ARBITRATION LAW OF THE PEOPLE’S REPUBLIC OF CHINA
Adopted at the 9th Session of the Standing Committee of the 8th National People’s Congress of the People’s Republic of China, and promulgated by the President, on 31 August 1994. Effective from 1 September 1995
Chapter 1. General Provisions
Article 1
This Law is formulated in order to ensure the impartial and prompt arbitration of economic disputes, to protect the legitimate rights and interests of the parties and to safeguard the sound development of the socialist market economy.
Article 2
Contractual disputes and other disputes over rights and interests in property between citizens, legal persons and other organizations that are equal subjects may be arbitrated.
Article 3
The following disputes may not be arbitrated:
| (1) | marital, adoption, guardianship, support and succession disputes; |
| (2) | administrative disputes that laws require to be handled by administrative authorities. |
Article 4
The parties’ submission to arbitration to resolve their dispute shall be on the basis of both parties’ free will and an arbitration agreement reached between them. If a party applies for arbitration in the absence of an arbitration agreement, the arbitration commission shall not accept the case.
Article 5
If the parties have concluded an arbitration agreement and one party institutes an action in a People’s Court, the People’s Court shall not accept the case, unless the arbitration agreement is void.
Article 6
The arbitration commission shall be selected by the parties by agreement.
In arbitration, there shall be no jurisdiction by level and no territorial jurisdiction.
Article 7
In arbitration, disputes shall be resolved on the basis of facts, in compliance with law and in an equitable and reasonable manner.
Article 8
Arbitration shall be carried out independently according to law and shall not be subject to interference from administrative authorities, social organizations or individuals.
Article 9
A system of a single and final award shall be implemented for arbitration. If a party applies for arbitration or institutes proceedings in a People’s Court regarding the same dispute after an arbitral award has been made, the arbitration commission or People’s Court shall not accept the case.
If an arbitration award is set aside or its enforcement is refused by the People’s Court in accordance with law, a party may apply for arbitration on the basis of a new arbitration agreement reached between the parties, or institute court proceedings in the People’s Court, regarding the same dispute.
Chapter 2. Arbitration Commissions and the Arbitration Association
Article 10
Arbitration commissions may be established in municipalities directly under the central government and in municipalities that are the seats of the People’s Governments of provinces and autonomous regions. They may also be established in other municipalities with districts, according to need. Arbitration commissions shall not be established at each level of the administrative divisions.
To establish an arbitration commission, the People’s Governments of the municipalities referred to in the preceding paragraph shall arrange for the relevant departments and chambers of commerce to organize such commissions in a unified manner.
The establishment of an arbitration commission shall be registered with the administrative department of justice of the relevant province, autonomous region or municipality directly under the central government.
Article 11
An arbitration commission shall meet the conditions set forth below:
| (1) | to have its own name, domicile and charter; |
| (2) | to have the necessary property; |
| (3) | to have the personnel that are to form the commission; and |
| (4) | to have appointed arbitrators. |
The charter of an arbitration commission shall be formulated in accordance with this Law.
Article 12
An arbitration commission shall be composed of one chairman, two to four vice chairmen and seven to eleven members.
The offices of chairman, vice chairman and member of an arbitration commission shall be held by experts in the field of law, economy and trade and by persons with practical working experience. At least two-thirds of the persons forming an arbitration commission shall be experts in the field of law, economy and trade.
Article 13
Arbitration commissions shall appoint their arbitrators from among righteous, upright persons.
An arbitrator shall meet one of the conditions set forth below:
| (1) | has been engaged in arbitration work for eight years; |
| (2) | has worked as a lawyer for eight years; |
| (3) | has served as a judge for eight years; |
| (4) | has been engaged in legal research work or legal education work and has a senior title; or |
| (5) | has acquired the knowledge of the law, engaged in the professional work of economy and trade, etc. and possessed a senior title or attained an equivalent professional level. |
Arbitration commissions shall draw up lists or arbitrators according to different professions.
Article 14
Arbitration commissions shall be independent from administrative authorities and there shall be no subordinate relationships between arbitration commissions and administrative authorities. There shall also be no subordinate relationship between arbitration commissions.
