Zeyu Huang, PhD Student in University of Macau (Private International Law & International Arbitration) TRACKING THE INSTITUTIONALISATION OF AD HOC ARBITRATION IN MAINLAND CHINA THE RELEVANCE OF UNCITRAL RECOMMENDATIONS FOR CHINA AND CHINESE INNOVATION
ROADMAP Institutionalisation of Ad Hoc Arbitration The Relevance of UNCITRAL Recommendations Chinese Experiences and Innovation
WHAT IS INSTITUTIONALISATION OF AD HOC ARBITRATION? Originally, there is only ad hoc arbitration. However, more and more permanent arbitral institutions have been set up to handle international commercial arbitrations. As a result, arbitration fell into two distinct categories: ad hoc arbitration v. institutional arbitration. In the context of international commercial arbitration, there is a global trend that private parties are inclined to submit disputes to permanent arbitral institutions for settlement. Institutionalisation of International Commercial Arbitration - See Fouchard, Gaillard, Goldman on International Commercial Arbitration, pp. 33-35. Does this trend have anything to do with ad hoc arbitration?
WHAT IS INSTITUTIONALISATION OF AD HOC ARBITRATION? INSTITUTIONALISATION OF AD HOC ARBITRATION - HYBRID ARBITRATION Hybrid Arbitration: where arbitration institutions offer administrative services or act as appointing authority in ad hoc arbitration. Is it still ad hoc? In practice, many prestigious arbitral institutions have adopted administrative procedures to ac as the appointing authority or offer general services of administrative assistance in ad hoc arbitration. To name a few
WHAT IS INSTITUTIONALISATION OF AD HOC ARBITRATION? ADMINISTRATIVE PROCEDURES OF ARBITRATION INSTITUTIONS ACTING AS APPOINTING AUTHORITY AND/OR OFFERING ADMINISTRATIVE SERVICES ICC: Rules of ICC As Appointing Authority in UNCITRAL Or Other Ad Hoc Arbitration Proceedings (effective as of 1 January 2004); American Arbitration Association (AAA) International Centre of Dispute Resolution (ICDR): Procedures for Cases under the UNCITRAL Arbitration Rules; Singapore International Arbitration Centre (SIAC): Practice Note on Case Administration of Arbitrators & Financial Management for Cases under the UNCITRAL Rules 2010 Stockholm Chamber of Commerce ( SCC ): Procedures for the Administration of Cases under the 2010 UNCITRAL Arbitration Rules and the SCC Procedures as Appointing Authority under the 2010 UNCITRAL Arbitration Rules Swiss Chambers Arbitration Institution (SCAI): Rules of the Swiss Chambers Arbitration Institution as Appointing Authority in UNCITRAL or other Ad Hoc Arbitration Proceedings; Some even drafted by themselves a separate set of ad hoc arbitration rules being juxtaposed with its institutional arbitration rules, e.g., Bulgarian Chamber of Commerce and Industry: Rules Concerning Ad Hoc Arbitration Assisted by the Court of Arbitration at the Bulgarian Chamber of Commerce and Industry, adopted on 17 January 1989
WHAT IS INSTITUTIONALISATION OF AD HOC ARBITRATION? CHARACTERISTICS Hybrid System of Arbitration: the participation of permanent arbitral institutions in ad hoc proceedings; Arbitral institutions acting as the appointing authority or offering administrative services. Distinguishable from the pure ad hoc arbitration in the strict sense which excludes participation of institutions. Challenge: It has blurred the clear-cut dividing line between ad hoc arbitration and institutional arbitration.
WHAT IS INSTITUTIONALISATION OF AD HOC ARBITRATION? THE REASON BEHIND THE TREND OF INSTITUTIONALISATION OF AD HOC ARBITRATION UNCITRAL Arbitration Rules: Requests the Secretary_General to arrange for the widest possible distribution of the arbitration rules. See UN General Assembly Resolution 37/98 adopted in 1976. UNCITRAL Recommendations: Recommendations to Assist Arbitration Institutions and Other Interested Bodies With Regard to Arbitration under the UNCITRAL Arbitration Rules (the 1982 version & the 2012 version).
