Arbitrating China Business Disputes - Chapter 1 - Dispute Resolution in China

Michael J. Moser is a leading foreign specialist in Chinese business law. A member of the New York Bar, he has practiced law in China for nearly 30 years and advised on a number of ground-breaking commercial transactions. He is also a leading expert on the resolution of Chinese-foreign business disputes and frequently acts as arbitrator in disputes between Asian parties and multinational corporations. He is Chairman of the Hong Kong International Arbitration Centre (HKIAC), Vice President of the Asia Pacific Regional Arbitration Group (APRAG), Co-Chair of the China Arbitration Forum and a former Vice Chair of the IBA Committee on Arbitration. He is also a Court Member of the London Court of International Arbitration, a Board Member of the Arbitration Institute of the Stockholm Chamber of Commerce and a Commission Member of CIETAC.

Friven Yeoh
Mr. Yeoh is a Partner of O’Melveny & Myers and a member of the firm’s Business Trial and Litigation Practice Group. He is admitted to practice in Hong Kong, England & Wales, and Victoria, Australia. Mr. Yeoh’s practice focuses on the resolution of Chinese-foreign business disputes and has represented clients in international arbitrations conducted under various institutional and ad hoc arbitration rules including those of the ICC, HKIAC, CIETAC, SIAC, SCC and UNCITRAL. He also sits as an arbitrator. Mr. Yeoh is recognized as a leading individual in International Arbitration by Chambers Global and the Asia Pacific Legal 500. He is assistant editor of the Journal of International Arbitration and has written on a number of topics relating to dispute resolution in China and Hong Kong. He is fluent in English, Mandarin and Cantonese.

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Originially from Dispute Resolution in China

Arbitration as a means of resolving disputes arising from foreign trade is well established in China. The PRC government took the first steps in developing a domestic arbitration venue for foreign-related cases when in 1956 it created the China International Economic And Trade Arbitration Commission (“CIETAC”), then known as the Foreign Trade Arbitration Commission (“FTAC”).

The initial purpose of FTAC was to provide a forum to settle disputes arising from contracts and transactions in foreign trade, “particularly disputes between foreign firms, companies or other economic organizations, on the one hand, and Chinese firms, companies or other economic organizations on the other.”1 Developing in parallel to FTAC and CIETAC has been the growth of the domestic arbitration commissions, which are discussed elsewhere in this volume. Since 1987, China has been a party to the Convention on the Recognition of Enforcement of Foreign Arbitral Awards (the “New York Convention”). Although concerns have been expressed about the difficulties of enforcing foreign arbitral awards in China, Chinese awards have frequently been enforced outside China under the New York Convention. China’s accession to the Convention, therefore, has contributed to the growing number of investors choosing to resolve their disputes through arbitration.

The development of arbitration as a means of dispute resolution in China has also been helped by the enactment of the PRC Civil Procedure Law (the “CPL”)2 in 1991 and the PRC Arbitration Law (the “Arbitration Law")3 in 1995. These two pieces of legislation from the main sources of arbitral law in China. In addition, CIETAC has its own set of arbitration rules, which have been revised a number of times in recent years, most recently in 2012.

Table of Contents:

I. Introduction

II. The Advantages of Arbitration over Litigation with Regard to China-related Disputes

III. International Arbitration in China

IV. CIETAC Arbitration

V. Drafting a CIETAC Arbitration Clause

VI. The Validity of Certain Types of Arbitration Agreements

VII. Enforcement of CIETAC Awards outside China

VIII. Resolving Disputes through Arbitration outside China

IX. The Method of Arbitration - Institutional or Ad Hoc

X. Appendix