On August 28, 2014, the China Air Transport Association
("CATA"), the International Air
Transport Association ("IATA"), and the
Shanghai International Arbitration Center
("SHIAC") signed a cooperation agreement
on international aviation arbitration in Shanghai. They announced
that the Shanghai International Aviation Court of Arbitration
("SHIACA") and the Shanghai
International Aviation Arbitration Experts Committee
("SHIAAEC") were officially
SHIACA is affiliated with SHIAC. After the Court of Arbitration
of the Shanghai Free Trade Zone was initiated, SHIACA was regarded
as another marvelous innovation by SHIAC and the world's first
arbitration agency specialized in aviation disputes. It means that
international aviation arbitration system is officially established
in Shanghai, which provides great convenience and advantages to
domestic and foreign enterprises in the resolution of global
disputes through SHIAC.
(1) Background of SHIACA
Since 2005, the volume of Chinese civil aviation transportation
has ranked second place in the world. Currently, Shanghai is
committed to becoming an international economic center, financial
center, trade center, and shipping and air transportation center.
Establishing an international shipping center is one of the most
essential tasks. At the same time, Shanghai has placed great
importance on the free trade zone's development, which will
help develop Shanghai into an international shipping center and an
(2) Functions of SHIACA
Arbitration has an inherent advantage in aviation dispute
resolution because it is flexible, confidential, autonomous,
professional and enforceable. Ad hoc arbitration is the common form
of arbitration in aviation industry worldwide regarding disputes
between airline companies and airports, oil and catering companies.
However, China still only allows institutional arbitration. As a
result, many civil aviation enterprises have to go abroad for an ad
hoc arbitration or file a lawsuit in domestic courts, which is very
expensive and time-consuming. With the establishment of SHIACA,
there will be effective communications and connections between
international and domestic arbitration rules, thus providing
resolutions to recognition and enforcement of arbitration
With the strategic cooperation of three parties, SHIACA will
spare no efforts to promote alternative aviation dispute
resolution. SCATA and IATA have promised to recommend SHIACA to
their members as a dispute resolution agency. The three parties
will involve SHIACA in the dispute resolution clauses of their
Chinese and international standard agreements.
(3) Influence of SHIACA
As the world's first arbitration agency specializing in
civil aviation, SHIACA will promote the development of
international aviation arbitration, and help Shanghai build an
international and market-oriented business environment under the
rule of law. And its establishment creates a new horizon for the
Chinese legal service industry. However, opportunities also come
with challenges. Problems like the sharp increase in arbitration
cases and gaining the trust of arbitral parties will be the
important problems in future.
Based on current reports, whether SHIACA will be an independent
entity remains a question for us. The public's concern is how
much it can change the Chinese traditional arbitration model, such
as whether it will bring in many international arbitration
concepts, like consolidation of arbitration and whether it can
offer a new platform to solve the disputes of aviation accident
compensation based on contracts. However, it is believed all these
questions will be answered by future practice.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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.
Local and international news about shipping, aviation, rail and road transport.
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”
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).