Applying judicial interpretations in international commercial arbitration

The interpretations of the Supreme People’s Court on how laws and regulations are to be applied, and its interpretations concerning the application of laws and regulations to actual cases, are classified as judicial interpretations. Judicial interpretations are not laws or regulations that have been formulated by a legislative body in accordance with the statutory legislative procedure, and as such, it is difficult, in theory, to include them within the scope of “legislation”.

However, in practice, as a one of the sources of PRC law, judicial interpretations are universally binding on judicial organs at every level, provided that they do not violate the constitution or law. Accordingly, in foreign-related trials, people’s courts rely on judicial interpretations when making their rulings and judgments.

This raises the question of whether, in international commercial arbitration cases in which PRC law is the governing law, a concerned party can apply for arbitration or argue in its defence on the basis of judicial interpretations. A further question raised is whether an arbitration tribunal can apply a judicial interpretation which addresses a matter on which laws and regulations are silent.

Charles Pan is a senior consultant in the Shanghai office of Yao Liang Law Offices