration experiences.
In 2024, an interim measure decision made by an arbitral tribunal of the BAC/BIAC in an international arbitration case was recognised and enforced by a Beijing court, marking a milestone case and demonstrating Beijing’s leading status in judicial support for arbitration.
This development also contributes to the exploration of local legislation and is a key example of judicial empowerment in building the international arbitration hub.
High-quality legal service resources provide strong backing. Beijing is home to 252 regional headquarters of multinational corporations and more than 4,000 foreign-related lawyers, accounting for about 33% of the nation’s foreign-related legal professionals.
In 2023, commercial arbitration institutions in Beijing – including the China International Economic and Trade Arbitration Commission (CIETAC), the China Maritime Arbitration Commission (CMAC) and the BAC/BIAC – handled 978 foreign-related arbitration cases, with the total value of dispute amounting to RMB59.3 billion (USD8.2 billion).
In the past five years, the number and value of foreign-related cases handled by the three institutions in Beijing have reached 30% and 50% of the national total, respectively, creating an agglomeration effect.
This has enhanced international reputation and competitiveness. In 2021, Beijing ranked sixth in the global popularity of arbitration locations, tied with New York.
First-class arbitration institutions are driving forces. Beijing’s arbitration institutions play a crucial role in developing the international arbitration hub by continually innovating arbitration rules and practices that align with international standards. This process not only contributes to the evolution of arbitration systems, but also optimises the arbitration industry’s landscape, enhancing the quality, efficiency and credibility of its services.
The BAC/BIAC, for instance, has made repeated improvements to its arbitration rules in line with international standards, enhancing both its international enforcement capabilities and service experience.
First-class arbitration institutions are not only a key feature of an established arbitration hub, but also a critical part of the process of pursuing such a goal. With a clear objective of cultivating first-class international arbitration institutions, Beijing systematically guides and promotes improvement of relevant supporting legal systems, the formulation of supportive policies, and in-depth study of institutional governance and development.
New platform to watch
The BIDRC serves as a physical platform and operational entity for Beijing’s international arbitration hub. It plays a pivotal role in supporting and ensuring its development by catering to dispute resolution needs worldwide in a professional manner.
Not unlike Maxwell Chambers in Singapore, or the International Dispute Resolution Centre (IDRC) in London, the BIDRC is specifically designed to promote the growth of Beijing’s arbitration legal service ecosystem, cultivate international dispute resolution talent, and enhance the credibility of international arbitrations in Beijing.
Dedicated professional service sections – namely, its “arbitrators’ home”, “international arbitration lounge”, “international shared courtroom centre”, “full-chain commercial dispute resolution mechanism”, and “foreign-related legal talent training base” – underline the BIDRC’s commitment to providing convenient, high-quality services for domestic and foreign businesses, dispute resolution institutions, legal organisations and top-tier dispute resolution talent.
As vice-presidents of the BIDRC, CIETAC, CMAC and the BAC/BIAC contribute to providing world-class arbitration services and support to the dispute resolution ecosystem.
Encouragingly, many international dispute resolution institutions and legal service agencies are currently in talks to be stationed in the BIDRC. In short, the BIDRC is now firmly on course as the vanguard of Beijing’s determination to become a leading international arbitration hub.
Credibility: the bedrock of China’s arbitration going global
Credibility is the life and soul of arbitration. As the global economy rebounds, along with China accelerating its opening-up and deepening its Belt and Road Initiative co-operation, demand is growing in tandem for the advancement of international arbitration.
With this, credibility now emerges as the core driver for expanding China’s global arbitration footprint along international lines.
Enhancing arbitration credibility is a complex, systemic endeavour requiring collective efforts. It involves refining the arbitration legal system, improving the judicial environment, strengthening institutional development, and promoting the arbitration system and principles at multiple levels.
The China International Economic and Trade Arbitration Commission (CIETAC), the country’s first foreign-related arbitration institution, has prioritised building international credibility since its inception.
