| Arbitration in China |
|
|
|
|
Arbitration in the People's Republic of China Northern California International Arbitration Club Thomas J. Klitgaard, Esq. Dillingham & Murphy, LLP1 May 11, 2005 Arbitration in the People's Republic of China A. History:2 1956: Foreign Trade Arbitration Commission ("FTAC") 1980: Foreign Economic and Trade Economic Commission ("FETAC") 1987: Civil Law of the People's Republic of China, Article 142 1989: China International Economic and Trade Arbitration Commission ("CIETAC") 1991: Civil Procedures Law of the People's Republic of China, Article 257 1999: Arbitration Law of the People's Republic of China, Articles 1, 5 2005: New Arbitration Rules of CETAC effective May 13 B. Names in arbitration clause treated as a selection of CIETAC: 1 Foreign Trade Arbitration Commission of the China Council for the Promotion of International Trade 2. Foreign Economic and Trade Arbitration Commission of the China Council for the Promotion of International Trade 3. China International Economic and Trade Arbitration Commission ("CIETAC") aka "Court of Arbitration of the China Chamber of International Commerce" With special thanks to Natalie Y. Zhang, Esq., a member of the California and China 1 Bars, for her fine assistance in preparing this material. A comprehensive history of the People's Republic of China's arbitration laws can be 2 found in "Arbitration Law and Dispute Resolution in the People's Republic of China: Recent Developments," by Thomas J. Klitgaard, Private Investments Abroad, Mathew Bender & Co., Inc. (1992), section 14.02 (copies available from Mr. Klitgaard) 3 Rules amended in 2000, effective 2005 1 4. Other names deemed a reference to CIETAC by unanimous agreement of parties: a. China Council for the Promotion of International Trade b. China Chamber of International Commerce c. Arbitration Commission of the China Council for the Promotion of International Trade d. Court of Arbitration of the China Council for the Promotion of International Trade e. Arbitration Commission of the China Chamber of International Commerce f. Court of Arbitration of the China Chamber of International Commerce C. Competitors (in China): Main Office, Beijing Sub-Commissions, Shanghai, Shenzhen Beijing Arbitration Commission Hong Kong International Arbitration Centre Commissions in Provinces Ad Hoc arbitrations (beware) People's mediation committees D. Competitors (outside China): ICC Stockholm Chamber of Commerce London Court of International Arbitration Singapore International Arbitration Centre Malaysia, Regional Centre for Arbitration, Kuala Lumpur ICDR Others E. Enforceability of Awards: 1. New York Convention 2. Review by Courts a. 1995 Arbitration Law of the People' Republic of China, article 58 2 b. 1995 Notice of The Supreme People's Court Regarding Arbitration Matters Involving Foreign Elements and Cases Arbitrated Abroad c. 1998 Notice of The Supreme People's Court Regarding Revocation of Arbitral Awards Involving Foreign Elements 3. Statistics a. Up to 1996: 164 applications for enforcement, 37 rejected (22%) b. In recent years, information not readily available, but estimated lower number 2%-10% (BAC statistics, other sources) F. Selected Procedures: Inquisitorial vs. adversarial Mediation (conciliation) plus arbitration by arbitrators, article 514 No absolute right to challenge arbitrator Hearing dates set by Commission, within specified time limits Right or arbitrators independently to employ experts Evidence presented in request for arbitration, defense No provision for discovery Lack of provision for cross-examination Right of parties to argue during proceeding Requirement for arbitrator(s) to ask for final opinion parties at end of debate Power of presiding arbitrator to make award, if other two arbitrators cannot agree Requirement of statement of grounds for decision, article 54 Application for cancellation of award, articles 58 (4), (5), (6) (virtual de novo review per (4), (5)); see also Civil Procedure Law, article 217(4) main evidence to ascertain facts insufficient, (5) errors in application of law 4 "Article" refers to an article of the 1995 Arbitration Law, unless otherwise specified. 3 Cancellation of award if contrary to "social and public" interests, article 58 Proceedings in Chinese, unless parties agree otherwise G. Treatment of Foreigners: Different fee schedule than domestic Some differences in rules from domestic power to record details of hearing in writing power to appoint foreigners with professional knowledge in law, economics and trade, science and technology5 application to arbitration panel for order to preserve evidence, transmittal by panel to intermediate court H. Statistics: Number of cases CEITAC 700-800 per year Number of Arbitrators, CEITAC 1025, seven panels 793 Chinese 232 from Hong Kong, Macau, Taiwan, foreign countries (including 38 from US) Number of Cases, Beijing Arbitration Commission 3,339 per year (83 foreign) increasing Number of Arbitrators, Beijing Arbitration Commission 294 5 If your Chinese joint venture or your local Chinese company has a contractual provision for arbitration before a local commission, will the local commission have power to appoint foreigners with expertise in special areas such as economics, science, and technology? 4 I. Miscellaneous: No fee schedule for arbitrators Award of costs and attorney's fees to prevailing party, plus costs of arbitration Generally strict time limits for procedures, decision No reference to other rules, such as UNCITRAL Wins by foreigners (percentage of cases) J. Summary The "Wows" (CEITAC Rules) a. Challenges to arbitrators, statement of reasons, burden on party b. Discretion to reject challenge c. Chinese language, unless parties otherwise agree d. Can request parties to submit corresponding version of documents in Chinese e. Examination of case in any way panel deems appropriate, Article 29 f. Inquisitorial or adversarial approach (cf. Judge Dee) g. Independent investigation by panel, Article 37 h Conciliation can be done by panel, resume if conciliation fails (combination with arbitration) i. Decision by presiding arbitrator, if other arbitrators cannot agree K. Conclusion: Chinese view towards litigation (Confucius) In death, avoid hell; in life, avoid the law courts Chinese view of result of litigation ("Yu bang xiang zheng") L. Questions: 5 Thomas J. Klitgaard, Esq. Dillingham & Murphy, LLP 225 Bush Street, 6th Floor San Francisco, California 94104 Tel: 415-397-2700, ext. 247 Fax: 415-397-3300 This e-mail address is being protected from spam bots, you need JavaScript enabled to view it 6 |
| Next > |
|---|