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Settlement of Disputes
05/01/2007 15:50:04  CCPIT

In China, there are four ways of settling commercial disputes: consultation, mediation, arbitration and legal action.

I. Arbitration


Arbitration is commonly adopted way for settling international commercial disputes and so is it in China. It enjoys the advantages of summary procedures, quick handling less cost. It can settle disputes independently, fairly and rapidly. Parties concerned enjoy full rights. It also features flexibility, confidentiality, finalization and easy performance. That is why it is adopted by more and more parties concerned.

China has always advocated and encouraged settlement of international commercial disputes by arbitration. As early as in 1956, the Chinese Government set up an arbitration body whose sole purpose was to settle international commercial disputes. Rapid progress has been made in arbitration of international commercial disputes over the past 50 years. Now, China ranks first in terms of the number of cases handled by Chinese arbitration organizations. The fairness upheld has won universal approval at home and abroad. Parties concerned in dispute cases have come from more than 40 countries and regions. In fact, China has become a world center for handling international commercial disputes.

. Foreign-related arbitration organizations in China

There are two foreign-related arbitration organizations in China, which are, the China International Economic and Trade Arbitration Commission (CIETAC) and the China Maritime Arbitration Commission (CMAC). The former handles disputes arising from international economic and trade activities and the latter, disputes arising from maritime affairs.

CIETAC is headquartered in Beijing. It has two sub-commissions in Shenzhen and Shanghai and offices in Changsha, Hebei, Dalian, Fuzhou, Chongqing, Jilin, Jiangsu, Zhejiang, Hubei, Shandong, Xinjiang, Henan, Tianjin and Chengdu.

The CIETAC and its sub-commissions accept cases according to the arbitration rules and use the unified arbitration rules and list of arbitrators. Its offices are responsible for offering consulting services, assisting in the arrangement of arbitration court, engaging in arbitration publicity and promotion of arbitration agreements, collecting information about arbitration, carrying out investigation and study and handling other matters commissioned by CIETAC.

 

China International Economic and Trade Arbitration Commission (CIETAC)

Address: 6th Floor, Gaolan Mansion, 32 Liangmaqiao Road, Chaoyang District, Beijing

Postal code100016

Tel.(86-10) 64646688

Fax(86-10) 64643500,64643520

E-mailCIETAC@public.bta.net.cn

Websitehttp://www.cietac.org

CIETAC Shanghai Sub-Commission

Address7th floor, Building 2, 28 Jingling Road (W), Shanghai

Postal Code200021

Tel.:(86-02163877878 63878686

Fax:(86-02163877070

E-mailcietac@sh.col.com.cn

Websitehttp://www.cietac-sh.org

CIETAC South China Sub-Commission

Address19th Floor, BOC Manion, Caitian Road, Futian District, Shenzhen City

Postal Code518026

Tel.:(86-077583501700

Fax:(86-077582468591

E-mailinfo@sccietac.org

Websitehttp://www.sccietac.org

CIETAC Changsha Office

ContactFu Nanlin

Address1st Floor, Foreign Trade Building, 98 Wuyi Road (E), Changsha City 

Tel.0731-2296514

Postal Code410001

CIETAC Hebei Office

ContactLi Chao

Address2nd Floor, Commercial Hall Building No. 334, Heping Road (W), Shijiazhuang City

Tel.0311-7832953

Postal Code050071

E-mail: cietacheb@tom.com

CIETAC Dalian Office

ContactMa Xueqing

AddressRoom 1007, 10th Floor, Wanda Mansion, 18 Hongda Road, Zhongshan District, Dalian City

Tel.0411-82654418

Fax0411- 82806905

Postal Code116001

E-mail: yy@ccpitdl.org

CIETAC Fuzhou Office

ContactYang Xinjie

Address21st Floor, Pindong Office Tower, 128 Hualin Road, Fuzhou City, Fujian Province

Tel.0591-87818190\0591-87758182

Fax0591-87842827

Postal Code350003

CIETAC Chongqing Office

ContactZou Hang

Address19th Floor, International Chamber of Commerce Building, 78 Yanghe Yicun, Jiangbei District, Chongqing City

