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How to Examine Claims in Arbitration: Chinese Arbitrator's Notes by Dennis (Yongquan) Deng-02

Sun, 09 Aug 2020
Categories: Insights



As an arbitrator, I prepared a checklist as practice notes for the arbitration tribunals to examine arbitration claims.

I. Formality examination

The purpose of formality examination is to find out the clerical errors in the claim, the most serious of which is the wrong numbering of documents, which may lead to confusion in the reference of all case files, and even damage the arbitration rights of the respondent.

II. Legal attribute/claim types

See my earlier post “How to Identify the Type of Arbitration Claims”, for detailed expression of the legal attribute/claim types.

III. Arbitrability

The arbitral tribunal shall examine the arbitrability of the claim according to Articles 2 and 3 of the PRC Arbitration Law, which stipulate that contract disputes and other property rights disputes can be arbitrated, while marriage, adoption, custody, maintenance, succession disputes and administrative disputes that should be handled by administrative departments according to the law cannot be arbitrated. 

IV. Scope of arbitration

The parties can only submit to arbitration the disputes within the scope of the arbitration agreement. The arbitration institution has no jurisdiction over the matters outside or beyond the scope of the arbitration agreement, unless the respondent does not raise an objection. However, due to discretion, the arbitral tribunal shall examine these matters thoroughly and deal with them prudently. 

V. Absorption of claims

Some arbitration claims are actually an integral part or preconditions of other claims, that is, they can be absorbed by other claims.

For instance, after the contract is rescinded, the applicant not only requests the respondent to return a specific property, but also requests the return of all property. The former claim is clearly a component of the latter, and can be absorbed by the latter.

For another example, the applicant requests to the tribunal to adjudicate that the respondent constitutes a breach of contract, and should compensate for the losses; the former is a precondition of the latter, and can be absorbed by it.

VI. Contradictory claims

Some claims are contradictory and cannot be established at the same time. 

For instance, under Chinese law, the claim for deposit and the claim for liquidated damages cannot be supported at the same time.

For another example, if the applicant requests a ruling to rescind the contract, compensate for the loss and pay liquidated damages for late performance, the claim for contract rescission and the claim for liquidated damages for late performance may contradict each other. This is because, after the rescission of the contract, both parties shall stop performing their contractual obligations, and therefore do not need to pay liquidated damages for alleged late performance.

VII. Overlapping claims

There may be overlaps among different claims.

For example, as the lessee of the house, the applicant is unable to use the house normally due to the quality problem, and requests a ruling to rescind the contract, return the rent already paid, and compensate for the loss caused by renting another house. The return of the rent and the compensation for the loss may overlap, because the returned rent can be used to cover the new rent.

VIII. Associated claims

Some arbitration claims are interrelated, so they can only be either all supported or denied, or, the applicant can choose some of the claims.

For example, when the applicant requests the tribunal to rescind the contract and return the property, the two claims are interrelated, given that only after the contract is rescinded can the property be returned.

IX. Subject matter of the claim

The subject matters of the claim can be classified as follows:

1. Delivery of assets, provision of services

Delivery of assets means that the applicant requests the respondent to deliver money (such as payment of the price) or non-monetary items (such as delivery of goods) to him/her.

Provision of services means that the applicant requests the respondent to do certain acts. The arbitral tribunal shall be cautious about this kind of claim.

Provision of services can be further divided into two types:

(1) The service is a means through which the parties want to achieve a certain goal. For example, the applicant requests the respondent to register the transfer of the ownership of the house, the purpose of which is to obtain the ownership of the house.

(2) The service itself is the purpose of the party. For example, the applicant requests the respondent to apply to the government for a third-party payment license, the approval of which cannot be controlled by either side, but the respondent must act as requested.

2. Monetary debt, non-monetary debt

If the arbitration claim is a non-monetary debt, the arbitral tribunal shall examine whether there is any circumstance of non-performance under Article 110 of the PRC Contract Law.

The non-monetary debt overlaps with the aforementioned “provision of services” to some extent.

3. Indefinite things, definite things

If the subject matter is a definite thing, it is likely to involve the interests or rights of a third party, and the arbitral tribunal should be more cautious about it. For example, if the applicant requests the arbitral tribunal to determine his/her title to a house, then the tribunal shall carefully examine the ownership of the house. 

If the subject matter is an indefinite thing, since the respondent can obtain the same kind of thing from various occasions, handling the claim of the applicant would be less challenging to the arbitral tribunal.

4. Tangible things, intangible things

Intangible things are more vague, abstract and complex, and therefore is more difficult to identify. Improper handling may lead to inconvenience in enforcing the arbitral award. For example, the applicant delivers the house design drawing to the respondent by e-mail for the purpose of performing the contract, and requests the respondent to return the design drawing after the contract is rescinded.

5. Real estates, chattels, licenses, documents of title, information

The arbitral tribunal needs to treat these subject matters differently based on their different attributes.

X. Division of rights and obligations among multiple parties      

For example, the applicant consists of two investors, the respondent consists of three founders, and the two sides have signed an equity investment agreement. Thereafter, the applicant requires the respondent to buy back all the equity of the applicant according to the contract. The arbitration tribunal shall pay attention to whether the arbitration claim specifies the proportion of equity to be bought back, the investor and the founder involved.


Photo by CHEN Dairui ( on Unsplash

Contributors: Dennis (Yongquan) Deng 邓永泉

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