Arbitration Law of the People's Republic of China

     (Adopted at the 8th Session of the Standing Committee of the 8thNational People's Congress and Promulgated on August 31, 1994)

    Chapter I General Provisions

    Article 1
    This Law is formulated in order to ensure that economic disputes shallbe impartially and promptly arbitrated, to protect the legitimate rightsand interests of the relevant parties and to guarantee the healthydevelopment of the socialist market economy.

  Article 2
    Disputes over contracts and disputes over property rights andinterests between citizens, legal persons and other organizations as equalsubjects of law may be submitted to arbitration.

  Article 3
    The following disputes shall not be submitted to arbitration:
    1. disputes over marriage, adoption, guardianship,child maintenance and inheritance; and
    2. administrative disputes falling within the jurisdiction  of the relevant administrative organs according to law.

  Article 4
    The parties adopting arbitration for dispute settlement shall reach anarbitration agreement on a mutually voluntary basis. An arbitrationcommission shall not accept an application for arbitration submitted byone of the parties in the absence of an arbitration agreement.

  Article 5
    A people's court shall not accept an action initiated by one of theparties if the parties have concluded an arbitration agreement, unless thearbitration agreement is invalid.

  Article 6
    An arbitration commission shall be selected by the parties byagreement.
    The jurisdiction by level system and the district jurisdiction systemshall not apply in arbitration.

  Article 7
    Disputes shall be fairly and reasonably settled by arbitration on thebasis of facts and in accordance with the relevant provisions of law.

  Article 8
    Arbitration shall be conducted in accordance with the law, independentof any intervention by administrative organs, social organizations orindividuals.

    Article 9
    The single ruling system shall be applied in arbitration. Thearbitration commission shall not accept any application for arbitration,nor shall a people's court accept any action submitted by the party inrespect of the same dispute after an arbitration award has already beengiven in relation to that matter.

  If the arbitration award is canceled or its enforcement has beendisallowed by a people's court in accordance with the law, the partiesmay, in accordance with a new arbitration agreement between them inrespect of the dispute, re-apply for arbitration or initiate legalproceedings with the people's court.

     Chapter II Arbitration Commissions and Arbitration Association

     Article 10
    Arbitration commissions may be established in the municipalitiesdirectly under the Central Government, in the municipalities where thepeople's governments of provinces and autonomous regions are located or,if necessary, in other cities divided into districts. Arbitrationcommissions shall not be established at each level of the administrativedivisions.

  The people's governments of the municipalities and cities specified inthe above paragraph shall organize the relevant departments and theChamber of Commerce for the formation of an arbitration commission.

  The establishment of an arbitration commission shall be registeredwith the judicial administrative department of the relevant province,autonomous region or municipalities directly under the Central Government.

  Article 11
    An arbitration commission shall fulfil the following conditions:
    1. it must have its own name, domicile and Articles of Association;
    2. it must possess the necessary property;
    3. it must have its own members; and
    4. it must have arbitrators for appointment.
    The articles of association of the an arbitration commission shall beformulated in accordance with this Law.

  Article 12
    An arbitration commission shall comprise a chairman, two to fourvice-chairmen and seven to eleven members.

  The chairman, vice-chairmen and members of an arbitration commissionmust be persons specialized in law, economic and trade and persons whohave actual working experience. The number of specialists in law, economicand trade shall not be less than two-thirds of the members of anarbitration association.

    Article 13
    The arbitration commission shall appoint fair and honest person as itsarbitrators.
    Arbitrators must fulfil one of the following conditions:
    1. they have been engaged in arbitration work for at least eightyears;
    2. they have worked as a lawyer for at least eight years;
    3. they have been a judge for at least eight years;
    4. they are engaged in legal research or legal teaching and in seniorpositions; and
    5. they have legal knowledge and are engaged in professional workrelating to economics and trade, and in senior positions or of theequivalent professional level.
    The arbitration commission shall establish a list of arbitratorsaccording to different professionals.

