Can arbitration clauses stipulate cases shall close within 30 days?

By Zhang Xiaoyu, CIETAC
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In institutional arbitration, model clauses are widely used for their ascertained validity. On the basis of the model clause, the parties may also “customize” the arbitration procedure by incorporating special agreements to maximize the advantages of the arbitration procedure’s flexibility.

Recently, a dispute between a Swiss company and a Hong Kong company over the sale of masks was submitted to the China International Economic and Trade Arbitration Commission (CIETAC) South China Sub-Commission. According to the Arbitration Rules of China International Economic and Trade Arbitration Commission (2015 Edition), the arbitral tribunal shall render the arbitral award within six months from the date on which the arbitral tribunal is formed. However, the arbitration clause specifically stipulates that the arbitration procedure shall be completed within 30 days. In accordance with article 4(3) of the CIETAC arbitration rules, if a special agreement is enforceable and legal, it shall be followed.

The contract was signed on 24 March 2020, during the most severe covid-19 outbreak – and the most significant contradiction between supply and demand of masks. Affected by the pandemic, enterprises have been burdened with huge cashflow pressure, and the decision-making time of commercial activities has shortened.

Both sides expressed extremely high expectations for the efficiency of dispute resolution. If the award were to be rendered too late, the losses to both sides would expand further, resulting in a lose-lose situation. In view of the pandemic situation, after consulting both parties and making a preliminary evaluation of the difficulty of presenting the case, the service procedure and the willingness of both parties to co-operate, CIETAC South China Sub-Commission decided that the arbitration award should be made within 30 days from the formation of the arbitration tribunal.

The parties agreed with this decision and the corresponding procedural arrangements. The arbitral tribunal guided both parties to conduct a sufficient exchange of evidence and submissions before the hearing by issuing procedural orders and question lists. Thanks to the efficient work of the arbitration tribunal and the co-operation of both parties, the case was held on the 23rd day after the arbitration tribunal was formed, and the arbitral award was rendered on the 28th day.

In addition to the time period for rendering the award, in institutional arbitration practice, there are special agreements as follows:

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Zhang Xiaoyu is a case manager at CIETAC South China Sub-Commission

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