Breakthrough in interim measures of Shanghai FTZ’s arbitration system

On 8 April 2014, the Shanghai International Economic and Trade Arbitration Commission formally issued the Arbitration Rules of the China (Shanghai) Pilot Free Trade Zone (FTZ). Previously, the commission had established the China (Shanghai) Pilot Free Trade Zone Court of Arbitration, at the end of 2013. With this, the FTZ arbitration system not only has a specialised institution, but also its own new rules. The court and its new rules sketch an outline of the newest face of reform of China’s arbitration system, which will surely place it in a leading position in arbitration in China for a long time to come.

The innovations made in the court’s new rules in terms of interim measures, emergency arbitration tribunals, panel of arbitrators, consolidation of arbitration, third parties to arbitration, arbitration evidence, mediation in the course of arbitration, amiable arbitration and small claims arbitration have recently been the subject of a steady stream of reports in the industry. In particular, the new system of arbitration interim measures reflects the desire of pursuing international standards for China’s arbitration sector, as well as the numerous frustrations within China’s current arbitration system. Its significance is difficult to overstate.

Current Chinese law

As distinct from common practice in international arbitration, arbitration tribunals under current Chinese law do not have the power to directly take interim measures such as property preservation, evidence preservation, act preservation, etc. A party to arbitration with such a need is required to first bring it before the arbitration tribunal, which will then forward it to the competent people’s court for enforcement.

Vincent Mu is a senior associate at Martin Hu & Partners