Article 15
The China Arbitration Association shall be a social organization with the status of a legal person. Arbitration commissions shall be members of the China Arbitration Association. The charter of the China Arbitration Association shall be formulated by the National Congress of Members.
The China Arbitration Association shall be a self-regulating organization of arbitration commissions. It shall supervise arbitration commissions and their members and arbitrators as to whether or not they breach discipline, in accordance with its charter.
The China Arbitration Association shall formulate rules of arbitration in accordance with this Law and the relevant provisions of the Civil Procedure Law.
Chapter 3. Arbitration Agreement
Article 16
An arbitration agreement includes an arbitration clause included in the contract, and an agreement on submission to arbitration that is concluded in other written forms before or after the dispute arises.
An arbitration agreement shall contain the following particulars:
| (1) | an expression of the intention to apply for arbitration; |
| (2) | matters for arbitration; and |
| (3) | a designated arbitration commission. |
Article 17
An arbitration agreement shall be void if one of the following facts exists:
| (1) | the agreed matters for arbitration exceed the scope of arbitrable matters as specified by law; |
| (2) | one party that concluded the arbitration agreement has no capacity for civil acts or has limited capacity for civil acts; or |
| (3) | one party coerced the other party into concluding the arbitration agreement. |
Article 18
If an arbitration agreement contains no or unclear provisions concerning the matters for arbitration or the arbitration commission, the parties may reach a supplementary agreement. If no such supplementary agreement can be reached, the arbitration agreement shall be void.
Article 19
An arbitration agreement shall exist independently. The amendment, rescission, termination or invalidity of a contract shall not affect the validity of the arbitration agreement.
The arbitration tribunal has the right to affirm the validity of a contract.
Article 20
If a party challenges the validity of the arbitration agreement, he may request the arbitration commission to make a decision or the People’s Court to give a ruling. If one party requests the arbitration commission to make a decision and the other party requests the People’s Court for a ruling, the People’s Court shall rule.
A party’s challenge of the validity of an arbitration agreement shall be raised prior to the arbitration tribunal’s first hearing.
Chapter 4. Arbitration Proceedings
Section 1. Application and Acceptance
Article 21
A party’s application for arbitration shall meet the following requirements:
| (1) | there is an arbitration agreement; |
| (2) | there is a specific arbitration claim and there are facts and reasons; and |
| (3) | the application is within the scope of the arbitration commission’s acceptability. |
Article 22
To apply for arbitration, a party shall submit to the arbitration commission the written arbitration agreement and a written application for arbitration, together with copies thereof.
Article 23
A written application for arbitration shall specify the following particulars:
| (1) | the parties’ names, sexes, ages, occupations, work units and domiciles, and in the case of legal persons or other organizations, their names and domiciles and the names and positions of their legal representatives or principal officers; |
| (2) | the arbitration claim and the facts and reasons on which the claim is based; and |
| (3) | the evidence, the source of the evidence and the name and domicile of witness. |
Article 24
If, when an arbitration commission receives a written application for arbitration, it considers that the application complies with the conditions for acceptance, it shall accept the application and notify the party within five days from the date of receipt. If the arbitration commission considers that the application does not comply with the conditions for acceptance, it shall inform the party in writing of its rejection of the application and explain its reasons for rejection within five days from the date of receipt.
Article 25
After an arbitration commission accepts an application for arbitration, it shall, within the time limit specified in the rules of arbitration, deliver a copy of the rules of arbitration and a list of arbitrators to the claimant, and serve one copy of the application together with the rules of arbitration and a list of arbitrators on the respondent.
After receiving the copy of the application, the respondent shall submit a written defense to the arbitration commission within the time limit specified in the rules of arbitration. After receiving the written defense, the arbitration commission shall serve a copy thereof on the claimant within the time limit specified in the rules of arbitration. Failure on the part of the respondent to submit a written defense shall not affect the progress of the arbitration proceedings.
Article 26
If the parties have concluded an arbitration agreement and one party institutes an action in a People’s Court without declaring the existence of the agreement and, after the People’s Court accepts the case, the other party submits the arbitration agreement prior to the first hearing, the People’s Court shall dismiss the case unless the arbitration agreement is void. If the other party does not, prior to the first hearing, raise an objection to the People’s Court’s acceptance of the case, he shall be deemed to have renounced the arbitration agreement and the People’s Court shall continue to try the case.
