Building a one-stop international commercial dispute resolution platform, 

the International Logistics Arbitration Center of SCO Demonstration Area established

On December 20, 2021 the International Logistics Arbitration Center of China-Shanghai Cooperation Organization Local Economic and Trade Cooperation Demonstration Area(the Center) was inaugurated in the SCO National Living Room. The Center will provide free legal consultation services and training, as well as commercial dispute coordination and labor dispute mediation services for enterprises and individuals in the China-Shanghai Cooperation Organization Local Economic and Trade Cooperation Demonstration Area (hereinafter referred to as the "SCO Demonstration Area") through diversified dispute resolution services, fair and efficient adjudication and active external communications, the center will create a one-stop international commercial dispute resolution platform and provide logistics enterprises with professional, diversified and personalized arbitration legal services.

After the opening of the Center, it will adhere to the values of fairness, justice and efficiency, take "innovation-driven, transformation and upgrading" as its characteristics, give full play to the essential characteristics of arbitration such as contractual nature, professionalism, independence, efficiency, confidentiality, fairness and marketability, and provide dispute resolution services for commercial subjects from different countries and regions. The Center is oriented to the legal needs of the international logistics industry in the SCO Demonstration Area, actively using mediation, arbitration and other approach to resolve conflicts and disputes, and promoting the upgrading and development of international logistics arbitration business in the SCO Demonstration Area.

Chongqing Bar Association releases Guideline for Lawyers of Chongqing Bar Association 

in handling domestic commercial arbitration legal practice

On December 1, 2021 Chongqing Bar Association, together with Chongqing Arbitration Commission, held a press conference to release the "Guideline for Lawyers of Chongqing Bar Association in Handling Domestic Commercial Arbitration" (hereinafter referred to as the "Guideline"), which consists of six chapters and 83 articles, covering the obligations and responsibilities of lawyers in all aspects of commercial arbitration practice, including accepting arbitration entrustments, concluding arbitration agreements, initiating arbitration proceedings and performing the duties of arbitration agents, and handling business as an agent for the judicial review of commercial arbitration judicial, etc.

The purpose of the Guideline is to ensure that the lawyers are proficient in using arbitration to help the parties to resolve disputes in accordance with the provisions of the Guidelines, to improve the lawyers' ability and service quality in handling domestic commercial arbitration, to maintain the image of the legal profession, to defense the legitimate rights and interests of the clients, to maintain the proper implementation of the law and to carry out the arbitration activities in accordance with the law.

Shanghai Financial Court made its first recognition and enforcement of Singapore arbitration award

Recently, Shanghai Financial Court (the Court) has made an award in respect of an application for the recognition and enforcement of a Singapore arbitral award, which is the first case of recognition and enforcement of a Singapore arbitral award made by the Court.

Onshore Guarantor Company W has provided guarantee to Offshore Debtor Company H regarding its sale and purchase of crude oil with Offshore Creditor Bank M, and as a result of breach by Company H and Company W, the Singapore International Arbitration Center (SIAC) ruled that Guarantor Company W should pay the relevant amount. Thereafter, the Offshore Creditor applied to the Shanghai Financial Court for recognition and enforcement of an arbitral award rendered by the SIAC.

Upon hearing, the Court held that the arbitral award in this case was made by SIAC in Singapore, and since both China and Singapore are parties to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the relevant provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards should be applied to the review of the recognition and enforcement of the arbitral award in this case in accordance with Article 283 of the Civil Procedure La9w of the People's Republic of China. Therefore, it was ruled by the Court that the application for recognition and enforcement of the arbitral award was accepted.

The Fourth Intermediate People's Court of Beijing Municipality：

The arbitration tribunal shall have the right to refuse to admit evidence 

that do not meet the requirements of the arbitration rules.

Legal basis：

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.

Case Description:

Pursuant to the arbitration application submitted by Huayi Brothers (Tianjin) Sports Culture Co., Ltd.(Huayi) with Si Huadong, Wang Shuxin, Yaorong Culture , Yaozhan Culture  and Yaosheng Sports Co., Ltd as respondents, as well as the arbitration clause and relevant provisions in the Investment Cooperation Agreement executed by the parties on 4 September 2017, Beijing Arbitration Commission(BAC) accepted the aforesaid arbitration application. After the hearing, BAC issued Arbitration Award [(2021) Jing Zhongcai Zi No.2950], rejecting all of Huayi's arbitration requests.

Huayi stated that it requested the court to set aside the above-mentioned award made by BAC in accordance with the law and requested the court to order Si Huadong and other respondents to bear the application fee of this case. The reasons were as follows: (a) In the arbitration case, "the opposing party concealed evidence sufficient to affect the fair award. (2) The procedure of the arbitration violated the statutory procedures, and the arbitral tribunal did not hold a hearing to cross-examine the extremely important evidence.

