China: New CIETAC Arbitration Rules Adopted

Last Updated: 26 March 2012
Article by Falk Lichtenstein

Recently the China Council for the Promotion of International Trade and the China Chamber of International Commerce has revised and adopted the new arbitration rules ("New Rules") of the China International Economic and Trade Arbitration Commission ("CIETAC"). The New Rules will enter into effect on 1 May 2012.

Seven years after the former revised CIETAC Arbitration Rules came into force on 1 May 2005, the largest international arbitration institution in the People's Republic of China is now setting up a new procedural framework.

To view the article in full, please see below:



Full Article

Recently the China Council for the Promotion of International Trade and the China Chamber of International Commerce has revised and adopted the new arbitration rules ("New Rules") of the China International Economic and Trade Arbitration Commission ("CIETAC"). The New Rules will enter into effect on 1 May 2012.

Seven years after the former revised CIETAC Arbitration Rules came into force on 1 May 2005, the largest international arbitration institution in the People's Republic of China is now setting up a new procedural framework.

The most significant changes introduced by the New Rules are as follows:

1. The arbitration tribunal now has the power to issue interim measures itself. This is a significant improvement.

If there is the risk that a party will conceal property or destroy evidence, the other party to a dispute must often act fast. Sometimes they need to obtain interim preservation measures within a few hours. Formerly, in CIETAC arbitration proceedings every application for preservation of property or evidence had to be forwarded by the arbitration tribunal to the competent court.

Under the New Rules, the arbitration tribunal may still forward a party's application for conservatory measures to the competent Chinese court. However, Article 21 of the New Rules for the first time entitles the arbitration tribunal to grant interim measures itself. Such interim measures can take the form of a procedural order or alternatively an interlocutory award.

This new competency of the arbitration tribunal can save time for the applicant, avoiding the need to rely on a Chinese court for interim measures. However, as in the past, only the Chinese courts will be responsible for enforcing interim measures in China. It remains to be seen in practice whether Chinese courts will enforce interim measures granted by CIETAC arbitration tribunals, and whether they will implement them in the speedy manner required to be effective. It might be helpful if the PRC Supreme People's Court issued guidance on the enforcement of interim measures ordered by arbitration institutions.

2. As in the past, the parties are free to agree the language of the arbitration proceedings. Previously, in the absence of an agreement the default language was Chinese. Now the New Rules allow CIETAC to designate any language, but the language must have a connection to the circumstances of the case. Since the New Rules do not contain details of the criteria for selection of a foreign language by CIETAC, it remains to be seen how often CIETAC will actually select a language other than Chinese in the future.

3. The New Rules now explicitly stipulate that if the claimant does not rectify any formal deficiencies of his request for arbitration within the time designated by the Secretary of CIETAC, the claimant shall be deemed not to have submitted a request for arbitration. Furthermore, if the respondent files a counterclaim, he must pay the corresponding arbitration fee in advance. If he fails do so, he will be deemed not to have filed a counterclaim.

The above indicates a stricter attitude by CIETAC towards getting the parties to comply with the applicable procedural requirements in time.

4. The New Rules introduce a time limit for submission of an application for postponement of an oral hearing of 5 days after receipt of the notice of such hearing (3 days in domestic or summary proceedings). Under the old CIETAC Arbitration Rules, no fixed time limit applied. In return for these stricter requirements, the New Rules grant the arbitration tribunal the right to treat a party's delay as excused and to accept the application or statement notwithstanding such delay. The precondition is that the respective party can demonstrate justified reasons for the delay. The same exception for excused delay has also been newly established for failure to submit a statement of defence or a counterclaim in time.

The above change grants the arbitration tribunal more flexibility to consider the individual circumstances of a party concerned. However, such flexibility also makes the procedural timeline less predictable for the other party.

5. In certain cases, a respondent cannot meet the deadline for submitting a statement of defence and needs more time for preparation. In such a case, he may file an application for extension of the time limit for submitting his statement of defence. However, at the time of filing the arbitration tribunal may not have been established yet. In the past, it was unclear who could decide such an application. Now, Article 14 of the New Rules stipulates that if the arbitration tribunal has not yet been established the Secretary of CIETAC shall decide.

6. The New Rules contain an express provision in Article 43 that arbitration proceedings can be temporarily suspended if necessary. There are no further definitions as to when a suspension is necessary. When calculating the time limit for issuing the arbitration award (6 months for international disputes and 4 months for domestic disputes), periods of suspension are not counted.

7. Unlike before, the New Rules no longer contain an explicit provision that only one oral hearing should be held unless absolutely necessary. This might reflect the reality that in practice more than one oral hearing is quite common.

8. The summary arbitration procedure can now be applied for in cases with an amount in dispute of up to RMB 2,000,000. Formerly, the threshold was RMB 500,000. This shows CIETAC's intention to make the summary procedure, which is typically less time-consuming and expensive, available in a larger number of disputes.

9. Other procedural changes and clarifications include the appointment of arbitrators in bilateral and multi-party disputes, service of documents and consolidation of arbitration proceedings.

The New Rules reflect the tendency of CIETAC proceedings to become more modern and flexible and further strengthen CIETAC's prominent role in dispute resolution in China. Concerning the most important innovation, i.e. the power of the CIETAC arbitration tribunal to issue its own interim measures, it is still uncertain if such interim measures will actually be executed by Chinese courts in practice.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 21/03/2012.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
King & Wood Mallesons
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
King & Wood Mallesons
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions