Arbitration refers to a kind of dispute settlement mechanism whereby citizens, legal persons and other organizations as equal subjects of law submit disputes over economic contracts and disputes over other property rights and interests to legally established arbitration institutions through entering into written arbitration agreements or jointly concluding arbitration clauses in contracts, which shall be heard by independent and impartial arbitrators selected by the parties or appointed by arbitration institutions who will make final arbitral awards.
Arbitration is a kind of dispute settlement mechanism different from court lawsuits, the premise to initiate which is that the parties shall enter into clear arbitration agreements or arbitration clauses, while the awards of which have the same legal effect with court decisions, which obtain the recognition and enforcement of courts and even foreign courts.
Arbitration does not settle disputes over marriage, adoption, guardianship, child maintenance and inheritance, as well as administrative disputes falling within the jurisdiction of relevant administrative organs, nor does it settle labor disputes between employees and employers in terms of labor contracts, salaries, remuneration and welfare, as well as disputes over agricultural benefit contracts within collective agricultural economic organizations.
Arbitration is a way to settle disputes by specialists. The professionalism of arbitration depends on that of arbitrators. Submitting arbitration cases to arbitrators trusted by the parties with good legal accomplishment and rich industrial experience better conforms to commercial legal practice and trade practice, which has guaranteed the quality of dispute settlement between the parties and the fairness and rationality of arbitration results.
Arbitration respects the autonomy of will of the parties at the maximum degree. The parties may select more professional arbitration institutions that can provide better service to settle disputes, as well as enjoy bigger autonomous rights in selecting arbitrators, arbitration procedures, applicable laws or conventions, places of arbitration, way of trial and way of ruling, which provides maximum flexibility and convenience for the parties to settle commercial disputes in different areas and different countries.
The jurisdiction right of arbitration institutions comes from the authorization upon consensus of the parties. Clear and effective arbitration clauses may not only avoid complicated jurisdiction disputes between the parties afterwards, but also reduce the concern on regional or local judicial overprotection, which is beneficial to promote the stability and neutrality of dispute settlement.
Arbitration is an effective method for commercial parties to settle disputes peacefully, the confidential system of which as to arbitration process and results not only provides an effective guarantee for commercial parties to properly settle disputes in harmonious and relaxed atmosphere, but also is beneficial to reduce the negative effects brought by disputes to commercial parties.
Arbitration is a kind of alternative dispute settlement mechanism, the awards of which shall be final and binding. Arbitral awards are generally recognized and enforced by domestic laws and international conventions all over the world. Domestic awards may be enforced by courts upon application in accordance with relevant provisions of the Arbitration Law and the Civil Procedural Law, while foreign awards may be recognized and enforced by foreign courts abroad in accordance with the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) and the provisions of other relevant international treaties, the executive force of which is even stronger than court decisions to some extent.
Beijing Arbitration Commission/Beijing International Arbitration Center always abides by the concepts of independence, fairness, high efficiency and professionalism, as well as adheres to nongoernmental development direction. No matter in terms of arbitration rules or organizational governance, BAC always adheres to the highest international standards and makes continuous innovations with positive and open attitude, timely responds to dispute settlement needs of the parties worldwide and continuously promotes organizational operating capability, strongly guarantees the independence, fairness and authority of dispute settlement, as well as provides domestic and foreign parties with efficient and high-quality dispute settlement services, which has won good reputation and public praise, as well as obtained positive appraisal from international institutions.
——BAC is rated “the only local arbitration commission which meets or surpasses global standards” by the Economist Intelligence Unit.
——Global Arbitration Review evaluates that BAC has the qualities of “professionalism, competence and transparency”.
Particularly speaking, Beijing Arbitration Commission/Beijing International Arbitration Center possesses the following unique advantages:
Having the systems and measures to guarantee independence and fairness
The chairperson and members of the commission are largely composed of experts and scholars. Relevant business and important matters in terms of personnel, property and materials are totally decided by the commission itself, without the interference of administrative organs.
The chairperson and the staff of the arbitration commission do not hold the position of arbitrator during their incumbency, which has strongly guaranteed independent handling of cases by the arbitral tribunal.
The information disclosure system is implemented generally as to the arbitrators, and the parties are provided with an arbitrators’ information inquiry system.
The arbitrators of the Commission shall not act as the agent of the arbitration cases thereof.
An arbitrator who refuses to sign the award shall be required to “issue a dissenting opinion”, which shall be sent to the parties together with the award, while shall not form part of the award.
