- Agreements on appointing arbitrators by multiple parties under Chinese law (Lan Zhang v La Dolce Vita)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- When the parties’ agreement on the procedures of appointing arbitrators would be deemed as ‘inoperative’
- Whether multiple parties with the same controller may raise objections on their capability to jointly nominate an arbitrator
- Whether such objections are deemed as having been made in good faith
- Case details
Arbitration analysis: The China International Commercial Court (CICC) recently released decisions on two related cases concerning applications to set aside foreign-related arbitral awards, both relating to the interpretation of an arbitration clause and its interplay with the parties’ chosen arbitration rules. When interpreting the procedures for appointing arbitrators by multiple parties s in the parties’ arbitration clause and the China International Economic Trade Arbitration Commission (CIETAC) Arbitration Rules (2012), the CICC held that it should not construct the parties’ explicit agreement to such procedures as a simple repetition of the arbitration rules, but should instead give effect to the largest extent of the arbitration agreement. Furthermore, the two CICC decisions provide wake-up calls for parties, especially for group companies as respondents, that contemplating procedural objections not in good faith during the constitution of the arbitral tribunal to sabotage arbitration and leaving a door to challenge the arbitral award in China later may no longer be an effective tactic. Written by Huafang Zhu, senior partner, and David Gu, partner, at TianTong Law Firm.
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