In China, the Supreme People’s Court (SPC) has taken the welcome step of clarifying certain issues concerning arbitrations administered by the China International Economic and Trade Arbitration Commission (CIETAC), South China International Economic and Trade Arbitration Commission (SCIA), and Shanghai International Economic and Trade Arbitration Commission (SHIAC).
These issues arose following the controversial 2012 move by the Shenzhen and Shanghai sub-commissions of CIETAC to break away and establish themselves as separate arbitration commissions. This led to significant confusion in the China arbitration scene as to which institution should be competent to accept and administer arbitrations brought under clauses which provided expressly for disputes to be resolved by arbitration at the CIETAC Shenzhen and Shanghai sub-commissions.
The SPC published a notice of reply concerning judicial review of arbitral awards by CIETAC and its former sub-commissions. The Reply – effective from July 17, 2015 – is binding on all of China’s lower courts. It provides as follows.
SCIA/SHIAC will have jurisdiction over disputes arising from arbitration agreements entered into before the CIETAC Shenzhen sub-commission and CIETAC Shanghai sub-commission change of names to SCIA and SHIAC (on October 22, 2012 and April 8, 2013 respectively) (the Change of Names) which provide for the submission of disputes to these sub-commissions.
CIETAC will have jurisdiction over disputes arising from arbitration agreements entered into on or after the Change of Names which provide for the submission of disputes to the CIETAC Shenzhen sub-commission or the Shanghai sub-commission. However, where such an arbitration has been referred to SCIA or SHIAC and the respondent has not challenged its jurisdiction before an award is rendered, an application to have an award set aside or declared unenforceable after it has been rendered (on the basis that SCIA or SHIAC has no jurisdiction) will not be supported by the court.
Status of arbitrations accepted by CIETAC/SICA/SHIAC prior to July 17, 2015
If an arbitration accepted by CIETAC, SIAC or SHIAC prior to July 17, 2015 should not have been accepted, a party is not entitled to have an award set aside or declared unenforceable upon it being rendered on the basis of the lack of jurisdiction of the arbitral body.
Where more than one arbitral body has accepted jurisdiction before July 17, 2015, a party may apply to the Mainland China court prior to the first hearing of the arbitral tribunal for a determination on the validity of the arbitration agreement; a decision will be made by the court in accordance with the Reply. In the absence of such an application, the arbitral body that first accepted jurisdiction shall have jurisdiction.
Alfred Wu is a partner and Muriel Cheng is an associate in the Hong Kong office of Norton Rose Fulbright.