Knowledge crucial when locking horns in China-related disputes

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Last month, the first part of the Singapore International Arbitration Centre’s (SIAC) article on sharing our experiences with China-related cases explored some elements that are particular to Chinese disputes, and also examined Chinese companies as parties. In this issue, the second and final part of the article discusses some of the challenges to Chinese companies, tips for corporate counsel facing Chinese disputes and future trends in Chinese arbitration.

Challenges to China companies

Chinese companies may sometimes not be familiar with the practices of international arbitration centres. The default number of arbitrators, for example, is provided by ICC and LCIA rules to be one where the arbitration agreement is silent. The SIAC’s practice is the same in this regard. However, the default number is three in Chinese arbitral commissions. So sometimes parties leave this out, and find that they subsequently cannot have three arbitrators, and hence their nominee, as it is very rarely the case that they can get the other side to vary the arbitration agreement when the dispute has started and relations have broken down. We suggest that Chinese parties get the benefit of advice from practitioners who are experienced in international arbitrations before commencing one.

Chinese companies’ legal functions may not be as integrated with business functions as those of large international companies, and the relatively lower levels of co-ordination between legal and business decision makers is something that Chinese companies may want to address in order to maximise their chances of doing well in international arbitrations.

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Arvin Lee, the author, is Deputy Head (China) and Counsel at the Singapore International Arbitration Centre

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