Procedures for Arbitration in China

After exchanging documents and appointing arbitrators, the CIETAC will fix a hearing date. In some cases, the parties may elect to conduct the proceedings on a documents-only basis and dispense with the oral hearing. It can be done subject to the agreement of both parties and the tribunal. Documents-only arbitration is suitable for cases where there is no substantial dispute on matters of facts.

The three arbitrators will make an award after the hearing. If the arbitrators cannot reach a unanimous decision, it will be decided by simple majority. The Arbitration Rules provide that the tribunal shall render an award within six months after the tribunal is formed, although this time limit can be extended by the CIETAC. Delays are not unusual in practice, bearing in mind the fact that the three arbitrators involved may reside in different jurisdictions, and the award must be reviewed and approved by the CIETAC before it is issued. The award comes into legal effect the date on which it is made. If no time limit is specified in the award, the parties must automatically take it into effect; otherwise, they must execute the award within the time limit specified.

The tribunal has the power to decide in the award the arbitration fees and expenses to be paid by the parties to the CIETAC as well as any compensation for expenses occurred to be paid to the winning party.

If any claims or counterclaims were omitted from the award, either party has 30 days from the receipt of the arbitral award to request in writing an additional award. If the tribunal finds that such an omittance exists, they have 30 days from the receipt of the request to make an additional award. Similarly, the tribunal can on its own initiative make an additional award within a “reasonable period of time” following the arbitral award.

At any time before the final award is made, a partial award may be made on any issue, provided that it is considered necessary by the tribunal or that the parties request an award and the tribunal accepts. Failure to perform the award will not affect the continuation of proceedings nor prevent the tribunal from making a final award.

The Arbitration Rules also provide for a summary procedure to be followed where either parties with a disputed amount below RMB 500,000 or parties with a disputed amount above RMB 500,000 but who agree, in writing, to a summary procedure. Upon accepting the application for the summary procedure, the CIETAC shall issue a Notice of Arbitration. Only one arbitrator, who should be appointed by the parties by agreement within 15 days after receipt of the Notice, will preside over the summary procedure, failing which the Chairman of the CIETAC will appoint an arbitrator for the parties. Either oral hearing or a document-only arbitration may be adopted, as the CIETAC deems fit.

The time limits for filing of documents and publication of award under the summary procedures are shorter than those under normal procedures. The Respondent should file the defence and counterclaim within 20 days after the receipt of the Notice of Arbitration. The award shall be given within three months from the date that the tribunal was formed.

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