As a consequence, CIETAC’s global standing has significantly improved in recent years. In 2024, CIETAC recorded steady growth across key metrics such as the number of foreign-related cases and their total disputed amount. Internationalisation of its caseload has also become more prominent, with the number of countries covered by CIETAC cases reaching 166, including all of the Belt and Road countries and regions.
In late 2023, CIETAC was also once again recognised in the China Arbitration Credibility Assessment Report, securing dual honours as one of the Top 10 Arbitration Institutions in China, and Top 10 Arbitration Institutions for Foreign-related Services, ranking first among arbitration institutions honoured in the two awards.
CIETAC was also named the most preferred international arbitration institution for foreign-related cases. This recognition can be attributed to CIETAC’s systematic efforts to enhance its international credibility.
Rules revision
Advancing the arbitration rulebook is central to building credibility. On 1 January 2024, CIETAC implemented its 10th edition of Arbitration Rules, enhancing autonomy, flexibility, fairness, efficiency, convenience and transparency in arbitration.
Since their adoption, CIETAC has introduced measures to support application of the rules, leveraging digital technology to drive service upgrades and constantly improve the quality and efficiency of case handling.
Notable developments include enforcement of preservation measures abroad and a growing number of cases that involve early dismissal procedures, emergency arbitrator procedures, electronic service of the process, and the recommendation list for presiding/sole arbitrators.
In the first half of 2024, CIETAC also completed more than 200 fully online case proceedings and the electronic service of nearly 400 cases, steadily elevating its level of digital and intelligent case handling capabilities.
Building on its Chinese and English versions, CIETAC released updated arbitration rules in October 2024 in seven languages – namely, French, Russian, Spanish, Portuguese, Arabic, Japanese and Korean – covering the major common languages in the world. This ensures robust support for rule application across varied jurisdictions, as well as recognition and enforcement of awards.
At the China International Fair for Trade in Services 2024, this version of the CIETAC Arbitration Rules won the Demonstration Cases: China Service award. CIETAC was also the only arbitration institution to win this award.
Overseas recognition
Successful recognition and enforcement of arbitral awards across diverse legal jurisdictions is crucial for effective dispute resolution and legitimate protection of the rights and interests of parties, both domestic and international. It also serves as a key metric for assessing an arbitration institution’s global credibility.
In early 2024, Saudi Arabian courts recognised and enforced a CIETAC arbitral award worth RMB240 million (USD32.8 million). This not only set a record for the highest-value Chinese arbitration award enforced by Saudi courts, but also demonstrates the resilience of China’s arbitral awards to the scrutiny of Islamic law.
More recently, the Ontario Superior Court of Justice of Canada recognised and enforced a CIETAC award involving a RMB1.2 billion payment obligation, establishing a new record high for the largest overseas enforcement of an award of a Chinese arbitration institution.
Summarising its experience and insights on overseas enforcement of arbitral awards, CIETAC has compiled and published the Selected Cases Regarding Cross-Jurisdictional Recognition and Enforcement of CIETAC Awards (Selected Cases).
Focusing on 10 representative jurisdictions including the US, Canada, the UK, Australia, Russia, Singapore, India and Hong Kong, the publication features 15 carefully selected cases for systematic analysis. This marks the first domestic initiative in systematic examination of this critical area.
Research indicates that CIETAC arbitral awards are highly recognised and widely enforced across various jurisdictions worldwide. Meticulous procedural management is a prerequisite for the overseas enforcement of awards, while anticipating legal risks in the enforcement jurisdiction is crucial to the effectiveness of dispute resolution.
Importantly, CIETAC and its tribunals’ meticulous procedural management has effectively ensured parties’ due process rights – from proper notification of participating in the proceedings to fair opportunities for case presentation, as well as the right to select arbitrators.
These practices have garnered broad acceptance from courts across different jurisdictions. This significantly bolsters parties’ confidence in choosing CIETAC and arbitration in China, thereby enhancing the enforceability of awards.
International exchanges
The successful establishment of international exchange and co-operation platforms – along with the ability to attract and deepen partnerships – reflects an institution’s international credibility. Through these platforms, the promotion of arbitration systems and principles fosters mutual understanding and strengthens global confidence in Chinese arbitration. For this reason, CIETAC has focused on establishing such regional co-operation platforms.
