CHINA Trends and Developments Contributed by: Ernest Yang, Xiaoshan Chen, Han Ma and Dewey Song, DLA Piper UK LLP
Arbitration Law does not include the concept of place of arbitration. The draft amendment now introduces a provision stating that the parties may agree on the place of arbitration. It further provides that the place of arbi - tration shall serve as the basis for determining the law applicable to the arbitration procedure, and which court has the authority to conduct judicial review of the arbitration. If the parties have not agreed on the place of arbitration, or if the agreement is unclear, the place of arbitration should be the place stipulated in the applicable arbitration rules. If the arbitration rules do not provide such a place, then the place of arbitra - tion shall be determined by the arbitral tribunal. Shortening the time period for applying for setting aside of the arbitral award The current PRC Arbitration Law allows an applicant six months after receiving an arbitral award to apply for its setting aside in a competent PRC court. The draft amendment reduces this period to three months. Arbitration conducted online The draft amendment introduces a provision explicitly permitting the parties to conduct arbitration through online platforms. It also provides that arbitration con - ducted online shall have the same legal effect as arbitration conducted in person, thereby recognising the increasingly prevalent practice of conducting arbi - tration online and remotely, which has become more common since the pandemic. Bridging the connection with international arbitration institutions The amendment introduces a provision stating that “the state supports arbitration committees in strength - ening exchanges and cooperation with foreign arbi - tration institutions and relevant international organi - zations, and actively participating in the formulation of international arbitration rules”, which encourages PRC arbitration institutions to engage in international practice and align with global standards. These amendments collectively demonstrate the legis - lative intent to modernise and internationalise the arbi- tration framework in China and reflects a progressive and supportive approach towards arbitration. They are
expected to enhance the efficiency and effectiveness of the arbitration and to position the PRC as a more attractive venue for international arbitration, by foster - ing greater confidence and predictability for parties involved in cross-border disputes. It remains to be seen whether these amendments will be retained, and whether further changes will be included when the amended Arbitration Law is announced in the future. Breakthrough in the Recognition of Foreign Factors — Hong Kong Capital, Hong Kong Law, Hong Kong Arbitration On 14 February 2025, the “Reply of the Supreme People’s Court on the Effectiveness of Agreements Choosing Hong Kong or Macau Law as the Governing Law for Contracts or Agreements on Hong Kong or Macau as the Place of Arbitration for Hong Kong and Macau Investment Enterprises Registered in the Main - land of the Guangdong-Hong Kong-Macao Greater Bay Area” came into effect. This latest Supreme People’s Court (SPC) judicial interpretation stipulates that qualified Hong Kong- and Macau-invested companies within the Guangdong- Hong Kong-Macao Greater Bay Area may choose Hong Kong or Macau law as the applicable law for their contracts, and that they may agree on Hong Kong or Macau as their place of arbitration. According to the current PRC Civil Procedure Law and conflict of law rules, parties may agree to submit their disputes to arbitration administered by offshore arbi - tration institutions only if the dispute is considered to have “foreign elements”; that is, only if: • one or more of the parties is an offshore entity; • the incident giving rise to the establishment, change or termination of the relevant rights and obligations takes place in a foreign jurisdiction; or • the subject matter under dispute is located in a foreign jurisdiction, where the parties are permitted to choose foreign law as applicable law or resort to arbitration in a foreign arbitration institution – an agreement on jurisdiction or choice of law is invalid if the contract lacks such a foreign element.
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