United States: The International Arbitration Review - China

Last Updated: May 4 2016
Article by Keith Brandt and Michael Kan


The Civil Procedure Law and the Arbitration Law of China regulate arbitrations seated in China. China is pro-arbitration and arbitration is preferred to litigation, which suffers from inefficiency, administrative interference and local protectionism. Because the Arbitration Law requires arbitrations seated in China to be administered by a Chinese arbitral institution, a number of prominent arbitral institutions have emerged.

Competition among these institutions to be the best has been fierce to date. Importantly, while the China International Economic and Trade Arbitration Commission (CIETAC) has traditionally been the preferred arbitral institution for foreign-related disputes, and has continued to strive to do so with the announcement of its new rules on 1 January 2015, it faces serious challenges from its split-off Shanghai sub-commission, now formally known as the Shanghai International Arbitration Center (SHIAC), which has been able to take advantage of its geographical proximity to offer arbitration-related services to the Shanghai Pilot Free Trade Zone through its launch of the Shanghai Pilot Free Trade Zone Court of Arbitration in 2013, followed by the Shanghai Pilot Free Trade Zone Arbitration Rules in 2014. All the more so when SHIAC's legal status and standing have now been widely confirmed by the highest and intermediate courts in China. The dynamics have certainly changed.


i CIETAC updated its arbitration rules to reflect the latest international trends On 4 November 2014, CIETAC issued its revised arbitration rules (the 2015 Rules) to replace the previous version of the rules issued on 3 February 2012 (the 2012 Rules) in its continued quest to strive for international best practice. The 2015 Rules came into effect on 1 January 2015. The key changes introduced by the 2015 Rules may be summarised as follows.

Dealing with joinder, multiple contracts and consolidation of arbitrations

The 2015 Rules have introduced extensive provisions to deal with joinder, multiple contracts and consolidation of arbitrations.

Joinder (Article 18 of the 2015 Rules)

CIETAC may now join third parties to the arbitration at any stage if the third party is prima facie bound by the same arbitration agreement invoked in the arbitration. Either party to the arbitration may request CIETAC to order a third party to join the arbitration proceedings, provided that the applicant can prove that the third party is prima facie bound by the same arbitration agreement invoked in the arbitration. However, CIETAC also has the power to refuse ordering a joinder where it deems circumstances exist that make the joinder inappropriate.

Multiple contracts (Article 14 of the 2015 Rules)

Parties may now commence a single arbitration concerning disputes arising out of multiple contracts, provided, among other things, that such contracts comprise a principal contract and its ancillary contracts, or they involve the same parties which have legal relationships of the same nature; the disputes arise out of the same transaction or the same series of transactions; and that the arbitration agreements are identical or compatible.

Consolidation (Article 19 of the 2015 Rules)

Under the 2012 Rules, only upon the agreement of all parties could multiple proceedings be consolidated into a single arbitration. CIETAC's power to consolidate two or more arbitrations has been expanded under the 2015 Rules to include the power to consolidate arbitrations even in the absence of the consent from all parties, where the claims are made under multiple arbitration agreements that are identical or compatible, and they involve the same parties and legal relationships of the same nature; the claims in different arbitrations are made under the same arbitration agreement; or the claims are made under multiple arbitration agreements that are identical or compatible, and the multiple contracts involved consist of a principle contract and its ancillary contracts.

Emergency Arbitrator Procedure (Article 23 of and Appendix III to the 2015 Rules)

Another key change under the 2015 Rules is the introduction of emergency arbitrator procedure, which has been prevalent among established arbitral institutions, including the International Chamber of Commerce (ICC), Singapore International Arbitration Centre (SIAC) and Hong Kong International Arbitration Centre (HKIAC) in recent years. Under the procedures set out in Appendix III, parties may now apply to an emergency arbitrator to grant urgent interim injunctive relief such as preservation of property, prohibitory or mandatory injunctions, and preservation of evidence, before the arbitral tribunal is constituted. Appendix III provides that once the Arbitration Court (as discussed below) has decided that the emergency arbitrator procedure shall apply, the emergency arbitrator shall be appointed within one day of receipt of the relevant documents and payment. The emergency arbitrator is required to then provide a procedural timetable within two days leading to a decision within 15 days of his appointment. The usual safeguards including procedures for challenging the emergency arbitrator (e.g., on ground of lack of independence or impartiality) and the requirement for the applicant to provide security are provided for. It remains to be seen, however, whether an emergency arbitrator's decision, which under the 2015 Rules may be in the form of an order or award and is stated to be binding upon parties, may be readily enforced in the courts of various jurisdictions in accordance with local laws notwithstanding that it is arguably interim in nature. One example of such a hurdle is that, as mentioned in our previous article, only the Chinese courts have jurisdiction to grant interim measures such as injunctions or preservation of property or evidence order under the current PRC Civil Procedural Code.