Having stronger organizational management ability
The standing body of the commission implements effective incentive and restraint mechanism, and has a service-oriented, professional and efficient work team, which has provided guarantee for offering high-quality dispute settlement service to the parties.
A series of systems on regulating case handling by arbitrators have been established and implemented, such as Several Provisions on Promoting Arbitration Efficiency and Measures on Remuneration Payment of Arbitrators, having clearly provided the requirements on promoting case handling efficiency and the incentive and punishment measures, which has largely promoted case handling efficiency. Since establishment, the average time to close a case at BAC is 85 days, while most cases can be closed within the hearing time limit.
Always at the international frontier
Beijing Arbitration Commission/Beijing International Arbitration Center is always at the international frontier in terms of arbitration rules, arbitration practice and arbitration study, having absorbed the most advanced international arbitration system, actively explored and developed diversified dispute settlement mechanisms, as well as continuously promoted the communication between Chinese and western arbitration theory and practice. For the past 10 years since establishment, Beijing Arbitration Commission/Beijing International Arbitration Center has amended the Arbitration Rules for eight times, which has been continuously improved and has satisfied the needs of the parties from different regions for dispute settlement through arbitration in Beijing, as well as has succeeded in dealing with 600 foreign-related cases; The commission has formulated special Mediation Rules and Dispute Board Rules, succeeded in introducing independent commercial mediation system and construction dispute review system, which has been implemented, as well as actively promoted diversified dispute settlement mechanisms to satisfy the increasingly diversified dispute settlement needs of the parties; it has taken the lead to publish China Commercial Dispute Resolution – an Annual Review and Preview in recent years to promote the development in terms of theory and practice in dispute settlement field, which has generated positive and extensive influence on the international dispute settlement field, largely promoted the communication and cooperation between Chinese and international peer, as well as constantly enhanced the strength of the commission.
Extremely competitive arbitration costs
Compared to other famous international arbitration institutions, Beijing Arbitration Commission/Beijing International Arbitration Center has bigger competitive advantages in terms of arbitration charges on even ground, and the parties to international arbitration cases may select different arbitration charge modes, which has strengthened the predictability and controllability of arbitration costs; Compared to other famous arbitration institutions and courts in China, the Commission charges less. Competitive dispute settlement costs and more convenient and efficient case handling ability have largely promoted the economical efficiency for the parties to settle disputes.
Where the parties in dispute wish to submit the dispute to be settled by arbitration, they shall enter into an arbitration agreement. An arbitration agreement shall include the arbitration clauses provided in the contract and any other written form of agreement concluded before or after the disputes providing for submission to arbitration, so the parties may agree beforehand that future disputes shall be submitted to be settled by arbitration, or may reach an arbitration agreement upon consultation after disputes occur that the dispute shall be submitted for arbitration. According to the Arbitration Law, 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.
Model arbitration clause: “Any dispute arising out of or in connection with the contract shall be submitted to Beijing Arbitration Commission/Beijing International Arbitration Center for arbitration in accordance with the Arbitration Rules thereof. The arbitral award shall be final and binding on the parties.”
Yes. In accordance with relevant legal provisions and judicial recognition, “Beijing Municipal Arbitration Commission” shall be assumed to be the Commission, which is not the standard expression thereof, however. We advise the parties to refer to “the model arbitration clause” on the website to prepare partially satisfactory arbitration clauses when formulating arbitration clause. Having any other questions on arbitration clauses, the parties may call the case registration office (010-65669856—233/234) to consult if the arbitration clauses are effective.
According to the Arbitration Law, arbitration commissions may be established in the municipalities directly under the central government, in the municipalities where the people’s governments of provinces and autonomous regions are located or, if necessary, in other cities divided into districts. Arbitration commissions shall not be established at each level of the administrative divisions. There are over 200 arbitration institutions in China at present, while there are two in Beijing, respectively Beijing Arbitration Commission/Beijing International Arbitration Center (hereinafter referred to as the Commission) and China International Economic and Trade Arbitration Commission. According to the Arbitration Law, an arbitration agreement is effective provided that an arbitration institution is selected therein, so where the parties enter into arbitration clauses, they shall adopt model clauses and correctly write the name of the arbitration institution.
The Commission accepts not only domestic arbitration cases, but also foreign-related/international arbitration cases. International arbitration procedural matters are specially provided in Chapter VIII of the Arbitration Rules of Beijing Arbitration Commission.
The Commission accepts disputes over economic contracts and other disputes over property rights and interests between citizens, legal persons and other organizations, including but not limited to sales contract, contracts for construction projects, investment and finance contracts, loan contracts, lease contracts, intellectual property contracts, guarantee contracts, commission contracts and etc., as well as has dealt with a large quantity of complicated, difficult, novel and cutting-edge commercial and economic disputes.
