Originally from Business Disputes In China - 3rd Edition

I. Introduction

In recent years, there has been a steady, rapid increase in the number of arbitration proceedings seated in China. According to Chinese statistics, more than 60,000 arbitration cases per year are filed with over 200 local arbitration commissions established in mainland China. By far the most important arbitration institution within the mainland is the China International Economic and Trade Arbitration Commission (‘CIETAC’). The total value in dispute of proceedings filed with CIETAC in 2010 was some 13.75 billion RMB. A total of 1352 arbitration cases (934 domestic and 418 foreign-related) were filed with CIETAC in 2010, making CIETAC the most active arbitral institution worldwide by number of published cases. Currently, the majority of foreign-related disputes seated in mainland China are submitted to CIETAC, with the Beijing Arbitration Commission (‘BAC’) being the second choice. The BAC has been actively promoting itself recently as an attractive venue for cases directly or indirectly involving foreign capital.

i. Legal Framework

The legal framework for arbitration seated in China is set out in the PRC Arbitration Law (‘the Arbitration Law’) supplemented, in some respects, by the PRC Civil Procedure Law, a number of judicial interpretations, and the arbitration rules published by CIETAC and other arbitration institutions. In recent years the legal environment has been gradually improving as some important questions were clarified and improved by People’s Court interpretations and circulars2 as well as the revision of the PRC Civil Procedure Law that took effect in April 2008.