    Article 14
    Arbitration commissions are independent of administrative organs andthere are no subordinate relations with any administrative organs norbetween the different arbitration commissions.

  Article 15
    The China Arbitration Association is a social organization with thestatus of a legal person. Arbitration commissions are members of the ChinaArbitration Association. The Articles of Association of the ChinaArbitration Association shall be formulated by the national generalmeeting of the members.

  The China Arbitration Association is an organization in charge ofself-regulation of the arbitration commissions. It shall conductsupervision over the conduct (any breach of discipline) of the arbitrationcommissions and their members and arbitrators in accordance with itsarticles of association.

  The China Arbitration Association shall formulate Arbitration Rules inaccordance with this Law and the Civil Procedure Law.

     Chapter III Arbitration Agreement

     Article 16
     An arbitration agreement shall include the arbitration clausesprovided in the contract and any other written form of agreement concludedbefore or after the disputes providing for submission to arbitration.

  The following contents shall be included in an arbitration agreement:
    1. the expression of the parties' wish to submit to arbitration;
    2. the matters to be arbitrated; and
    3. the Arbitration Commission selected by the parties.

  Article 17
    An arbitration agreement shall be invalid under any of the followingcircumstances:
    1. matters agreed upon for arbitration are beyond the scope ofarbitration prescribed by law;
    2. an arbitration agreement concluded by persons without or withlimited capacity for civil acts; and
    3. one party forces the other party to sign an arbitration agreementby means of duress.

  Article 18
    If the arbitration matters or the arbitration commission are notagreed upon by the parties in the arbitration agreement, or, if therelevant provisions are not clear, the parties may supplement theagreement. If the parties fail to agree upon the supplementary agreement, the arbitration agreement shall be invalid.

  Article 19
    An arbitration agreement shall exist independently. Any changes to,rescission, termination or invalidity of the contract shall not affect thevalidity of the arbitration agreement.
    An arbitration tribunal has the right to rule on the validity of acontract.

  Article 20
    If the parties object to the validity of the arbitration agreement,they may apply to the arbitration commission for a decision or to apeople's court for a ruling. If one of the parties submits to thearbitration commission for a decision, but the other party applies to apeople's court for a ruling, the people's court shall give the ruling.
    If the parties contest the validity of the arbitration agreement, theobjection shall be made before the start of the first hearing of thearbitration tribunal.

     Chapter IV Arbitration Procedure

     Section 1: Application and Acceptance for Arbitration

     Article 21
    The parties applying for arbitration shall fulfil the followingconditions:
    1. they must have an arbitration agreement;
    2. they must have a specific claim with facts and argument on whichthe claim is based; and
    3. the arbitration must be within the jurisdiction of the arbitrationcommission.

  Article 22
    The party applying for arbitration shall submit to an arbitrationcommission the arbitration agreement, an application for arbitration andcopies thereof.

  Article 23
    An arbitration application shall state clearly the following:
    1. the name, sex, age, occupation, work unit and address of the party,the name address and legal representative of the legal person or otherorganization and the name and position of its person-in charge;
    2. the arbitration claim and the facts and argument on which the claimis based; and
    3. evidence and the source of evidence, the name and address of thewitness (es).

  Article 24
    Within 5 days from the date of receiving the arbitration application,the arbitration commission shall notify the parties that it considers theconditions for acceptance have been fulfilled, and that the application isaccepted by it. If the arbitration commission considers that theconditions have not been fulfilled, it shall notify the parties in writingof its rejection, stating its reasons.

  Article 25
    Upon acceptance of an arbitration application, the arbitrationcommission shall, within the time limit provided by the Arbitration Rules,serve a copy of the Arbitration Rules and the list of arbitrators on theapplicant, and serve a copy of the arbitration application, theArbitration Rules and the list of arbitrators on the respondent.