Tel.023-67755808

Fax023-67731702

Postal Code400020

Beijing Liaison Office

Address: 4th floor, Hualongjie Mid-Section, Nanheyan, Dongcheng District, Beijing

ContactBai Liang

Tel.010-65250622

Fax010-65250622

Postal Code100006

E-mail: bailiang@ccpitbj.org 

CIETAC Jilin Office

ContactChen Zhengwei

AddressXX, Beijing St., Jinli, Jilin Province

Tel.0432-2089200

Fax0432-2082600

Postal Code132084

E-mail: kenty-cao@163.com

CIETAC Jiangsu  Office

ContactYu Weining

AddressBuilding 8, 50 Zhonghua Road, Nanjing, Jiangsu Province

Tel.025-52254218/52856808

Fax025-52245267

Postal Code210000

E-mail: ccoicjcc@jlonline.com

CIETAC Zhejiang Office

Contact: Wu Zhaoping

Address: 18, Jiaochang Road, Hangzhou, Zhejiang Province

Tel.0571-87706108

Fax0571-87706198

Postal Code310006

CIETAC Hubei Office

ContactLu Kunxiang

Address15th Floor, Jinmao Mansion, 8 Jianghan Road (N), Wuhan City, Hubei Province

Tel.027-85750913/85796170

Fax027-85775174

Postal Code430022

CIETAC Shandong Office

ContactGao Jing

Address158 Jingsi Road, Jinan City, Shandong Province

Tel.0531-6168389

Fax0531-6168370

Postal Code250001

E-mail: sd.law@ccpit.org

CIETAC Xinjiang Office

ContactPu Lei

Address11 Tuanjie Rd. Urumqi, Xinjiang Uygur Autonomous Region

Tel.0991-2866771

Postal Code830001

CIETAC Henan Office

ContactWu Yongxin

AddressBuilding No.2, 115 Wenhua Road, Zhengzhou City, Henan Province
Tel.
0371-3576404

Postal Code450002

CIETAC Tianjin Office

ContactWu Fengling

AddressRoom 201, International Trade Building, 85, Qufu Road, Heping District, Tianjin

Tel.022-23317860/23022835

Postal Code300042

CIETAC Chengdu Office

ContactDai Shaoquan

Address14th Floor, Shaocheng Building, Shaocheng Road, Shudu Dadao, Chengdu City

Tel.028-86260418

Postal Code610015

Electronics Information Center

ContactMei Min

Address2nd Floor, Electronics Building, Wanshou Road, Beijing
Tel.
010-68207154

Fax010-68200638

Postal Code100846

E-mail: meimin123@263.net

CIETAC Shaanxi Office

ContactZhang Yuming

AddressXin Cheng House, Xi’an, Shaanxi Province

Tel.029-87280794

Fax029-87280794

Postal Code710006

CIETAC Heilongjiang Office

AddressHarbin Institute of Technology, 13, Fayuan Road, Nangang District, Harbin, Heilongjiang Province

Tel.045186402007

Fax045187280794

Postal Code150001

 

 

China Maritime Arbitration Commission (CMAC) settles by arbitration disputes arising from maritime affairs, maritime commerce and logistics and other contracting or non-contracting disputes in order to protect the lawful rights and interests of parties concerned and promote the development of international and domestic trade and logistics.

CMAC is headquartered in Beijing and has a sub-Commission in Shanghai and offices in Dalian, Guangzhou, Tianjin and Ningbo. CMAC handles arbitration cases according to the arbitration rules while its offices offer consulting services, assist in the arrangement of arbitration court, make publicity of arbitration and promotion of arbitration agreement as well as collect information about arbitration, carry out investigations and handle other matters designated or entrusted by CMAC.

