Beijing Arbitration Commission

Beijing Arbitration Commission 1997 Annual Review

(Passed at the Seventh Meeting of the First Session of the Beijing Arbitration Commission on September 5, 1998)

Since its establishment on September 28, 1995, the Beijing Arbitration Commission (BAC), with the regard of the municipal government and the support of pertinent government departments, has rigorously executed the Arbitration Law and relevant regulations issued by the State Council, strived to properly handle arbitration cases, made vast improvements, and achieved great success. Arbitration has come to be known and recognized by society, and as such, the credibility and reputation of the BAC has steadily increased.

I. The work of accepting and handling cases

Over the past three years, the number of cases handled by the BAC has increased, and the quality of case handling has also been enhanced. To date, the BAC has handled a total of 452 cases. 7 cases were accepted in 1995 (from October to December), 149 in 1996, and 168 in 1997, an increase of 19 over the previous year. By August 24 of this year, the number has reached 128, an increase of 27 as compared to the same period in 1997. So the number of cases has been steadily growing. Of all cases to date, there have been 221 sales disputes, accounting for 48.7 percent of the total. There have also been 82 house-property transferring and lease disputes, contractual disputes over real estate development and other disputes related to real estate, accounting for 18.18 percent of the total; 93 building contractual disputes, accounting for 20.6 percent; 13 patent and technology contractual disputes, accounting for 2.8 percent; 20 investment and pooling contractual disputes, accounting for 4.4 percent; and 23 advertisement deputy contractual disputes and other types of disputes, accounting for 5 percent. In addition, the BAC has concluded 375 cases, 82.9 percent of the total. The average duration for each case from the constituting of the Arbitral Tribunal to the conclusion was 79 days, and the average time from case acceptance to conclusion was 90 days. Moreover, the BAC was ranked as the top among arbitration institutions throughout the country in the number of cases accepted, the number of cases settled, and work efficiency.

Case handling is the main task of the BAC, and in order to guarantee that the task is accomplished adequately, the BAC has emphasized the following aspects:

1. Continuously improving the arbitration rules and case handling provisions

Shortly after its establishment, the BAC drafted the Arbitration Rules of the Beijing Arbitration Commission (hereinafter referred to as the Arbitration Rules) pursuant to the Arbitration Law and the No. 44 File of the General Office of the State Council. Thereafter, it revised the Rules three times, making gradual improvements as work requirements became clearer. In order to increase arbitrators case handling capacity, the BAC also drafted the Criterion of the Case Handling for the Arbitrators of the Beijing Arbitration Commission (discussed draft) and Provisions of Arbitral Award Rendering of the Beijing Arbitration Commission (discussed draft) for study and discussion by arbitrators. This was done in response to the particular problems presented by arbitration and drew on the experience of international arbitration organizations and on the justice reforms of the Peoples Court. Both discussed drafts were subsequently amended based on feedback and suggestion. The Arbitration Rules and the two discussed drafts effectively increased the standardization of arbitration procedures.

2. Emphasizing the engaging, training and examining of arbitrators and routinely checking case-handling quality

The professionalism of arbitrators is directly related to the quality of case handling. To raise the arbitrators professional level and capacity, the BAC has emphasized the following aspects:

(1) The BAC carried out arbitrator engagement with high standards and strict requirements, using the potential arbitrators morality, professional competency and case-handling ability as the standards for engagement. Moreover, the fact that Beijing has an exceptionally rich talent pool is advantageous for successful recruitment. To date, we have recruited 289 arbitrators, most of whom are elite practitioners from the legal and trade disciplines, and among our arbitrators, 46 have strong professional backgrounds, excellent foreign language ability, and experience in handling foreign cases.

(2) Emphasized the importance of quality when constituting arbitral tribunals. When the Chairman of the BAC was entrusted to appoint both a chief arbitrator and also general arbitrators, the professional experience and skills of all members of the Panel of Arbitration were taken into consideration in order to take full advantage of every members complementary talents and expertise.

(3) Evaluating and training excellent arbitration professionals. Over the past three years, the BAC has regularly reviewed the arbitrators in regards to their work style, professional capacity, work attitude, work efficiency, etc. The BAC then selected experts and scholars with integrity, impartiality, responsibility, impressive professional credentials, rich experience, and outstanding case handling capacity to serve as a chief arbitrator or sole arbitrator.

(4) Taking advantage of the benefits offered by professional experts. Because the arbitrators come from different fields and have different professional backgrounds, it is impossible to avoid differences when arriving at conclusions about questions of fact or law. In order to guarantee the objectivity of these determinations and consistency in applying the law across arbitral tribunals, the BAC invited experts to provide consultation on the requirements of proper arbitration proceedings.

