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APPLICABLE LAWS TO ARBITRATION AGREEMENTS UNDER CURRENT ARBITRATION LAW AND PRACTICE IN MAINLAND CHINA

Published online by Cambridge University Press:  17 July 2014

Fan Yang
Fan Yang*
Affiliation:
City University of Hong Kong School of Law, fan.yang@cityu.edu.hk.
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Abstract

This article examines the recent development of mainland Chinese law and judicial practice regarding the law applicable to arbitration agreements. It identifies potential changes to mainland Chinese law and practice that may help to further develop the People's Republic of China (PRC) into a truly international-arbitration-friendly jurisdiction. It argues that in the absence of explicit statutory provisions and a consistent approach in the People's Courts to the determination of the place of arbitration and the law applicable to arbitration agreements, it is important for parties negotiating arbitration clauses with a seat in China and/or for contracts involving mainland Chinese elements to explicitly designate the place of arbitration as well as the law governing their arbitration agreements.

Keywords

applicable lawarbitration agreementsChinese lawcomparative lawrecognition and enforcement
Type
Shorter Articles and Notes
Information
International & Comparative Law Quarterly , Volume 63 , Issue 3 , July 2014 , pp. 741 - 754
Copyright
Copyright © British Institute of International and Comparative Law 2014 

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References

1 eg Schwebel, SM, ‘The Severability of the Arbitration Agreement’ in International Arbitration: Three Salient Problems (Grotius 1987) 1–60Google Scholar; Dimolitsa, A, ‘Report: Separability and Kompetenz-Kompetenz’ in van den Berg, AJ (ed), ICCA Congress Series No 9 (Paris 1998) (Kluwer Law International 1999)Google Scholar; Lew, JD, Mistelis, LA and Kröll, SM, Comparative International Commercial Arbitration (2003) 99–127Google Scholar; Born, GB, International Commercial Arbitration (2009)Google Scholar ch 3 and 4; Blackaby, N, Partasides, C, Redfern, A and Hunter, M, Redfern and Hunter on International Arbitration (5th edn, OUP 2009) 116–19CrossRefGoogle Scholar; Tao, J, Arbitration Law and Practice in China (Kluwer Law International 2012) 82–4Google Scholar.

2 eg Paulsson, J, Rawding, N and Reed, L, The Freshfields Guide to Arbitration Clauses in International Contracts (Kluwer Law International 2010) 17–30Google Scholar.

3 eg Berger, KP, ‘Re-Examining the Arbitration Agreement: Applicable Law – Consensus or Confusion?’ in van den Berg, AJ (ed), International Arbitration 2006: Back to Basics? International Council for Commercial Arbitration Congress Series 2006 Montreal (Kluwer Law International 2007) vol 13, 302Google Scholar; Bernardini, P, ‘Arbitration Clauses: Achieving Effectiveness in the Law Applicable to the Arbitration Clause’ in van den Berg, AJ (ed), Improving the Efficiency of Arbitration Agreements and Awards: 40 years of Application of the New York Convention ICCA Congress Series No 9 (Paris 1998) (Kluwer Law International 1999) vol 9, 197Google Scholar.

4 1985 UNCITRAL Model Law on International Commercial Arbitration, with amendments as adopted in 2006.

5 Minutes of the Second National Meeting on Adjudication of Foreign-Related Commercial and Maritime Cases (26 December 2005) issued by the Supreme People's Court, in Chinese: 最高人民法院《第二次全国外商事海事判工作会要》的通知 (法[2005]26号), 2005年12月26日.

6 Born, GB, International Arbitration: Law and Practice (Kluwer Law International 2012) 55Google Scholar : ‘[I]n most cases, parties do not agree upon a choice-of-law clause specifically applicable to their arbitration agreement (e.g., “This arbitration agreement (Article X) shall be governed by [X] law.”), and instead agree only to a general choice-of-law clause, applicable to their underlying contract (e.g., “This contract shall be governed by [X] law.”)’.

7 Redfern and Hunter on International Arbitration (n 1) ch 3, para 3.10.

8 UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration, 176 at para 20 and fn 966 citing CLOUT case No 740 [Aloe Vera of America, Inc v Asianic Food (S) Pte Ltd and another, High Court, Singapore, 10 May 2006], [2006] 3 SLR 174 (206) para 61.

9 eg ICC Case No 4131; Lew, Mistelis and Kröll (n 1) 129; see also Lew, JD, ‘The Law Applicable to the Form and Substance of the Arbitration Clause’, ICCA Congress Series No 14, 1998, Paris, 142Google Scholar.

10 ICCA's Guide to the Interpretation of the 1958 New York Convention (2013) 51.

11 Minutes of the Second National Meeting on Adjudication of Foreign-Related Commercial and Maritime Cases (26 December 2005) issued by the Supreme People's Court, in Chinese: 最高人民法院《第二次全国外商事海事判工作会要》的通知 (法 [2005]26号), 2005年12月26日.