 

China Maritime Arbitration Commission (CMAC)

Address6th floor, Gaolan Mansion, 32, Liangmaqiao Road, Chaoyang District, Beijing

Postal Code100016

Tel.(86-10)64646688

Fax(86-10)64643500,64643520

E-mailcmac@cmac.org.cn

Websitehttp://www.CMAC.org.cn

CMAC Shanghai Sub-Commission

AddressRooms 1301, 1314, 13th floor, Tangchen Jinrong Mansion, 710 Dongfang Road, Pudong, Shanghai

Postal Code200122

Tel.021-58200329 50810729

Fax021-50810965

CMAC Dalian Office

AddressR. 1007, 10th floor, Wanda Mansion,Hongda Rd. Zhongshan District, Dalian City

Postal Code116001

Tel.0411-2654418

Fax0411-2654438

CMAC Guangzhou Office

Address R. 930, 4th floor, Zhongyang Hotel Office Tower, 33 Airport Rd. Sanyuanli, Guangzhou

Postal Code510405

Tel.020-86578331-1930

Fax020-86581343

CMAC Tianjin Office

AddressR. 205, International Trade Building, 85, Heping District, Tianjin

Postal Code300042

Tel.86-22 23301340/23022385

Fax86-22 23301340

CMAC NingboOffice

Address12th Floor, Tianning Building, 138, Zhongshan Rd. (W), Ningbo City

Postal Code315000

Tel.86-574 87368209

Fax86-574 87368100

. Cases to be accepted

Commercial cases to be accepted

The Arbitration Commission shall settle disputes of contractual or non-contractual economic trade in an impartial and fair manner through arbitration.

According to the provisions of Article 3 of the Arbitration Rules of the CIETAC, the Arbitration Commission shall accept disputes as follows:

a. International or foreign-related disputes;

b.Disputes involving Hong Kong and Macao special administrative regions or Taiwan Province;

c. Domestic disputes.

According to the provisions of Article 2 of the Financial Disputes Arbitration Rules of the CIETAC, the Arbitration Commission shall accept disputes arising from financial business or other disputes concerned, including but not limited to businesses as follows:

a.Loans;

b.Deposit receipts;

c.Security;

d.Letters of credit;

e.Bills;

f.Funds of business and trusteeship;

g.Bonds;

h.Collection and foreign exchange remittance;

i.Factoring;

j.Payment agreement between    banks;

k.Securities and futures.

 

Maritime arbitration cases to be accepted

a.Disputes arising from charter party, contract of multi-model transport, bill of lading, waybill or any other transport documents in connection with carriage of goods by sea or waters, or carriage of passengers;

b.Disputes arising from sale, construction, repair, chartering, financing, towage, collision, salvage or raising of ships or other offshore mobile units, or from sale, construction, chartering, financing and other relative business of containers;

c.Disputes arising from marine insurance, general average or ship's protection and indemnity;

d.Disputes arising from supply or security of ship's stores or fuel, ship's agency, seamen's labor service or port's handling;

e.Disputes arising from exploitation and utilization of marine resources or pollution damage to marine environment;

f.Disputes arising from freight forwarding, non-vessel operating common carriage, transport by highway, railway or airway, transport, consolidation and devanning of containers, express delivery, storing, processing, distributing, warehouse distributing, logistics information management, or from construction, sale and leasing of tools of transport, tools of carrying and handling, storage facilities, or from logistics center and distribution center, logistics project planning and consulting, insurance related to logistics, tort or others related to logistics;

g.Disputes arising from fishery production or fishing; and

h.Other disputes submitted for arbitration by agreement between parties.

. Model arbitration clauses

When applying for arbitration, the claimant must submit an arbitration agreement, which may be arbitration clauses incorporated in the contract or any agreement reached for arbitration before or after the disputes. According to China’s laws, a valid arbitration agreement must be accompanied by expressed claim of arbitration, a selected arbitration committee, and agreed items in arbitration (which may be settled through arbitration). The agreement must be in written form. Parties concerned must have the capacity of signing the arbitration agreement, which is legal in contents and form.

The China International Economic and Trade Arbitration Commission (China Maritime Arbitration Commission) recommend the following model arbitration clause:

"Any dispute arising out of or in connection with this contract shall be submitted to the China International Economic and Trade Arbitration Commission (China Maritime Arbitration Commission) for arbitration in accordance with the existing rules of the Commission. The arbitration award shall be final and binding upon the parties."

To the above arbitration clause, parties concerned may add the following items, or make supplementary agreements in written forms after arbitration clauses/agreements are reached and before disputes are submitted for arbitration or arbitration procedures begin:

a. Place of Arbitration and/or place of court;

b. Arbitration language to be used;

c. Number of arbitrators required;

d. Nationalities of arbitrators;

e. Law to be applied;

f.Ordinary procedures or simplified procedures to be applied.