(5) Reinforcing work training. The BAC periodically (on a bimonthly basis) distributed the Beijing Arbitration Review to the arbitrators, introducing the practices of other arbitration institutes at home and abroad. To date, 17 issues of the Beijing Arbitration Review have been published. At the same time, the BAC directed arbitrators to probe deeply the theoretical and practical problems posed by arbitration by attending training courses and symposiums.

These measures have increased the professionalism of arbitrators and the quality of their case handling. Through the course of arbitration, arbitrators have strictly enforced the Arbitration Law and the Arbitration Rules, performed cautiously and conscientiously, and checked on the key points of oral hearings, cross-examinations, certifications and arbitral award renderings. In the process, they have tried to improve the overall quality of case handling. Their efforts have been met with praise from the parties. According to the Peoples Court, of the 375 cases concluded by the BAC, only 18 cases have parties applied to the Peoples Court to set aside the arbitration award, accounting for only 4.8 percent of resolved cases. To date, not a single arbitral award has been set aside by the Peoples Court. Most of the arbitral awards have been performed voluntarily by the parties or forcibly imposed by the Peoples Court.

3. Emphasizing publicity efforts and enhancing societys awareness and understanding of the new arbitration system

Since its establishment, the BAC has always stressed publicizing the Arbitration Law and arbitration system, and has engaged in publicity through various channels. By the end of October of this year, more than 40 newspapers and magazines had published more than 200 articles introducing the arbitration system and the BAC. Programs about the Arbitration Law and arbitration system were also televised or broadcasted through CCTV, BTV, China Radio, and Beijing Radio. In addition, special columns about arbitration could be found in newspapers and magazines such as Beijing Daily, China Business, Industrial Commerce, the Pioneer, and the Joint Venture Newsletter. The BAC has disseminated more than 13 different publicity materials through various channels and directly educated more than 2000 people through lectures and discussions. In addition, the BAC built its own website, with detailed information, the Beijing Arbitration Review, and updated laws and regulations. To date, the site has received 2300 hits. These widespread efforts have had a significant impact. Research by the Zero Investigation Corporation revealed that among 659 enterprises in Beijing in October in 1997, 66.6 percent of all the people surveyed knew about the enactment of the Arbitration Law and the establishment of the BAC, and 70.7 percent of enterprises were satisfied with arbitration as a dispute resolution mechanism, an increase of 40 and 20 percent respectively from that in 1995. Therefore, we may conclude that more and more enterprises have become aware of the Arbitration Law and the BAC in the years since the BAC was established. Of all the cases accepted by the BAC, the number in which the parties have expressly entered into an agreement to arbitrate at the BAC has been steadily increasing from year after year, accounting for 25.5 percent of the total in 1996, 33.3 percent in 1997, and 71.4 percent through October of this year.

II. The self-construction of the BAC

Throughout its early development, the BAC has routinely examined the quality of case handling, paid close attention to work efficiency, and continually strengthened the composition of the arbitrator pool and administrative staff. It has strived to become a fair arbitration institution of distinguished reputation that is free of corruption, with first-class service, quality, efficiency, and staff. To these ends, the BAC adopted the following measures:

1. Perfecting the arbitration system and cultivating a fair and impartial image of arbitration

First, the BAC stressed impartiality and fairness as the most important aspects of the training and examination of arbitrators, as stipulated in the Ethical Standards for Arbitrators of the Beijing Arbitration Commission (hereinafter referred to as Ethical Standards). The Ethical Standards mandate that if an arbitrator conceals any fact that should be disclosed, meets with the parties in private, accepts entertainment, gifts or other benefits from the parties, violates principles of fairness in the handling of cases, or behaves in any other way that exhibits a bias toward any party on several occasions in his/her tenure, the BAC has the power to dismiss them or not re-engage him.

Second, the BAC established the challenge system and feedback system for the parties. After the BAC accepts an application from parties and constitutes an arbitral tribunal, the BAC will instantly deliver the parties notice to the parties and make arbitrators sign the arbitrators announcement. The parties notice makes the parties aware of the fact that they are not permitted to meet with arbitrators in private, talk about the case, or provide entertainment, gifts or other benefits to arbitrators. In the arbitrators announcement, the arbitrators agree to accept their selection (or appointment) and affirm that no conditions stipulated in the Arbitration Rules bar them from hearing the case. Parties may challenge the selection or appointment of an arbitrator if any such conditions do exist. After the resolution of cases, the BAC solicits feedback from the parties on the implementation of the Arbitration Rules either by letter or an informal discussion.

