Validity of arbitration agreement from case filing perspective

By Tian Bin, Langfang Arbitration Commission

The validity of an arbitration agreement is essential to an arbitration institution’s jurisdiction over a case and its filing. Unlike courts, jurisdiction of arbitration institutions and tribunals derives from agreement between parties and the law. The forms of authorisation by agreement, and key conditions for formation of the arbitration agreement stipulated by law, are expressed in the written arbitration agreement. Therefore, a preliminary judgment on the validity of an arbitration agreement is definitely involved in the case filing.

Based on experience at Langfang Arbitration Commission (LAC), the author analyses how to determine the validity of an arbitration agreement at case filing stage.

Judgement on validity

The validity of an arbitration agreement/clause is generally judged from three aspects: whether there is an expression of intention to apply for arbitration; whether there are arbitrable matters; and whether there is a selected arbitration commission.

Tian Bin, Langfang Arbitration Commission
Tian Bin
Director of the Case Filing Division
Langfang Arbitration Commission
Tel: +86 316 233 6602

In negotiating and signing a contract, parties often focus on their respective rights and obligations, performance of the contract and remedies for violation, and usually disregard the dispute resolution clause that is often regarded as the “midnight clause” in a contract. Therefore, it often occurs that no explicit arbitration clause is agreed upon.

For example, there is no stipulation on the arbitration institution in the provision: “Any dispute arising from this contract shall be settled through friendly consultation between the parties, and if consultation fails, it shall be settled through arbitration.” If parties submit an application to a specific arbitration institution according to this clause, should the arbitration institution accept the case?

Strictly speaking, this clause is invalid according to the current Arbitration Law and its judicial interpretation. However, the author believes the arbitration tribunal should make such a judgment after the hearing, and making the judgment at filing stage is inappropriate as there is no respondent’s opinion on the arbitration clause. If the claimant and respondent confirm the arbitration institution in the subsequent procedure, it will be deemed they have reached a valid agreement.

For example, the provision: “To solve the problem with the _____ method (option is left blank): (1) submit it to the LAC for arbitration; (2) file a lawsuit with the _____ people’s court according to the law” (option is left blank). There are two possible causes for this situation: either omission, or failure of the parties to reach an agreement. Whatever the cause, judgment is impossible at the filing stage and requires feedback from the counterparty to refer.

Through such cases, the LAC tends to accept all possible cases at the arbitration case filing stage. As long as the parties have the most basic intention of settling disputes through arbitration, the opportunity should not be denied at filing stage. Determination of the arbitration matter and the arbitration institution should be made by the arbitration tribunal based on the parties’ opinions.

Independence of arbitration clause

An arbitration clause is independent from the remaining clauses of a contract. The clause on dispute resolution is reached by the parties after careful consideration and consultation, and is an agreement with certain commercial value for both parties. If the contract change does not directly involve change of the arbitration clause – meaning the two parties have yet to reach a new agreement on the dispute resolution method – the original arbitration clause will not change with remaining clauses.

Article 6 of the Arbitration Rules of Langfang Arbitration Commission (2022) provides on the independence of the arbitration clause as follows: “The validity of an arbitration clause shall be judged separately, and will not be affected by the formation, existence, modification, rescission, termination, voidness, invalidation, ineffectiveness or revocation of a contract.”

This following case is a typical example concerning the independence of arbitration clauses. In this case, the original contract contains an arbitration clause, and the parties reach a repayment agreement after consultation for the creditors’ rights and debts of the original contract, but reach no agreement on an arbitration clause. Now the debtor fails to fulfil its obligations under the repayment agreement, the creditor applies for arbitration according to the arbitration clause in the original contract.

However, the debtor raises an objection to jurisdiction, arguing that the repayment agreement is a new agreement reached between the parties – different from the original contract, which contains no arbitration clause and is not bound by the arbitration clause in the original contract – and the dispute between the parties is under the repayment agreement, which should not be settled by arbitration, but by a court trial.

The author believes the role of the repayment agreement should be judged according to the relationship between the repayment agreement and original contract. If it can be proved from the repayment agreement contents and relevant evidence that it is a continuation of the original contract, it should be regarded as a supplementary agreement to the original contract on the payment of the contract amount, and bound by the arbitration clause in the original contract.

In summary, aside from having a thorough understanding of the conclusion, performance and violation of a contract, parties to arbitration should make a preliminary judgment on the validity of the arbitration agreement in accordance with the Arbitration Law and its judicial interpretation, as well as the arbitration rules of the agreed arbitration institution, and make full preparations before filing the case.

Tian Bin is a director of the Case Filing Division at the Langfang Arbitration Commission. He can be contacted at +86 316 233 6602 or by e-mail at