.  Guide to CIETAC arbitration procedures

1.Application procedure

When applying for arbitration, the claimant must submit to Secretariat of the Arbitration Commission or Secretariats of the Sub-commissions an arbitration agreement and an application for arbitration in writing, and the facts and evidence on which his claim is based, and the claimant shall pay an arbitration fee in advance to the Arbitration Commission according to the Arbitration Fee Schedule of the Arbitration Commission.

(1)The Application for Arbitration

 The following shall be specified in the Application for Arbitration:

a. the name and address of the claimant and those of the respondent, including the zip code, telephone number, telex number, fax number and cable number or any other means of electronic telecommunications, if any;

b. the Arbitration agreement relied upon by the claimant;

c. the facts of the main points of dispute;

d.. the claimant's claim; and

e. the facts and grounds on which the claim is based;

f. The Application for Arbitration shall be signed and/or stamped by the claimant and/or the attorney authorized by the claimant.

The copies of arbitration application and evidence materials should the sum total of the number of people of the applicant side, arbitration court and secretariat.

After applying for arbitration, the claimant may request to amend his arbitration claim; but the arbitration tribunal may refuse such a request for amendment if it considers that it is too late to raise the request and the amendment may affect the arbitration proceedings.

(2) Defense and Counterclaim

At the time of sending the Notice of Arbitration to the respondent, the Secretariat(s) of the Arbitration Commission shall enclose one copy each of the claimant's application for arbitration and its attachment as well as the Arbitration Rules, the Panel of Arbitrators and the Arbitration Fee Schedule of the Arbitration Commission.

In foreign arbitration, the respondent shall, within 45 days from the date of receipt of the Notice of Arbitration, submit to the Secretariat(s) of the Arbitration Commission his written defense and relevant documents to be entered into evidence. In domestic arbitration, the respondent shall, within 20 days from the date of receipt of the Notice of Arbitration, produce his written defense and relevant documentary evidence to the Secretariat(s) of the Arbitration Commission. The respondent may request to amend his defense. The respondent shall submit his defense within the time limit specified by the arbitration tribunal. The arbitration tribunal may extend that time limit appropriately if it deems that there are justified reasons. The arbitration tribunal has the power to decide whether to accept a Statement of Defense submitted after expiration of the aforementioned time limit. 

The respondent may lodge his counterclaim during the arbitration procedure, and the counterclaim must meet the following three requirements:

a. the counterclaim arises from the same contract relation or legal relation as that of the claims raised by the claimant;

b. the counterclaim is directed against the claimant;

c. the disputes involved in the counterclaim shall not be the same as the disputes involved in the arbitration claims.

The counterclaim shall, at the latest within 45 days (in foreign-related cases) or 20 days (in domestic cases or summary procedure cases) from the respondent's receipt of the Notice of Arbitration, be submitted to the Arbitration Commission. The arbitration tribunal may extend that time limit appropriately if it deems that there are justified reasons.

When lodging a counterclaim, the respondent shall lodge with the arbitration tribunal his counterclaim in writing, and state in it his specific claim, reasons for his claim and facts and evidence upon which his counterclaim is base and attach to his written statement of counterclaim the relevant documentary evidence. The written statement of counterclaim may be submitted together with his defense or alone. The written statement of counterclaim and the relevant documentary evidence shall be submitted in the same copies as the total number of the parties and arbitrators put together, so that all of the parties, arbitrators and the Secretariat(s) could get one copy each.

 When lodging his counterclaim, the respondent shall pay a deposit in advance as arbitration fee according to the Arbitration Fee Schedule of the Arbitration Commission.

The respondent may request to amend his counterclaim, but the arbitration tribunal may refuse such request for amendment if it considers that it is too late to raise the request and the request may affect the arbitration proceedings.

(3) Composition of Arbitration Tribunal

According to the Arbitration Rules of the Arbitration Commission, there are two types of arbitral tribunal:

a. Sole-Arbitrator Tribunal

Both parties may jointly appoint or jointly entrust the Chairman of the Arbitration Commission to appoint one sole-arbitrator from among the Panel of Arbitrators of the Arbitration Commission to form the tribunal for the case. Both parties have the power to recommend 1-3 persons as candidates of sole-arbitrator.