Article 27
The claimant may renounce or amend its arbitration claim. The respondent may accept or refute an arbitration claim and shall have the right to make a counterclaim.
Article 28
A party may apply for interim measures of protection of property if it may become impossible or difficult to implement the award due to an act of the other party or other causes.
If a party applies for interim measures of protection of property, the arbitration commission shall submit the party’s application to a People’s Court in accordance with the relevant provisions of the Civil Procedure Law.
If the application is wrongful, the applicant shall compensate for the losses suffered by the party against whom the interim measures have been taken.
Article 29
A party or statutory agent may appoint a lawyer or other agent to carry out the arbitration activities. To appoint a lawyer or other agent to carry out the arbitration activities, a power of attorney shall be submitted to the arbitration commission.
Section 2. Formation of Arbitration Tribunal
Article 30
An arbitration tribunal may be composed of either three arbitrators or one arbitrator. An arbitration tribunal composed of three arbitrators shall have a presiding arbitrator.
Article 31
If the parties agree that the arbitration tribunal shall be composed of three arbitrators, they shall each appoint, or entrust the chairman of the arbitration commission to appoint one arbitrator. The parties shall jointly select or jointly entrust the chairman of the arbitration commission to appoint the third arbitrator who shall be the presiding arbitrator.
If the parties agree that the arbitration tribunal shall be composed of one arbitrator, they shall jointly appoint or jointly entrust the chairman of the arbitration commission to appoint such arbitrator.
Article 32
If the parties fail to agree on the method of formation of the arbitration tribunal or to select the arbitrators within the time limit specified in the rules of arbitration, the arbitrators shall be appointed by the chairman of the arbitration commission.
Article 33
After the arbitration tribunal has been formed, the arbitration commission shall notify the parties in writing of the tribunal’s formation.
Article 34
In one of the following circumstances, the arbitrator must withdraw, and the parties shall also have the right to challenge the arbitrator for a withdrawal:
| (1) | the arbitrator is a party in the case or a close relative of a party or of an agent in the case; |
| (2) | the arbitrator has a personal interest in the case; |
| (3) | the arbitrator has another relationship with a party or his agent in the case which may affect the impartiality of the arbitration; or |
| (4) | the arbitrator has privately met with a party or agent or accepted an invitation to entertainment or a gift from a party or agent. |
Article 35
If a party challenges an arbitrator, he shall submit his challenge, with a statement of the reasons therefor, prior to the first hearing. If the matter which gives rise to the challenge becomes known after the first hearing, the challenge may be made before the conclusion of the final hearing of the case.
Article 36
The decision as to whether or not the arbitrator should withdraw shall be made by the chairman of the arbitration commission. If the chairman of the arbitration commission serves as an arbitrator, the decision shall be made collectively by the arbitration commission.
Article 37
If an arbitrator cannot perform his duties due to his withdrawal or for other reasons, a new arbitrator shall be selected or designated in accordance with this Law.
After a substitute arbitrator has been selected or appointed due to an arbitrator’s withdrawal, a party may request that the arbitration proceedings already carried out shall be carried out anew. The decision as to whether or not to permit such proceedings to be carried out anew shall be made by the arbitration tribunal. The arbitration tribunal may also make a decision of its own motion as to whether or not the arbitration proceedings already carried out should be carried out anew.
Article 38
If the circumstances described in item (4) of Article 34 hereof apply to an arbitrator and such circumstances are serious, or if the circumstances described in item (6) of Article 58 hereof apply to an arbitrator, such arbitrator shall assume legal liability according to law and the arbitration commission shall remove his name from the list of arbitrators.
Section 3. Hearing and Award
Article 39
Arbitration shall be conducted by means of hearings. If the parties agree to arbitration without hearings, the arbitration tribunal may render an arbitration award on the basis of the written application, the written defense and other material.
Article 40
Arbitration shall be conducted in camera. If the parties agree to public arbitration, the arbitration may be public, unless state secrets are involved.
