Ms. Wang Hongsong, Secretary-General of BAC
Beijing Arbitration Commission (Hereinafter abbreviated as BAC) discussed and passed its new ¡°Arbitration Rules of BAC¡± (Hereinafter abbreviated as 2008 Rules) on the 1st meeting of the 5th session on Sep 20th, 2007, which will be implemented since April 1st, 2008. This has been the 7th revision for the arbitration rules since the foundation of BAC, and this revision, on the one hand, enables the arbitration rules to be more improved in its system and specific contents, and provide the more reasonable and effective system assurance for the principal party in the arbitration to carry out the arbitration activities, and on the other hand, it also makes the arbitration rules more in compliance with the international traditions, and lay the foundation for the civil and commercial arbitration activities in our country to be connected with the international standard and then to attract the parties in the international cases.
The 2008 Rules are revised with the Arbitration Rules implemented since March 1st, 2004 (Hereinafter abbreviated as 2004 Rules) as the blueprint. The 2004 Rules symbolize BAC ¡°has been gradually transformed from passively making up the procedure defects to actively serving for achieving the advanced arbitration concept¡±, and in terms of the body and contents, the Regulations have had the significant adjustments, revisions and supplements compared with those in the past, and many systems and measures such as disclosure and obviation systems for arbitrators, selection & appointment methods for arbitrators as well as the related regulations in terms of that different opinions should be attached by arbitrators who do not sign, etc. are the first introductions and innovations by a Chinese arbitration institute. Although the 2004 Rules have received the relatively high comments from the arbitration communities at home and abroad, in the practices, some problems have also been revealed. The revision of the 2008 Rules is the further effort and exploration to achieve the advanced arbitration-concept services based on the 2004 Rules. What the revision of the 2008 Rules involves all are the systematic problems, which indicate the constant efforts by BAC for the internationalization of the arbitration rules.
I. Cancel the delivery of notarization and public notice
It is a significant change in the Arbitration Rules on the delivery means to cancel the delivery of notarization and public notice.
Considering there were the relatively serious disputes on whether the international tradition of ¡°Delivery attempt¡± in the commercial arbitration is applicable for the domestic cases or not at that time, with the reference to the maintenance and delivery means of the public notice in the civil action, the 2004 Rules adopted this temporary alternative to solve the delivery issue in the domestic cases. This delivery means has been gradually doubted in the practice, it is believed it may violate the confidentiality principle in the arbitration, and furthermore, it wastes labor and materials, and causes delay to the arbitration procedures, which violates the economical and efficient principles of the arbitration. As early as 1999 when the arbitration rules were revised, BAC recommended adopting the regulation of ¡°Delivery attempt¡±, but due to various reasons, it was not implemented. The 2004 Rules adopted the ¡°Delivery attempt¡± regulation for the delivery of the international commercial cases for the first time, i.e. ¡°After the enquiries in reasonable manners, the business address, the permanent residential address or other correspondence address of the recipient can not be found, and is delivered to the last known business address, permanent residential address or other correspondence addresses of the recipient by mail, express mail or any other means that can provide the delivery records, which will be deemed as delivered.¡± The 2008 Rules further expand the applicability of this delivery means to all the cases. This article is also beneficial to promote the credit cooperation between the parties, to prompt the parties to provide the accurate contact means, and otherwise they may bear the consequences of the delivery failure.
II. In the international commercial cases, the parties are allowed to select arbitrators outside the list of arbitrators.
BAC applies the system of the list of arbitrators, and the parties can select arbitrators from the list of arbitrators provided by BAC. But the candidates from the list of arbitrators sometimes are not satisfactory, lacking attraction especially for the parties in the international commercial cases. Observing the international traditions, usually, arbitration organizations will recommend a list, and even do not have the list, and the parties can freely select arbitrators.
The 2008 Rules of BAC regulate the parties in the international commercial cases can select arbitrators outside the list of arbitrators, which enables the parties not to be restricted by the list but to freely select the arbitrators who comply with the conditions in the arbitration law, which, on the one hand, increases the independence of the parties to select arbitrators, and emphasizes the principle of respecting the wills of the parties, and on the other hand, it will further connect the regulations in BAC with the international traditions, and increase the attract to the parties in the international cases.
In the 2008 Rules, the contents added on the arbitrator selection include (See Article 55):
¡°(I) Arbitrators could be chosen by the parties from or outside the Panel of Arbitrators maintained by the BAC.
(II) If the parties want to select arbitrators outside the Panel of Arbitrators maintained by the BAC, they shall submit the resume and means of contact of the candidate to the BAC. The candidate selected outside the Panel may act as an arbitrator with the confirmation of the BAC, and with a term to expire at the closing of the case, unless the BAC decides on listing the arbitrator on the Panel of Arbitrators.¡±
III.The 2008 Rules no longer distinguish the list of arbitrators for domestic and international commercial cases
In the past, BAC separated the list of arbitrators for domestic and international cases, so that the parties can select from the corresponding list of arbitrators as per the nature of the cases. Due to the continuous increase of international commercial cases in BAC in recent years, the demands for arbitrators in international commercial cases are bigger and bigger. In addition, as the continuous increase of employment standards for arbitrators and the continuous enhancement of the training systems in BAC, the overall level of arbitrators has been increased, and the combined list of arbitrators for domestic and international commercial cases not only can expand the scope of independent selections by parties, but also provide opportunities for the arbitrators to continuously increase their own abilities to be adapted with the demands for the arbitration internationalization.
