China's international credibility in maritime arbitration widely recognized；Foreign-related cases in maritime arbitration account for 35% of the total number of cases accepted

On 16 July 2021, the China Maritime Arbitration Commission (CMAC) hosted a high-level seminar on 2021 Chinese maritime commercial arbitration with the theme of "The Future Development of Maritime Commercial Arbitration in the Post-Epidemic Context" in Beijing. 

In 2020, the number of maritime and maritime commercial cases handled by the CMAC remains among the highest in the world, with foreign-related cases accounting for 35% of the total number of cases accepted and parties from 22 countries and regions.

The seminar was held through a combination of online and offline sessions, with over 100 offline delegates attending and nearly 10,000 people watching the live stream online.

Shenzhen Court of International Arbitration: expanding the "Moments" for international arbitration cooperation

On 20 July 2021, the Shenzhen International Arbitration Institute (SCIA) was approved by the Municipal Committee to hang the "Guangdong-Hong Kong-Macao Greater Bay Area International Arbitration Centre", while a "fusion platform" for the convergence of Guangdong-Hong Kong-Macao rules is being built. This will facilitate exchanges and cooperation among arbitration and mediation institutions in the Guangdong-Hong Kong-Macao Greater Bay Area and promote Hong Kong-Guangdong cooperation and Macao-Guangdong cooperation. 

With the support of the Qianhai Administration, the SCIA Tower has been set up in Qianhai, which will provide a more solid platform for the innovative development of Chinese arbitration and international cooperation. A number of international organizations and overseas arbitration institutions have already expressed their active interest in locating in Qianhai, including UNCITRAL, ICSID, HCCH, ICC-ICA, SCAI, KCAB, and SIMC.

One-click and one-click inspection is available for the "online delivery" platform of Wuhan Arbitration Commission, being the first platform in China

In July 2021, the Wuhan Arbitration Commission released a three-year action plan (2021-2023) for the construction of "Smart Arbitration", which aims to build a "Smart Arbitration Brain" and create an all-business, all-time arbitration legal service network, with a comprehensive arbitration data service system as the main line.

At present, the Wuhan Arbitration Commission's online arbitration is mainly applicable to two types of cases. One is for financial institution lending contract disputes of the same business type and legal relationship, which can be heard in bulk; the other is for offline mediation or online mediation followed by online arbitration confirmation.

It is reported that the Wuhan Arbitration Commission's online arbitration platform has been built as an integrated system platform integrating online identification, electronic service, online hearing and online process management, with an average case completion time of one month. In particular, for cases with online confirmation of arbitration, if the materials are complete, the confirmation of the arbitration award can be obtained on the same day at the earliest.

Beijing No. 4 Intermediate People's Court：

After the debtor goes bankrupt, the arbitration case concerning the debtor shall be applied for arbitration in accordance with the arbitration agreement

Relevant Provisions:

Arbitration Law of the People’s Republic of China (Revision 2017)

Article 58. Where the parties concerned can provide evidence disproving the arbitration award in any of the following circumstances, they may request a cancellation of the arbitration award by an intermediate People's Court at the place where the arbitration commission is located:

(1) there was no arbitration agreement;

(2) items for arbitration were not within the scope of the arbitration agreement or were those upon which the arbitration commission had no right to arbitrate;

(3) the establishment of the arbitration tribunal or arbitration procedures are in contravention of legal proceedings;

(4) the evidence upon which the arbitration award is made was counterfeit;

(5) the other party has concealed evidence to the degree that fairness has been affected;

(6) arbitrators have accepted bribes, resorted to deception for personal gain or perverted the course of justice by the award.

Where the People's Court has formed a collegiate bench and has examined and verified that the award was made under one of the aforesaid situations, it shall order the cancellation of the award.

Where the People's Court decides that it should make a ruling to the effect that there has been a violation of the public interest, it shall order the cancellation of the award.

Business Bankruptcy Law of the People's Republic of China

Article 20. Upon the acceptance of a bankruptcy application by a People's Court, all commenced and pending civil proceedings or arbitration proceedings that are related to the debtor shall be suspended; such proceedings or arbitration shall continue after the administrator has taken over the administration of the assets. 

Article 21. Upon acceptance of a bankruptcy application by the People's Court, civil proceedings which relate to the debtor shall only be initiated in the People's Court that accepted the bankruptcy application. 

Provisions of Supreme People's Court on Several Issues Relating to Application of the Enterprise Bankruptcy Law of the People's Republic of China (III) (Amended in 2020)

Article 8. Where a debtor or a creditor raises objection to a claim recorded in the statement of claims, it shall specify the reasons and legal basis therefor. If the objector still disagrees on the explanation or adjustment made by the administrator, or the administrator refuses to make explanation or adjustment, the objector shall file a lawsuit for confirmation of his/its claim with the People's Court within 15 days from completion of verification at the creditors' meeting. If the parties have concluded an arbitration clause or an arbitration agreement between them before acceptance of the application for bankruptcy, an application shall be filed with the selected arbitration agency for confirmation of the creditor-debtor relationship. 

Case Description:

I. On 1 September 2000, the Agricultural and Industrial Development Company and Haiwen Zhongyi Company entered into the Lease Contract, agreeing to lease to Haiwen Zhongyi Company the premises located on the ground floor, ground, third and fourth floors of the West Annex Building of Haiwen Building, No. 1 Jinsong South Road, Chaoyang District, Beijing. 

On 8 February 2012, the bankruptcy administrator of the Agricultural and Industrial Development Company issued a notice to Haiwen Zhongyi Company, requesting Haiwen Zhongyi Company to deliver the house in question to the bankruptcy administrator of the Agricultural and Industrial Development Company, but Haiwen Zhongyi Company failed to do so.

