BAC Newsletter Issue 5
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  Fifth Event Held for Arbitrator Salon Group for Construction Projects
-----Pushing forward the costing appraisal works in BAC

  On the afternoon of July 10th, 2008 the BAC Arbitrator Salon Group for Construction Projects held its fifth activity in the International Conference Hall at the BAC. The subject of this Salon was “Current Issues in the Appraisal Process.” The participants were all senior arbitrators with extensive experience in handling construction disputes.

  During the Salon, arbitrators engaged in comprehensive, in-depth dialogue on several issues, such as: how to prevent abuses of the right to appraisal, how to effectively control and push forward the appraisal process, and how to consider the results of the appraisal.

  Most participants believed that the BAC has made great improvements in how the appraisal process is executed; the BAC has developed a special list for appraisals, making an extra effort to oversee appraisal companies and hold them to very strict standards. A considerably large number of construction project cases involve the appraisal procedures. However, there was a consensus reached that there were still ample opportunities to improve the length and the quality of appraisals.

  The participants concluded that once the appraisal procedure starts, the authority and responsibilities of the arbitration tribunal and the appraisal company should be made clear – and communicated clearly to the appraisal company. The arbitration tribunal must make clear the scope and content of the appraisal and make sure that it is carried out by the appraisal company. During the appraisal process, the arbitration tribunal should keep contact with the appraisal company through the BAC Secretariat, and urge the appraisal company to complete their responsibilities on time. In terms of evaluating appraisal results, most of the participants concluded that the report issued by appraisal company is the opinion of an expert organization to be used as evidence to support a decision by the tribunal, but not a decision in itself.

  According to the BAC’s current standards for appraisal, and through their own experiences and achievements in dealing with cases, the participating arbitrators also proposed several ideas on how to improve and streamline the BAC’s appraisal process.

(Chen Liangyu)

  On July 24th, 2008, Mr. Feng Zhixiang, Deputy Director of the Administrative Office for Bidding and Tendering of Construction Projects in Beijing and Arbitrator of the BAC, was invited to act as Keynote Speaker at the 7th (The 44th session in total) BAC Arbitrator Salon of 2008. During the Salon he introduced and commented on the “Standard Bidding Document for Construction Projects,” newly released in the People’s Republic of China.

  Mr. Feng firstly introduced the background, release process, and main clauses of the Document, including the composition and applicability of the standard clauses. Then, in focus, he introduced the manner of thought behind, and overall content of the universal clauses. Next, he provided an analysis of many current issues faced by arbitrators in practice, such as the use of “And” and “Or”, the price clause of the contract, defects liability period, delays in the construction schedule and project quality issues, contract modification, and the price of changing the contract. During his speech, Mr. Feng referenced a large number of practical cases for analysis, enabling the audience to more deeply grasp the content and uses of the Document. After his speech, Mr. Feng also had a brief question and answer session with the audience regarding their issues of concern about the bidding and tendering process.

(Ding Jianyong and Gu Xuan)

  On July 21st-23rd, 2008, the Juridical Reform Office (JRO) of People’s Supreme Court held a “Seminar on the Reform of Alternative Dispute Resolution” in Dongguan, Guangdong Province. The seminar was held according to the plan and outline created by the Supreme Court for establishing and improving the alternative dispute resolution system. Ms. Jiang Lili, Secretary and Representative of BAC, attended the seminar.
Mr. Wei Yanming, Deputy Director of the JRO, gave a speech he titled “Establishing an Alternative Dispute Resolution System Guided by the Scientific Development Concept.” The participants discussed and commented on the initial draft of the reform report proposed by the JRO. Mr. Leng Haidong, Deputy Secretary General of CIETAC pointed out the following during discussion: (1) As various aspects of the Chinese society, particularly the economy, have developed there has been increasing demand for alternative dispute resolution (2) The creation of an alternative dispute resolution system and developments such as civil conciliation, commercial arbitration, and mediation all are closely connected with establishment and development of market economy. (3) Various branches of government, legislative, law enforcement and judicial, and all members of society should fully recognize the independent value of dispute resolution methods, which are an alternative to the juridical approach, and recognize that they are all they are necessary to develop a socialist market economy. Secretary Jiang Lili from the BAC proposed some specific revision suggestions relating to commercial arbitration learned by the BAC.

   Mr. Zhang Genda, emcee of the seminar and Deputy Director of the JRO, expressed his appreciation for the opinions and suggestions proposed by the directing bodies, consultants, and all members of the project teams, and said he would organize revision of the reform report as soon as possible. Mr. Zhang explained that the next step of the project would entail three steps: releasing the judicial interpretations, forming central decisions, and pushing forward legislative improvements.

   The project report will be published by the sub-topic team for commercial arbitration in the 66th issue of “Beijing Arbitration.” Watch for its release!

(Jiang Lili)