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Pinsent Masons

International Arbitration Centre Bars Local Branches From Administering New Cases.

 

20 August, 2012

 

 

Two local branches of China's international arbitration body have been told they can no longer accept and administer cases due to their failure to accept the body's new rules, it has been announced.14 Aug 2012
 
The China International Economic and Trade Arbitration Commission (CIETAC) said that the Shanghai and South China (Shenzhen) offices, or 'sub-commissions', refused to "remain under the leadership of CIETAC in respect of case administration". It was suspending their authority to hear cases in order to "ensure the effective realisation of parties' autonomy in choosing CIETAC for arbitration" and "facilitate the effective resolution" of disputes, it said.
 
CIETAC's 2012 Arbitration Rules came into force on 1 May 2012. Under changes to Article 2 of the rules sub-commissions became branch offices which accept applications and administer arbitrations "with CIETAC's authorisation". In the previous version of the rules, which came into force in 2005, sub-commissions were described as an integral part of CIETAC with the power to administer cases under the directive of their respective secretariats.
 
Established in 1956, CIETAC is the dominant arbitration centre in China and administered 1,282 cases in 2011. In addition to the Shanghai and South China sub-commissions it also has offices in Chongqing and Tianjin. The 2012 rules, which were launched after extensive consultation, were intended to modernise and enhance the flexibility of CIETAC's arbitral processes.
 
In an announcement posted on its website, CIETAC said that any parties that had agreed to arbitrate their disputes through the Shanghai or South China sub-commissions should submit applications for arbitration from 1 August 2012 directly to CIETAC in Beijing for authorisation and administration. Without CIETAC's authorisation, it said, "no institutions shall have the right to accept and administer the afore-mentioned arbitration cases".
 
Cases which would have been heard by the Shanghai sub-commission will be heard in Shanghai, it said; while cases which would have been heard by the South China sub-commission would be heard in Shenzhen.
 
The 2012 CIETAC rules provide that the Secretariat of CIETAC, based in Beijing, will be the default administrator of arbitrations unless the parties have clearly agreed to administration by a sub-commission. If their agreement is ambiguous or the sub-commission specified does not exist, Beijing will administer the arbitration. Similarly, general references to "CIETAC arbitration" will result in Beijing administering the arbitration.
 
In an open letter posted on its website in May, CIETAC said that the changes were designed to prevent delays as a result of parties "forum shopping" between sub-commissions.
 

 

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