The China International Economic and Trade Arbitration Commission (CIETAC) has recently introduced the 2024 CIETAC Arbitration Rules. These rules, which came into effect on 1 January 2024, have been tailored to meet the evolving needs of parties and arbitral tribunals involved in CIETAC arbitrations. This edition marks the 9th revision of the regulation after the last version of the Arbitration Rules published in 2015.
With an expansion in the number of provisions (from 84 to 88) and the incorporation of key developments in international arbitration, the 2024 Rules aim to enhance flexibility, efficiency, and transparency throughout the arbitration process. In this note, we will delve into the key amendments and new updates brought about by the 2024 CIETAC Arbitration Rules.
Article 6 – Jurisdiction
The Chinese Arbitration Law of 1995 fails to follow the doctrine of Kompetenz-Kompetenz. Instead, Article 20 gives the decision on the effect of an arbitration agreement to the Arbitration Commission or the courts of the People's Republic of China:
Where any party challenges the effect of an arbitration agreement, he may either submit it to the Arbitration Commission for a decision or bring it before the people's court for an order. If one party submits it to the Arbitration Commission for a decision while the other one brings it before the people's court for an order, the people's court shall rule an order.
To ensure the widely recognized principle that arbitral tribunals should decide on their own jurisdiction, Article 6.1 of the 2024 CIETAC Arbitration Rules states that it is CIETAC that has the power to "determine the existence and validity of an arbitration agreement and its jurisdiction over an arbitration case." However, if the arbitral tribunal has already been formed, such power is delegated to the arbitrators.
Article 8.2 – Service of Documents and Periods of Time
In an effort to make arbitrations "greener", the new rules introduced Article 8.2. The provision allows all documents to be served by electronic means, therefore preventing unnecessary printing and shipping of the submissions as well as saving the associated costs.
Article 37.5 – Virtual Hearings
As another eco-friendly alternative, since the COVID-19 pandemic arbitration hearings are also often held virtually. The CIETAC Arbitration Rules provide for such a possibility, stating in Article 37.5 that:
After consultation with the parties and taking into consideration of the circumstances of the case, the arbitral tribunal may, at its own discretion, decide to conduct the oral hearing in person, by remote virtual conference, or by other appropriate means of electronic communication.
Article 48 – Third Party Funding
Following the trend also reflected in the ICSID Arbitration Rules of 2022, the 2024 CIETAC Arbitration Rules introduced an obligation to communicate the existence of a third-party funding agreement to the Arbitration Court. The party concluding the third-party funding agreement must communicate "the existence of the third party funding arrangement, the financial interest therein, the name and address of the third party funder and other relevant information" to the Court.
Consequently, the Arbitration Court forwards the information to other parties and the arbitral tribunal. The sole arbitrator or arbitral tribunal can then take into account the existence of third-party funding when deciding on the costs of the arbitration.
The disclosure obligation has been at the centre of debates in recent years. The main issues mentioned by scholars and practitioners are the potential conflicts of interest that might arise between funders and arbitrators, parties and their counsel.
The new Article 48 follows the 2017 Guidelines for Third-Party Funding published by the CIETAC, which incorporated rules to the CIETAC International Investment Arbitration Rules. The obligation to communicate third-party funding agreements now extends to commercial arbitration cases as well.
Article 50 – Early Dismissal
Another feature of the 2024 CIETAC Arbitration Rules that is also found in the ICSID Arbitration Rules is the new provisions introduced regarding early dismissal. The Article follows the note on early dismissal and preliminary determination adopted in 2023 by UNCITRAL.
According to Article 50, parties can request the early dismissal of a claim or counterclaim "on the ground that the claim or counterclaim is manifestly without legal merit, or is manifestly outside the jurisdiction of the arbitral tribunal."
The request shall be made in writing, stating the facts and legal basis supporting the application. Upon the instruction of the arbitral tribunal, the party making the request might also have to "provide justifiable grounds for the request and to demonstrate that the early dismissal process will expedite the overall proceedings."
The arbitral tribunal has 60 days from the date of the request to decide whether the claim or counterclaim should be dismissed. Such a request, however, does not prevent the arbitral tribunal from proceeding with the arbitration and, in case of the dismissal of a claim or counterclaim, from continuing the hearing of other claims or counterclaims.
In conclusion, the 2024 CIETAC Arbitration Rules embrace digitalization, introduce useful procedures, and reinforce the fundamentals of fairness and impartiality. With the new rules, CIETAC aims to provide a robust framework for the resolution of commercial disputes. These changes not only align with global trends but also position CIETAC as a leading arbitration institution, committed to fostering a climate of trust and efficiency in the ever-evolving landscape of international arbitration.
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