Arbitration in China: An Overview

China does not permit ad hoc arbitration; all arbitrations must be administered by an approved arbitral institution. The most prominent and historically widely used institution is the China International Economic and Trade Arbitration Commission ("CIETAC"), which handles a significant number of international and domestic cases. Other notable institutions have become more prevalent in recent years, including the Beijing Arbitration Commission ("BAC"), China Maritime Arbitration Commission ("CMAC"), Shenzhen Court of International Arbitration ("SCIA") and the Shanghai International Economic and Trade Arbitration Commission ("SHIAC"). Each institution has its own set of rules, which generally align with international standards but generally include unique provisions tailored to Chinese practice.

A valid arbitration agreement is a prerequisite for initiating arbitrations in China. The agreement must be in writing and clearly express the parties’ intention to arbitrate. Each agreement should specify the chosen arbitral institution, as failure to do so may render the agreement invalid under Chinese law. Parties are advised to draft arbitration clauses carefully to avoid jurisdictional challenges later.

Arbitration procedures in China emphasize efficiency and fairness. The burden of proof lies with the party asserting a claim and parties are expected to submit evidence promptly. Disclosure obligations are more limited compared to common law jurisdictions and there is no extensive discovery process. Evidence typically includes documentary evidence, witness statements and expert reports. Hearings may be conducted in person or virtually, depending on the institution’s rules and the parties’ agreement.

Confidentiality is a cornerstone of arbitration in China. Proceedings are generally private and arbitral awards are not published unless both parties consent, ensuring the protection of sensitive commercial information. While Chinese law does not have a comprehensive doctrine of legal privilege akin to common law systems, arbitral tribunals respect confidentiality obligations and take measures to safeguard privileged communications.

The enforcement of arbitral awards in China is governed by the Civil Procedure Law and the Arbitration Law. Domestic awards are enforced by Chinese courts upon application by the winning party. The Supreme People’s Court has requires lower courts to obtain higher-court approval before refusing enforcement, mitigating against arbitrary denials. For foreign awards, China’s adherence to the New York Convention ensures that such awards are recognized and enforced, subject to limited exceptions. Challenges to enforcement are rare and typically confined to procedural issues or public policy considerations. 

Arbitral awards in China are final and binding on the parties. Appeals on the merits are generally not permitted (although SCIA allows appeals by agreement so long as the law of the arbitration does not prohibit the same). However, parties may apply to set aside an award on limited grounds, such as lack of a valid arbitration agreement or procedural irregularities. Chinese courts generally adopt a pro-arbitration stance and are reluctant to interfere with arbitral awards.