On September 12, 2023, "China Arbitration Week – the Seminar on Trust Dispute Resolution" (the "Seminar") co-hosted by China International Economic and Trade Arbitration Commission ("CIETAC"), Nankai University School of Law and China Trustee Association, supported by Financial Arbitration Committee of China Academy of Arbitration Law was successfully held in Beijing at CIETAC. Xie Changqing, Vice President of CIETAC Arbitration Court, Li Yanhong, Vice President of Beijing Financial Court, Yan Jiandong, Full-time Vice President of China Trustee Association, attended the Seminar and delivered opening speeches. Song Hualin, Dean of Nankai University School of Law delivered a speech online. Han Liang, CIETAC arbitrator and professor of Nankai University School of Law presided over the Seminar.

(Seminar site)

(Han Liang, CIETAC arbitrator and Professor of Nankai University School of Law presiding over the Seminar)

In the opening speech, Xie Changqing, Vice President of CIETAC Arbitration Court said that, currently, various challenges such as macroeconomic downward pressure, capital market volatility, and increased regulatory scrutiny have led to a large number of trust disputes. These disputes show characteristics such as diverse transaction subjects, high professionalism, complex legal relationships, and significant societal and market impact in certain cases. The seminar aims at analyzing the legal basis of fiduciary duty and its application in adjudication from multiple perspectives, exchanging and coordinating adjudication concepts and standards between courts and arbitration under the current situation, and enhancing the industry’s and enterprises' ability to manage risks and respond to disputes. CIETAC has gained rich experience in arbitration practice in trust and other financial fields, and has a team of more than 500 arbitrators specializing in finance, whose high-quality arbitral awards have played a positive role in safeguarding the legitimate rights and interests of parties and guiding the establishment of a healthier and more orderly environment for the industry. In the future, CIETAC hopes to further understand the industry's demand for arbitration, promote the industry's and enterprises' understanding of arbitration advantages and its wider application, and assist the high-quality development of the trust and other financial industries with professional, efficient, fair and impartial arbitration service.

(Opening speech by Xie Changqing, Vice Chairman of CIETAC Arbitration Court)

Li Yanhong, Vice President of Beijing Financial Court said that the Beijing Financial Court bears the important responsibility and mission of ensuring the implementation of the national financial strategy and contributing to the healthy development of the economy. With the development of the capital market, trust as a major asset management and financing tool, plays an increasingly important role in the capital market. Trust cases are concentrated in regions with relatively developed economy and rapid development of financial industry, showing characteristics such as a large increase in number, high complexity, and a strong group dynamic. Therefore, it is worth studying and discussing for judges what kind of adjudication concept should be upheld in judicial judgment, seeking a balance between adapting to the rule of financial development and protecting the legitimate rights and interests of the parties, and achieving the correct application of law and judgment. The Beijing Financial Court will continue to deepen the collaborative construction of the rule of law, and contribute to the modernization of the financial trial system and the high-quality development of finance.

(Opening speech by Li Yanhong, Vice President of Beijing Financial Court)

Yan Jiandong, Full-time Vice President of China Trustee Association, said that in recent years, with the transformation of the trust industry, the resolution of legal disputes related to trusts has become a concerned topic in the industry. In the context of new business, how to better fulfill the responsibility of the trustee, reasonably and legally protect the interests of beneficiaries, and appropriately and efficiently resolve disputes are practical problems that trust companies should seriously study and solve. As a self-regulatory organization, the China Trustee Association has always taken protecting the legitimate rights and interests of its members as an important part of work, and has made suggestions for the improvement of the trust legal system through various channels, to promote the construction of a legal system environment applicable to the needs of high-quality development of the industry.

(Opening speech by Yan Jiandong, Full-time Vice President of China Trustee Association)

Song Hualin, Dean of Nankai University School of Law, indicated that the duty of loyalty plays a core role in fiduciary relationship, and the duty of loyalty has been regulated in the Trust Law of China. Therefore, it is necessary to explore the legal basis of fiduciary duty, especially the relevant judicial application from legal hermeneutics. With the development of the commercial society and the accumulation of materials, arbitration and trust will play a more and more important role. The study of the trust dispute resolution from the perspective of arbitration and trust will help build a diversified governance mechanism in the financial field, and Nankai University School of Law will also continue to invest in and study this area. 

(Online Speech by Song Hualin, Dean of Nankai University School of Law)

The keynote session of this Seminar includes two parts.

