Reply of the Supreme People’s Court on the Request of the Shanghai High People’s Court for Instructions on the Cases Involving the Judicial Review of Arbitration Awards Made by the CIETAC and its Former Sub-Commissions

On July 15, 2015, the Supreme People’s Court has issued the Reply on the Request of the Shanghai High People’s Court for Instructions on the Cases Involving the Judicial Review of Arbitration Awards Made by the CIETAC and its Former Sub-Commissions (the “Reply”). The Reply, once taking into effect dated on July 17, 2015, will solve the disputes over the issues regarding the validity of relevant arbitration awards and the right to accept arbitration cases, the jurisdiction over arbitration cases and the enforcement of arbitration awards of several arbitration agencies.

Background

A dispute between the central Beijing commission of the China International Economic and Trade Arbitration Commission (“CIETAC”) and its Shanghai sub-commissions and South China sub-commissions has arisen as the two sub-commissions refused to comply with the new arbitration rules issued by CIETAC that took into effect on May 1, 2012. As a result, on August 1, 2012, the central Beijing commission suspended the authority of arbitration to the Shanghai and South China sub-commissions. Correspondingly, the former South China sub-commission changed its name to the South China International Economic and Trade Arbitration Commission (“SCCIETAC”) and the former Shanghai sub-commission changed its name to the Shanghai International Economic and Trade Arbitration Commission (“SHIAC”).

As a result, after names were changed (“Rename Date”), SCCIETAC and SHIAC became independent from CIETAC. However, it also caused several disputes over the issues such as the validity of relevant arbitration awards and the right to accept arbitration cases, etc.

Reply of the Supreme People’s Court

In order to solve the disputes in practice, the Supreme People’s Court confirmed in the reply as follows:

(1)    Before the Rename Date, where the parties agree to submit their disputes to “CIETAC South China Sub-Commission” or “CIETAC Shanghai Sub-Commission” for arbitration, SCCIETAC or SHIAC shall have jurisdiction over these arbitration cases. Where any party of the dispute requests the people’s court to determine the arbitration agreement to be invalid or applies for the revocation or non-enforcement of the arbitration award on the ground that SCCIETAC or SHIAC has no right to arbitrate, the people’s court shall reject such request.

(2)    After the Rename Date, where the parties agree to submit their disputes to “CIETAC South China Sub-Commission” or “CIETAC Shanghai Sub-Commission” for arbitration, CIETAC shall have jurisdiction over these arbitration cases. However, if one party applies to SCCIETAC or SHIAC for the arbitration and the respondent raises no objection to the jurisdiction of the SCCIETAC or SHIAC, and after an arbitration award is made, any party of the dispute applies for the revocation or non-enforcement of the arbitration award on the ground that SCCIETAC or SHIAC has no right to arbitrate, the people’s court shall reject such application.

(3)    After the Reply takes into effect, where the parties sign an arbitration agreement and agree to submit their disputes to “CIETAC South China Sub-Commission” or “CIETAC Shanghai Sub-Commission” for arbitration, CIETAC shall have the jurisdiction over these arbitration cases.

(4)    Where the applicant in an arbitration case requests the arbitration committee to decide the jurisdiction over the case, and after the arbitration committee determines that the arbitration agreement is valid and it has jurisdiction over the case, the respondent files a lawsuit with the people’s court before the first hearing, applying for confirming the validity of the arbitration agreement, the people’s court shall accept the lawsuit to make a judgment. Where the applicant or the arbitration committee claims that the people’s court shall not accept the lawsuit filed by the respondent, the people’s court shall reject such claim.

(5)    Where, before this Reply takes into effect, an arbitration case that shall not be accepted by CIETAC, SCCIETAC or SHIAC according to Article 1 of the Reply has been accepted and the arbitration committee has made the award, such award is effective and binding.

(6)    Where, before this Reply takes into effect, CIETAC has accepted the same arbitration case with SCCIETAC or SHIAC, the arbitration committee that first accepted the case shall have jurisdiction over the case.

Comment

The Reply has clarified the queries during the arbitration practice among different arbitration commissions. As a result, the contradiction of jurisdiction over cases among arbitration commissions is solved to some extent and the status of SCCIETAC and SHIAC has been confirmed in a formal way.