  Upon receipt of a copy of the arbitration application, the respondentshall, within the time limit prescribed by the Arbitration Rules, submitits defence to the arbitration commission. Upon receipt of the defence,the arbitration commission shall, within the time limit prescribed by theArbitration Rules, serve a copy of the reply on the applicant. The failureof the respondent to submit a defence shall not affect the proceeding ofthe arbitration procedures.

  Article 26
    Where the parties had agreed on an arbitration agreement, but one ofthe parties initiates an action before a people's court without statingthe existence of the arbitration agreement, the people's court shall,unless the arbitration agreement is invalid, reject the action if theother party submits to the court the arbitration agreement before thefirst hearing of the case. If the other party fails to object to thehearing by the people's court before the first hearing, the arbitrationagreement shall be considered to have been waived by the party and thepeople's court shall proceed with the hearing.

  Article 27
    The applicant may abandon or alter his arbitration claim. Therespondent may accept the arbitration claim or object to it. It has aright to make a counterclaim.

  Article 28
    A party may apply for property preservation if, as the result of anact of the other party or for some other reasons, it appears that an awardmay be impossible or difficult to enforce.

  If one of the parties applies for property preservation, thearbitration commission shall submit to a people's court the application ofthe party in accordance with the relevant provisions of the CivilProcedure Law.

  If a property preservation order is unfounded, the applicant shallcompensate the party against whom the order was made for any lossessustained as a result of the implementation of the property preservationorder.

  Article 29
    The parties and their legal representatives may appoint lawyers orengage agents to handle matters relating to the arbitration. In the eventthat a lawyer or an agent is appointed to handle the arbitration matters,a letter of authorization shall be submitted to the arbitrationcommission.

    Section 2: Composition of the Arbitration Tribunal

     Article 30
     An arbitration tribunal may comprise three arbitrators or onearbitrator. If an arbitration tribunal comprises three arbitrators, apresiding arbitrator shall be appointed.

  Article 31
    If the parties agree to form an arbitration tribunal comprising threearbitrators, each party shall select or authorize the chairmen of thearbitration commission to appoint one arbitrator. The third arbitratorshall be selected jointly by the parties or be nominated by the chairmanof the arbitration commission in accordance with a joint mandate given bythe parties. The third arbitrator shall be the presiding arbitrator.

  If the parties agree to have one arbitrator to form an arbitrationtribunal, the arbitrator shall be selected jointly by the parties or benominated by the chairman of the arbitration commission in accordance witha joint mandate given by the parties.

    Article 32
    If the parties fail, within the time limit prescribed by theArbitration Rules, to select the form of the constitution of thearbitration tribunal or fail to select the arbitrators, the arbitratorsshall be appointed by the chairman of the arbitration commission.

  Article 33
    After the arbitration tribunal is constituted, the arbitrationcommission shall notify the parties in writing of the composition of thearbitration tribunal.

  Article 34
    In any of the following circumstances, an arbitrator must withdrawfrom the arbitration, and the parties shall have the right to apply forhis withdrawal if he:
    1. is a party or a close relative of a party or of a party'srepresentative;
    2. is related in the case;
    3. has some other relationship with a party to the case or with aparty's agent which could possibly affect the impartiality of thearbitration;
    4. meets a party or his agent in private, accepts an invitation fordinner by a party or his representative or accepts gifts presented by anyof them.

  Article 35
    When applying for the withdrawal of an arbitrator, the petitioningparty shall state his reasons and submit a withdrawal application beforethe first hearing. A withdrawal application may also be submitted beforethe conclusion of the last hearing if reasons for the withdrawal onlybecame known after the start of the first hearing.

  Article 36
    Whether an arbitrator is withdrawn or not shall be determined by thechairman of the arbitration commission. If chairman is serving as anarbitrator, the withdrawal or not shall be determined collectively by thearbitration commission.

  Article 37
    If an arbitrator is unable to perform his duties as an arbitrator as aresult of the withdrawal or any other reasons, another arbitrator shall beselected or appointed in accordance with the provisions of this Law.