In response to the above reasons alleged by Huayi, the court sent an inquiry letter to BAC . BAC replied that: (i)The supplementary evidence submitted by Si Huadong and other respondents met the requirements of submitting term. (ii)The 13 materials attached to Huayi's proxy opinion, which claimed certain contracts provided by Si Huadong and other respondents in the supplementary evidence were forged, and they were not submitted with an evidence list and a brief description of the names of the evidence, etc., as required by the Arbitration Rules, so that the arbitral tribunal could not directly determine its intention to submit the 13 materials in the form of evidence; moreover, the materials, if used as evidence, had exceeded the agreed deadline for submission. Therefore, the arbitration tribunal did not treat the 13 materials as supplementary evidence. (iii) The arbitral tribunal's decision that the Investment Cooperation Agreement has been terminated is based on the contractual agreement and identified facts , rather than the circumstances reflected in the supplementary evidence submitted by Si Huadong and other respondents. Whether there was any forged evidence in the supplementary evidence did not affect the outcome of the tribunal's decision.

Court’s View:

Regarding Huayi's claim that the arbitration violated the statutory procedures, the court held that: (i) Based on Article 33(2),(4) of the Arbitration Rules, the arbitration tribunal shall have the right to decide whether the evidence submitted by the parties concerned beyond the specified time limit is admissible; the evidence submitted by the parties shall also comply with the formal requirements such as attaching an evidence list, stating the name of the evidence and the object of proof. (ii) According to the arbitral award, the arbitral tribunal set out the evidence submitted by the parties in the arbitral award, but did not write down the specific content of the parties' cross-examination opinions. (iii) Pursuant to the reply letter from BAC, the supplementary evidence submitted by Si Huadong and other respondents was accepted by the arbitration tribunal because it complied with the circumstances stipulated in the Arbitration Rules. As for the 13 materials attached to the proxy opinion mailed by Huayi, the arbitration tribunal did not treat the above materials as supplementary evidence, taking into account the fact that the intention of submitting these materials could not be determined and the deadline for supplementary evidence was exceeded, etc. Meanwhile, BAC stated that the tribunal found the agreement in this arbitration had been terminated based on the convention of the agreement and the identified facts , rather than the supplementary evidence submitted by Si Huadong and other respondents.

In summary, the court is of the opinion that, firstly, according to the arbitration award, there is no differentiation in the specific content of the parties' cross-examination of each other's evidence. Secondly, In accordance with the Arbitration Rules,the arbitral tribunal had the right to decide whether to accept the overdue evidence submitted by the parties. Under this premise, the award did not violate the provisions of the Arbitration Rules, nor did it violate the provisions of the Arbitration Law. The court did not support Huayi's claim that the arbitration procedure violated the statutory procedure because there were no factual and legal basis for the claim.

In conclusion, the reasons for applying for revocation of the arbitral award submitted by Huayi were untenable, and its request for revocation of the arbitral award was not upheld by the court. In accordance with the provisions of Article 58 and Article 60 of the Arbitration Law of the People's Republic of China, the court ruled as follows: The application of Huayi Brothers (Tianjin) Sports Culture Co., Ltd. is rejected.

The Fourth Intermediate People's Court of Beijing Municipality：

The "right to initiate arbitration" should not be interpreted as "either to apply for arbitration or to initiate litigation". 

Legal basis：

Arbitration Law of the People’s Republic of China (Revision 2017)，Article 16：

An arbitration agreement shall include arbitral clauses stipulated in the contract and other written agreements which request arbitration to be made prior to or following the occurrence of a dispute.

An arbitration agreement shall include the following:

(1) the expression of an application for arbitration;

(2) items for arbitration;

(3) the chosen arbitration commission.

Case Description:

Shanghai Pantuo Aviation Technology Service Co., Ltd. (the Applicant) and Volkswagen (China) Investment Company Limited(the Respondent) entered into a Service Contract dated April 1, 2021, which stipulates in Clause 13.3: "If the parties fail to reach a settlement through negotiation, either party shall have the right to submit the dispute to China International Economic and Trade Arbitration Commission (hereinafter referred to as CIETAC) for arbitration. The arbitration shall be held in Beijing and shall be governed by the arbitration rules of CIETAC at the time of acceptance of the application for arbitration. The language of the arbitration shall be English. The arbitral award shall be final and binding on both parties. ......". The Respondent filed an application for arbitration to CIETAC. The case had not yet been heard as of the date of acceptance of this case.

The Applicant argues that the right to sue is a legal right of the parties and cannot be waived by implication. If the parties choose to resolve the dispute by arbitration, the arbitration agreement or arbitration clause shall explicitly confirm that either party "shall" submit the dispute to the arbitration institution for arbitration. However, the dispute resolution clause in the contract does not expressly exclude the competence of the people's court over the contract dispute. Therefore, the dispute resolution clause is an "adjudication or trial" dispute resolution clause, which should be invalid,therefore the Applicant applied to the court to confirm that the arbitration clause is invalid.

Court’s View:

The content of the arbitration agreement in this case was clear and complete, with the parties' intention to request arbitration, the matters requested to be arbitrated and the selected specific arbitration committee. The parties' signatures or seals on the Cooperation Agreement indicated that the parties knew and agreed to the arbitration clause, therefore it was a valid arbitration agreement. The Court was in the opinion that the arbitration agreement in this case did not clearly stipulate that the dispute can be resolved through litigation, and the arbitration agreement should not be interpreted as "either applying for arbitration or filing a lawsuit". The Applicant's opinion that the arbitration agreement was invalid lacked basis and was not accepted by the court.

In accordance with the provisions of Article 16 and Article 20 of the Arbitration Law of the People’s Republic of China, it was ruled as follows: The application of Shanghai Pantuo Aviation Technology Service Co., Ltd. is rejected .

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  Jingya MAO

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