CHINA Law and Practice Contributed by: Paul Zhou and Leslie Shen, SGLA Law Firm
3.3 National Courts’ Approach Chinese courts have consistently adopted a pro- arbitration approach in the interpretation of arbitra - tion agreements. The SPC has held in multiple guid - ing cases that an arbitration agreement should be declared invalid only when it is impossible to give effect to the parties’ expressed intention to arbitrate. In its judicial interpretations and replies, the SPC has consistently reinforced the principle of validating arbitration agreements where the parties’ intention is clear, even if the agreement contains minor defects in formulation. The 2025 Arbitration Law reinforces this pro-arbitration policy, providing that any ambiguity in an arbitration agreement shall be resolved in favour of validity where the parties’ intention to arbitrate can be ascertained from the agreement as a whole. 3.4 Validity An arbitration agreement is invalid if: (i) the subject matter of the dispute is not arbitrable; (ii) the agree - ment was concluded by a person lacking legal capac - ity; (iii) the consent to arbitrate was obtained through fraud, coercion, or the exploitation of the other party’s distressed circumstances; or (iv) the arbitration agree - ment does not comply with the statutory written form requirement. The 2025 Arbitration Law adds a further ground: an arbitration agreement providing for ad hoc arbitration in a non-foreign-related dispute is invalid, because Article 82 limits ad hoc arbitration to foreign- related maritime disputes or foreign-related disputes arising between enterprises registered within free trade pilot zones or Hainan Free Trade Port. Separability (sometimes referred to as “severability”) is a long-standing principle under Chinese law. Article 30 of the 2025 Arbitration Law provides that the arbitra - tion clause is separable from the underlying contract. Even if the underlying contract is determined to be invalid, revoked or terminated, the arbitration clause remains valid unless the clause itself is invalid. This principle, which is well established in Chinese case law and international arbitration practice, ensures that a party cannot evade the arbitration obligation by challenging the validity of the underlying contract. The 2025 Amendment reaffirmed and strengthened the separability principle.
From a practical drafting perspective, the following points warrant emphasis. First, where the parties intend to designate a Chinese arbitration institution, the clause should specify both the institution’s name and the seat of arbitration. The model clause rec - ommended by CIETAC provides: “Any dispute aris - ing from or in connection with this contract shall be submitted to China International Economic and Trade Arbitration Commission for arbitration in accordance with its Arbitration Rules in effect at the time of apply - ing for arbitration. The seat of arbitration shall be [Bei - jing/Shanghai/Shenzhen]. The arbitral award is final and binding upon both parties.” Second, where the contract is bilingual, the arbitration clause should expressly provide which language version prevails in the event of inconsistency. Third, for contracts involv - ing Belt and Road Initiative projects, practitioners should consider designating the “Belt and Road Arbi - tration Centre” (a specialised division of CIETAC) as the administering institution, as its rules incorporate specific provisions on multiparty and multi-contract disputes common in infrastructure projects. The parties are free to agree on the number of arbitra - tors and the method of appointment. In the absence of agreement, the default composition is a tribunal of three arbitrators (one presiding arbitrator/chairper - son and two co-arbitrators). The 2025 Arbitration Law expanded party autonomy in arbitrator selection, per - mitting the parties to select arbitrators from outside the administering institution’s panel with the agree - ment of all parties. For foreign-related arbitration, the parties enjoy even greater freedom: the 2025 Amend - ment allows the parties to a foreign-related dispute to agree on ad hoc arbitration and to select arbitrators without institutional constraints, provided that the selected arbitrators possess the legal qualifications and satisfy the impartiality and independence require - ments of the law, and that the arbitration agreement is in writing. 4.2 Default Procedures 4. The Arbitral Tribunal 4.1 Limits on Selection If the parties fail to agree on the method of composing the tribunal, the arbitral institution appoints the tribu -
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