Since the splitting of the Shanghai and South China
sub-commissions from China's arbitration institute CIETAC in
2012, we have seen many disputes concerning the interpretation and
validity of arbitration clauses that refer to the Shanghai and
South China sub-commissions. Two higher courts ruled in earlier
cases that references to the former sub-commissions of CIETAC
should be interpreted as references to the new arbitration
institutes established by the former sub-commissions after the
split. The Supreme People's Court of China has now confirmed
this interpretation, bringing to an end the uncertainty caused
after the CIETAC split. The SPC appears to recognise the
independent position of the two former CIETAC sub-commissions. Even
though the recent decision provides clear guidance, we still
recommend the careful drafting of arbitration clauses, including
referring to the specific arbitration institute with its most
recent name in accordance with the standard arbitration clause
provided by each arbitration institute.
In 2012, the internal struggle within China's arbitration
institute, CIETAC, resulted in a split-off by the Shanghai
sub-commission and the South China sub-commission in Shenzhen. The
Shanghai sub-commission changed its name to Shanghai International
Arbitration Centre (SHIAC), and the South China sub-commission to
Shenzhen Centre of International Arbitration (SCIA). CIETAC
established new offices in Shanghai and Shenzhen.
Since the split-off, there has been uncertainty regarding the
interpretation of arbitration clauses agreed prior to the split and
referring to the Shanghai or the South China sub-commission of
CIETAC. The question was whether disputes should be referred to the
Shanghai or Shenzhen CIETAC office or to the newly formed
arbitration institutes, SHIAC and SCIA.
In our In context article Rulings confirm jurisdiction of sub-commissions following
CIETAC split published in April this year, we mentioned
two higher court judgments which confirmed that a reference to the
Shanghai or the South China sub-commission of CIETAC in arbitration
clauses agreed prior to the split should be read as a reference to
SHIAC and SCIA, respectively.
After the two judgments were issued, the SPC issued a
"Reply to the Request of the Shanghai High People's Court
etc. for Judicial Review over Arbitration Awards Made by the CIETAC
and its Former Sub-Commissions" on 15 July 2015. The Reply,
which took effect two days later, confirms the interpretation of
the higher courts in the two judgments. For parties which have
agreed to submit their disputes to the "CIETAC South China
Sub-Commission – renamed as the South China International
Economic and Trade Arbitration Commission on 22 October 2012 and
also known as the Shenzhen Court of International Arbitration
(SCIA) – or to the "CIETAC Shanghai Sub-Commission
– renamed as the Shanghai International Arbitration Center
(SHIAC) for arbitration on 17 April 2013 – the following
If the arbitration clause was agreed
prior to the renaming, SCIA or SHIAC, as the case may be, have
jurisdiction over the dispute.
If the arbitration clause was agreed
after the renaming, CIETAC has jurisdiction over the dispute.
In the case of an arbitration clause
agreed after the renaming but prior to the Reply taking effect, if
a party applies to the SCIA or the SHIAC for arbitration and the
respondent raises no objection to the jurisdiction of the SCIA or
the SHIAC at that time, the parties cannot, after the arbitration
award is made, apply for revocation or non-enforcement of the
arbitration award on the ground that the SCIA or the SHIAC had no
This long-expected interpretation published by the SPC finally
brings an end to the uncertainty of the interpretation and validity
of arbitration clauses after the split of the Shanghai and South
China sub-commissions from CIETAC.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Parties have agreed on the resolution themselves, so it is often more practical for their own particular circumstances.
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