12 eg UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration, 104 referring to Dubai Islamic Bank PJSC v Paymentech, High Court, England, 24 November 2000, [2001] 1 LLR 65; and CLOUT case No 374 (also reproduced under CLOUT case No 408) [Oberlandesgericht Düsseldorf, Germany, 6 Sch 02/99, 23 March 2000], also available at <http://www.dis-arb.de/de/47/datenbanken/rspr/olg-düsseldorf-az-6-sch-02-99-datum-2000-03-23-id46>, in an action to set aside an arbitral award under art 34, where the arbitrator had failed to state the place of arbitration in the award, the German court found that the place of arbitration was the actual, effective place of the arbitration, and not simply the address on the award.

13 For discussions on institutional adherence in Chinese arbitration, see Weixia, G, Arbitration in China: Regulation of Arbitration Agreements and Practical Issues (Sweet & Maxwell 2012)Google Scholar ch 2, at 2.002

14 For discussions on the introduction of ad hoc arbitration into the PRC Arbitration Law, see Fan Yang, Foreign-related Arbitration in China: Commentary and Cases (Cambridge University Press 2014) Part II at 2.1.4 (forthcoming); see also Jin Huang and Lianbin Song, ‘Arbitration Law of the PRC (Modification Suggestions)’ Fa Xue Ping Lun 4 (2003).

15 See eg Hong Kong Vista Shipping Agency Co Ltd v Shenzhen Tuxuchan Tea Import & Export Company, No 18 of the Fourth Civil Tribunal of the Supreme People's Court (16 July 2002).

16 German No 23 of the Fourth Civil Tribunal of the Supreme People's Court (8 July 2004).

17 Changzhou Donghong Packaging Materials Co Ltd v DMT Company of France, No 6 of the Fourth Civil Tribunal of the Supreme People's Court (26 April 2006).

18 Zhangjiagang Xinggang Electronics Company v Brose International GmbH, No 1 of the Fourth Civil Tribunal of the Supreme People's Court (9 March 2006).

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20 Amoi Technology Co Ltd v Societe de Production Belge AG, No 5 of the Fourth Civil Tribunal of the Supreme People's Court (20 March 2009).

21 Huzhao No 2 Refractory Joint Venture Factory v Minteq International Inc, No 42 of the Fourth Civil Tribunal of the Supreme People's Court (30 November 2004).

22 Shenzhen Food Group Co Ltd v Noble Resources Co Ltd (Singapore), No 22 of the Fourth Civil Tribunal of the Supreme People's Court (9 June 2010).

23 ICCA's Guide to the Interpretation of the 1958 New York Convention (2013) 24.

24 See eg Davis-Standard Corporation v Ningbo Xiecheng Power Tools Co Ltd, No 13 of the Fourth Civil Tribunal of the Supreme People's Court (25 June 2004); and Wuhan Zhongheng New Technology Industry Co Ltd v Jinli Xingye Holdings Co Ltd, No 19 of the Fourth Civil Tribunal of the Supreme People's Court (27 July 2004).

25 Akzo Nobel Coatings (Dongguan) Co Ltd v Sincere Metal Engineering (Hong Kong) Co Ltd, No 32 of the Fourth Civil Tribunal of the Supreme People's Court (26 July 2005).

26 Shenzhen Food Group Co Ltd v Noble Resources Co Ltd (Singapore), No 22 of the Fourth Civil Tribunal of the Supreme People's Court (9 June 2010).

27 Xiamen Xinjiexing Industry & Trade Co Ltd, and She Wenbin v Xiamen Fengruite Industry & Trade Development Co Ltd, No 4 of the Fourth Civil Tribunal of the Supreme People's Court (26 February 2009).

28 Hemofarm DD, MAG International Trading Company and the Sulam Media Co Ltd v Jinan Yongning Pharmaceutical Co Ltd, No11 of the Fourth Civil Tribunal of the Supreme People's Court (2 June 2008).

29 Minutes of the Second National Meeting on Adjudication of Foreign-Related Commercial and Maritime Cases (26 December 2005) issued by the Supreme People's Court, in Chinese: 最高人民法院《第二次全国外商事海事判工作会要》的通知 (法 [2005]26号), 2005年12月26日: 58. 当事人在合同中定的适用于解决合同争的准据法不能用来确定外仲裁条款的效力。.

30 See eg ICCA's Guide to the Interpretation of the 1958 New York Convention (2013) 37.

31 Born (n 6) 55–6.

32 Pearson, S, ‘Sulamérica v Enesa: The Hidden Provalidation Approach Adopted by the English Courts with Respect to the Proper Law of the Arbitration Agreement’ (2013) 29(1) Arbitration International 115–26CrossRefGoogle Scholar.

33 ibid.

34 Sulamérica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638; [2013] 1 WLR 102; [2012] 2 All ER (Comm) 795; [2012] 1 Lloyd's Rep 671; [2012] 2 CLC 216; [2012] Lloyd's Rep IR 405; The Times, 24 August 2012; Official Transcript.

35 ibid para 24; C v D [2007] EWCA Civ 1282, [2008] 1 All ER (Comm) 1001 considered.

36 Ibid at para. 26; XL Insurance Ltd v Owens Corning [2001] 1 All E.R. (Comm) 530 considered.

37 Ibid at para. 29.

38 Ibid.

39 Ibid at para. 30.

40 Ibid.

41 Ibid.

42 See Supreme People's Court's Official Notice on Several Questions in Dealing with Foreign-related and Foreign Arbitration (1995.08.28): (1995.08.28); commonly known and referred to as the Report System.