Yes. According to the Arbitration Rules, where the parties have agreed beforehand that the arbitration language shall be English or jointly require to hear the case in English afterwards, the agreement thereof shall be followed. Where the parties make no such agreement, the arbitral tribunal may determine that Chinese or any other language shall be used in the arbitral proceedings according to the particular circumstances of the case. The arbitrators and the staff of the Commission are all able to use English proficiently, and have the practical experience to deal with English cases. In addition to Chinese and English, the arbitrators of the Commission may also be able to use (including but not limited to) French, German, Italian, Russian, Korean, Japanese and Latin to deal with cases.
BAC does not accept administrative disputes falling within the jurisdiction of administrative organs, labor disputes, disputes over agricultural benefit contracts within collective agricultural economic organizations, as well as disputes over marriage, adoption, guardianship, maintenance and inheritance.
Arbitration is different from court lawsuit, the award of which shall be final and binding, so there is no second instance and retrial procedure in arbitration, which means that once an arbitral award is made, it shall be final and binding on the parties. Neither party may make an appeal or claim retrial to the court or the arbitration institution.
Where a party fails to perform the arbitration document that has taken effect, as at the domestic level, arbitral awards and mediation documents have the same effect with the effective judgments of the court, the other party may directly apply for enforcement to the court; at the international level, arbitral awards also have compulsive execution effect, and the other party may directly apply for enforcement to the local court in accordance with the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention)and other relevant international treaties.
In the case of applying for enforcement to Chinese courts, the enforcement of arbitral award may be applied for to the intermediate people’s court of the place where the domicile of the person subject to the enforcement is located or the place where the property subject to the enforcement is situated; in the case of applying for execution to foreign courts, within the signatory states to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), an application may be filed to the local court with jurisdiction, and an enforcement application shall be submitted as required together with the original arbitration agreement and arbitral award, as well as the translation thereof.
According to relevant provisions of the Civil Procedural Law, the parties may apply for pre-arbitration or arbitration property preservation/evidence preservation to the people’s court. In terms of pre-arbitration preservation, the parties shall directly apply to the people’s court. Where the people’s court has accepted the application, it shall give a ruling with 48 hours; where the people’s court rules to adopt preservative measures, they shall be enforced immediately. Where the applicant fails to apply for arbitration according to law within 30 days after the people’s court has taken preservative measures, the people’s court shall relieve the preservation.
In the case of applying for property preservation, the parties shall first determine the competent court by themselves, while the Commission shall forward property preservation materials to the corresponding court as directed by the parties. In principle, in the case of property preservation in Beijing, an application shall be submitted to the corresponding intermediate people’s court (judged by the jurisdiction of the court), while in the case of property preservation in other areas, the parties are advised to consult the local court system beforehand to determine the corresponding competent court.
The courts at different areas have different requirements on property preservation materials. The parties are advised to refer to the court websites or directly consult the courts to learn relevant information.
In the case of arbitration property preservation in Beijing, the following materials shall be prepared (for reference only, subject to particular court provisions and interpretation):
(1) Property preservation application (in duplicate):
Specifying the address, postcode and telephone number of the relevant court;
Specifying the clue of the property preserved in the property preservation application;
• In the case of preservation of current accounts, the name of the natural person/unit, the account number and the opening bank are required;
• In the case of preservation of house property, the address of the house, the property ownership certificate and the copy of the identification documents of the owner are required;
• In the case of preservation of other real estate, the address thereof and relevant property right information are required.
(2) Letter of indemnity or letter of commitment (in duplicate)
• The clue of the property for guarantee shall be specified in the letter of indemnity.
• Where the guarantor is a legal person, the copy of the business license with recent annual inspection (the official seal of the guarantor is required) and the financial audit report of the past year are required;
• Where the guarantor is a natural person, the effective identity card and the ownership certificate of the property for guarantee are required.
(3) A set of complete arbitration application materials
As the arbitration procedure is more flexible, it is faster to close a case than lawsuit. Besides, the arbitral award is final and binding, which has reduced the time of final settling of disputes. Therefore, generally speaking, arbitration better conforms to the efficiency principle of dispute settlement.
Mediation is composed of the mediation during arbitration and independent mediation.
The mediation during arbitration means that the arbitral tribunal organizes the parties to mediate or the parties are voluntary to mediate during the trial of arbitration cases. Where a mediation agreement is reached, the parties may claim that the arbitral tribunal prepares an award or mediation document in accordance with the contents of the mediation agreement; where mediation fails, the arbitral tribunal shall make an award timely.