If both parties have agreed on the appointment of a sole arbitrator to examine and hear their case but failed to agree on the choice of such a sole arbitrator within 15 days from the date on which the respondent received the Notice of Arbitration, the Chairman of the Arbitration Commission shall make such appointment.

b. Three-Arbitrator Tribunal

Within fifteen 15 days from the date of receipt of the Notice of Arbitration, the claimant and the respondent shall each appoint one arbitrator or entrust the Chairman of the CIETAC to make such appointment. Where a party fails to appoint or to entrust the Chairman of the CIETAC to appoint an arbitrator within the specified time period, the arbitrator shall be appointed by the Chairman of the CIETAC. 

Within fifteen 15 days from the date of the respondent’s receipt of the Notice of Arbitration, the presiding arbitrator shall be jointly appointed by the parties or appointed by the Chairman of the CIETAC upon joint authorization given by the parties. 

The parties may each recommend one to three arbitrators as candidates for the presiding arbitrator and shall submit the list of recommended candidates to the CIETAC within the time period specified in paragraph 2. Where there is only one common candidate in the lists, such candidate shall be the presiding arbitrator jointly appointed by the parties. Where there is more than one common candidate listed, the Chairman of the CIETAC shall choose a presiding arbitrator from among the common candidates based on the specific nature and circumstances of the case, who shall act as the presiding arbitrator jointly appointed by the parties. Where there is no common candidate in the lists, the presiding arbitrator shall be appointed by the Chairman of the CIETAC from outside of the lists of recommended candidates. 

Where the parties have failed to jointly appoint the presiding arbitrator according to the above provisions, the presiding arbitrator shall be appointed by the Chairman of the CIETAC. 

The presiding arbitrator and the two appointed arbitrators shall jointly form an arbitration tribunal to examine and hear the case.

c. Multi-Party 

Where there are two or more claimants and/or two or more respondents in an arbitration case, the claimant side and/or the respondent side each shall, through consultation, jointly appoint or jointly entrust the Chairman of the CIETAC to appoint one arbitrator from the CIETAC Panel of Arbitrators. 

Where the claimant side and/or the respondent side fail to jointly appoint or jointly entrust the Chairman of the CIETAC to appoint one arbitrator within fifteen 15 days from the date of receipt of the Notice of Arbitration, the arbitrator shall be appointed by the Chairman of the CIETAC. 

The presiding arbitrator or the sole arbitrator shall be appointed in accordance with the procedure stipulated in the rules for Three-Arbitrator Tribunal. When appointing the presiding arbitrator or the sole arbitrator, the claimant side and the respondent side each shall, through consultation, submit a list of their jointly agreed candidates to the CIETAC. 

d. Procedures of withdrawal, replacement, and majority to continue arbitration 

If an arbitrator is related in the case or has some other relationship with the case which could possibly compromise the impartiality of the arbitration, he shall disclose the information to the Arbitration Commission, and ask for withdrawal from the arbitration. The parties shall have the right to apply for his withdrawal. In the event that an arbitrator is prevented de jure or de facto from fulfilling his/her functions, or he/she fails to fulfill his/her functions in accordance with the requirements of these Rules or within the time period specified in these Rules, the Chairman of the CIETAC shall have the power to decide whether the arbitrator shall be replaced. The arbitrator may also withdraw form his/her office. In the event that, after the conclusion of the last oral hearing, an arbitrator on a three-member arbitration tribunal is unable to participate in the deliberation and/or render the award owing to his/her demise or removal from the CIETAC Panel of Arbitrators, the other two arbitrators may request the Chairman of the CIETAC to replace the arbitrator pursuant to the Arbitration Rules. After consulting with the parties and upon the approval of the Chairman of the CIETAC, the other two arbitrators may continue the arbitration and make decisions, rulings or the award. The Secretariat of the CIETAC shall notify the parties of the above circumstances.

