Has SPC finally resolved CIETAC sub-commission controversy?

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The battle for jurisdiction between the China International Economic and Trade Arbitration Commission (CIETAC) and its two breakaway sub-commissions, the Shanghai International Economic and Trade Arbitration Commission (also known as the Shanghai International Arbitration Centre, or SHIAC) and the South China International Economic and Arbitration Commission (also known as the Shenzhen Court of International Arbitration, or SCIA), has attracted wide attention among legal professionals and the international business community. The rift has continued for the past three years and started when CIETAC publicly announced it would suspend authority to these two sub-commissions.

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On 15 July 2015, the Supreme People’s Court (SPC) provided specific guidance to clarify the jurisdiction between these arbitration institutions by issuing a reply to the Shanghai High People’s Court and other courts. Although jurisdiction has since been clarified, the reply is less clear on how the courts should deal with existing awards issued under the overlap of CIETAC and SHIAC/SCIA. This article will analyze the rift between CIETAC and SCIA/SHIAC, interpret the reply and provide suggestions for drafting future arbitration clauses.

The rift

On 1 May 2012, CIETAC suspended authority to its former Shenzhen and Shanghai sub-commissions. In December 2012, CIETAC terminated both sub-commissions and prohibited them from using the CIETAC name. In the meantime, the former Shenzhen and Shanghai sub-commissions announced their independence and renamed themselves as SCIA and SHIAC on 22 October 2012 and 16 April 2013, respectively.

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Shen Peng is a special counsel with the dispute resolution group at Baker & McKenzie in Beijing