Is the dust finally beginning to settle on fractious intra-CIETAC dispute?

On 1 May 2012, the China International Economic and Trade Arbitration Commission (CIETAC Beijing) issued a public statement declaring that the unauthorised public claim made by the Shanghai Sub-commission of CIETAC that it was an independent arbitration institution, its formulation of arbitration rules and engagement of arbitrators were all invalid. CIETAC Shanghai and the South China Sub-commission of the CIETAC (CIETAC Shenzhen) immediately came back with tough responses, not only publicly declaring their independence, but using their own newly formulated arbitration rules to replace the past CIETAC Arbitration Rules. This raised the curtain on the intra-CIETAC dispute that has riveted the attention of the arbitration world, both inside and outside the PRC.

The most central issue is how it will all end – will CIETAC ultimately split up or, after all of the shouting is over and done with, will it return to being a single entity? This not only involves territorial division in China arbitration, but also directly affects the immediate interests of large numbers of parties to arbitration. With a view to briefly delineating the origin of the intra-CIETAC dispute and analysing the effect that a ruling in an award vacation case will have on arbitration practice in China in future, the author has written this column to express his personal view.

Independent status

On 14 November 2012, Ruling (2012) Shen Zhong Fa She Wai Zhong Zi No. 225 of the Intermediate People’s Court of Shenzhen Municipality, Guangdong, found CIETAC Shenzhen to be an “independent arbitration institution” and dismissed the application for vacation of the arbitration award made on the grounds that “failure by CIETAC Shenzhen to apply the most recent arbitration rules of CIETAC Beijing resulted in the procedure being illegal”.