The China International Economic and Trade Arbitration
Commission (CIETAC), headquartered in Beijing, is the largest
arbitration commission in China and internationally the most widely
CIETAC has however no exclusivity in administering international
arbitrations in China. For instance, since 2004, many foreign
arbitration matters have been handled by the Shanghai Arbitration
Commission Pudong International Arbitration Centre.
CIETAC had allowed two arbitration bodies, established in
Shanghai and Shenzhen with the approval of the respective municipal
governments, to use the CIETAC brand and be known as CIETAC
Shanghai sub-commission (Shanghai CIETAC) and CIETAC South China
sub-commission (Shenzhen CIETAC) respectively.
Both wanted to gain independence from CIETAC, which had
announced new Arbitration Rules containing inter alia a provision
centralising in Beijing the administration of all cases where the
arbitration clause did not state a venue.
Shanghai CIETAC and Shenzhen CIETAC refused to adopt these
forthcoming new CIETAC Arbitration Rules.
Shanghai CIETAC declared its independence from CIETAC in April
2011, changed its name to 'Shanghai International Economic and
Trade Arbitration Commission', also using the name
'Shanghai International Arbitration Centre' (SHIAC) and on
8 December 2011 was registered as an independent arbitration
institution by the Shanghai Municipal Bureau of Justice.
Shenzhen CIETAC subsequently changed its name to 'South
China International Economic and Trade Arbitration Commission',
also using the name 'Shenzhen Court of International
Arbitration' (SCIA) and was registered as an independent
arbitration institution by the Department of Justice of Guangdong
On 1 May 2012, the new CIETAC Arbitration Rules came into
On 31 December 2012, CIETAC terminated its authorisation to its
sub-commissions in Shanghai and Shenzhen to accept and administer
arbitration cases. In its Announcement of same date, CIETAC also
stated that Shanghai CIETAC and SCIA can no longer conduct any
further arbitration activities in the name of CIETAC and that it
would soon establish new branch offices in Shanghai and
On 21 January 2013, SHIAC and SCIA reacted in a joint
announcement, declaring that they are independent arbitration
institutions, authorised to accept and administer arbitration
For international investors and legal practitioners, the
developments involving CIETAC and its former sub-commissions do
create a risk of challenges by the losing parties to the validity
of arbitral awards rendered by SCIA or SHIAC, if the relevant
arbitration clause specified that the proceedings be administered
by Shenzhen CIETAC or Shanghai CIETAC respectively, or simply by
CIETAC with venue in either Shenzhen or Shanghai.
To reduce this risk, it is recommended, at the contract drafting
stage, to be extra clear in the arbitration clause on the chosen
venue. A party should either refer to Shenzhen CIETAC or to
Shanghai CIETAC, with the full understanding that any dispute will
be administered by the newly opened branch offices of CIETAC in
Shenzhen or Shanghai under the 2012 CIETAC Arbitration Rules, or,
alternatively, refer to arbitration by SHIAC or SCIA, without any
reference to CIETAC.
Regarding existing contracts which include an arbitration clause
referring disputes to be administered by Shenzhen CIETAC or
Shanghai CIETAC, it is strongly recommended, in the event the
parties want to have any dispute arising between them administered
by SHIAC or SCIA, that the parties recognise by written agreement,
prior to any validity challenge, that SHIAC or SCIA (as the case
may be) has the jurisdiction and competence to hear the case and
issue an award.
This recommendation is supported in particular by the decision
issued on 7 May 2013 by the Suzhou Intermediate People's Court
in re: Canadian Solar Inc v. LDK Solar Co Ltd, rejecting the
enforcement of an arbitral award from SHIAC on the grounds that
after 8 December 2011, when it was registered as an independent
institution, it lost the power to decide cases where the
arbitration clause referred any dispute to arbitration by CIETAC
with venue in Shanghai. Since the parties did not confirm in
writing to SHIAC that they both considered SHIAC as having
jurisdiction, the court ruled that the parties' original
intention to select CIETAC as the arbitration commission should be
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