The Lin-Gang Framework Plan in the Shanghai Free-Trade Zone: A Stepping Stone for Reform of International Arbitration in China - ARIA - Vol. 32, No. 3

Dr. Jie Zheng is a research associate and lecturer at Shanghai Institute of International Organizations and Global Governance, Shanghai University of Finance and Economics, China. She is also an attorney and a member of the PRC bar association. She specializes in alternative dispute resolution, e-commerce law and global governance. She can be reached at zhengjie@mail.shufe.edu.cnzhengjie@mail.shufe.edu.cn.

Maud Piers is an associate professor at Ghent University (Belgium) where she is the coordinator of the Center for the Future of Dispute Resolution. She focuses her research and teaching on digitalization and artificial intelligence in arbitration and ADR and regularly acts as an arbitrator and expert in international arbitrations. She has been a member of the Board of Directors of the Belgian Center of Arbitration and Mediation (Cepani) since 2012 and Vice President since 2017. She was the founder and is currently an Editor (and former Editor-in-Chief) for b-Arbitra, the Belgian Review for Arbitration; an Editor for Tijdschrift@ipr.be; and a ‘korrespondierende Herausgeber’ for the ZEuP. She can be reached at maud.piers@ugent.be.

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Originally from the American Review of International Arbitration (ARIA)

ABSTRACT

The Lin-gang Framework Plan for the new Lin-gang Special Area in Shanghai Free Trade Zone now allows foreign arbitration institutions to register in the Lin-gang Special Area and administer foreign-related arbitrations that deal with international commercial disputes. The authors explore several issues arising under Chinese Arbitration Law that may create obstacles under the Framework Plan: the position of foreign arbitration institutions under the Framework Plan, the nationality of arbitral awards, the definition of foreign-related disputes that can be administered by foreign institutions, and finally, the judicial support before and during the arbitration proceedings and the supervision over the arbitral award. The authors make a number of suggestions for legal reform that will be essential to achieve the Framework Plan’s objectives and to increase the level of trust in China as a more open and arbitration-friendly environment.

I. INTRODUCTION

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The focus of this paper’s analysis is on the Lin-gang Framework Plan’s dispute resolution rules. Already back in 2014, the Shanghai International Economic and Trade Arbitration Commission issued the China (Shanghai) Pilot Free Trade Zone Arbitration Rules in the context of the Shanghai FTZ. These arbitration rules contained more modern provisions on emergency arbitration, consolidation of arbitration, as well as an open-ended list of arbitrators. The Lin-gang Framework Plan of Shanghai FTZ and the SPC’s implementation rules now takes this a step further. The innovative element of the new Lin-gang Framework Plan lies in the fact that it opens up the gate to foreign arbitration institutions to register and administer arbitrations in the Lin-gang Special Area of Shanghai FTZ. This is revolutionary compared to the dispute resolution provisions in other FTZ framework plans which maintain the more conservative China-centered arbitration rules which exclude foreign arbitration institutions from the Chinese arbitration market.

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It will certainly be interesting to see what the effect is of the Lin-gang Framework Plan on the Chinese arbitration services market and on the reforms of the arbitration law of the PRC (the “PRC Arbitration Law”) that are on the agenda for the coming years. The authors in this article will identify a number of issues of Chinese Arbitration law that may give rise to obstacles under the Lin-gang Framework Plan, both for parties to an arbitration and foreign institutions registered in the Lin-gang Special Area of Shanghai FTZ. To that end and after giving an overview of the legal rules that more generally apply (Part 2), this Article explores three specific issues of Chinese law that will affect Shanghai FTZ arbitrations: first of all, there is the determining factors of the nationality of the arbitral award and the review regimes that apply to it (Part 3); second, there is the current trend of the increasingly broader scope of foreign-related disputes that can be administered by foreign institutions (Part 4); and finally, there is a concern surrounding court support before and during the arbitration proceedings and with regard to supervision of an arbitral award (Part 5). The authors will address some of these sore points and make recommendations for the legal reform that is required to bring the Chinese international arbitration practice in alignment with the current trends in the international arbitration arena.