May 1, 2012

China International Economic and Trade Arbitration Commission

An Open Letter to All Arbitrators

Dear CIETAC Arbitrators,

The China International Economic and Trade Arbitration Commission (CIETAC)， set up by the China Council for the Promotion of International Trade (China Chamber of International Commerce) with the approval of the Administration Council of the Central People’s Government in 1954, is a permanent international arbitration institution independently resolving economic and trade disputes.

In 1982, the CIETAC Shenzhen Office was approved by the China Council for the Promotion of International Trade to be set up in Shenzhen following approval by the State Council of an application jointly submitted by the China Council for the Promotion of International Trade, the Ministry of Foreign Economic Relations and Trade and the Ministry of Foreign Affairs.  The Shenzhen Office was renamed the Shenzhen Sub-Commission in 1989 and the South China Sub-Commission in 2004.  The South China Sub-Commission is under the direct leadership of the China Council for the Promotion of International Trade in respect of its arbitration business and it is under the leadership of the Shenzhen Municipal Government in terms of personnel and administrative affairs.

In 1988, the CIETAC Shanghai Sub-Commission was approved by the China Council for the Promotion of International Trade to be set up in Shanghai after it obtained the approval from the State Council.  The Shanghai Sub-Commission is under the direct leadership of CIETAC in its business and is administratively attached to the Shanghai Sub-Council of the China Council for the Promotion of International Trade.

In February 2012, the China Council for the Promotion of International Trade (China Chamber of International Commerce) approved CIETAC’s new Articles of Association and Arbitration Rules that had been previously reviewed and approved by the Commission Meeting of CIETAC.  The new Arbitration Rules come into force on May 1, 2012.

It is the power bestowed upon the China Council for the Promotion of International Trade (China Chamber of International Commerce) by the Arbitration Law of China to establish foreign-related arbitration commissions.  It is also a duty and responsibility of the China Council for the Promotion of International Trade (China Chamber of International Commerce) to formulate and revise CIETAC’s Arbitration Rules (foreign-related arbitration rules), entrusted by China’s Arbitration Law and the 1988 State Council’s Official Reply Concerning the Renaming of the Foreign Economic and Trade Arbitration Commission as the China International Economic and Trade Arbitration Commission and the Revision of its Arbitration Rules. CIETAC’s sub-commissions neither have the power to constitute their own commissions nor have the power to formulate their own arbitration rules or adopt their own Panels of Arbitrators. CIETAC and its sub-commissions, which are branches of CIETAC, form an integrated arbitration commission.  This was clearly stipulated in CIETAC’s Articles of Association in 1993 and has remained so ever since.  The provision is not only the fundamental basis of the legitimate existence of CIETAC’s sub-commissions in local places after the implementation of China’s Arbitration Law but also an inevitable requirement in strictly enforcing the Arbitration Law.

CIETAC Arbitration Rules (2012) have further optimized the management jurisdiction of CIETAC and its sub-commissions over arbitration cases so as to prevent parties from taking advantage of the old rules to “forum shopping” among CIETAC and its sub-commissions or among its sub-commissions, which may lead to delayed proceedings and conflicted arbitral awards and bring negative consequences on the credibility and seriousness of the arbitral awards rendered by CIETAC and its sub-commissions.

Recently, certain sub-commissions of CIETAC declared openly in one way or another that they were independent arbitral institutions. One sub-commission even declared to have set up its own commission, published its own arbitration rules and adopted its own Panel of Arbitrators.  Such conducts have caused confusion in the domestic and international arbitration communities and seriously affected the parties’ lawful rights and interests.  CIETAC hereby avails itself of this opportunity to sincerely apologize for any trouble or confusion imposed upon its arbitrators by the inappropriate conducts of its sub-commission.

In order to stop and rectify the inappropriate conducts of such sub-commission of CIETAC and safeguard its unity and integration, the China Council for the Promotion of International Trade and CIETAC have taken various internal measures to actively coordinate with the municipal governments concerned and communicate with the relevant sub-commissions.  However, until now no remedial actions have been taken by the relevant sub-commission.

To protect the parties’ lawful rights and interests and ensure CIETAC’s normal arbitration activities, with the authorization of the China Council for the Promotion of International Trade (China Chamber of International Commerce), CIETAC will make a public statement in due course in response to the inappropriate conducts of its sub-commissions, with a view to clarifying some issues and ensuring a correct understanding of them. The statement includes the following: (1) the conduct of setting up its own commission by the sub-commission is null and void; (2) the arbitration rules formulated by the sub-commission are null and void; (3) the conduct of recruiting arbitrators by the sub-commission is null and void; (4) as from 1 May 2012, where parties submit their dispute to a sub-commission of CIETAC for arbitration in accordance with an arbitration clause that provides for arbitration by that sub-commission, the said sub-commission must apply CIETAC Arbitration Rules (2012) to the case; and (5) pursuant to the relevant provisions of CIETAC Arbitration Rules (2012), in cases administered by CIETAC and its sub-commissions, the decisions on jurisdiction and on a party’s standing to participate in the arbitration shall be made by CIETAC or the arbitral tribunals with its authorization; the arbitrators shall be appointed by the Chairman of CIETAC (unless appointed by the parties); the challenge of arbitrators shall be decided by the Chairman of CIETAC; and any document concluding a case, such as an arbitral award, a decision on dismissing a case and a conciliation statement, shall be affixed with the seal of CIETAC.  Any and all legal responsibilities and consequences resulting from non-compliance with CIETAC Arbitration Rules (2012) in accepting arbitration cases and conducting arbitral proceedings by the sub-commission of CIETAC shall be borne by that sub-commission.

Arbitrators are an important strength of CIETAC whose  development embodies the contributions and efforts of all its arbitrators.  We sincerely hope that all the arbitrators of CIETAC will continue to strictly follow the laws and CIETAC’s Arbitration Rules in their arbitration activities and work in unison to bring CIETAC arbitration to a new height.

China International Economic
and Trade Arbitration Commission