How can China become a more attractive venue for international arbitrations?

The Chartered Institute of Arbitrators (CIArb) held a meeting this month, organised by Ruby Zhang, economic officer with the British Consulate-General Shanghai, to assist the Shanghai Municipal Commission in identifying what is required to make the free trade zone a more attractive venue for international arbitrations.

CIArb member Simon Maynard (Allen and Overy), Paul Brumpton (White and Case), and Bing Yan (Skadden) provided insight into three key issues: the success of the English arbitration model, competition between key institutions, and the perspective of foreign parties on arbitration in China.

English arbitration model

Simon Maynard initiated the discussion by considering the success factors associated with the English arbitration system. The Arbitration Act 1996 and its relationship with the United Nations Commission on International Trade Law (UNCITRAL) Model Law, autonomy of the parties, supportive courts, competitive institutions, and adherence to the principles of separability (the invalidity of a contract does not automatically affect the arbitration agreement within it) and competence-competence (an arbitral tribunal has the power to rule on its own jurisdiction), as well as the assurance of confidentiality throughout the arbitral process, were all mentioned as key aspects which attracted users both at home and abroad.

Competition between institutions

Paul Brumpton examined the role of competition between both institutions and seats (including the UK, France, Switzerland, the US, and Singapore). Using interim measures as an example, healthy rivalry was put forward as a key component in developing the responsiveness of arbitration services to the needs of users.

Foreign perspective

Bing Yan considered the lack of confidence on the part of non-Chinese parties in light of the limits on party autonomy under the Arbitration Law of the People's Republic of China (PRC), and possible amendments that could be made to the PRC Arbitration Law in order to meet the accepted international practices. Subsequently, the main conclusions touched on the need for a straightforward, liberal, confidential, and transparent arbitration process to attract international arbitrations. Successful arbitration practices in Singapore and Hong Kong were listed as potential prototypes for reform.

Members of the delegation included Lu Zheng, the deputy director of the fair trade division at the Shanghai Municipal Commission of Commerce; Yan Bei, the deputy director of the service trade division at the Shanghai Municipal Commission of Commerce; Xia Yongzheng, an officer at the Shanghai Municipal Commission of Commerce; Zhou Jiepu, a professor at the law school of the Shanghai University of Finance and Economics; Shang Shu, the executive director of the Free Trade and Alternative Dispute Resolution (ADR) Development Centre at the Shanghai University of Finance and Economics; and Ruby Zhang, an economic officer at the British Consulate-General Shanghai.

The group will be visiting other arbitral institutions in London, including the London Court of International Arbitration (LCIA) during its trip.

CIArb is the world's leading professional membership body for arbitration and ADR. A not-for-profit organisation, CIArb promotes the use of ADR internationally through a membership of 13,000 professionally qualified members in more than 120 countries. In addition to providing education and training for arbitrators, mediators, and adjudicators, CIArb acts as an international resource centre for practitioners, policy makers, academics, and those in business concerned with the cost-effective and early settlement of disputes.