the fairness of arbitration still needs to be improved. the industry has these expectations for the revision of the arbitration law.
2024-09-15
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recently, the "annual report on judicial review of commercial arbitration by the supreme people's court (2023)" was released, and the current development status of my country's arbitration industry and the revision of the arbitration law have once again entered the public eye.
the revision of the arbitration law is included in the legislative work plan for 2024 announced by the state council.
li xuan, professor at the school of law of the central university of finance and economics and executive director of the arbitration law research association of the chinese law society, told caixin that at present, there are large differences in the case handling level and the quality of arbitrators among arbitration institutions in different places, and there is still room for improvement in the fairness of arbitration results. it is urgent to revise the arbitration law and establish the china arbitration association to coordinate arbitration institutions in various places and improve the quality of arbitration.
what are the advantages of arbitration in resolving commercial disputes?
arbitration is an alternative dispute resolution method. the parties reach an agreement on a voluntary basis to submit the dispute to a non-judicial arbitrator for trial, who will make a binding decision and finally resolve the dispute. compared with traditional litigation, arbitration is generally considered to be fast, flexible and confidential.
with the rapid economic development and the acceleration of global economic integration, commercial activities and civil exchanges have become more frequent, and disputes and controversies have also increased. whether commercial disputes can be resolved efficiently also affects the high-quality and healthy development of the economy. up to now, china has established 282 arbitration institutions with more than 60,000 arbitrators, and has handled more than 5 million cases with a total amount of more than 8 trillion yuan. the parties involved involve more than 100 countries and regions around the world. the scope of arbitration cases covers many fields such as economic trade, engineering construction, finance and insurance, transportation, real estate transactions, agricultural production and management, internet economy, and intellectual property rights.
data disclosed in the "annual report on judicial review of commercial arbitration by the supreme people's court (2023)" show that the number of arbitration cases and the total amount of arbitration cases in my country showed a significant growth trend in 2023. throughout the year, arbitration institutions across the country accepted a total of 607,000 arbitration cases, a year-on-year increase of 27.8%, and the total amount of arbitration cases was 1,160.2 billion yuan, a year-on-year increase of 17.66%. among them, there were more than 3,100 foreign-related arbitration cases, a year-on-year increase of 8.28%, and the foreign-related amount was 170 billion yuan, a year-on-year increase of 42.29%.
li xuan said in an interview with china business news, "after nearly 30 years of development, my country's arbitration industry has gradually been aligned with international practices. the number of arbitration cases and the quality of case handling have significantly increased. the social impact and international reputation of arbitration have also been getting better and better."
since arbitration is final, compared with litigation that implements a two-instance final judgment system, arbitration is generally more efficient and has relatively lower overall costs. li xuan pointed out, "last year, there were more than 600,000 arbitration cases in my country. compared with the more than 20 million civil and commercial cases received in a year, the overall number of arbitration cases is relatively small, and the backlog is also relatively small." this means that the arbitration procedure can enable the parties to resolve disputes relatively quickly, avoid more time consumption caused by litigation, and return to business.
in addition, arbitration cases are not open to the public in principle, which can effectively protect the business secrets and privacy of the parties involved and maintain the business reputation of the parties involved, which is crucial to the production and operation of market entities. "as the saying goes, family disgrace should not be made public. once a dispute occurs, if it is to be made public, it is often destructive to both parties of the enterprise. the confidentiality of arbitration is very beneficial to business enterprises," said li xuan.
arbitration is becoming an important dispute resolution mechanism in modern commercial society. li xuan told caixin that lawyers are increasingly inclined to recommend corporate clients to choose commercial arbitration to resolve commercial disputes. as a part-time arbitrator, he also strongly recommends that corporate leaders try to choose arbitration clauses when signing contracts.
to improve the quality of arbitration, there are still some issues to be solved
judging from objective data, arbitration has an increasing influence on the resolution of commercial disputes in my country, and enterprises are increasingly likely to choose arbitration to resolve property disputes. li xuan believes that arbitration has actually shown a trend of maturity at this stage. however, this is only generally speaking. specifically, the differences in arbitration levels in various places are still very obvious, and arbitration institutions in various places can be said to be "independent", with differences in arbitration rules, arbitration fee standards, and arbitrator team building. how to coordinate arbitration institutions across the country is an issue that needs to be solved in the future.
li xuan pointed out that arbitration institutions in big cities such as beijing, shanghai, guangzhou and shenzhen handle far more cases than other places. some local arbitration institutions are proactive and focus on business expansion and capacity improvement to enhance their competitive advantages; others tend to "survive on their own" and do not play a big role. some local arbitration institutions even find it difficult to guarantee independence and impartiality.
in terms of arbitration rules, local arbitration institutions enjoy a high degree of autonomy within the scope of the arbitration law. there is no unified and clear agreement on arbitration fee standards across the country. li xuan mentioned that this may lead to two problems: first, from the perspective of regionalism, some local commercial arbitration institutions will tend to set higher arbitration fee standards; second, the arbitration rules of different arbitration institutions may conflict with each other or even violate the arbitration law.
in terms of arbitrators, the selection mechanism and personnel quality of different regions also vary greatly. "for example, the beijing arbitration commission prohibits arbitration institution insiders or administrative and judicial officials from serving as arbitrators. it mainly employs legal experts or technical experts with strong social independence, which can better fulfill the "expert case handling" and ensure the independence of arbitrators. but many other arbitration institutions cannot do this." at the same time, arbitrator corruption may also become a problem, so more stringent management measures need to be formulated to make arbitration corruption nowhere to hide.
in addition, there is room for further improvement in the current judicial review of arbitration cases. at present, there is no review mechanism for violations of arbitration rules, which may affect the legality, compliance and fairness of arbitration procedures. at the same time, the current judicial supervision of arbitration is still too conservative. "in reality, there is a practice of requiring the revocation of foreign-related arbitration awards to be reported to the supreme court. from the perspective of arbitration law and litigation law, this is inappropriate," said li xuan.
whether these problems will be solved, the revision of the arbitration law, which has been put on the agenda, may provide an answer. recently, yang xiangbin, director of the public legal services administration of the ministry of justice, introduced that the ministry of justice launched a comprehensive revision of the arbitration law at the beginning of this year, and the draft revision has been reviewed and approved by the state council executive meeting.
li xuan pointed out that this revision may involve how to further improve the current arbitration mechanism. whether a national arbitration industry organization can be established is also worth looking forward to. in fact, when the arbitration law was passed in 1994, it mentioned the establishment of a national china arbitration association. the general office of the state council also issued the "notice on preparatory work for the reorganization of arbitration institutions and the establishment of the china arbitration association" in the same year. however, in the 30 years since then, due to various reasons, the china arbitration association has not been established.
there has been a long-standing call from all walks of life for the early establishment of the china arbitration association. in li xuan's view, the china arbitration association can standardize arbitration institutions in various regions, improve the quality of arbitration in various regions, help solve the above-mentioned series of problems, and further enhance the social influence of arbitration. according to him, relevant preparatory work has already begun this year.
(this article comes from china business network)