Article 41
The arbitration commission shall notify the parties of the date of hearing within the time limit specified in the rules of arbitration. A party may, within the time limit specified in the rules of arbitration, request a postponement of the hearing if he has justified reasons therefor. The arbitration tribunal shall decide whether or not to postpone the hearing.
Article 42
If the claimant fails to appear before the tribunal without justified reasons after having been notified in writing or leaves the hearing prior to its conclusion without the permission of the arbitration tribunal, he may be deemed to have withdrawn his application for arbitration.
If the respondent fails to appear before the tribunal without justified reasons after having being notified in writing or leaves the hearing prior to its conclusion without the permission of the arbitration tribunal, a default award may be made.
Article 43
Parties shall provide evidence in support of their own arguments.
The arbitration tribunal may of its own motion collect such evidence as it considers necessary.
Article 44
If the arbitration tribunal considers that a special issue requires appraisal, it may refer the issue for appraisal to an appraisal department agreed on by the parties; or to an appraisal department designated by the arbitration tribunal.
If requested by a party or required by the arbitration tribunal, the appraisal department shall send its appraisers to attend the hearing. Subject to the permission of the arbitration tribunal, the parties may question the appraiser.
Article 45
Evidence shall be presented during the hearings and may be examined by the parties.
Article 46
Under circumstances where evidence may be destroyed or lost or be difficult to obtain later, a party may apply for interim measures of protection of evidence. If a party applies for interim measures of protection of evidence, the arbitration commission shall submit his application to the basic-level People’s Court in the place where the evidence is located.
Article 47
The parties shall have the right to carry on debate in the course of arbitration. At the end of the debate, the presiding arbitrator or sole arbitrator shall solicit final opinions from the parties.
Article 48
The arbitration tribunal shall make records of the hearings in writing. The parties and other participants in the arbitration shall have the right to apply for correction of the record of their own statements if they consider that such record contains omissions or errors. If no corrections are made, their application for correction shall be recorded.
The record shall be signed or sealed by the arbitrators, the recordist, the parties and the other participants in the arbitration.
Article 49
After an application for arbitration has been made, the parties may settle on their own. If the parties reach a settlement agreement, they may request the arbitration tribunal to make an arbitration award in accordance with the settlement agreement; alternatively, they may withdraw their application for arbitration.
Article 50
If a settlement agreement reached by the parties is repudiated after the application for arbitration is withdrawn, an application for arbitration may be filed again in accordance with the arbitration agreement.
Article 51
The arbitration tribunal may carry out conciliation prior to giving an award. The arbitration tribunal shall conduct conciliation if both parties voluntarily seek conciliation. If conciliation is unsuccessful, an arbitration award shall be made promptly.
If conciliation leads to a settlement agreement, the arbitration tribunal shall make a written conciliation statement or make an arbitration award in accordance with the settlement agreement. A written conciliation statement and a written arbitration award shall have equal legal validity and effect.
Article 52
The written conciliation statement shall specify the arbitration claim and the results of the settlement reached between the parties. The written conciliation statement shall be signed by the arbitrators and sealed by the arbitration commission. After the written conciliation statement has been so signed and sealed, it shall be served on both parties.
The written conciliation statement shall become legally effective immediately after both parties have signed for receipt thereof.
If the written conciliation statement is repudiated by a party before he signs for receipt thereof, the arbitration tribunal shall promptly make an arbitration award.
Article 53
The arbitration award shall be made in accordance with the opinion of the majority of the arbitrators. The opinion of the minority of the arbitrators may be entered in the record. If the arbitration tribunal is unable to form a majority opinion, the arbitration award shall be made in accordance with the opinion of the presiding arbitrator.
Article 54
The arbitration award shall specify the arbitration claim, the facts of the dispute, the reasons for the decision, the result of the award, the allocation of arbitration costs and the date of the award. If the parties agree that they do not wish the facts of the dispute and the reasons for the decision to be specified in the written arbitration award, the same may be omitted. The arbitration award shall be signed by the arbitrators and sealed by the arbitration commission. An arbitrator with dissenting opinions as to the arbitration award may either sign or not sign the award.
Article 55
In arbitration proceedings, if a part of the facts involved have already become clear, the arbitration tribunal may first make an award in respect of such part of the facts.
