A meeting of the ways

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Chinese arbitration has its own development track. Riding high on the goals and undertakings of making home-grown arbitration practices more international, the country also charts its course of introducing “China’s experience” and “Oriental wisdom” onto the international arbitration stage. We asked the region’s major player for their views − and their wisdom. Read the full interview with the leaders of six arbitration centres here.

In China, arbitration is something transplanted from other countries. Bringing the arbitration rules in line with international practice has long been a mainstream topic in the field. However, if we look at all the proposals so far to improve the “widely accepted” norms in international arbitration, we may find that some of the international norms that China is trying to learn may be in the process of evolving towards the domestic norms that China currently follows.

A basic mode

Arbitration
Chen Fuyong

Beyond the differences between civil and common law. The continual efforts in encouraging the internationalization of Chinese arbitration have made it possible for foreign lawyers to argue arbitration cases in Beijing in a similar fashion to the way they do before tribunals in other leading arbitration centres such as Hong Kong, Singapore, London and Paris. According to GAR’s Guide to Regional Arbitration 2018, the BAC rules are the most flexible of those offered in China in terms of party autonomy, where they approach the international norm. You are very likely able to arbitrate a dispute pretty much in any way you want, even when it comes to the vexed topic of which laws should apply.

It is not, however, safe to assume that all relevant procedural matters are the same, or that they are simply a complete transplantation of international norms. Although China is seen as a civil law jurisdiction, this does not mean that Chinese arbitration proceedings will necessarily always apply the core civil law principles, such as the inquisitorial approach and a focus on documents, which are often referred to as some of the key features of Chinese litigation practice.

Rather, the BAC Arbitration Rules clearly state that, in respect of any matters not expressly provided for in the rules, the BAC may administer, and the arbitral tribunal may conduct, the arbitration in such manner as they consider appropriate to ensure the efficient and fair resolution of the dispute between the parties.

This does not mean that common law procedures will automatically be adopted by the tribunal either. For users who prefer common law procedures, it is advisable to put in a special agreement on the specific procedures that will make sure that common law procedures or international arbitration practices are adopted in the Chinese arbitration.

Style of pleading

There is a tendency for the tribunal in international arbitration to require the parties to limit their submissions to a certain number of pages (as appropriate), and focus their pleadings on the key issues. The style and approach to pleading in China is generally shorter and more concise than equivalents in international arbitration outside China. A party is expected to serve supporting witness statements along with its pleading and the documentary evidence that supports its case.

Unless as a matter of procedure already agreed upon by the parties or decided upon by the arbitral tribunal, there is no specific provision or limitation on the rounds of pleadings. However, the usual expectation in practice is not only to set out the basics, but also to include the content of a full statement of the case/statement of defence in the request for arbitration/defence and the answer.

Document production

There are many complaints concerning the abuse of document production in international arbitration. In China, if parties want specific document production, it is advisable for them to agree to the use of the International Bar Association (IBA) Rules on the Taking of Evidence in International Arbitration in advance in their arbitration agreement.

If parties do not specify a set of rules, the rules of evidence that arbitrators in Chinese arbitrations will apply include the evidence rules from the Arbitration Law and institutional arbitration rules. Under these rules, there is no express power for a tribunal to make orders for the specific production of documents. However, if a party submits an issue in a case, and can show that the relevant evidence is only in the possession of the other party, the other party is expected to disclose the evidence. If it refuses to disclose the evidence without any justifiable reason, and the evidence would have had an adverse impact on the case of the party possessing the evidence, adverse inferences may be drawn from the refusal to disclose.

The hearing

There are more and more tribunals in international arbitration that try to limit the evidentiary hearing and rely more on documents. Normally, hearings in China last for only a half day or one day, which is substantially shorter than the hearings before major international arbitration institutions.

This is largely a result of the fact that Chinese parties in arbitrations seldom introduce witnesses in the proceedings if they believe that the documentary evidence they have submitted will be sufficient to prove their claims. However, more complex disputes can have oral hearings lasting several days, or have several hearings in non-consecutive days.

Role of case-handling secretary

Traditionally, Chinese arbitral institutions will assign to each individual case a case-handling secretary, who plays a much more important role than those of the case manager in international arbitration. Usually the secretary will directly handle most logistical and even procedural matters in arbitration, for instance, the service of documents and the issuing of procedural notices, and allow arbitrators to focus on substantive issues.

Some experts in China advocate limiting the role of the case-handling secretary and encourage the tribunal to assume more work. However, the growing practice in international arbitration of introducing a secretary to tribunal in recent years seems to justify the Chinese practice of allowing a case-handling secretary to take broader duties than those of a case manager.

In conclusion, compared with lawyer-driven and lengthy Western conventional practice, the Chinese conventional wisdom is to allow the arbitral tribunal and the arbitration institution to play more active roles, so that the arbitration proceeding can be run in an efficient and cost-effective way and be tailored as appropriate for each dispute.

Although it is not yet clear when Chinese and Western conventional wisdom will meet, they definitely will meet at some point in the future.

Chen Fuyong is deputy secretary-general of the Beijing Arbitration Commission/Beijing International Arbitration Centre