Independent mediation is a mediation procedure independent of arbitration procedure, which means that the parties voluntarily reach a settlement agreement to settle commercial disputes under the direction of the mediator and on the basis of equal consultation. Independent mediation procedure is flexible and convenient, as well as charges less. The parties may realize “the package settlement” of the disputes over several types of contracts among several parties in one case, which facilitates trade autonomy and social harmony.
The mediation during arbitration and the independent mediation are two different procedures. The arbitration procedure is initiated based on the arbitration agreement between the parties, while the independent mediation procedure is based on the mediation will of the parties. No matter whether the parties enter into an agreement, the mediation procedure may be initiated as long as one party applies for mediation. Therefore, mediation application is a strategy and way for the parties to show cooperation sincerity and break the ice. The Commission encourages the parties in dispute failing to reach an arbitration agreement to use the independent mediation procedure to settle commercial disputes. Where the parties reach an arbitration agreement during the independent mediation procedure, they may commence arbitration proceedings.
Yes. Beijing Arbitration Commission has established the mediation center to provide high-end commercial mediation service and accept the disputes over contracts and other disputes over property rights and interests between natural persons, legal persons and other organizations as equal subjects of law.
Where the parties wish to settle disputes through the Mediation Center of Beijing Arbitration Commission, they may use the following expression when entering into contract dispute settlement clause:
Confidentiality and non-public trial are the principles of arbitration. The parties and the attorneys thereof, witnesses, arbitrators, experts consulted by and appraisers designated by the arbitral tribunal, as well as relevant persons of the Commission shall not disclose the substantive and procedural circumstances of the case. Where the parties agree upon disclosure, relevant circumstances may be disclosed, except for those involving state secrets, the third-party trade secrets or those that the arbitral tribunal assumes not proper to be disclosed.
The parties of arbitration cases may inquire the information or materials of cases that are being dealt with or that have been closed at the Commission, but the Commission will not accept any inquiry request of those other than the parties.
The parties applying for arbitration shall fulfill the following conditions: (1) they must have an arbitration agreement (including the arbitration clause in the contract); (2) they must have a specific claim with facts and reasons on which the claim is based; (3) the arbitration must be within the jurisdiction of the arbitration commission.
Where the parties apply for arbitration, they shall submit the arbitration application, the arbitration agreement (or the contract including the arbitration clause), the identification materials of the parties (the copy of individual ID card/the copy of the business license of the legal person, the certificate of legal representative, the power of attorney), evidence materials and etc.. (refer to case registration materials for details).
Where the parties submit case registration materials in person, the filing date shall be the date of submission. Where the parties register cases by mail, the filing date shall be the date of mail. (refer to case registration materials for details).
(2) Detailed calculation formula: for example, claiming that the respondent shall compensate for the economic losses (the losses are the interests of the price of goods, calculated with XXX yuan as the principal and in accordance with the loan rate of the People’s Bank of China during the corresponding period from mm/dd/yy to the date of the arbitral award, which shall be XXX yuan as of the date of arbitration application).
(refer to case registration materials for details).
The amount in dispute shall be determined according to the arbitration claim. Where the amount claimed by the parties is inconsistent with the actual amount in dispute or the parties fail to claim specific amount, the actual amount in dispute shall prevail. The actual amount in dispute shall be determined by the Commission according to the specific circumstances of the case, the complexity of the object and the rights and interests involved in the claim. Please consult the case registration office for details (010-65669856—233/234).
Yes. The arbitral tribunal is entitled to decide that the losing party compensates the winning party the reasonable expenses occurred due to the case as claimed by the party. The arbitral tribunal decides whether to support the claimed attorney fees according to the specific circumstances of the case.
Where the amount in dispute exceeds 1 million yuan, and the parties have reached an agreement or agreed, the summary procedure may be applied
Where the amount in dispute doesn’t exceed 1 million yuan, and the parties have reached an agreement or agreed, the ordinary procedure may be applied (arbitration fees may be increased).
Case registration materials may be submitted in person at the case registration office of the Commission, and be submitted by mail (mailing address: Case Registration Office, Beijing Arbitration Commission, Floor 16, China Merchants Tower, 118 Jianguo Road, Chaoyang District, Beijing 100022 ). Case registration procedures may be dealt with on the spot provided that case registration materials meet the acceptance conditions of the Commission and the fees are paid in full.
Arbitration fees can be paid in several ways. In addition to the payment in cash, they can be paid through checks, swiping bank cards and remittance.