Arbitrators shall be independent and impartial, not representing interests of any party. The Arbitration Commission established Ethical Standards for Arbitrators to normalize the behavior of arbitrators during hearing of cases. Arbitrators shall hear cases based on facts and laws in addition to using fair, rational, and independent methods. Arbitrators shall perform arbitration procedures fairly, and independently and provide both parties with opportunities to fully state their opinions. Candidate arbitrators shall not act as the arbitrators of the case if they have discussed cases with one party or offered consulting opinions ahead of time. Arbitrators shall not accept gifts from any party involved in the case, and shall not meet in private with any party to discuss cases or accept materials. Arbitrators shall maintain strict confidentiality and never reveal any information about arbitration contents or proceedings and his/her own opinion to any one of the parties or outsiders. Arbitrators should diligently and prudently perform all the duties.

 

(4) Hearing of Cases

a. Conduct of Hearing

 Generally, oral hearings are conducted in the course of arbitration. However, the arbitration tribunal may examine the case and make an award on the basis of documents only at the request of the parties or with their consent, and with the arbitration tribunal's confirmation that oral hearings are unnecessary, or in case of Summary Procedure.

b. Date of Hearing

The date of oral hearing shall be fixed by the arbitration tribunal after consultation with the Secretariat of the Arbitration Commission, and shall be communicated to the parties 20 days (in foreign-related cases) or 15 days (in domestic cases) before the date of the hearing so that they may have sufficient time to make necessary arrangements. However, the notice of the date of hearing subsequent to the first hearing is not subject to the 20-day or 15-day time limit.

A party having justified reasons may communicate his request to the Secretariat of the Arbitration Commission for a postponement of the date of the hearing 10 days (in foreign-related cases) or 7 days (in domestic cases) before the date of the hearing. The arbitration tribunal shall decide whether or not to postpone the hearing.

c. Place of Hearing

Where the parties have agreed on the place of arbitration in writing, the agreement made by the parties shall prevail. Where the parties have not agreed on the place of arbitration, the place of arbitration shall be the office of the CIETAC or its Sub-Commission. The arbitration award shall be deemed as being made at the place of arbitration.

Where the parties have agreed on the place of oral hearings, the case shall be heard at that agreed place except for circumstances stipulated in Paragraph 3 of Article 69 of these Rules. Unless the parties agree otherwise, a case accepted by the CIETAC shall be heard in Beijing, or if the arbitration tribunal considers it necessary, at other places with the approval of the Secretary-General of the CIETAC. A case accepted by a Sub-Commission of the CIETAC shall be heard at the place where the Sub-Commission is located, or if the arbitration tribunal considers it necessary, at other places with the approval of the Secretary-General of the Sub-Commission.

d. Hearing by Default

The parties shall send their representative(s) or authorized agent(s) to attend the hearing. If the respondent fails to appear at an oral hearing without showing sufficient cause for such failure, the arbitration tribunal may proceed with the hearing and make an award by default. If the claimant fails to appear at an oral hearing without showing sufficient cause for such failure, the claimant may be deemed to have withdrawn the Request for Arbitration.

(5) Evidence

There are seven types of evidence: real evidence, written-documentary evidence, parties statements, witnesses testimony, photographs, video-audio tapes, expert's report, and investigation-reconnaissance records. All evidences cannot be invoked as the basis for making decision until they are proved to be true.

The claimant and the respondent shall produce evidence for the facts on which their claim, defense or counterclaims are based. The arbitration tribunal may undertake investigation and collect evidence on its own initiatives, if it deems it necessary. If the arbitration tribunal investigates and collects evidence on its own initiative, it shall timely inform the parties to be present on the spot if it deems it necessary. Should one party or both parties fail to appear on the spot, the investigation and collection of evidence shall by no means be affected.

The arbitration tribunal may consult an expert or appoint an appraiser for the clarification of special questions relating to the case. And the parties are obliged to submit or produce to the expert or appraiser any materials, documents, properties or goods related to the case for check-up, inspection or appraisal. The parties may engage experts to be present at the hearing to make witness on its own initiative.

The adoption of any evidence, including the evidence submitted by the parities and the expert's report and the appraiser's report shall be decided by the arbitration tribunal after examination. And the arbitration tribunal has the right to make decision on the relevance, importance and effectiveness of evidence.

(6) Protective measures

In order to ensure the smooth process of the arbitration procedures, the fair hearing of cases and effective performance of the award, parties concerned have the right to apply for the protection of property and evidence.

When a party applies for measures of protection of property and/or evidence, the party