The topic of the first part was "Legal Basis and Judicial Application of Fiduciary Duty". CAI Gaihuan, Chief Economist of China Trustee Association, gave the presentation on "Jurisprudence and Compliance of Fiduciary Duty in China". He pointed out that fiduciary duty is a general term for actions where asset managers behave in the best interests of beneficiaries. Fiduciary duty originates from the trust law of common law system, but its application is not limited to the trust industry. All asset management activities should follow the basic principle of fiduciary duty and act for the best interests of investors. When the trustee performs fiduciary duties, the investor shall bear the risk at his own risks. Failure to perform fiduciary duties results in liability for compensation using its property. CIETAC arbitrator Bu Xiangrui, former Chief Legal Counsel of China Banking Association and Director of Financial Arbitration Committee of China Academy of Arbitration Law, analyzed the development history of fiduciary duty in China's fiduciary industry. He pointed out that fiduciary duty is both contractual and legal, and the concept of fiduciary duty has been reflected in legal regulations and judgments. Director Bu pointed out that in the trust judgment, it should not easily deny the validity of the trust contract, and should carefully use the judicial thinking of conspiracy or hypocrisy to penetrate and prudently apply the violation of the public order and good morals. Wang Qichang, associate professor of Law School of Shanghai University of International Business and Economics, gave the presentation on "Jurisprudence and Judicial Application of Fiduciary Duty", and points out that fiduciary duty includes the duty of loyalty, the duty of care and other obligations formed by cases. Professor Wang said that fiduciary duty should be examined from an economic perspective at the same time, fiduciary duty is a contingent liability, which plays a role in ensuring the safety and efficiency of transactions, and is of great significance in international trade financing.  

(From top to bottom: Cai Gaihuan, Bu Xiangrui, Wang Qichang)

The second part focuses on "Trust Disputes from the Perspective of Adjudication-Litigation and Arbitration". Guests in this part respectively delivered speeches focusing on the dual perspectives of litigation and arbitration. Li Mohan, Judge of the Second Trial Division and Senior Judge of the Third Class of Beijing Financial Court, emphasized on the identification of the fiduciary relationship and the obligation and liability of the trustee with trail practice. The determination of fiduciary relationship should adhere to the judicial idea that avoids excessive intervention in the financial market when necessary correction is carried out. The obligation of the trustee should be reviewed in combination with the general obligation, and the core is to respect the business logics and the autonomy of will, protect innovation and adhere to the law. Tao Xiuming, CIETAC arbitrator and partner of Beijing Junzejun Law Firm, firstly discussed the application of trust tools in commercial transactions, then analyzed the legality of trust transactions by taking shareholding entrustment as an example, and finally pointed out that the determination of the liability of trustee should consider various factors and carry out analysis based on the specific circumstances of the case. Tang Jie, Doctor of Laws from Nankai University, distinguished external disputes and internal disputes from the perspective of internal trust dispute resolution. Internal disputes are disputes between trust parties or stakeholders within a trust, which are more suitable to be settled by arbitration. Dr. Tang Jie summarized the international trend of internal trust dispute resolution, pointing out that although the supervision of trusts by courts is a basic principle of the trust system, the current ADR dispute resolution has largely replaced the supervision of courts, which has gradually changed such principle. 

(From top to bottom: Li Mohan, Tao Xiuming, Tang Jie)

In the roundtable discussion, Dr. Bai Gaoyuan, Deputy Director of the Capital Market Research Center of Nankai University and Senior Consultant of Financial Law of Beijing King & Capital Law Firm was the moderator. Tang Zhimiao, Deputy Investment Director of Family Trust Shenzhen Team of Ping An Trust Co., Ltd, Wang Yanbing, Senior Compliance Manager of Compliance Legal Department of China Foreign Economy and Trade Trust Co., Ltd., Wu Guohua, Deputy General Manager of CNCB (Beijing) Equity Investment Fund Management Co., Ltd., Yin Tianshu, Deputy Director of International Case Division of CIETAC, Zhou Xuan, Executive General Manager of Wealth Management Division of CCB Trust Co., Ltd., focusing on the topic of "Fiduciary Responsibility in Asset and Wealth Management", discussed new regulations and events in the industry from industry observation and the common perspective of fiduciary duty, and analyzed the fiduciary duty of the investment adviser from macro scope to micro scope. On this basis, guests discussed the selection factors of litigation or arbitration, and summarized the discussion from the perspective of trust to fiduciary duty.

(From left to right: Bai Gaoyuan, Tang Miaozhi, Wang Yanbing, Wu Guohua, Yin Tianshu, Zhou Xuan)

In Conclusion:

The seminar was conducted both in person and online, with nearly 1,000 participants attended, including more than 70 representatives from more than 30 domestic trust institutions, and more than 60 representatives from other fields such as financial courts, arbitration institutions, lawyers, and academia.

The seminar received a enthusiastic response. Guests shared in-depth discussions on issues such as the development of business trusts, the identification of fiduciary duties and liabilities of trustees, and the ideas of courts and arbitrations on trust disputes from multiple perspectives such as theory and practice, judgments and institutions, litigation and arbitration, they shared theoretical thoughts, the latest judicial concepts and industry practical experience, which will help to improve and develop the dispute resolution mechanism of China’s asset management industry under the new situation.