On 17 Mar. 2025, the Shanghai Maritime Court concluded a case on the validity of an ad hoc arbitration agreement, providing judicial support for Shanghai’s efforts to develop an international commercial arbitration center. This was the first such case following the implementation of the “Regulations on Promoting the Development of the International Commercial Arbitration Center in Shanghai” (上海市推进国际商事仲裁中心建设条例).
The dispute arose between two companies registered in the Shanghai Free Trade Zone over the transportation, customs clearance, and port-related fees for a batch of imported goods. In November 2024, the parties signed an Ad Hoc Arbitration Agreement (hereinafter the “Agreement”), agreeing to arbitrate in Shanghai under the Ad Hoc Arbitration Rules of the Shanghai Arbitration Association (hereinafter the “Rules”, 上海仲裁协会临时仲裁规则), with a sole arbitrator. However, due to a disagreement over the validity of the Agreement, one party filed a lawsuit seeking confirmation of its validity.
The court found that the parties had expressed a clear intent to arbitrate and that the contract contained foreign-related elements. Although the Agreement did not directly designate an arbitrator, the Rules referred to in the Agreement provided a method for appointing one, thereby satisfying the requirement of a “designated person”. Accordingly, the court affirmed the validity of the Agreement.
This case sets a judicial precedent for the use of ad hoc arbitration in China and supports Shanghai’s efforts to establish itself as an international commercial arbitration center.
Photo by Claire Chang on Unsplash
Contributors: CJO Staff Contributors Team
