Arbitrating Chinese Domestic Disputes

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clpstaff &clp articles

Despite some remaining flaws, arbitration is still the preferred method of dispute resolution for investors in China. This is not only due to the generally applicable advantages of arbitration over litigation but is also linked to the particularities of the Chinese legal system. However, these particularities should be carefully taken into account when drafting the arbitration clause in a contract involving a Chinese party, otherwise the arbitral process could lead to an unenforceable and useless award.

SETTLING CHINA-RELATED DISPUTES THROUGH ARBITRATION

Settling a dispute through arbitration is in many respects more attractive than litigation as it ensures neutrality, flexibility, and the possibility of choosing arbitrators with technical abilities in the relevant industry or business sector. Furthermore, not only does arbitration allow confidentiality of the hearings and awards, it is also attractive because of its speed and cost. But above all, arbitration is attractive because of its easy enforceability.

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