Overview of Arbitration in China in 2022

Overview of Arbitration in China in 2022 

2022年中国仲裁概览 

Arbitration is a significant part of China’s diversified dispute resolution mechanism. An increasing number of Chinese enterprises, especially those engaging in cross-border businesses, are choosing arbitration to resolve contractual disputes considering its autonomy, confidentiality, high efficiency, convenience for cross-border enforcement, and other advantages. In recent years, in order to create a law-based and internationalised business environment and expand high-level opening-up, the Chinese government has attached great importance to constructing a mature arbitration regime and has taken “improving the arbitration regime and enhancing the credibility of arbitration” as a task of reform. The Chinese government has promulgated a series of policies and measures in this respect to support the development of arbitration. Benefiting from that, the number of cases accepted by China’s leading arbitration institutions and the value of the claims in dispute have kept growing. Since the global economic recovery has yet to stabilise and China’s domestic economy is facing downward pressure, we can expect that the number of commercial disputes will remain high in China, and the number of arbitration cases and the value of claims will keep its rapid growth in 2022.

仲裁是中国多元化纠纷解决机制的重要组成部分。由于仲裁具有自治性、保密性、高效性和跨境执行上的便利性等优势，越来越多的中国企业（特别是从事跨境商业活动的中国企业）选择仲裁作为商业合同争议解决方式。近年来，着眼于打造法治化国际化的营商环境，扩大高水平对外开放，中国政府高度重视仲裁制度的建设，把“完善仲裁制度、提高仲裁公信力”作为一项改革任务，出台了一系列改革和完善仲裁制度的政策举措，中国各大仲裁机构的受案数量、受案金额持续较快增长。当前，全球经济复苏尚未企稳，中国国内经济面临下行压力，预计2022年商事纠纷仍将处于高发状态，仲裁案件的数量和金额仍将较快增长。

Amendments to the Arbitration Law 

仲裁法修订 

The current Arbitration Law of China was implemented in 1995, more than 20 years ago. It was slightly amended in 2009 and 2017, while many of its provisions can no longer adapt to the development and requirements of arbitration in China. In 2021, the Ministry of Justice of China released the proposed revisions to the Arbitration Law for public consultation (the “Draft for Comments”). The Draft for Comments aims to make systematic amendments to the current arbitration system and align the Chinese arbitration system with international standards. In summary, the Draft for Comments proposes the following critical revisions:

(a) simplifying the factors to determine the validity of an arbitration agreement: parties are no longer required to specify an arbitration institution to make the arbitration agreement valid. Instead, the revisions have provided the rules as to how to decide the competent arbitration institution if the arbitration agreement is silent or unclear on this point;

(b) reforming the route of confirming the validity of an arbitration agreement: the revisions have adopted the competence-competence principle in arbitration. Parties are not allowed to go straight to the court asking for the ruling on the validity of the arbitration agreement before they obtain the tribunal’s decision on the validity or jurisdiction issue;

(c) introducing the concept of seat of arbitration: this is in line with the international practice;

(d) unifying the provisions on setting aside domestic and foreign-related arbitral awards, refining the grounds for setting aside an arbitral award, and shortening the time limit for applying for setting aside an arbitral award from 6 months to 3 months commencing from the date of receipt of the award;

(e) specifying the arbitral tribunal’s power to grant interim relieves such as property preservation, evidence preservation, behaviour injunction, etc.;

(f) deleting the concept of non-enforcement of arbitral awards: There will be no concept of “non-enforcement of arbitral awards” as it is basically of the same grounds as the “set-aside of arbitral awards”. The courts shall limit their scope of review to whether the enforcement of the award would be contrary to the public interest when a party applies for enforcing the award;

(g) granting reliefs to the non-party to the arbitration: the non-party can raise written objections in the course of the award enforcement proceedings if its property is subject to enforcement and sue the parties if it has the evidence to prove the error in the arbitral award has damaged its rights and interests; and

(h) allowing ad hoc arbitration for foreign-related commercial disputes.

These revisions are rich in content and have significant implications. However, as the industries still have different opinions on various aspects, it is expected that time will be needed before the legislative authority decides on and passes the revisions.

