A dispute between the central Beijing commission of the China
International Economic and Trade Arbitration Commission
("CIETAC") and its Shanghai and Shenzhen
sub-commissions has arisen as the two sub-commissions refused to
comply with the new arbitration rules issued by CIETAC that came
into effect on 1 May 2012. The dispute has led to the suspension of
the Shanghai and Shenzhen sub-commission by CIETAC's central
Beijing commission effective as of 1 August 2012. As a result of
the suspension, the status of the Shanghai and Shenzhen
sub-commissions is uncertain and it is advised that companies that
include CIETAC as arbitration institute in new contracts clearly
appoint the CIETAC's central commission in Beijing as the
competent administrative authority. Companies who appointed the
Shanghai or Shenzhen sub-commissions in existing contracts should
be aware that it is uncertain whether that appointment can be
enforced in the current situation.
The direct cause of the internal dispute is the stipulation in
the new arbitration rules that all arbitrations must be
administered by the central Beijing commission unless contracts
explicitly state an alternative. The two sub-commissions refused to
go along with this provision and declared their independence. The
Shanghai sub-commission has even gone one step further and
published its own arbitration rules.
It is at this time unclear how the dispute will be resolved. It
is expected that some additional (governmental) actions will be
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