IV.New regulation about submitting the disputes
One clause is added in Article 2 in the 2008 Rules:
¡°Where the parties agree to apply the BAC rules, but do not choose a specific arbitration institution, they shall be deemed to agree to provide their disputes to the BAC¡±
Looking at the international traditions, very few countries require an arbitration organization must be determined in the arbitration clauses, therefore usually the parties in the international commercial cases are used to stipulate the applicable arbitration rules, but not stipulate the arbitration institutes. According to this tradition, if is arbitrated by an institute, it is stipulated that the arbitration rules applied for whichever arbitration institute, it will be arbitrated by this organization. But the arbitration law in our country requests an arbitration organization selected should be listed in the arbitration agreement.
The clause added is mainly based on the rules in Article 4 of the ¡°Interpretations for several issues on the applicable arbitration laws by Supreme Court¡± ¡°If the arbitration agreement only stipulates the arbitration rules applicable for the dispute, it will be deemed as no arbitration institute stipulated, unless the parties reach a supplementary agreement or an arbitration institute can be determined according to the arbitration rules stipulated¡±. According to this regulation, if only the arbitration rules are stipulated, it is still invalid, unless an arbitration institute can be determined according to the arbitration rules stipulated. This regulation by Supreme Court also makes the reference to the international traditions, but it should be declared by the arbitration rules themselves. If the arbitration rules in an arbitration institute do not regulate the arbitration rules stipulated to be applicable for this institute, and then it is deemed as the both parties agree to submit the dispute to this institute for arbitration, then the arbitration agreement will be invalid. So after this regulation is added, it can make up the defects in the original arbitration rules, so as to comply with the judicatory interpretations, avoid troubles in the arbitration jurisdiction to be caused to the parties, and will secure the interests of the parties, especially in the international commercial cases.
V.Revisions in other aspects
- One clause is added in Article 18:
¡°(VI) If an arbitrator rejects the appointment by a party or is unable to participate in the case hearing due to other reasons that may affect his/her normal responsibilities as an arbitrator, the party should reselect an arbitrator within 5 days after receiving the notice to reselect an arbitrator.¡±
The main consideration for adding this article is for the reselection issue of the arbitrators before an arbitration court is formed. Article 22 in the 2004 Rules focuses on the situations after the court is formed, but in the past, it had no regulations for how to operate before the court is formed, which referred to Article 22 for practice. The revision this time makes this issue clear.
- Regulations on separate mediation are added.
The purpose is to collaborate with the implementation of the ¡°Mediation Rules¡±. From the mediation practices in other countries, the number of the cases with mediation first after the parties terminate the arbitration procedures during the arbitration process is increasing year after year. The addition of this article can provide the parties who are worried that the arbitrators who act as mediators at the same time may affect the fairness of the award when the mediation fails with more flexible, economical and cost-saving methods for dispute resolution.
The contents of the regulation added include:
¡°Article 40 Seperate Mediations
During the case hearing process, the two parties can compromise by themselves or apply from BAC to be mediated by mediators according to the ¡°Mediation Rules in BAC¡±.
- Add the regulations on suspension of the arbitration procedures
The occurrence of some specific circumstances will cause to the suspension of the procedures. According to the new arbitration rules, the arbitration court can make the decision for the suspension, and the period for the suspension of the procedures will not be counted within the hearing period of the case, and it is easier for the parties to accept.
The contents of the regulations added include:
¡°Article 41: Suspension of Arbitral Proceedings
(1) The arbitral proceeding may be suspended upon the joint request of the parties or if special circumstances occur during the proceeding that makes suspension of proceeding necessary;
(2) The suspension shall be decided by the Arbitral Tribunal, or if the Arbitral Tribunal has not been constituted, by the BAC.¡±
(IV)Article 65 adds the regulation that ¡°The power to interpret these Rules is vested in the BAC. Other documents issued by the BAC do not constitute part of these rules, unless the BAC has otherwise statement.¡±
It is clearly regulated that except Arbitration Rules, other internal documents released by BAC, including the behavior criterions guiding the arbitrators, secretaries as well as the verification organizations, etc. are not part of Arbitration Rules, which should not be used as the standards for the judgment of whether it violates the arbitration procedures.
(V) Add the regulations on the arbitration expenses
The purpose to add the regulations on the arbitration expenses is mainly to make the charges by BAC more transparent, and the regulations clearly regulate that except the case acceptance fee and processing fee are those incurred in each case, the specific cases may also have other expenses, which should be paid according to the actual conditions.
The regulations added are as below:
Article 18
(V) The party shall bear the burden of the arbitrator¡¯s increased travel expense incurred necessarily by hearing the cases, if the party nominates the arbitrator living outside Beijing. If a party has not deposited the advance on expenses within the period stipulated by the BAC, it shall be deemed not to select the arbitrator. The Chairman could appoint the arbitrator for the party in accordance with these Rules.
Article 32
(II) The parties shall deposit an advance in appraisal costs according to the agreement by the parties or the proportion confirmed by the Tribunal. The Tribunal has the power to decide not to carry out the appraisal, if the parties do not deposit an advance in costs.
Article 55
£¨IV£©As a party agrees to increase the compensation for international arbitrators, the party shall deposit an advance on the resulting additional costs within the period stipulated by the BAC. If a party has not deposited the advance on costs, it shall be deemed not to select the arbitrator. The Chairman could appoint the arbitrator for the party in accordance with these Rules.
The development and perfection of the arbitration rules are an epitome of the continuous development and progress of the arbitration organization. The revision of the 2008 Rules fully represents the practical and innovative spirit constantly promoted by BAC. As the implementation of the new regulations, BAC will further improve the regulated level of the arbitration works, to provide the principal parties in commercial cases with the more professional, efficient, economical and appropriate arbitration services, and make constant efforts for constructing an internationally first-class arbitration organization!
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