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.
Arbitration in the modern sense is an imported product for China. It has always been international. Therefore, there is inherently no issue or need for China to “internationalize” its arbitration system.
It is often seen that the difference between ambiguous foreign practices (there is actually no country called “foreign country” in the world, not to mention a unified set of international practices. There is at most a certain degree of commonness. So they are the “ambiguous foreign practices”) and domestic practices is perhaps, under certain circumstances, where some foreign practices sharing certain common characteristics are more efficient and more professional than certain domestic practices that have something in common.
Therefore, the domestic arbitration community learns these practices in order to improve efficiency and professional standards, and essentially satisfy the market demand.
This is a horizontal, borderless process of communication, learning and self-improvement among the professional community. In other words, the driving force behind the learning process is the desire to be more professional, rather than to be more “international”.
Hence, such a phenomenon of how Chinese arbitration is changing itself, which we have noticed in recent years, is not a manifestation of efforts to be what is called “international”, but efforts to be “professional” and “market-driven”.
Therefore, a statement like: “Chinese arbitration becomes more professional and market-driven than before” is perhaps more accurate than a statement like: “Chinese arbitration becomes more international than before”.
Secondly, international arbitration must conform to local laws in any single country across the world. Hence, a certain degree of localization and adjustment is much needed.
However, this does not mean that international arbitration will be made more “Chinese” in China, more “Indian” in India, or more “Brazilian” in Brazil. Therefore, the localization of international arbitration in China is not equivalent to the “Sinicization of international arbitration”.
Only when part, or even the majority, of a fundamental system of international arbitration has its current standards replaced by those standards originally developed in China can it be regarded as the “Sinicization of international arbitration”. Apparently, so far, this has not happened.
Finally, it can be seen that the so-called “internationalization of Chinese arbitration” and the “Sinicization of international arbitration” are not a pair of concepts corresponding to each other, despite the wording making it appear that way. The so-called phenomenon of “internationalizing Chinese arbitration”, in essence, is a process of improving the professional standards and the level of marketization via professional exchanges, in order to provide the parties with better services. The so-called phenomenon of “Sinicization of international arbitration” is just a misconception of how international arbitration adjusts itself in different countries to meet the compliance requirements from local laws.
With the decades-long development of Chinese arbitration, the “China experience”, which conforms to international practices and fits in well with the fundamental reality of the country, has come into existence. The most typical case comes from the expedited arbitration procedure, which goes by the name of “simplified procedure” in China.
Compared with the leading international arbitral institutions, Chinese arbitration bodies have adopted all along the expedited procedure to resolve lower-value disputes by analogy to the use of expedited rules for lawsuits. Although the specific approach is slightly different from those of the leading international arbitration agencies, it indeed marks the practice adopted by Chinese arbitral institutions far earlier than the leading international arbitration bodies.
This is the result of the fact that the arbitration community in China had begun to handle small claims cases since the 1990s. Compared with the disputes with monetary values of up to hundreds of millions of dollars in international arbitration, there was an urgent need to put the expedited procedure into use in Chinese arbitration. Apparently, such procedure places an aggressive curb on lengthy proceedings and hefty costs over the recent development of international arbitration. Hence, it is gradually becoming the latest trend of international arbitration.
However, I personally still have reservations about issues like how to export the “China experience”.
International arbitration traces its roots to the autonomy of merchants. Businesses have no national boundary, with the free flow of capital. They have never carried the excessively prominent characteristic of any single country. It is the same with international arbitration.
Rather than attaching a country-of-origin label to successful experience, it might as well be recognized that this is the outcome of international collaboration and concerted effort. This is the wisdom and intelligence contributed by China via its proactive participation in international activities.
For instance, a series of arbitration cases handled by a certain foreign arbitral institution has formed a set of effective practices. However, from both the parties to the lawyers and arbitrators, two-thirds of the people hold Chinese passports. So here is the question: Should the experience, formed and developed at this moment, be defined as the so-called “China experience”, or “foreign country’s experience”?
Or, the other way round, a series of arbitration cases handled by a certain Chinese arbitration body has formed a set of effective practices, but none of the parties, lawyers or arbitrators has Chinese nationality. So the question is: Should the experience, formed and developed at this moment, be defined as the “China experience” or the “foreign country experience”?
The nature of arbitration itself decides that it possesses all kinds of complex factors, and does not belong to a certain country or countries, be it China, the US or the UK. Every practitioner in every single country is contributing their wisdom and strength. But the ultimate outcomes belong to the whole international arbitration community, with no distinction between “them” and “us”.
Fan Mingchao is the director of arbitration and ADR forNorth Asia at International Chamber of Commerce