The PRC Arbitration Law: Problems and Prospects for Amendment

Abstract

International arbitration remains by far the most favoured means of resolving China-related commercial disputes between foreign investors and their Chinese counterparts. Most foreign investors prefer arbitration outside of China, partly out of lack of confidence in the fairness and competence of arbitration practice in China. One of the aims of China’s first Arbitration Law of 1994 was to address those concerns by establishing a more uniform and transparent system for arbitration in China. It was hoped that this would also promote the wider use of arbitration as a means of resolving commercial disputes between Chinese domestic parties. The 1994 Law was very general in nature, however, with many key areas unaddressed. The Law as it stands is increasingly unable to meet the demands of parties for an arbitration system capable of resolving complex commercial disputes in a fair and professional manner. This article looks at some of the important issues that urgently need attention in any reform of the Arbitration Law, and assesses the chances of the necessary reforms being enacted any time in the near future.