Article 56
If there are literal or calculation errors in the arbitration award, or if matters which have been decided by the arbitration tribunal are omitted in the arbitration award, the arbitration tribunal shall correct or supplement the award.
Within thirty days from the date of receipt of the award, the parties may request the arbitration tribunal to correct and/or supplement the award.
Article 57
The arbitration award shall be legally effective from the date on which it is made.
Chapter 5. Application for Setting Aside Arbitration Award
Article 58
A party may apply for setting aside an arbitration award to the intermediate People’s Court in the place where the arbitration commission is located if he can produce evidence which proves that the arbitration award involves one of the following circum-stances:
| (1) | there is no arbitration agreement; |
| (2) | the matters decided in the award exceed the scope of the arbitration agreement or are beyond the arbitral authority of the arbitration commission; |
| (3) | the formation of the arbitration tribunal or the arbitration procedure was not in conformity with statutory procedure; |
| (4) | the evidence on which the award is based was forged; |
| (5) | the other party has withheld evidence sufficient to affect the impartiality of the arbitration; |
| (6) | while arbitrating the case, the arbitrators committed embezzlement, accepted bribes, practiced graft or made an award that perverted the law. |
The People’s Court shall rule to set aside the arbitration award if a collegiate bench formed by the People’s Court verifies upon examination that the award involves one of the circumstances set forth in the preceding paragraph.
If the People’s Court determines that the arbitration award is contrary to the public interest, it shall rule to set aside the award.
Article 59
A party that wishes to apply for setting aside an arbitration award shall submit such application within six months from the date of receipt of the award.
Article 60
The People’s Court that has accepted an application for the setting aside of an arbitration award shall rule to set aside the award or to reject the application within two months from the date of acceptance.
Article 61
If the People’s Court that has accepted an application for setting aside an arbitration award considers that re-arbitration can be carried out by the arbitration tribunal, it shall notify the tribunal that it should re-arbitrate the dispute within a certain time limit and shall rule to stay the setting aside procedure. If the arbitration tribunal refuses to re-arbitrate the dispute, the People’s Court shall rule to resume the setting aside procedure.
Chapter 6. Enforcement
Article 62
The parties shall perform the arbitration award. If a party fails to perform the arbitration award, the other party may apply to the People’s Court for enforcement in accordance with the relevant provisions of the Civil Procedure Law. The People’s Court that accepts such an application shall enforce the award.
Article 63
If the party against whom the enforcement is sought presents evidence which proves that the arbitration award involves one of the circumstances set forth in the second paragraph of Article 217 of the Civil Procedure Law (see Annex to the Law), the People’s Court shall, after examination and verification by a collegiate bench formed by the People’s Court, rule to refuse enforcement.
Article 64
If one party applies for enforcement of an arbitration award and the other party applies for setting aside the arbitration award, the People’s Court shall rule to suspend the enforcement proceedings.
If the People’s Court rules to set aside the arbitration award, it shall rule to terminate the procedure. If the ruling is made to reject the application for setting aside of the arbitration award, the People’s Court shall rule to resume the enforcement procedure.
Chapter 7. Special Provisions for Foreign-related Arbitration
Article 65
This Chapter applies to the arbitration of disputes arising from economic, trade, transportation and maritime activities involving a foreign element. For matters not covered in this Chapter, the other provisions of this Law shall apply.
Article 66
Foreign-related arbitration commissions may be organized and established by the China Chamber of International Commerce.
A foreign-related arbitration commission shall be composed of one chairman, several vice chairmen and members.
The chairman, vice chairmen and members of foreign-related arbitration commissions may be appointed by the China Chamber of International Commerce.
Article 67
Foreign-related arbitration commissions may appoint their arbitrators from among foreigners with special knowledge in the fields of law, economy and trade, science and technology, etc.
Article 68
If a party to a foreign-related arbitration applies for taking interim measures of protection of evidence, the foreign-related arbitration commission shall submit his application to the intermediate People’s Court in the place where the evidence is located.
Article 69
A foreign-related arbitration tribunal may enter the details of the hearing in a written record or make written minutes thereof. The written minutes may be signed or sealed by the parties and the other participants in the arbitration.
