In his keynote speech entitled "PRC
Arbitration Law and Regulations - What to Expect in the Next Five
Years" delivered at the Hong Kong Arbitration Week 2015,
CIETAC Secretary General Dr. Yu Jianlong predicted that it would be
more feasible for foreign arbitration institutions to set up
offices in China's free trade zones than for ad hoc arbitration
to be accepted and practiced in China. Dr Yu has been proven
correct three weeks later.
On 19 November 2015, the Hong Kong International Arbitration
Centre (HKIAC) announced the opening of a representative office in
Shanghai at an opening ceremony held at the Shanghai Aurora
Museum. HKIAC's presence in Shanghai is the first time a
foreign arbitral institution has set up an office in mainland
China. In a press statement issued at the time of the event,
HKIAC stated that, operating through its Shanghai office, it
intends to seek closer cooperation with local arbitration
commissions to promote international arbitration best practice on
the mainland. It will do that by providing professional
training to mainland Chinese arbitrators and practitioners and by
facilitating the development of an overall pro-arbitration policy
across China. Where necessary, the Shanghai office will
extend HKIAC's services to support its hearings on the mainland
and provide such other appropriate services as may be permitted
under Chinese law.
HKIAC has been careful to note that its Shanghai office does not
provide case administration services, which will continue to be
provided by the HKIAC Secretariat in Hong Kong. This is no
doubt in reference to the Chinese Arbitration Law which provides
that all arbitrations seated and conducted in mainland China are
subject to the Arbitration Law. The prevailing view, until
recently, was that an agreement to arbitrate in mainland China
under the administration of a foreign arbitral institution was
invalid under Arbitration Law. However, it was held by the
Supreme People's Court in the Longlide case (covered by our
earlier newsletter) that an arbitration clause providing for
arbitration of a foreign-related dispute in Shanghai under the ICC
Rules was valid.
While the Longlide case is a positive development for
arbitration in China, it remains our view that it is better to
avoid using dispute resolution clauses which provide for
arbitration of foreign-related disputes seated in mainland China to
be administered by a foreign arbitration institution (eg ICC,
HKIAC, SIAC etc.) Considerable risks on validity and
enforceability remain. The HKIAC's announcement that its
Shanghai office will not provide case administration services is
consistent with this prevailing uncertainty.
Be that as it may, HKIAC's move to Shanghai is a positive
development in the arbitration scene in mainland China and it is
anticipated that other established international arbitration
institutions (eg. ICC and perhaps SIAC) will follow suit.
However, their presence at the moment is more symbolic than
substantive. Despite the many changes that here occurred in
the arbitration scene in China over the years, the Arbitration Law
remains in force without any significant amendment. It
therefore remains to be seen whether and how the rep offices of
foreign arbitration institutions will be allowed to play a more
substantive role in administering arbitration cases in
foreign-related arbitrations seated in mainland China.
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.
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We discuss Robinson Helicopter Company Incorporated v McDermott  HCA 22 .
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