China’s arbitration quid pro quo

Chinese arbitration has its own development track. Riding high on the goals and undertakings of making home-grown arbitration practices more international, the country also charts its course of introducing “China’s experience” and “Oriental wisdom” onto the international arbitration stage. We asked the region’s major player for their views − and their wisdom. Read the full interview with the leaders of six arbitration centres here.

In recent years, as Chinese companies embark on an overseas journey and the national policy of the Belt and Road Initiative gets off the ground, more and more Chinese enterprises are going global to engage in investments abroad.

According to statistics, Chinese parties rank third in terms of the number of parties involved in cases commenced at the International Court of Arbitration of the International Chamber of Commerce (ICC), and fourth in terms of the number of parties involved in cases commenced at the Singapore International Arbitration Centre (SIAC). In the past three years, parties from the Chinese mainland have come in second in terms of the number of parties participated in the arbitrations commenced at the Hong Kong International Arbitration Centre (HKIAC), next only to parties from Hong Kong.

The growing demand from Chinese parties for international arbitration, on the one hand, promotes the fine-tuned international arbitration practices to be better accepted by Chinese practitioners. On the other hand, it also increases the chances of “Chinese elements”, including Chinese law, language, lawyers and arbitrators, appearing on the international arbitration stage.

This can be said to be how the concept of “Sinicization of international arbitration” manifests itself externally. As arbitration is known to be a dispute resolution mechanism, whether it could be given full play relies on how the design of this mechanism integrates with legal culture accepted by the parties to the dispute. From this point of view, for arbitral institutions in mainland China, the goal of the Sinicization of international arbitration is to make the case management practices and dispute resolution culture of our own gradually accepted by the international arbitration community.

In fact, with years-long arbitration practices and external exchanges, some arbitral institutions in mainland China with a higher degree of internationalization, such as the Shanghai International Economic and Trade Arbitration Commission (also known as Shanghai International Arbitration Centre, or SHIAC), have already shared their sophisticated ideas and experience on how to strike a balance between quality and efficiency.

This also has an impact on the recent practices of their global counterparts, to a certain extent. For example, arbitral institutions like the London Court of International Arbitration (LCIA) and the Hong Kong International Arbitration Centre (HKIAC) have successively taken a leaf from mainland arbitration institutions’ books in terms of case management, beginning to allow the parties to select and employ the tribunal secretary.

In terms of legal culture in arbitration, “arbitration-mediation” is being increasingly accepted by the international arbitration community. In Asia, apart from mainland China, arbitration legislation in Hong Kong and Singapore both allow an arbitrator to act as a mediator if all parties consent in writing. Arbitral institutions in European countries like Germany, Switzerland and Austria also stipulate that arbitrators have the obligation to actively assist the parties in reaching an amicable settlement of the dispute.