Third, the BAC has opened up its case-handling procedures and the Arbitration Rules to society and invited feedback and suggestions from lawyers and business managers on ways to enhance and improve the fairness of arbitration.

Finally, a Discipline Board has been set up to be responsible for investigating any violations by arbitrators.

The above measures are not only backed by the parties and their representatives, but also supported by the arbitrators. To date, of the 171 arbitrators who have handled cases, appointed on 666 occasions, there has not been a single occasion on which the parties or representatives have alleged that arbitrators have violated the Arbitration Rules and accepted entertainment, gifts or other benefits. The arbitrators have won the respect and trust of the parties and their representatives with their impartiality, honesty, seriousness, and diligence.

2. Setting up a simple but competent administrative body

The Office is the administrative body of the BAC. In order to guarantee the quality and efficiency of service at the Office, the BAC established an effective management system. First, an excellent staff with high professional ability, integrity, honesty, diligence, and devotion was selected from among the undergraduates and graduates of advanced universities through public recruitment. Second, the structure of the Office was set up in accordance with the practical requirements of our work. The staff is asked to assume multiple roles and various duties and must be versatile to maintain high efficiency and competency. Third, we emphasized the welfare of all personnel according to the spirit of reform and characteristics of the arbitration institution. A two-way selection process between the Office and staff was implemented. Employment is contract based, creating a system of mutual rights and obligations, with no guarantee of lifelong employment. Staff compensation is not fixed, but rather directly related to staff members devotion, hard work, and the development of the BAC. Finally, the BAC insisted on cultivating a strong work ethic, guiding young staff to build up admirable philosophy and values, fostering and training the new generation, and providing a close, harmonious, vigorous, competent and innovative work environment.

3. Modernizing the management of arbitration by adopting computer technology

Work quality and efficiency is not only dependant on personnel, but also closely linked to the methods and means of management. In preparing for its establishment, the BAC worked with computer experts from Peking University to develop a management software for an efficient arbitration system that would automate the management of arbitration procedures. After its establishment, the BAC also purchased necessary books and databases of relevant laws and regulations, equipped every staff member with a computer, built a network, and implemented an arbitration system driven by the management software. As the BAC developed, the office upgraded the management software, achieving complete automation of case statistics, scheduling, fee calculation, and data processing. They also updated the computer management of arbitration procedures from the acceptance of a case, to constitution of the tribunal, to oral hearings, up through the resolution of the case. In 1997, as the Internet continued to proliferate, the BAC registered a domain name and set up its own website and e-mail addresses. It appears nowadays that these investments are absolutely necessary to increase work efficiency, guarantee impartial arbitral implementation and scientific management, and improve the overall public perception of the BAC. We believe that investment in computerized management will continue to show increasing returns over time.

III. Experiences and realization

Reflecting on the past three years, we are convinced:

1. that the success and viability of arbitration depends on its fairness and impartiality, as its authority depends on the faith and credit of the parties and not by compulsion. Only if fairness and impartiality are preserved and corruption consistently avoided can the BAC obtain the trust and support of the people.

2. that handling cases properly and in accordance with the law is the primary work of the BAC and that this furthers the goal of achieving fairness and impartiality in arbitration. Only if it persistently raises the quality and efficiency of case handling can the BAC continue to develop and thrive.

3. that we must be able to faithfully depend on all of our arbitrators. The arbitral tribunals are responsible for hearing and deciding the cases. Professional, diligent arbitrators guarantee the quality and efficiency of case handling.

4. that the development of the BAC benefits from the strong support of the Beijing Municipal Government. While appointing its personnel upon establishment of the BAC, the Municipal Government leadership adhered to the regulations of the Arbitration Law and designated experts and scholars in the legal and trade fields as the Chairman and committee members of the BAC. This lent immediate expertise and credibility to the BAC and received a favorable reaction throughout the country and around the world. Subsequently, the municipal government offered necessary financial assistance and continually enabled the BAC to operate independently, which guaranteed the independence of arbitration and established a strong foundation for the development of the BAC.

5. that the BAC has consistently received collaboration and support from pertinent departments, particularly the Peoples Court. The Peoples Court has continually promoted the development of arbitration institutions, ensured mutual consultation and close cooperation with the BAC in their work, and overcome various difficulties to ensure that arbitral awards and property protection are executed. All these things have significantly helped to promote the development of the BAC.

 

Model Arbitration Clause Arbitration Clause
All disputes arising from or in connection with this contract shall be submitted to Beijing Arbitration Commission / Beijing International Arbitration Center for arbitration in accordance with its rules of arbitration. The arbitral award is final and binding upon both parties.
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