Under the 1994 PRC Arbitration Law, to be valid an arbitration agreement must refer to the arbitration commission (仲裁委员会) selected by the parties, among other things. But do foreign arbitration institutions qualify within the meaning of the law? Or must I choose the China International Economic and Trade Arbitration Commission (Cietac)? What language and rules should be specified? In short:

How should I construct my China arbitration clause to avoid future problems?

The international perspective

Foreign investors contracting with PRC counterparties should usually seek to agree on a place of arbitration outside the PRC: Hong Kong or Singapore are both good choices. But the relative bargaining power of the parties may mean this is not possible. If you are going to agree to submit disputes to arbitration in the PRC, there are a number of factors to consider when drafting your arbitration clause in order to make the process more user-friendly and minimise the risk of any challenges.