The CIETAC suspends authorisation to its Shanghai Sub-Commission and South China Sub-Commission for accepting and administering arbitration cases
On 1 August 2012, the China International Economic and Trade Arbitration Commission (CIETAC) issued an announcement on its website regarding the administration of arbitration cases which are agreed to be arbitrated by the CIETAC Shanghai Sub-Commission or the CIETAC South China Sub-Commission (Announcement).
The key contents of the Announcement are summarised as follows:
- the CIETAC’s authorisation to the CIETAC Shanghai Sub-Commission and the CIETAC South China Sub-Commission for accepting and administering arbitration cases has been suspended as from 1 August 2012;
- if any transaction parties have agreed to submit disputes to the CIETAC Shanghai Sub-Commission or the CIETAC South China Sub-Commission for an arbitration, the parties should directly apply to the CIETAC for arbitration from 1 August 2012. The CIETAC Secretariat will be responsible for accepting the arbitration applications and administering the cases. The local contact details of the CIETAC Secretariat in Shanghai and Shenzhen are also provided in the Announcement; and
- unless the parties have agreed otherwise, in respect of the cases that are agreed to be arbitrated by the CIETAC Shanghai Sub-Commission, the venue of arbitration and the place of hearing will be Shanghai; and in respect of the cases that are agreed to be arbitrated by the CIETAC South China Sub-Commission, the venue of arbitration and the place of hearing will be Shenzhen.
The Announcement is regarded as a further action of the CIETAC in response to its continuous internal disputes with its sub-commissions which initially drew the public attention earlier this year. On 30 April 2012, the CIETAC Shanghai Sub-Commission published its own articles of association and arbitration rules, which are independent of the new CIETAC Articles of Association and Arbitration Rules approved by the China Council for the Promotion of International Trade in February 2012. The CIETAC Shanghai Sub-Commission also issued its own list of arbitrators and claimed itself as an arbitration institution independent and separate from the CIETAC.
As the dispute between the CIETAC and its sub-commissions heats up, the market is concerned that such ongoing dispute may impair the CIETAC’s reputation established in the past decades. The foreign investors and traders may push their Chinese counterparties to accept offshore arbitration e.g., arbitration by the Hong Kong International Arbitration Centre or the Singapore International Arbitration Centre.
For further information, please contact Sun Hong or Tony Zhong.
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