The following Arbitration guidance note Produced in partnership with James Zimmerman of Sheppard Mullin Ritcher & Hampton LLP provides comprehensive and up to date legal information covering:
This Practice Note discusses ad hoc arbitration in China under Chinese law.
For a general introduction to ad hoc arbitration, see Practice Note: Ad hoc arbitration—an introduction to the key features of ad hoc arbitration.
Arbitration in China is governed by the Arbitration Law (promulgated by the Standing Committee of the National People’s Congress, 31 August 1994, effective 1 September 1995) (the Arbitration Law). The Arbitration Law requires parties to an arbitration agreement to select an institution in their arbitration agreement to manage the parties’ proceeding (Arbitration Law, art 16). This provision in the Arbitration Law has been interpreted to invalidate awards issued in ad hoc arbitration proceedings, namely, arbitration managed without an institution. (Note that Chinese courts do not recognise precedent so there is no case law on this point with binding authority.) However, the requirement that arbitration be managed by an arbitral institutional has not been strictly applied in China.
The Chinese courts have looked to the applicable law, and the impact of the choice of seat (explained below), such that an ad hoc arbitration agreement (ie one that does not provide for an administering institution) will not be automatically invalidated under the Arbitration Law and will still be enforced by a Chinese court as long as the parties have either:
specifically chosen a
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