现行中国仲裁法自1995年施行以来，已有20多年时间，其间虽于2009年、2017年进行两次小幅修订，但许多内容已不能完全适应中国仲裁发展形势和要求。2021年，中国司法部公布《中华人民共和国仲裁法（修订）（征求意见稿）》，拟对现行仲裁制度作出系统性修订，体现了中国仲裁制度接轨国际的趋势。对于当事人而言，征求意见稿提出的重要修订内容包括：（1）修改仲裁协议的有效条件，不再要求当事人必须选定仲裁机构，并对当事人未选定仲裁机构或约定不明情形下的仲裁机构确定作出规定；（2）改革申请确认仲裁协议效力制度，规定当事人在未向仲裁庭提出仲裁协议效力或管辖权异议且仲裁庭作出决定前，不得直接向法院提出异议；（3）引入仲裁地概念，与国际惯例接轨；（4）统一法院撤销国内和涉外仲裁裁决的规定，完善撤销仲裁裁决的事由，并将申请撤销仲裁裁决的期限从收到裁决书之日起6个月缩短为3个月；（5）明确规定仲裁庭有权采取财产保全、证据保全、行为保全和其他临时措施；（6）取消不予执行仲裁裁决制度，改为当事人申请执行仲裁裁决时，法院仅对执行裁决是否违背社会公共利益进行审查；（7）赋予案外人救济路径，允许案外人在裁决执行过程中对执行标的提出书面异议，允许案外人在有证据证明裁决错误损害其民事权益时，依法对仲裁当事人提起诉讼；（8）对涉外商事纠纷，允许进行临时仲裁。本次仲裁法修订内容丰富，影响重大。不过，由于业界对不少修改内容尚有分歧意见，预计立法机关审议通过修订法案仍有待时日。

Courts’ Support and Supervision of Arbitration 

司法对仲裁的支持与监督 

Bearing the concept of supporting and supervising arbitration, the Chinese courts have provided strong support for the efficient operation of the arbitration system. In recent years, many judiciary measures have been improved to support arbitration. Many local courts and arbitration institutions have begun to establish the connection mechanism to facilitate arbitration preservation and enforcement of arbitral awards more efficiently. At the end of 2021, the Supreme People’s Court (the “SPC”) released the Minutes of the Symposium on the Trial of Foreign-related Commercial and Maritime Cases at National Courts to clarify the rules and unify the judicial practice regarding a few arbitration related issues, such as the determination of the validity of arbitration agreements, the scope of review as to confirm the validity of arbitration agreements, the determination of the jurisdiction issue where a master contract and its ancillary contract agree on litigation and arbitration respectively, the application for revoking a mediation agreement reached in arbitration, and the grounds for setting aside and non-enforcing an arbitral award. In addition, the SPC has established and improved the reporting and review system for arbitration judicial review cases to prevent local courts from improperly denying the validity of arbitration agreements or wrongfully setting aside or refusing to enforce arbitral awards. The achievements are fruitful. The courts have developed and promoted the trend to recognise the validity of arbitration agreements as much as possible and limit the scope of review when enforcing arbitral awards. All these have contributed to making China a more arbitration-friendly jurisdiction.

中国法院遵循依法支持和监督仲裁的理念，为仲裁制度的高效运行提供了坚强保障。近年来，中国持续完善司法支持仲裁的举措，不少地方法院和仲裁机构陆续建立对接机制，仲裁保全和仲裁裁决执行的便利度持续提高。2021年底，最高人民法院公布《全国法院涉外商事海事审判工作座谈会会议纪要》，针对仲裁协议效力认定、确认仲裁协议效力案件审查范围、主从合同分别约定诉讼和仲裁的情形的主管权确定、申请撤销仲裁调解书、撤销和不予执行仲裁裁决事由把握等仲裁司法审查实践中存在分歧的问题，进一步明确裁判规则，统一裁判尺度。最高人民法院建立和完善仲裁司法审查裁定报核制度，以避免地方法院不当否认仲裁协议效力或者错误撤销、不予执行仲裁裁决。通过一系列制度设计和实践，中国法院日益确立起尽量使仲裁协议有效、对仲裁裁决进行有限审查等司法理念，仲裁友好型的司法环境不断完善。

Online Arbitration 

在线仲裁 

The COVID-19 pandemic has brought a severe impact on offline arbitration. As a response, China's major arbitration institutions have formulated rules and guidelines for online arbitration to facilitate parties' participation in arbitration and improve the efficiency of arbitration proceedings through online hearings and electronic services. These rules and guidelines have taken into account both the legality of the arbitration procedure and the parties' autonomy. China's arbitration institutions continue to explore the approach of online arbitration and actively learn the rules, hardware and software associated with online arbitration.

新冠肺炎疫情对线下仲裁造成了严重冲击。中国各大仲裁机构纷纷制定在线仲裁相关规则和指引，在兼顾仲裁程序合法性与当事人意思自治的基础上，通过互联网庭审、电子送达等手段，便利当事人在疫情下参与仲裁，提高仲裁效率。中国仲裁机构正在规则、硬件、软件等方面不断探索积累中国在线仲裁的经验。