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CIETAC introduces new Arbitration Rules 2015

Founded in 1956 as China’s first arbitration provider, the China International Economic and Trade Arbitration Commission ("CIETAC") recently introduced new arbitration rules with effect from 1 January 2015.

CIETAC introduces new Arbitration Rules 2015

Founded in 1956 as China’s first arbitration provider, the China International Economic and Trade Arbitration Commission ("CIETAC") recently introduced new arbitration rules with effect from 1 January 2015.

The major amendments included in the new CIETAC Rules concern:

· Emergency arbitration procedure (Art 23.2 and Appendix III)

· Multiple contract disputes (Art 14)

· Joinder (Art 18)

· Consolidation (Art 19)

· Threshold for Summary Procedure (Art 56)

· Special provisions for Hong Kong arbitration (Arts 73-80)

Emergency Arbitrator

Pursuant to Art 23 and Appendix III of the 2015 Rules, a party may apply - in accordance with the applicable law or the agreement of the parties – for emergency relief to the Arbitration Court of CIETAC (or to the arbitration court of the relevant sub commission/arbitration centre of CIETAC), which shall appoint an emergency arbitrator within 1 day of receipt of the relevant fees.

The decision of an emergency arbitrator is binding on both parties. Its powers cease on appointment of the arbitral tribunal. Detailed procedures are set out in Appendix III of the Rules.

Multiple Contract Disputes

Under Art 14 the claimant may initiate a single arbitration arising out of, or in connection with, multiple contracts, if all the conditions below are met:

i. the contracts consist of a principal contract and its ancillary contract(s), or such contracts involve the same parties, as well as legal relationships of the same nature;

ii. the disputes arise out of the same transaction or the same series of transactions; and

iii. the arbitration agreements in such contracts are identical or compatible.

Joinder

Art 18 of the 2015 Rules provides that a party wishing to join an additional party to the arbitration may file the request for joinder with CIETAC, based on the arbitration agreement invoked in the arbitration that prima facie binds the additional party.

The arbitration agreement invoked to join the additional party, together with the facts and reasons supporting the joinder must be set out in the request. CIETAC may decide not to join an additional party where the additional party is prima facie not bound by the arbitration agreement invoked in the arbitration, or where any other circumstance exists that makes the joinder inappropriate.

Consolidation

The revised Art 19 of the 2015 Rules introduces four grounds under which multiple arbitrations may be consolidated. Specifically, at the request of a party, CIETAC may decide to consolidate several arbitrations into a single arbitration under the following conditions:

i. all claims in these arbitrations are made under the same arbitration agreement; or

ii. the claims in the arbitrations are made under multiple arbitration agreements that are identical or compatible, the arbitrations involve the same parties and the legal relationships are of the same nature; or

iii. the claims in the arbitrations are made under multiple arbitration agreements that are identical or compatible, and the multiple contracts involved consist of a principle contract and its ancillary contracts; or

iv. all parties agree to consolidate.

Threshold for Summary Procedure

Chapter IV of the CIETAC Rules contains provisions for fast track arbitration (the so-called summary procedure) especially providing for shorter time limits compared to regular proceedings. The threshold value for the Summary Procedure is raised from 2 million to 5 million RMB. Parties can still agree to use the Summary Procedure for disputes of a larger amount.

Hong Kong Arbitration

Chapter VI of the 2015 Rules establishes the CIETAC Hong Kong Arbitration Center. Unless otherwise agreed by the parties, for arbitrations administered by the CIETAC Hong Kong Arbitration Center the place of arbitration shall be Hong Kong, the law applicable to the arbitral proceedings shall be the arbitration law of Hong Kong, and the arbitral award shall be a Hong Kong award (Art 74).

Conclusion

The revised CIETAC 2015 Arbitration Rules are an attempt to further enhance CIETAC's international appeal. The key to their success lies in whether CIETAC can establish its reputation of implementing the 2015 Rules in a transparent and predictable manner.

For more detailed information please contact Christian W. Konrad, c.konrad konrad-partners com, founding partner of Konrad & Partners, and visit the CIETAC website: www.cietac.org