Organisational changes within CIETAC

The 2015 Rules has also made changes to CIETAC's internal organisational structure by creating an arbitration court. Under the 2015 Rules, all functions and powers of the former CIETAC Secretariat will be transferred to the Arbitration Court, which are reflected in various provisions throughout the 2015 Rules. As such restructuring is more of an internal adjustment within CIETAC, it is not anticipated to have a significant impact on the actual conduct or progress of the arbitration.

Increasing the threshold for the application of its summary procedure

Under the 2015 Rules, the threshold for the application of its summary procedure has been increased from 2 million to 5 million renminbi. This adjustment is in line with the rules of other international arbitral institutions and is aimed to improve CIETAC's administrative efficiency and effectiveness, by offering parties the option of agreeing upon a leaner, and therefore quicker, arbitration procedure in the appropriate dispute.

Attempted clarification on the relationship (if any) between CIETAC Beijing and its Shanghai and South China (Shenzhen) sub-commissions

On 30 April 2012 and 16 June 2012, the CIETAC's sub-commissions in Shanghai and Shenzhen respectively declared independence from CIETAC headquartered in Beijing, followed by name changes to the SHIAC and the Shenzhen Court of International Arbitration (SCIA), and the adoption of their own respective arbitration rules and panels of arbitrators. The 2015 Rules attempt to address the split between CIETAC Beijing and its Shanghai and South China (Shenzhen) sub-commissions after the latter two broke away from CIETAC in 2012, by providing effectively in Article 6 that where an arbitration agreement provides for arbitration before the old CIETAC Shanghai or South China (Shenzhen) sub-commissions, the arbitration will fall under the jurisdiction and administration of CIETAC (Beijing). Pursuant to Article 4(2) and Article 84, the 2015 Rules and therefore Article 6 should apply to arbitration commenced after they came into force (i.e., 1 January 2015).

Further, on 31 December 2014, CIETAC announced the reconstitution of its Shanghai and South China sub-commissions.

The validity and effectiveness of Article 6 should be viewed with extreme caution. As will be seen below, there has been a number of judicial authorities, presumably following guidance issued by the Supreme People's Court (SPC), the highest court in China, that the split sub-commissions (not CIETAC (Beijing)) had jurisdiction pursuant to the arbitration agreements providing for administration by such sub-commissions. Accordingly, while there may be more substance in an argument that Article 6 should apply to fresh arbitration agreements entered into after the 2015 Rules came into force on 1 January 2015 expressly providing for the application of those rules and expressly referring to the CIETAC Shanghai or South China Sub-Commission, in each case clearly and accurately identifying the rules or sub-commission, this may well not be the position in other situations, in particular in respect of arbitration agreements entered into prior to 31 December 2014 and arbitrations commenced pursuant to the same.

Special Rules for CIETAC Hong Kong Arbitration Centre

In September 2012, CIETAC established the CIETAC Hong Kong Arbitration Centre. Article 73 to Article 80 of the 2015 Rules make provisions for arbitrations administered by the CIETAC Hong Kong Arbitration Centre. Of significance is that the rules now provide that any arbitration referred to the CIETAC Hong Kong Arbitration Centre shall be seated in Hong Kong and an award shall be a Hong Kong award. As such, the arbitration shall be subject to Hong Kong procedural law, including the Hong Kong Arbitration Ordinance, and the supervisory jurisdiction of the Hong Kong courts. Sino-West business partners may find the prospect of a Hong Kong award carrying a CIETAC hallmark an attractive compromise. First, from the Chinese side, the oversight of arbitration by a familiar Chinese arbitral institution and from the Western side, the supervisory powers exercisable by an internationally recognised quality judicial system displacing concerns of local protectionism and uncertainty associated with arbitrating on the counterparty's turf. Secondly, the Chinese side may perceive that a Hong Kong award may be more readily recognised and enforced in foreign jurisdictions where the counterparty is situated under the New York Convention, and the Western side may perceive that a CIETAC-administered award may be more readily recognised and enforced in the counterparty's hometown in mainland China.

The 2015 Rules have once again reinforced CIETAC's prominence among leading arbitral institutions in the region and internationally. The effectiveness of the highlights remain to be tested, both as a matter of law (at least insofar as enforceability of interim relief award or order before an emergency procedure is concerned) and attractiveness to business people.

To continue reading this article, please click here


1 Keith M Brandt is the managing partner and Michael KH Kan is a senior managing associate at Brandt Chan & Partners in association with Dentons HK LLP.

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

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.

Events from this Firm
24 Oct 2017, Seminar, Washington, DC, United States

The Dentons Forum for Women Executives invites you to join us for a luncheon featuring guest speaker Liza Mundy, journalist and author. Ms. Mundy recently released her latest book, Code Girls, the riveting untold story of more than 10,000 spirited young American women who cracked German and Japanese codes to help win World War II.

27 Oct 2017, Seminar, New York, United States

Please join us for a milestone event, our 10th annual CLE Seminar for In-House Counsel.

1 Nov 2017, Seminar, Washington, DC, United States

Celebrate the 58th anniversary of Dentons' Government Contracts practice

In association with
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.