3. On 13 March 2014, the Agricultural and Industrial Development Company applied to the Beijing Arbitration Commission for arbitration, requesting the delivery of the house by Haiwen Zhongyi. Haiwen Zongyi filed a counter-claim in the arbitration. 

4. On 7 December 2016, the Beijing Arbitration Commission made an interlocutory award No. 0002 of (2016) Jing Zhong Cai Zi, ruling that Beijing Arbitration Commission had jurisdiction over the case. Later, the Agricultural and Industrial Development Company applied to the Beijing No. 3 Intermediate Court to set aside the award, and the Beijing No. 3 Intermediate Court rejected its application.

5. On 29 May 2019, the Beijing Arbitration Commission issued Award No. 1273 (2019) Jing Zhong Cai Zi in respect of the case.

6. Haiwen Zongyi applied to the Beijing No. 4 Intermediate Court to set aside Award No. 1273 (2019) Jing Zhong Cai Zi on the grounds that: 1. the case should be under the centralized jurisdiction of the bankruptcy court; 2. in the arbitration case, the subject qualifications of the Agricultural and Industrial Development Company were self-contradictory and the Beijing Arbitration Commission had disregarded the legal facts and ruled in vain; and 3. the arbitration procedure violated the statutory procedures.

7. After hearing the case, the Beijing No. 4 Intermediate Court ruled to reject the application of Haiwen Zhongyi.

In this case, the focus of dispute was: after Agricultural Industrial and Commercial Development Company was declared bankrupt by a court under the circumstances that both parties had agreed on an arbitration clause in the Lease Contract, whether the Beijing Arbitration Commission had no right to have jurisdiction over the dispute arising under the Lease Contract between the two parties? 

Court’s View:

This is a case in which the parties applied for the setting aside of a domestic arbitral award, and the case should be examined in accordance with the provisions of Article 58 of the Arbitration Law of the People's Republic of China.

Civil litigation and arbitration are two different dispute resolution mechanisms, and from the provisions of Article 21 of the PRC Enterprise Bankruptcy Law, it cannot be concluded that arbitration cases concerning debtors are also under the jurisdiction of the people's court receiving the bankruptcy application. The Court does not support the claim that the Beijing Arbitration Commission does not have jurisdiction over the dispute between the two parties on this ground, which has no legal basis. In this arbitration case, Haiwen Zhongyi did not object to the jurisdiction of Beijing Arbitration Commission, and made a counterclaim for arbitration. After the Beijing Arbitration Commission has made a final award on the dispute in this case, its application for revocation of arbitration made by the Beijing Arbitration Commission on the ground that it has no jurisdiction is obviously against the principle of good faith and shall be overruled by Court.

Weinan Intermediate People's Court of Shanxi Province:

The arbitration clause was invalid because it provided for a "local arbitration committee in Beijing"

Relevant Provisions:

Interpretation of the Supreme People's Court on Certain Issues relating to Application of the Arbitration Law of the People's Republic of China (Revision 2008)

Article 6. Where an arbitration is agreed to be conducted by an arbitration agency at a fixed locality and only one arbitration agency exists at that locality, that arbitration agency shall be deemed as the arbitration agency stipulated under the arbitration agreement. Where there are two or more arbitration agencies at that locality, the parties may negotiate to select one of the agencies for arbitration; where the parties concerned are unable to agree on the choice of an arbitration agency, the arbitration agreement shall be deemed invalid.

Case Description:

The applicant Jia Liying and the respondent Shanxi Yitong Technology Co., Ltd. signed a Service Contract for Face-Scanning Payment Project with the number yt020041030001 on July 3, 2020, and the fourth item of other agreements in Article 8 of the contract reads: "Matters not covered by this contract shall be resolved by A and B through friendly consultation. In the event of any dispute under this contract and cannot be resolved through negotiation, it shall be submitted to the local arbitration committee in Beijing to initiate litigation to resolve the dispute." The Beijing arbitration institutions included the Beijing Arbitration Commission, the China Maritime Arbitration Commission and the China International Economic and Trade Arbitration Commission.

Jia Liying, the applicant, claimed that the arbitration clause agreed in the service contract between the applicant and the respondent for the Face-Scanning Payment Project involved in this case did not clearly agree on the specific arbitration committee with jurisdiction, and requested that the arbitration clause be confirmed as invalid.

The respondent, Shanxi Yitong Technology Co., Ltd, claimed that the contract signed between the two parties agreed on the Beijing Arbitration Commission, which was also confirmed by the applicant, and that the arbitration clause was valid.

Court’s View:

The applicant and the respondent agreed in the service contract for the Face-Scanning Payment Project involved in this case that any dispute arising in the course of the performance of the contract which could not be resolved through consultation between the two parties would be submitted to the local arbitration committee in Beijing for arbitration. As there were more than two local arbitration institutions in Beijing, in the event that the parties failed to agree on the choice of arbitration institution, the arbitration clause involving dispute resolution agreed between the applicant and the respondent should be deemed invalid according to Article 6 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Arbitration Law of the People's Republic of China.

According to Article 18 of the Arbitration Law of the People's Republic of China, it is ruled as follows: the arbitration clause involved in Item 4 of Article 8 of the Service Contract for Face-Scanning Payment Project (No. YT 020041030001) signed by and between the claimant Jia Liying and the respondent Shanxi Yitong Technology Co., Ltd. shall be invalid.

This Newsletter is produced by ZLWD International Business Committee and for your reference only.

Editorial Board: Wei LIN  Philip DUAN  Ellen WANG  Lingling GUO

Yuming Li  Ning Ning  Yu Zhuan

All Information published in this Newsletter is from open source. 

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