‘Seat’ should be clarified for PRC arbitration

Of the major news in Chinese arbitration circles in 2016, at least two items involved “seat of arbitration”. The first is the Procedural Guidelines for the Application of the UNCITRAL Arbitration Rules, issued by the Shenzhen Court of International Arbitration (SCIA), and the second is the recognition by a Nanjing court of an award rendered by the China International Economic and Trade Arbitration Commission Hong Kong Arbitration Centre (CIETAC HK).

The “seat of arbitration” determines the nationality of an arbitration award, concerns the governing law and validity of an arbitration agreement, and decides the governing law for an arbitration procedure. It also serves as the geographical basis to set aside an award and a precondition for application of the New York Convention. Accordingly, the seat of arbitration is a fundamental concept peculiar to arbitration law.

The 1996 UK Arbitration Ordinance defines the seat of arbitration as the juridical seat, demonstrating a major development on this issue in international arbitration theory. Seat of arbitration is no longer simply a geographical concept, but is rather a legal connection that links an arbitration award to the arbitration procedure.

There is a close relationship between the “seat of arbitration” and the place where the arbitration institution is located, but the place where the arbitration institution is located is not necessarily the seat of arbitration. Usually, there is an even tighter relationship, in legal terms, between the actual place where an award is rendered and the award.

Tim Meng is the managing partner of GoldenGate Lawyers. He can be contacted on +86 10 5870 2028 or by e-mail at tmeng@goldengatelawyers.com