THE RELEVANCE OF UNCITRAL RECOMMENDATIONS It is recalled in the UN General Assembly Resolution 37/98 adopted on 15 December 1976 that the UNCITRAL Arbitration Rules was initially established for ad hoc arbitration. At present, there are three versions of the UNCITRAL Arbitration Rules: (1) the 1976 Version; (2) the 2010 revised version; and (3) the 2013 version which incorporates the UNICITRAL Rules on Transparency. But, the Rules have been used for the settlement of a broad range of disputes: disputes between private commercial parties where no arbitral institution is involved (ad hoc arbitration); commercial disputes administered by arbitral institutions (institutional arbitration) investor-state disputes (investment arbitration) State-to-State disputes (State-to-State Arbitration Under Public International Law)
THE RELEVANCE OF UNCITRAL RECOMMENDATIONS UNCITRAL RECOMMENDATIONS(1982)&(2012) Recommendations to Assist Arbitral Institutions and Other Interested Bodies With Regard to Arbitration under the UNCITRAL Arbitration Rules (1976), adopted in 1982; Recommendations to Assist Arbitral Institutions and Other Interested Bodies With Regard to Arbitration under the UNCITRAL Arbitration Rules (2010), adopted in 2012.
THE RELEVANCE OF UNCITRAL RECOMMENDATIONS UNCITRAL RECOMMENDATIONS(1982) It is entrenched in the Recommendations that [a]d hoc arbitrations conducted under the UNCITRAL Arbitration Rules may be facilitated by a body acting as appointing party or providing administrative services of a secretarial, technical nature. See UNCITRAL Recommendations (1982), at 421-424. Functions of acting as appointing authority: appointment of arbitrators, decision on challenge or replacement of arbitrator, assistance in fixing fees of arbitrators, and advisory comments regarding deposits. An Non-exhaustive list of possible administrative services of a secretarial, technical nature: forwarding written communications, assisting the arbitral tribunal in organising proceedings, preparing meeting rooms for hearings or deliberations of the arbitral tribunal, and arranging for stenographic transcripts on hearings or other secretarial services, etc.
THE RELEVANCE OF UNCITRAL RECOMMENDATIONS UNCITRAL RECOMMENDATIONS(2012) It identifies three different usages of the UNCITRAL Rules by arbitration institutions and other similar bodies. 1. the Rules have served as a model for institutions to draft their own arbitration rules; 2. institutions have offered to administer disputes under these Rules or to render administrative services in ad hoc arbitration under these Rules; 3. the institutions may be requested to act as appointing authority as provided for under the Rules
CHINESE EXPERIENCES AND INNOVATION Ad Hoc Arbitration with the seat in Mainland China is generally not permitted by Chinese Law: Strict Interpretation of Articles 16 & 18 of the Arbitration Law of PRC. The Notice of the Supreme People s Court on the Provision of Judicial Safeguards for the Construction of Pilot Free Trade Zones, Article 9, Fa Fa [2016] No. 34, effective on 30 December 2016 ( 最高人民法院关于为自由贸易试验区建设提供司法保障的意见, 第 9 条, 法发 [2016]34 号,2016 年 12 月 30 日颁布实施 ) [the SPC s FTZ Notice].
CHINESE EXPERIENCES AND INNOVATION THREE SPECIFICS ARBITRATION OR AD HOC ARBITRATION? Article 9, Paragraph 3 of the SPC FTZ Notice provides that [t]he arbitration agreement between the enterprises registered in the Pilot FTZs, which provides arbitration seated in one specific place of mainland China and conducted by specific people to settle relevant disputes pursuant to specific arbitration rules, may be considered valid.