  After a replaced arbitrator has been selected or appointed followingthe withdrawal of an arbitrator, the parties may apply to resume thearbitration procedure. The arbitration tribunal shall determine whetherthe resumption of the procedure may be allowed. The arbitration tribunalmay determine on its own whether the arbitration procedure shall beresumed.

    Article 38
    An arbitrator involved in one of the circumstances described in Item4, Article 34, if it is serious, or those described in Item 6, Article58, such arbitrator shall be legally liable in accordance with the law.The arbitration commission shall remove his name from the list ofarbitrators.

     Section 3: Hearing and Arbitral Awards
    Article 39
    An arbitration tribunal shall hold a tribunal session to hear anarbitration case. If the parties agree not to hold a hearing, thearbitration tribunal may render an award in accordance with thearbitration application, the defence statement and other documents.

  Article 40
    An arbitration shall not be conducted in public. If the parties agreeto a public hearing, the arbitration may proceed in public, except thoseconcerning state secrets.

  Article 41
    The arbitration commission shall notify the two parties within thetime limit provided by the Arbitration Rules of the date of the hearing.Either party may request to postpone the hearing with in the time limitprovided by the Arbitration Rules if there is a genuine reason. Thearbitration tribunal shall decide whether to postpone the hearing.

  Article 42
    If the applicant for arbitration who has been given a notice inwriting does not appear before the tribunal without good reasons, orleaves the tribunal room during a hearing without the permission of thearbitration tribunal, such applicant shall be deemed as having withdrawnhis application.

  If the party against whom the application was made was served with anotice in writing but does not appear before the tribunal without duereasons or leaves the tribunal room during a hearing without thepermission of the arbitration tribunal, an award by default may be given.

  Article 43
    The parties shall produce evidence in support of their claims.
    An arbitration tribunal may collect on its own evidence it considersnecessary.

  Article 44
    For specialized matters, an arbitration tribunal may submit forappraisal to an appraisal organ agreed upon by the parties or to theappraisal organ appointed by the arbitration tribunal if it deems suchappraisal to be necessary.

  According to the claim of the parties or the request of thearbitration tribunal, the appraisal organ shall appoint an appraiser toparticipate in the hearing. Upon the permission of the arbitrationtribunal, the parties may question the appraiser.

    Article 45
    Any evidence shall be produced at the start of the hearing. Theparties may challenge the validity of such evidence.

  Article 46
    In the event that the evidence might be destroyed or if it would bedifficult to obtain the evidence later on, the parties may apply for theevidence to be preserved. If the parties apply for such preservation, thearbitration commission shall submit the application to the basic-levelpeople's court of the place where the evidence is located.

  Article 47
    The parties have the right to argue during an arbitration procedure.At the end of the debate, the presiding arbitrator or the sole arbitratorshall ask for the final opinion of the parties.

  Article 48
    An arbitration tribunal shall make a written record of the hearing. Ifthe parties or other participants to the arbitration consider that therecord has omitted a part of their statement or is incorrect in some otherrespect, they shall have the right to request correction thereof. If nocorrection is made, the request for correction shall be noted in thewritten record.

  The arbitrators, recorder, parties and other participants to thearbitration shall sign or affix their seals to the record.

  Article 49
    After the submission of an arbitration application, the parties maysettle the dispute among themselves through conciliation. If aconciliation agreement has been reached, the parties may apply to thearbitration tribunal for an award based on the conciliation agreement.Then may also withdraw the arbitration application.

  Article 50
    If the parties fall back on their words after the conclusion of aconciliation agreement and the withdrawal of the arbitration application,application may be made for arbitration in accordance with the arbitrationagreement.

  Article 51
    Before giving an award, an arbitration tribunal may first attempt toconciliate. If the parties apply for conciliation voluntarily, thearbitration tribunal shall conciliate. If conciliation is unsuccessful, anaward shall be made promptly.

