Given that parties have been facing uncertainty over this issue for more than three years, a number of arbitration cases under affected arbitration clauses had already been commenced, accepted by the relevant arbitration institution and, in some cases, concluded as at 17 July 2015 without the benefit of the SPC’s guidance.
Paragraphs 2 and 3 of the Reply limit the scope by which a jurisdictional challenge can be brought in relation to such historic which were not conducted in accordance with the Golden Rule.
Firstly, paragraph 2 provides that, where a chosen arbitral institution accepted a case prior to 17 July 2015, its jurisdiction may not subsequently be overturned by the courts, unless a jurisdictional challenge was brought prior to the first oral hearing in the arbitration proceedings.
For example, if arbitration under a pre-22 October 2012 arbitration agreement specifying CIETAC Shenzhen, was ‘wrongly’ commenced with, and accepted by, CIETAC Beijing rather than SCIA, then, unless the Respondent has raised a jurisdictional challenge to the PRC courts prior to the first oral hearing in the arbitration, that jurisdictional question cannot be decided against the Claimant in subsequent challenges.
The Reply also confirms that this position is unaffected by any finding of the arbitral institution itself that it has jurisdiction. In so ruling, the SPC has created an exception to the usual principle of PRC law that a court shall refrain from ruling on such an issue if the institution has so confirmed.
Secondly, paragraph 3 provides that where a case accepted by the institution prior to 17 July 2015 and an arbitral award has been rendered, the award may not be challenged in the courts at the enforcement stage.
Finally, paragraph 4 of the Reply provides that where, prior to 17 July 2015, both CIETAC and its former sub-commission have accepted jurisdiction over the same case, then, if a party has applied to a court for a jurisdictional determination, the court will accept and make a civil ruling in accordance with the Golden Rule. Once again, however, application to the courts must be made before the first oral hearing in the arbitration. If no such jurisdictional challenge has been made, the institution which accepted the case first will have jurisdiction to administer it.