CHINESE EXPERIENCES AND INNOVATION TWO DIFFERENT APPROACHES IN TWO PILOT FREE TRADE ZONES (FTZS) Shenzhen Court of International Arbitration (SCIA): Guidelines for the Administration of Arbitration under the UNCITRAL Arbitration Rules, effective as from 1 December 2016 ( 深圳国际仲裁院关于适用 < 联合国国际贸易法委员会仲裁规则 > 的程序指引, 自 2016 年 12 月 1 日起施行 ) [the SCIA Guidelines]. Zhuhai Arbitration Commission: Ad Hoc Arbitration Rules of (Guangdong) Pilot Free Trade Zone (FTZ) Hengqin Area of Zhuhai, enter into force on 15 April 2017 ( 珠海 横琴自由贸易试验区临时仲裁规则,2017 年 3 月 18 日第五届珠海仲裁委员会第二次会议通过, 自 2017 年 4 月 15 日起施行 )[the Hengqin Ad Hoc Rules].
CHINESE EXPERIENCES AND INNOVATION ONE INNOVATION: BRIDGING AD HOC ARBITRATION AND INSTITUTIONAL ARBITRATION Guangzhou Arbitration Commission: China Internet Arbitration Alliance Rule for Bridging Ad Hoc Arbitration and Institutional Arbitration, entered into force on 19 September 2017 ( 中国互联网仲裁联盟临时仲裁与机构仲裁对接规则,2017 年 9 月 19 日通过并生效 )
CHINESE EXPERIENCES AND INNOVATION LEGAL PROBLEMS AND CHALLENGES No Legislative Definition of Ad Hoc Arbitration under Chinese Law. Are the Pilot Free Trade Zones Lawless Regions? How to Determine Whether a Hybrid Arbitration is Ad Hoc or Not under Chinese law? Hybrid Arbitration:e.g. Arbitration conducted pursuant to the Hengqin Ad Hoc Rules with Zhuhai Arbitration Commission acting as the appointing authority or providing administrative services of a secretarial nature.
CHINESE EXPERIENCES AND INNOVATION HOW TO DETERMINE WHETHER A HYBRID ARBITRATION IS AD HOC OR NOT UNDER CHINESE LAW Zhejiang Yisheng v INVISTA( 浙江逸盛石化有限公司诉英威达技术有限公司 ( 卢森堡 ) 申请确认仲裁协议效力纠纷案 ), [2012] Zhe Yong Zhong Zi No. 4, [2013] Min Si Ta Zi No. 60, Adjudication on 21 March 2014. Model Case No. 6, released according to Several Opinions of the Supreme People s Court on How People s Courts Provide Judicial Services and Protection to One Belt One Road, Fa Fa [2015] No.9, Issued on 16 June 2015 ( 典型案例之六, 依据 最高人民法院关于人民法院为 一带一路 建设提供司法服务和保障的若干意见, 法发 [2015]9 号,2015 年 6 月 16 日发布 ).
CHINESE EXPERIENCES AND INNOVATION ZHEJIANG YISHENG V INVISTA The Arbitration Cause between between the Applicant Yisheng and the Respondent INVISTA provided that [T]he arbitration shall take place at China International Economic Trade Arbitration Centre (CIETAC), Beijing, P.R. China and shall be settled according to the UNCITRAL Arbitration Rules as at present in force. The Ningbo Intermediate People s Court (following the instruction from the SPC): the arbitration clause was valid under Chinese law, without giving a clear answer on the question whether the arbitration clause was an ad hoc one or not.
CHINESE EXPERIENCES AND INNOVATION ZHEJIANG YISHENG V INVISTA In the case comment on the Model Case, the SPC elaborated that this case was the first case where the court recognised the validity of the arbitration clause referring disputes to arbitration proceedings administered by Chinese permanent arbitration institution under the UNCITRAL Rules (Hybrid Arbitration Clause). Furthermore, the SPC explicitly expressed that the arbitration agreed by the parties was institutional arbitration rather than ad hoc arbitration. Comment: It can be presumed that such a hybrid arbitration clause is considered as institutional by Chinese courts in a one size fits all approach.
CHINESE EXPERIENCES AND INNOVATION The Proposal: A Multi-Tiered Test Step 1: interpreting the arbitration agreement to determine whether an arbitration institution or a set of institutional arbitration rules is designated; Step 2: finding out the role and functions the arbitration institution has in the proceedings if there is an institution involved; Step 3: checking out the nature of the proceedings and the communications among the parties and arbitrator in the process of appointing arbitrators
Thanks a Lot for Your Listening! Q & A