Enforcement of International Arbitration Agreements in Chinese Courts

Abstract

This article discusses selected topics on the enforcement of international arbitration agreements in Chinese courts, i.e. standard of reviewing the arbitration agreement; the law applicable to and the scope of the arbitration agreement; and referral to arbitration at the case filing and post-filing stage, as well as in multi-party proceedings. Chinese courts rarely deal with issues which may lead to full inquiry into the parties’ intent. Yet when Chinese law applies to the arbitration agreement, Chinese courts engage in more detailed review of the arbitration agreement than when foreign law applies. Usually, the formal validity of an arbitration agreement is regulated by Article II of the (New York) Convention on the Recognition and Enforcement of Foreign Arbitral Awards which requires agreements in writing. It is an open question whether an arbitration agreement can be enforced by Chinese courts if it does not meet the form requirement of Article II, but satisfies the more lenient requirements of Chinese law. In recent practice, the substantive validity of an arbitration agreement is often governed by, in order of priority, the law chosen by the parties, the lex loci arbitri, or the lex fori. There seems to be an increasing consensus among Chinese courts that interpretation of scope of the arbitration agreement should not be based on the plaintiff's chosen classification of the disputes. In interpreting the scope of an arbitration agreement, Chinese courts now tend to give equally broad interpretations to terms such as ‘disputes in respect of, ‘disputes arising under’, ‘disputes arising out of, ‘disputes arising from’, etc. Referral to arbitration by Chinese courts can take place at two stages. At the case filing stage, an arbitration agreement should be reviewed by Chinese courts ex officio, but upon the parties’ request at the post-filing stage. Allocation of burden of proof in establishing a valid arbitration agreement deserves attention. Referral to arbitration encounters difficulties in cases involving counterclaims, and in multi-party proceedings concerning a compulsory joinder of parties to the arbitration agreement and a third party .