The Number of Cases Administered by Arbitration Institutions in Mainland China Has Continued to Grow Rapidly for 23 Years

Statistics from the Ministry of Justice show that by the end of 2018, 255 arbitration commissions with more than 60,000 staff (the number includes over 50,000 arbitrators) had been set up in mainland China.  The number of cases administered was over 2,600,000, all with a total target value of more than CNY 4 trillion involving more than 70 countries and regions.

Since the Arbitration Law of the People’s Republic of China came into force in 1995, the number of cases administered by arbitration institutions in mainland China has continued to grow rapidly for 23 years, with an average annual growth rate of over 30%. In 2018, the 255 arbitration commissions have administered over 540,000 cases, this number has increased by 127% compared with 2017. The total value of the cases nearly reached CNY 700 billion which increased by 30% compared with 2017.

Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region

On April 2, 2019, the Supreme People’s Court of the People’s Republic of China and the Government of Hong Kong Special Administrative Region have entered into an Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region (“the Arrangement”), the Arrangement will come into force on a date to be announced.

Pursuant to the Arrangement, any party to arbitral proceedings in Hong Kong may apply to the relevant Mainland Chinese courts for interim measures relating to the preservation of assets, evidence and conduct. Equally, any party to arbitral proceedings in Mainland China may apply to relevant Hong Kong courts for injunctions and other interim measures. There are 13 articles in the Arrangement, which have a comprehensive scope concerning preservation relief, definition of arbitral proceedings in Hong Kong, procedures for applying for preservation, and preservation procedures etc.

India Plans to Set Up the New Delhi International Arbitration Centre

The New Delhi International Arbitration Centre Ordinance was promulgated on March 2, 2019 (“Ordinance”). The Ordinance seeks to provide for the establishment of the New Delhi International Arbitration Centre (“NDIAC”) to conduct arbitration, mediation, and conciliation proceedings. 

The key objectives of the NDIAC include: (a) to promote research and study, providing teaching and training, and organizing conferences and seminars in arbitration, conciliation, mediation and other alternative dispute resolution matters; (b) to provide facilities and administrative assistance for conciliation, mediation and arbitral proceedings; and (c) to maintain panels of accredited arbitrators, conciliators and mediators both at national and international level or specialists such as surveyors and investigators.

The First Intermediate People’s Court of Tianjin:

The Determination of the Arbitration Commission at a Fixed Location Agreed in the Arbitration Agreement Shall Be Dependent on 

Article 10 of the Arbitration Law

Relevant Provision:

Paragraph 1 of article 10 of the Arbitration Law of the People’s Republic of China (“Arbitration Law”) provides, “An arbitration commission may be established in a city where there is a directly administered municipal, provincial or autonomous regional people's government and may also be established in other cities with districts on a needs basis. It shall not be established in accordance with the administrative structural hierarchy.”

Article 6 of the Interpretation of the Supreme People’s Court on Certain Issues relating to Application of the ‘Arbitration Law of the People’s Republic of China’ (“the Interpretation”) provides, “Where an arbitration is agreed to be administrated by an arbitration commission at a fixed location and only one arbitration commission exists at that location, that arbitration commission shall be deemed as the arbitration commission agreed in the arbitration agreement. Where there are two or more arbitration commissions at that location, the parties may negotiate to select one of the arbitration commissions; if the parties are unable to agree on the choice of an arbitration commission, the arbitration agreement shall be deemed invalid.”

With respect to the dispute between Hu Weibin, and Meng Haitang, Tianjin Shangyi Enterprise Management Consulting Co., Ltd. (“Shangyi Company”) regarding the validity of the arbitration agreement, the key issue was whether the agreed arbitration institution in the arbitration agreement (the place where Shangyi Company is located) refers to the arbitration institutions in Tianjin or the arbitration institution located near Shangyi Company.

Court’s View:

The determination of a “fixed location” provided in the Interpretation is dependent on article 10 of the Arbitration Law, which indicates that it shall refer to and cover all administrative areas of a municipality under the central government. Therefore, the arbitration institution agreed in the Shangyi arbitration agreement refers to the arbitration institutions in Tianjin, since there are more than one arbitration commission in Tianjin, and the parties failed to agree on the choice of an arbitration commission, the arbitration agreement was therefore deemed invalid.

Singapore High Court:

Request for Setting Aside an Arbitration Award on Grounds of 

Fraud or Public Policy Has Been Dismissed

Relevant Provision:

Article 24(a) of the International Arbitration Act (Cap 143A, 2002 Revised Edition) of Singapore provides, “…the High Court may, in addition to the grounds set out in Article 34(2) of the UNCITRAL Model Law on International Commercial Arbitration, set aside the award of the arbitral tribunal if – the making of the award was induced or affected by fraud or corruption; …”

Article 34 (2) (b) (ii) of the UNCITRAL Model Law on International Commercial Arbitration provides, “An arbitral award may be set aside by the court specified in article 6 only if: … the court finds that: … the award is in conflict with the public policy of this State…”

Standard of Review:

(1) it must be shown that there is deliberate concealment aimed at deceiving the arbitral tribunal;

(2) there must be a causative link between the deliberate concealment and decision in favor of the concealing party;

(3) there must not have been a good reason for the deliberate concealment.

In BVU v BVX [2019] SGHC 69, the key issue was whether the BVX’s decision not to call certain witnesses to give evidence and disclose certain internal documents, render the arbitration award liable to be set aside on grounds of fraud or public policy.

Court’s View:

The court dismissed BVU’s application for the following reasons:

(1) there was no deliberate concealment or withholding of material evidences on the part of BVX;

(2) BVX’s alleged act of deliberately concealing or withholding material evidences would not have an impact on the arbitration award.

Singapore High Court:

The Injunction to Restrain a Winding up Application by the Other Party Has Been Granted on Grounds of “Bona Fide Prima Facie Dispute”

In BWF v BWG [2019] SGHC 81, the key issue was whether the injunction to restrain BWG from bringing winding up proceedings against BWF shall be granted by the court and what standard of review should be applied. BWF’s application relied on the grounds that the goods payment dispute between the parties had occurred within the ambit of the arbitration agreement. 

Court’s View:

(1) Citing relevant cases, the court held that, the standard of review for granting the injunction sought should be: whether there is a bona fide prima facie dispute. According to the principle of party autonomy, if there is a bona fide prima facie dispute, the dispute shall be submitted to arbitration, and the injunction shall be granted by the court; however, if there is no bona fide prima facie dispute, the application for the injunction shall be dismissed by the court.

(2) The criteria of determining a bona fide prima facie dispute are as follows:

i.Whether issues are raised bona fide, i.e. there is no abuse of process;

ii.There is a prima facie dispute.

In this case, BWF had stated that its goods-payment liability was conditional upon another payment from a third party, the court held that there had not been any admission by BWF. Accordingly, there was a bona fide prima facie dispute. The injunction to restrain BWG from bringing winding up proceeding sought by BWF was therefore granted by the court.