CHINA Trends and Developments Contributed by: Jun Gao and Fan Xu, Zhong Lun Law Firm
Two critical clarifications The ICC Rules also provide two key clarifications. First, they explicitly codify the “when in doubt, dis - close” principle, requiring arbitrators and parties to prioritise disclosure whenever there is any doubt regarding the existence of a conflict of interest, rather than making their own judgement as to whether it is material. Second, they clarify that disclosure in itself does not constitute evidence of a lack of independ - ence or impartiality, thereby avoiding undue deter - rence of good-faith disclosures and encouraging all parties to make candid disclosures. Institutionalisation of the multi-party disclosure principle The new rules formally institutionalise a multi-party disclosure mechanism, with the underlying rationale for this reform being that “prevention is better than cure”. By comprehensively screening for potential risks early in the proceedings, the system aims to reduce conflicts of interest at their source and prevent parties from subsequently seeking to set aside arbitral awards on these grounds. This not only enhances the efficiency and certainty of the arbitration process but also effectively prevents corruption from infiltrating the proceedings through improper relationships, thereby further strengthening the international credibility of ICC arbitration. Structural Reflection: Countering the Judicialisation of Arbitration and Returning to Its Commercial Essence The core value of international commercial arbitration lies in its flexibility, efficiency, and business-oriented approach. However, in recent years, there has been a clear trend towards judicialisation in arbitration proceedings. At the same time, while strengthened anti-corruption measures and conflict-of-interest regulations are crucial for maintaining the credibility of arbitration, they may also objectively increase the risk of procedural complexity. How to strike a balance between strengthening institutional constraints and returning to the essence of business deserves further exploration. Signs and drawbacks of arbitration judicialisation The judicialisation of arbitration is primarily mani - fested in procedural rules aligning with those of court
litigation. An increasing number of arbitral tribunals are adopting court-style practices such as discovery, cross-examination during hearings, and document formatting, resulting in protracted and rigid proceed - ings. The involvement of a large number of former judges and litigation attorneys also leads to arbitration proceedings that tend to overlook commercial and industry practices, thereby diluting the commercial nature of arbitration. This undermines arbitration’s core competitiveness, causing commercial parties to increasingly favour other more efficient dispute resolution methods. For small and medium-sized enterprises in particular, the high costs in terms of time and money create a “bar - rier to entry”. Therefore, arbitral tribunals should pri - oritise the practical needs of commercial transactions rather than mechanically applying legal rules, which may result in awards that lack commercial logic. Global consensus on returning to commercial sense Leading international arbitration institutions, repre - sented by the ICC, collectively advocate that arbitral tribunals should move away from pure proceduralism and apply a business-oriented mindset throughout the entire proceedings. The ICC states that the amend - ments to the Arbitration Rules aim to enhance efficien - cy, clarity and usability, ensuring that ICC arbitration continues to meet the needs of global entities and to strengthen parties’ confidence in the fairness and efficiency of dispute resolution. In the future, the international arbitration community is expected to advance the arbitration regime in a more business-friendly direction by focusing on the follow - ing areas: • encouraging the participation of practitioners with industry experience, expertise in anti-corruption compliance, and cross-cultural competence; • streamlining procedures, promoting documents- only proceedings, and optimising the emergency arbitrator mechanism; and • integrating ADR methods, such as mediation and expert determination, with arbitration to form a multi-tiered dispute resolution system.
210 CHAMBERS.COM
Powered by FlippingBook