The Deputy Head of the Supreme People’s Court (SPC) Fourth Civil Division, Liu Jingdong, recently revealed that the SPC is considering applying the reporting system for the enforcement of international arbitration awards to domestic arbitration awards. If implemented, this move will unify the standards for judicial review of domestic awards and help reduce incorrect lower court decisions on enforcement of arbitral awards.
This development is in line with China’s recent trends and will enhance its reputation as an arbitration-friendly jurisdiction (to avoid any doubt, a reference to China in this article means Mainland China). However, despite improvements made in the past decade, certain aspects of the legal framework for arbitration in China still lag behind international standards.
POSITIVE DEVELOPMENTS
Increased willingness to give effect to arbitration clauses. The Arbitration Law and Chinese court practices have long been criticised for imposing unnecessarily rigid requirements on the validity of an arbitration agreement (or arbitration clause). For example, the arbitration agreement has to specify an arbitration institution – as a result, ad hoc arbitration is not recognized in China. But in recent years, the SPC is moving closer to international practices by broadening the interpretation of what constitutes a valid arbitration agreement in order to give effect to an arbitration agreement.
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Simon Hui is a partner with the dispute resolution group at Baker & McKenzie, and he can be contacted on +86 21 6105 5996 or by email at SIMON.HUI@BAKERMCKENZIE.COM
Cui Hailin is an associate with the group, and she can be contacted on +86 10 6535 9093 or by email at HAILIN.CUI@BAKERMCKENZIE.COM
