On 23 Dec. 2020, China’s Supreme People’s Court (SPC) published the Annual Report on Judicial Review of Commercial Arbitration (2019) (the Report), Part One of which introduces the laws, regulations and policies related to arbitration (the Instruments) in China.
Such instruments represent a comprehensive legal framework of arbitration in China.
China Annual Report 2019 on Judicial Review of Commercial Arbitration Highlights:
Based on our understanding, we have reorganized and compiled the Instruments mentioned in the Report, and now provide the following links to the full text of such Instruments.
I．General Legal Provisions
The Arbitration Law was promulgated in 1994 and amended in 2009 and 2017 respectively. The latest revision entered into force on January 1, 2018.
The Civil Procedure Law of China was promulgated in 1991, and amended in 2007, 2012, and 2017 respectively. The latest revision entered into force on July 1, 2017. This Law is divided into four parts and 28 Chapters, and Chapter XXVI is Arbitration.
This Judicial Interpretation of the Arbitration Law is a milestone marking that China’s arbitration judicial review system has entered a new era after its gradual exploration and improvement after the implementation of the Arbitration Law.
II. Pro-Arbitration Policies Issued by the Government and the Judiciary
The Opinion standardized various mechanisms connecting mediations, arbitrations, and litigations. It also specified that the judiciary should support and promote the diversified dispute resolution mechanism including commercial arbitration.
This Opinions proposed that the people's courts should strengthen the connection with arbitration institutions.
This Opinions proposed that the judicial review of arbitral awards involving parties in countries along the Belt and Road must be strengthened. Possible ways should be explored to improve judicial review procedures, establish uniform judicial review criteria and back up arbitration development in respect of revoking and refusing to enforce arbitral awards with foreign elements. The working mechanism for centralized judicial review of commercial and maritime arbitration cases shall be implemented to ensure the uniform standards for judicial review of commercial and maritime arbitration.
Specific measures in support of arbitration can be found in Article 9 of the Opinions on Providing Judicial Guarantees for the Construction of Pilot Free Trade Zones.
The arbitration institutions in Mainland China shall be encouraged to establish joint arbitration mechanisms with the arbitration institutions of other countries participating in the Belt & Road Initiative. A model shall be explored to settle the relevant disputes by arbitration of special personnel in special locations in Mainland China according to special arbitration rules agreed upon by enterprises registered in the pilot free trade zones, and foreign arbitration institutions shall be supported in setting up branch offices in China (Shanghai) Pilot Free Trade Zone Lin’gang Special Area to provide arbitration services.
The additional efforts shall be spared to expand the breadth and depth of reform measures of the business environment in justice and strive to maintain the global leading status of Shanghai in the field of commercial dispute resolution, making Shanghai one of the world’s cities with the lowest cost, best quality and highest judicial credibility for commercial dispute resolution.
China allows well-known overseas arbitration and dispute resolution institutions to establish business institutions in the Lin’gang Special Area, as registered at the Shanghai Judicial Bureau and filed with the Ministry of Justice, to provide arbitration services with respect to civil and commercial disputes arising in international commerce, maritime affairs, investment, and other fields.
The well-known overseas arbitration and dispute resolution institutions may, after having made registration at the Shanghai Judicial Bureau and filed with the Ministry of Justice, establish branches in the Lin’gang Special Area to conduct arbitration business with respect to civil and commercial disputes arising in international commercial, maritime affairs, investment, and other fields.
10. Administrative Measures for Business Ofﬁces Established by Overseas Arbitration Institutions in Lin-Gang Special Area of China (Shanghai) Pilot Free Trade Zone (2019)境外仲裁机构在中国(上海)自由贸易试验区临港新片区设立业务机构管理办法
These Administrative Measures are formulated to regulate the registration of business offices to be established by Overseas Arbitration Institutions in Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone and the business activities thereof.
11. Opinions on Provision Regarding the Judicial Services and Guarantees Provided by the People’s Courts for the Construction of China (Shanghai) Pilot Free Trade Zone Lin’gang Special Area (2019)关于人民法院为中国（上海）自由贸易试验区临港新片区建设提供司法服务和保障的意见
China supports Shanghai to turn into an Asia-Pacific arbitration center. The reform and innovation of the arbitration system in Lin’gang Special Area shall be supported and foreign arbitration institutions registered shall be supported in arbitrating civil and commercial disputes in international commercial matters, maritime matters, investment, and other fields in Lin’gang Special Area.
III. Legal Norms on Judicial Review of Arbitration
This notice stipulated that in cases involving the validity of arbitration agreements with foreign elements, the enforcement of arbitral awards with foreign elements, and the recognition and enforcement of foreign arbitral awards, an intermediate people's court must report to the higher people’s court in the place where it is located whenever it is about to deny the validity, refuse the recognition, or to refuse the enforcement. If the higher people’s court agrees to such denial of validity, non-recognition and/or non-enforcement decision, it shall report its opinion to the SPC.
This notice incorporated the review of setting aside arbitral awards with foreign elements into the “internal report system”.
This Notice established the mechanism for centralized handling of cases regarding judicial review of arbitration. Prior to this, the main problem of judicial review of arbitration was that the judicial review of domestic arbitration was decentralized at different levels, in different courts and chambers, which tended to cause disunity of review practices and a waste of judicial resources.
This Provisions established the system of applications for verification of arbitration cases under judicial review.
This Provisions embodied the basic concept of friendly, convenient, and international arbitration-related judicial review, and established China’s international image as a “friendly jurisdiction in international arbitration”.
This Provisions specifies enforcement review of arbitral awards from the perspective of legal document enforcement.
Article 26 of this Provisions provides: “Where an administrative agreement contains an arbitration clause, the people’s courts shall confirm the nullity of the clause, except as otherwise provided by the laws, administrative regulations, or international treaties concluded and acceded to by China.”
IV. International Commercial Courts and Arbitration
SPC promulgated the “Provisions of the SPC on Several Issues Regarding the Establishment of the International Commercial Courts” (Fa Shi  No. 11), and the China International Commercial Court (hereinafter referred to as “the CICC”) of the SPC was formally established in Shenzhen and Xi’an.
2. Notice on Determining the First Batch of International Commercial Arbitration and Mediation Institutions Included in the "One-Stop" International Commercial Diversified Resolution Mechanism (2018)关于确定首批纳入“一站式”国际商事多元化解决机制的国际商事仲裁及调解机构的通知
Five arbitration institutions including China International Economic and Trade Arbitration Commission (CIETAC), Shanghai International Arbitration Center (SHIAC), Shenzhen International Arbitration Court (SIAC), Beijing Arbitration Commission (BAC), and China Maritime Arbitration Commission (CMAC), and two mediation institutions including the China Council for the Promotion of International Trade (CCPIT) Mediation Center and the Shanghai Trade Commercial Mediation Center (SCMC) are included in the "one-stop" mechanism.
Contributors: Meng Yu 余萌