Originally from The Law and Practice of International Arbitration: Essays in Honor of John Fellas – Preview Page

INTRODUCTION 

A.  The Rise and Subsequent Silence of Shareholder Representation Arbitration 

On July 30, 2021, China’s Ministry of Justice released Arbitration Law of the People’s Republic of China (Draft for Public Comment) (hereinafter referred to as “Draft for Public Comment”).2 Article 25 of the draft provides: “Where a shareholder of a company or a limited partner of a partnership, in accordance with the law, asserts claims against the opposing party in their own name on behalf of the company or partnership, the arbitration agreement concluded between the company or partnership and the opposing party shall be binding on such shareholder or partner.”3  

In the explanatory notes issued on the same day, the Ministry of Justice stated that one of the purposes of the revision was to: “... (4) Improve provisions concerning arbitration agreements... by explicitly defining the validity of arbitration agreements in special circumstances, such as disputes involving principal and subordinate contracts, or shareholder representation litigation4 in order to promote effective dispute resolution.”5