Meaning
Statutory framework that governs all arbitration proceedings conducted within the People’s Republic of China defines the legal rules for resolving commercial disputes through institutional tribunals. The provisions of the PRC Arbitration Law require an arbitration agreement to be in writing and to designate a specific, legally recognized arbitration commission. This statutory requirement means that ad hoc arbitration is generally not permitted for domestic disputes.
Institutional Role
Local arbitration commissions manage the proceedings and maintain lists of qualified arbitrators from which the parties must choose. These commissions ensure that the arbitration is conducted in accordance with their specific rules and the national statutory framework. The role of the commission is more active than in many western jurisdictions, where the arbitral tribunal itself has broader administrative autonomy.
Court Supervision
Intermediate people’s courts hold the authority to enforce or set aside arbitration awards issued by domestic commissions. Parties can apply to the courts to set aside an award if they can prove procedural defects, such as the absence of a valid arbitration agreement. This court involvement provides a layer of oversight while maintaining the finality of the arbitration process.
Recent Reform
Legislative updates have been proposed to align the domestic framework more closely with international practices. These changes aim to recognize ad hoc arbitration in specific contexts, such as within pilot free trade zones, and to provide clearer rules for interim measures. Implementing these updates would help attract more international commercial disputes to domestic arbitration institutions.
The revised statutes also seek to clarify the powers of the tribunal to order protective measures directly, reducing the need for parties to apply to domestic courts for emergency relief during the course of the arbitration proceedings.
