Latest developments in PRC arbitration

As the Chinese legal system matures, PRC litigation is an increasingly viable option for commercial dispute resolution. At the same time, arbitration continues to evolve and play and important role.

Foreign arbitration institutions in China

According to PRC laws, foreign-related disputes can be submitted to a domestic or international institution according to the arbitration clause or agreement. Many foreign parties choose major global arbitration institutions to settle disputes with their Chinese counterparties. Popular forums include the International Chamber of Commerce (ICC), Singapore International Arbitration Center (SIAC) and Hong Kong International Arbitration Centre (HKIAC). China already takes up much of the caseload of these major institutions. 20% of the SIAC's cases, for instance, are China-related.

Rep offices in Shanghai FTZ

The ICC, SAIC and HKIAC have been expanding their footprints in China. Between November 2015 and February 2016, all three had established representative offices in the China (Shanghai) Pilot Free Trade Zone (Shanghai FTZ). Although these offices cannot provide arbitration services to cases seated in mainland China, they allow for cooperation with local arbitrators and practitioners, and help promote global practices in the PRC.

Expansion of foreign-related disputes

Chinese law has historically drawn a line between “foreign-related” and domestic disputes. In practice, wholly foreign-owned enterprises (WFOEs) are considered Chinese legal entities. Foreign investors doing business in China through WFOEs or other types of foreign-invested enterprises (FIEs) are therefore often required to arbitrate in China, if the opposing parties are Chinese.