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China: New CIETAC Arbitration Rules adopted

Q:  When will the China International Economic and Trade Arbitration Commission (CIETAC) arbitration rules be changed?

A:  The China Council for the Promotion of International Trade and the China Chamber of International Commerce has revised and adopted the new arbitration rules ("New Rules") of the China International Economic and Trade Arbitration Commission ("CIETAC"). The New Rules will enter into effect on 1 May 2012.

Q:  What is the most important change in the new Arbitration Rules compared with the former Rule ?

A:  The most important change among others is the power of the CIETAC arbitration tribunal to issue its own interim measures. This is a significant improvement.

    Formerly, in CIETAC arbitration proceedings every application for preservation of property or evidence had to be forwarded by the arbitration tribunal to the competent court. According Article 21 of the New Rules, the arbitration tribunal may still forward a party’s application for conservatory measures to the competent Chinese court. However, at one party’s request, the arbitration tribunal has the power to grant interim measures itself if it deems necessary and proper. Such interim measures can take the form of a procedural order or alternatively an interlocutory award.

    This new power of the arbitration tribunal can save time for the applicant, avoiding the need to rely on a Chinese court for interim measures.

Q:  By what condition a summary procedure can be applied according to the new rules?

A:  In accordance with the new arbitration rules, the summary arbitration procedure can now be applied for in cases with an amount in dispute of up to RMB 2,000,000.

 

Q:  What kind of language is allowed to be used in CIETAC arbitration in accordance with the new Arbitration Rules?

A:  In accordance with the new rules of CIETAC, the arbitration tribunal may designate a kind of language when no language agreement can reached by both parties. In old rules, if both parties failed to reach an agreement regarding to the language being used in this arbitration proceeding, the default language was Chinese.

Q:  Is the New rules more strict than the old one regarding to the affairs of arbitration application submission?

A:   According to the new rules, if the claimant does not rectify any formal deficiencies of his request for arbitration within the time designated by the Secretary of CIETAC, the claimant shall be deemed not to have submitted a request for arbitration.

Contrarily, if the respondent files a counterclaim, he must pay the corresponding arbitration fee in advance. If he fails do so, he will be deemed not to have filed a counterclaim.

The New Rules also stipulate a time limitation for submission of an application for postponement of an oral hearing is 5 days after receipt of the notice of such hearing (3 days in domestic or summary proceedings). In the old CIETAC Arbitration Rules, no fixed time limit applied.

Q:  Are there any changes regarding to the length of the arbitration proceeding in CIETAC new rules?

A:  In Article 43 of the new rules, it stipulated that arbitration proceedings can be temporarily suspended if necessary. There are no further definitions as to when a suspension is necessary. When calculating the time limit for issuing the arbitration award (6 months for international disputes and 4 months for domestic disputes), periods of suspension will not be counted.  

According to the New Rules, no contain provision stipulated here that only one oral hearing should be held. It means more than one oral hearing shall be held when it deemed necessary by arbitration tribunal.

Q:  In the new arbitration rules, whether the power of the Secretary of CIETAC is enlarged?

A:  Article 14 of the New Rules stipulates that if the arbitration tribunal has not yet been established, the Secretary of CIETAC shall decide whether an application for extension of the time limit is allowed or not.

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