In 2023 and 2024, it hosted two consecutive China-Latin America International Arbitration Forums targeting the Latin American region. For Central Asia, CIETAC organised the China-Central Asia Arbitration Forum and established the CIETAC Central Asia Oral Hearing Centre, which commenced proceedings on two foreign-related arbitration cases within just 45 days of its launch.
In 2024, CIETAC also hosted the China Arbitration Summit and the China-Middle East and North Africa (MENA) Arbitration Summit, collaborating with 30 influential international arbitration institutions from the MENA region to jointly launch the International Arbitration Co-operation Initiative (2024). This fosters deepening exchanges, expanding co-operation, and advancing high-quality international arbitration development.
Studies and research
Strong emphasis on arbitration theory research and production of high-quality scholarly outputs can demonstrate the depth of an arbitration institution’s expertise to professionals and the public alike.
These theoretical advancements can also guide and promote best practices in arbitration, thereby further enhancing the institution’s credibility and public trust. In recent years, CIETAC has undertaken significant research and published key works in the field of international arbitration.
These include the Annual Report on International Commercial Arbitration in China; Research of the International Arbitration System in Countries along the Belt and Road; Selection of Arbitration Cases Involving the Belt and Road Countries; and Research on the Status of Dispute Resolution of the Belt and Road. These publications serve as valuable references for using and participating in arbitration.
Talent development
Arbitration talent development is a social responsibility of arbitral institutions. Institutions with higher credibility are more likely to gain the trust of talent development programmes and organisations.
In terms of training future talent, CIETAC and its branches have collaborated with seven leading universities to establish innovative co-training bases for international legal professionals. This makes CIETAC the practitioner organisation with the most co-built bases with academia.
For the mainstay of legal professionals, CIETAC delivers robust training programmes for trainee lawyers, practising lawyers, judges and arbitration institution staff through mock arbitration hearings and thematic seminars. These efforts have yielded notable success.
Ad hoc arbitration advancing China’s dispute settlement ecosystem
China’s Arbitration Law only regulates institutional arbitration, requiring the designation of an arbitration institution as a prerequisite for valid arbitration clauses, with no specific provisions for ad hoc arbitration.
But as China’s trade and economic exchanges with the world deepen – with its arbitration market gradually opening up – ad hoc arbitration offers clear advantages.
Compared to institutional arbitration, it meets the practical needs of parties in efficiency and cost-effectiveness, particularly in the shipping sector.
The China Maritime Arbitration Commission (CMAC) has consequently pioneered ad hoc arbitration services on the mainland since 2022, setting a precedent and actively driving improvements in the country’s arbitration system.
Status quo
Although not provided for in the Arbitration Law, ad hoc arbitration can still be conducted within the existing legal framework.
Parties involved in foreign-related disputes. Parties to foreign-related disputes are allowed to agree on the governing law of the arbitration agreement, pursuant to article 18 of the Law on the Application of Laws to Foreign-related Civil Relations, and article 13 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Judicial Review of Arbitration Cases.
Accordingly, for foreign-related disputes, if the chosen governing law permits ad hoc arbitration, the arbitration clause is deemed valid, enabling parties to agree on conducting ad hoc arbitration on the mainland.
Enterprises registered in pilot free trade zones (FTZs). In accordance with the Supreme People’s Court’s 2016 Opinions on Judicial Protection for the Establishment of Pilot FTZs, arbitration agreements between enterprises registered in pilot FTZs are valid if the arbitration seat, rules and arbitrators are specified for arbitrating issues in the mainland.
This allows enterprises in pilot FTZs to agree on ad hoc arbitration for resolving disputes.
Under the above-mentioned provisions parties involved in foreign-related disputes, or disputes between enterprises in pilot FTZs, may agree to resolve issues through ad hoc arbitration. However, it was not until 2022 that ad hoc arbitration was formally implemented.