  When a settlement agreement is reached by conciliation, thearbitration tribunal shall prepare the conciliation statement or the awardon the basis of the results of the settlement agreement. A conciliationstatement shall have the same legal force as that of an award.

    Article 52
    A conciliation statement shall set forth the arbitration claims andthe results of the agreement between the parties. The conciliationstatement shall be signed by the arbitrators, sealed by the arbitrationcommission, and served on both parties.
    A conciliation statement shall have legal effect once signed andaccepted by the parties.
    If the parties fall back on their words before the conciliationstatement is singed and accepted by them, an award shall be made by thearbitration tribunal promptly.

  Article 53
    An award shall be based on the opinion of the majority arbitrators.The opinion of the minority arbitrators shall be recorded in writing. Ifan opinion of the minority arbitrators shall be recorded in writing. If anopinion of the majority arbitrators can not be constituted at thetribunal, the award shall be given according to the opinion of thepresiding arbitrator.

  Article 54
    The arbitration claims, the matters in dispute, the grounds upon whichan award is given, the results of the judgement, the responsibility forthe arbitration fees and the date of the award shall be set forth in theaward. If the parties agree not to include in the award the matters indispute and the grounds on which the award is based, such matters may notbe stated in the award. The award shall be signed by the arbitrators andsealed by the arbitration commission. The arbitrator who disagrees withthe award may select to sign or not to sign it.

  Article 55
    During the course of arbitration by an arbitration tribunal, where apart of facts has been made clear, a partial award may first be given inrelation to that part.

  Article 56
    The parties may, within 30 days of the receipt of the award, requestthe arbitration tribunal to correct any typographical errors, calculationerrors or matters which had been awarded but omitted in the award.

  Article 57
    An award shall be legally effective on the date it is given.

     Chapter V Application for Cancellation of an Award

    Article 58
    The parties may apply to the intermediate people's court at the placewhere the arbitration commission is located for cancellation of an awardif they provide evidence proving that the award involves one of thefollowing circumstances:

  1. there is no arbitration agreement between the parties;
    2. the matters of the award are beyond the extent of the arbitrationagreement or not within the jurisdiction of the arbitration commission;
    3. the composition of the arbitration tribunal or the arbitrationprocedure is in contrary to the legal procedure;
    4. the evidence on which the award is based is falsified;
    5. the other party has concealed evidence which is sufficient toaffect the impartiality of the award; and
    6. the arbitrator(s) has (have) demanded or accepted bribes, committedgraft or perverted the law in making the arbitral award.
    The peoples' court shall rule to cancel the award if the existence ofone of the circumstances prescribed in the preceding clause is confirmedby its collegiate bench.
    The people's court shall rule to cancel the award if it holds that theaward is contrary to the social and public interests.

  Article 59
    If a party applies for cancellation of an award, an application shallbe submitted within 6 months after receipt of the award.

  Article 60
    The people's court shall, within 2 months after receipt of theapplication for cancellation of an award, render its decision forcancellation of the award or for rejection of the application.

  Article 61
    If the people's court holds that the case may be re-arbitrated by thearbitration tribunal after receipt of the application for cancellation ofan award, the court shall inform the arbitration tribunal ofre-arbitrating the case within a certain period of time and rule tosuspend the cancellation procedure. If the arbitration tribunal refuses tore-arbitrate, the people's court shall rule to resume the cancellationprocedure.

     Chapter VI Enforcement

    Article 62
    The parties shall execute an arbitration award. If one party fails toexecute the award, the other party may apply to a people's court forenforcement in accordance with the relevant provisions of the CivilProcedure Law, and the court shall enforce the award.

  Article 63
    A people's court shall, after examination and verification by itscollegiate bench, rule not to enforce an award if the party against whoman application for enforcement is made provides evidence proving that theaward involves one of the circumstances prescribed in Clause 2, Article217 of the Civil procedure Law.

