Arbitration in China has dramatically increased in recent years, as China International Economic and Trade Arbitration Commission [CIETAC], a governmental body that deals with arbitration, remained the busiest arbitral institution in the world last year, according to a report from Orrick, Herrington & Sutcliffe.
The increase is apparent when comparing the number of arbitrations that CIETAC dealt with in past years; while the arbitral institution administered 1,188 arbitration cases in 2007, there were 981 cases in 2006 and only 37 in 1985.
“It’s largely due to the increase in foreign investment in mainland China - there is a time lag between foreign companies investing there, then disputes arising, and then those disputes being referred to arbitration,” said Robert Pé, a partner with Orrick. Foreign companies investing in China are becoming more alert than ever to the benefits of resolving disputes through arbitration rather than relying on the local Chinese courts, he said.
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