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Singapore High Court Upholds Arbitration Clause Designating Non-Existent Arbitral Institution, “China International Arbitration Center” being construed as CIETAC

Mon, 11 Apr 2022
Categories: China Legal Trends

On 18 Mar. 2022, Singapore High Court rendered a ruling on Re Shanghai Xinan Screenwall Building & Decoration Co, Ltd [2022] SGHC 58, and considered the reference to “China International Arbitration Center” as a reference to “China International Economic and Trade Arbitration Committee” (“CIETAC”).

In this case, the Claimant obtained leave of court to enforce a CIETAC award in Singapore, while the Respondent applied to set aside the leave order. The Respondent contended that the arbitration agreement is invalid, for the selected “China International Arbitration Center” is a non-existing arbitral institution.

In accordance with Article 16 and Article 18 of PRC Arbitration Law, parties must select an arbitral institution. Where one is not selected in the original arbitration agreement, there must be a supplementary agreement between parties choosing an arbitral institution. Otherwise, the arbitration agreement is void.

The Singapore High Court dismissed the Respondent’s application to set aside the leave order against the Respondent.

Philip Jeyaretnam, Judge of the High Court, held that an arbitration agreement is to be construed like any other commercial agreement, with an intent to give effect to the parties’ objective intention.

When the name of the arbitral institution in an arbitration agreement does not precisely correspond with that of any existing arbitral institution, it is not that parties have chosen a non-existent institution. Rather, the question is whether they intended the same institution.

Parties used the first two words in CIETAC’s name, namely “China” and “International”. They also used another word contained in CIETAC’s name, namely “Arbitration”.

The Court considered the names of five major international arbitral institutions in China as nominated by the Respondent, namely, CIETAC, Shenzhen Court of International Arbitration (“SCIA”), Beijing International Arbitration Center (“BIAC”), Shanghai International Arbitration Center (“SHIAC”) and China Maritime Arbitration Commission (“CMAC”).

SCIA, BIAC, and SHIAC are all named after cities in China, instead of carrying the critical national name of “China”. CMAC is a maritime arbitral institution and does not administer non-maritime disputes such as those arising from the contracts.

Thus, the court held that the reference to “China International Arbitration Center” is properly to be construed as a reference to CIETAC.



Cover Photo by Mike Enerio on Unsplash

Contributors: CJO Staff Contributors Team

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