  Article 64
    If one party applies for enforcement of an award while the other partyapplies for cancellation of the award, the people's court receiving suchapplication shall rule to suspend enforcement of the award.

  If a people's court rules to cancel an award, it shall rule toterminate enforcement. If the people's court overrules the application forcancellation of an award, it shall rule to resume enforcement.

     Chapter VII Special provisions on Foreign-Related Arbitration

    Article 65
    The provisions of this Chapter shall apply to all arbitration ofdisputes arising from foreign economic, trade, transportation or maritimematters. In the absence of provisions in this Chapter, other relevantprovisions of this Law shall apply.

  Article 66
    A foreign arbitration commission may be organized and established bythe China International Chamber of Commerce.
    A foreign arbitration commission shall comprise one chairman, severalvice-chairmen and several committee members.
    The chairman, vice-chairmen and committee members may be appointed bythe China International Chamber of Commerce.

  Article 67
     A foreign arbitration commission may appoint foreigners withprofessional knowledge in such fields as law, economic and trade, scienceand technology as arbitrators.

  Article 68
    If the parties to a foreign-related arbitration apply for evidencepreservation, the foreign arbitration commission shall submit theirapplications to the intermediate people's court in the place where theevidence is located.

  Article 69
    The arbitration tribunal of a foreign arbitration commission mayrecord the details of the hearing in writing or record the essentials ofthe hearing in writing. The written record of the essentials shall besigned or sealed by the parties and other participants in the arbitration.

  Article 70
    A people's court shall, after examination and verification by itscollegiate bench, rule to cancel an award if a party to the case providesevidence proving that the arbitration award involves one of thecircumstances prescribed in Clause 1, Article 260 of the Civil ProcedureLaw.

  Article 71
    A people's court shall, after examination and verification by itscollegiate bench, rule not to enforce an award-if the party against whoman application is made provides evidence proving that the arbitrationaward involves one of the circumstances prescribed in Clause 1, Article260 of the Civil Procedure Law.

  Article 72
    Where the party subject to enforcement or its property is not withinthe territory of the People's Republic of China, a party applying for theenforcement of a legally effective arbitration award shall apply directlyto the foreign court having jurisdiction for recognition and enforcementof the award.

    Article 73
    Foreign arbitration rules may be formulated by the China InternationalChamber of Commerce in accordance with this Law and the relevantprovisions of the Civil Procedure Law.

     Chapter VIII Supplementary Provisions

    Article 74
    If the law has stipulated a time limitation of arbitration, suchprovisions of the law shall apply. If the law has not stipulated a timelimitation of arbitration, the provisions on the limitation of actionsshall apply.

  Article 75
    The arbitration Commission may formulate provisional arbitration rulesin accordance with this Law and the relevant provisions of the CivilProcedure Law before the formulation of the arbitration rules by the ChinaArbitration Association.

  Article 76
    The parties shall pay arbitration fees in accordance with the relevantprovisions.
    The methods for the collection of arbitration fees shall be submittedto the commodity prices administration department for approval.

  Article 77
    Arbitration of labor disputes and disputes over contracts forundertaking agricultural projects within agricultural collective economicorganizations shall be separately stipulated.

  Article 78
    In the event of conflict between the provisions on arbitrationformulated before the coming into effect of this Law and the provisions ofthis Law, the provisions of this Law shall prevail.

  Article 79
    Arbitration organs established before the coming into effect of thisLaw in the municipalities directly under the Central Government, in themunicipalities where the people's governments of the provinces orautonomous regions and in other cities divided into districts must bere-organized in accordance with the relevant provisions of this Law. Thearbitration organs which are not re-organized shall be terminated at theexpiration of one year after the date of effectiveness of this Law.

  All other arbitration organs established before the implementation ofthis Law and not conforming to the provisions of this Law shall beterminated on the date of effectiveness of this Law.

  Article 80
    This Law shall be effective as of September 1, 1995.