CMAC practice
CMAC introduced the Ad Hoc Arbitration Rules and the Ad Hoc Arbitration Service Rules in collaboration with the China Maritime Law Association (CMLA) in 2022, pioneering the practice of ad hoc arbitration on the mainland.
First ad hoc arbitration of foreign-related dispute. On 30 June 2023, CMAC successfully concluded mainland China’s first ad hoc arbitration case, where it acted as the designated institution to provide arbitrator service. The anonymised award was disclosed as agreed upon by the parties.
The case involved a dispute over a co-operation agreement, with one party based in Hong Kong. The arbitration clause stipulated: “All disputes arising from or related to this agreement shall be resolved through arbitration under CMLA’s Ad Hoc Arbitration Rules.
“The governing law of the arbitration agreement shall be Hong Kong’s arbitration law, with Qingdao of Shandong province appointed as the location of hearing. China’s Civil Code shall apply as the substantive law. Either the China Maritime Arbitration Commission or its Qingdao Arbitration Centre shall be the designated institution for arbitration.”
Given the nature of the Hong Kong-related dispute and the absence of a specified arbitration seat – and pursuant to the CMLA’s Ad Hoc Arbitration Rules – the tribunal determined the arbitration seat to be Qingdao, Shandong.
This had taken into account the applicant’s address, the location of the disputed leased property, and the agreed hearing location, all of which were in Qingdao. Consequently, the arbitration procedures were governed by mainland China’s arbitration laws.
Furthermore, the Law on the Application of Laws to Foreign-Related Civil Relations and the Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Judicial Review of Arbitration Cases allows parties to choose and agree on the governing law of foreign-related disputes.
Accordingly, the tribunal upheld the validity of the ad hoc arbitration clause, as the parties had explicitly chosen Hong Kong’s arbitration law as the governing law of the arbitration agreement.
Ad hoc arbitration guidelines in Pilot FTZs. In collaboration with relevant institutions, the CMAC released the Guidelines for Ad Hoc Arbitration in the (Fujian) China Pilot Free Trade Zones in Xiamen, in August 2023.
These guidelines outline the legal basis, procedural rules and key considerations for resolving disputes through ad hoc arbitration in the Fujian FTZ. They aim to provide enterprises and other market participants with practical rules and operational guidance, while serving as a reference for ad hoc arbitration practices in China’s free trade ports and zones.
The guidelines addressed a significant gap in this area and, within just over a year, by 30 September 2024, the CMAC had significantly extended its efforts.
Similar ad hoc arbitration guidelines were released in the Zhejiang, Liaoning, Shandong and Guangxi FTZs, further advancing the development and implementation of ad hoc arbitration across these regions.
Taking shape
Supporting the development of ad hoc arbitration, Shanghai built on existing practices by issuing the Regulations on Promoting the Construction of the Shanghai International Commercial Arbitration Centre on 23 November 2023.
The Shanghai Municipal Bureau of Justice also formulated the Measures for the Promotion of Foreign-Related Commercial and Maritime Ad Hoc Arbitration in Shanghai (Trial) on 1 August 2024, facilitating its implementation.
Earlier, on 29 May 2024, the Hainan provincial government promulgated the Several Provisions on the Development of International Commercial Arbitration in the Hainan Free Trade Port, exploring the implementation of ad hoc arbitration within the free trade port.
Beijing is also expected to introduce similar regulations to support ad hoc arbitration. As such, China’s ad hoc arbitration framework has taken initial shape and continues gaining momentum.
As China’s arbitration law undergoes revision, there are expectations that the top-level design will be further strengthened to provide clear regulations on ad hoc arbitration. This would serve to enhance the arbitration framework and build a comprehensive and orderly arbitration ecosystem in China.
You must be a
subscribersubscribersubscribersubscriber
to read this content, please
subscribesubscribesubscribesubscribe
today.
For group subscribers, please click here to access.
Interested in group subscription? Please contact us.
你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章，欢迎成为我们的订阅会员成为我们的订阅会员。
RELATED ARTICLESMORE FROM AUTHOR
Ready for take-off
Eight leading arbitration institutions share the latest trends and developments across the board