Article 70
If a party presents evidence which proves that a foreign-related arbitration award involves one of the circumstances set forth in the first paragraph of Article 260 of the Civil Procedure Law, the People’s Court shall, after examination and verification by a collegiate bench formed by the People’s Court, rule to set aside the award.
Article 71
If the party against whom the enforcement is sought presents evidence which proves that the arbitration award involves one of the circumstances set forth in the first paragraph of Article 260 of the Civil Procedure Law, the People’s Court shall, after examination and verification by a collegiate bench formed by the People’s Court, rule to refuse the enforcement of the award.
Article 72
If a party applies for enforcement of a legally effective arbitration award made by a foreign-related arbitration commission and the party against whom the application for enforcement is sought or such party’s property is not within the territory of the People’s Republic of China, the party shall directly apply to a competent foreign court for recognition and enforcement of the award.
Article 73
Foreign-related arbitration rules may be formulated by the China Chamber of International Commerce in accordance with this Law and the relevant provisions of the Civil Procedure Law.
Chapter 8. Supplementary Provisions
Article 74
If there is prescription for arbitration stipulated by law, such prescription shall apply. If there is no such prescription for arbitration stipulated by law, the prescription for litigation shall apply to arbitration.
Article 75
Until the China Arbitration Association formulates rules of arbitration, the arbitration commissions may formulate tentative rules of arbitration in accordance with this Law and the relevant provisions of the Civil Procedure Law.
Article 76
Parties shall pay arbitration fees according to regulations.
The methods for charging arbitration fees shall be submitted to the commodity-price administration authorities for examination and approval.
Article 77
Regulations concerning arbitration of labor disputes and agricultural contractor’s contract disputes arising within the agricultural collective economic organizations shall be formulated separately.
Article 78
In the event of conflict between the provisions governing arbitration regulations formulated prior to the implementation of this Law and the provisions of this Law, this Law shall prevail.
Article 79
Arbitration institutions in the municipalities directly under the central government, in the municipalities that are the seats of the People’s Governments of provinces and autonomous regions and in other municipalities with districts that were established prior to the implementation of this Law shall be reorganized in accordance with this Law. Those of such arbitration institutions that are not reorganized shall cease to exist one year from the date of implementation of this Law.
Other arbitration institutions established prior to the implementation of this Law that do not comply with the provisions of this Law shall cease to exist from the date of implementation of this Law.
Article 80
This Law shall be implemented from 1 September 1995.
Annex – Relevant Provisions of the Civil Procedure Law
Article 217
If the party against whom the enforcement is sought presents evidence which proves that the arbitration award involves one of the following circumstances, the People’s Court shall, after examination and verification by a collegiate bench formed by the People’s Court, refuse enforcement thereof:
| (1) | the parties have neither included an arbitration clause in their contract nor subsequently reached a written arbitration agreement; |
| (2) | matters decided in the award exceed the scope of the arbitration agreement or are beyond the arbitral authority of the arbitration institution; |
| (3) | the formation of the arbitration tribunal or the arbitration procedure was not in conformity with statutory procedure; |
| (4) | the main evidence for ascertaining the facts was insufficient; |
| (5) | application of law was truly incorrect; or |
| (6) | in arbitration, arbitrators committed embezzlement, accepted bribes, practiced graft or made an award that perverted the law. |
Article 260
(4) If the party against whom the enforcement is sought presents evidence which proves that the arbitration award made by the foreign-related arbitration institution of the People’s Republic of China involves one of the following circumstances, the People’s Court shall, after examination and verification by a collegiate bench formed by the People’s Court, rule to refuse the enforcement of the award:
| (1) | the parties have neither included an arbitration clause in their contract nor subsequently concluded a written arbitration agreement; |
| (2) | the party against whom the enforcement is sought was not notified to appoint an arbitrator or to take part in the arbitration proceedings or the party against whom the enforcement is sought was unable to state his opinions due to reasons for which he is not responsible; |
| (3) | the formation of the arbitral tribunal or the arbitration procedure was not in conformity with the rules of arbitration; or |
| (4) | matters decided in the award exceed the scope of the arbitration agreement or are beyond the arbitral authority of the arbitration institution. |