Commercial Dispute Resolution in China

In 2019, the world economic slowdowns already under way reflected common influence across the countries. The cyclical and structural slowdowns in China have fueled disputes in the market place and thus created a rising number in the statistics of commercial dispute resolution in China. Many developments in the field of arbitration and mediation mark the milestones of building the rule-based practice. Some of these developments have already brought positive effects in the dispute resolution industry amid the slowing down economy. To present an insightful understanding of the developments of commercial dispute resolution in China, the Beijing Arbitration Commission/Beijing International Arbitration Center (hereinafter referred to as the «BAC/BIAC») continuingly invites experts to author 12 chapters of this book, namely, the chapters on commercial arbitration, commercial mediation, construction, real estate, energy, international trade, investment, finance, intellectual property, civil aviation, entertainment, and sports.

In the chapter on commercial arbitration, the authors believe many efforts in the regulatory and judicial directions have further promoted China as a viable choice of arbitration seat. In the direction of regulation, the Several Opinions on Improving the Arbitration System to Strengthen the Creditability of Arbitration issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council, as the first central-level government’s policy for arbitration, has laid out an ambitious plan for the vigorous and competitive arbitration industry in China. In the direction of judicial policy, the Supreme People’s Court and the Hong Kong Special Administrative Region Department of Justice signed the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region, as a symbolic cooperation between the mainland courts and courts in Hong Kong SAR, has bridged the gap in mechanisms of enforcing the interim measures resulting from the arbitration in the region. Breakthroughs in practice has also been recorded in 2019. For example, the BAC/BIAC has adopted its new arbitration rules which introduce a long-expected reform in the framework of arbitration fees. The transparency and the fee's redistribution of the BAC/BIAC’s new rules are not only praised by the Chinese practitioners, but also  regarded as a breakthrough of the internationalization of Chinese arbitration industry and a guarantee of process of cultivating the professionalism among the Chinese arbitrators.

In the chapter on commercial mediation, the authors predict that the signing of the United Nations Convention on International Settlement Agreements Resulting from Mediation may align the mediation theories and practice in China to the international counterparts and safeguard the healthy development of commercial mediation in China.

The impact of economic slowing down also project profound changes in each different specialized sector. More detailed and targeted legislation and regulations have emerged in 2019 as the response to the changing climate of business environment. In the chapter on construction, numerous legislations and regulations have been referred to. The Construction Law of the People's Republic of China, the Regulation on Government Investment and the Regulation on Ensuring Wage Payment to Migrant Workers, and other laws and regulations have been revised, reflecting the liability rearrangement among the relevant parties. The arbitrability of a PPP contract provided in the Provisions on Several Issues Concerning the Trial of Administrative Agreement Cases touched on the controversial matters in the dispute resolution of PPP contracts, triggering even more controversial arguments. In the chapter on real estate, a series of regulation and policies were recorded as the response to the Central Government’s call for “Fang Zhu Bu Chao” (meaning, cooling down the real estate market). Rising disputes in this sector have already brought challenges to the industry. In the chapter on energy, the authors compliment the regulative efforts and progress to promote open-up of market and fair competition and to safeguard the role of the market force. In the chapter on investment, the authors observe an emerging mindset of a new framework of regulating foreign investment, which has been promoted by the Law of the People's Republic of China on Foreign Investment. Concurrently, the Minutes of the National Conference for the Work of Courts in the Trial of Civil and Commercial Cases makes clarification in some long-debated issues of dispute resolution. In the chapter on international trade, the signing of the phase I of Sino-US trade agreements will have a profound impact on the development of international trade and the settlement of related disputes, thus being recorded by the authors. In the chapter on finance, the authors brief the Minutes of the National Conference for the Work of Courts in the Trial of Civil and Commercial Cases and look into various matters including bill discount, guarantees beyond authority, and independent guarantee. In the chapter on intellectual property, the authors highlighted the revision of the Trademark Law of the People's Republic of China, the Law of the People's Republic of China against Unfair Competition, the Law of the People's Republic of China on E-commerce, and other important legislations and pointed out the significance of these developments. In the chapter on entertainment, the authors explain the regulatory measures and predict the upgrade and adjustments in the future as many unresolved disputes have projected the ongoing changes of balance of the entertainment industry. In the chapter on civil aviation, the authors highlight the development of UAV sectors and the reframing of the legislation in the general aviation, which has been regarded as the guarantee of future prosperity of the industry. In addition, as the 2022 Beijing Olympic Winter Games are approaching, the authors comment on many disputed cases in the sport industry.

In this book, experts from the front line gathered together and wrote each chapter as the reflection of their first-handed experience on the overview, updates of legislation and regulation, case studies, debated issues, and outlook of the industries. It is the eighth edition of the Annual Review and Preview of the Commercial Dispute Resolution in China. In this edition, for the first time, experts from in-and-out China co-authored one of the chapters, ie., the chapter on sport, which is a new creation of this book. The authors of this new chapter examine the Chinese legislation, regulation, and cases in the field of sport from different perspectives. For example, the athlete Yang Sun’s arbitration case has been debriefed and may help readers gain the pulse of the dispute resolution of sport in China.

In general, the book presents to all stakeholders a reference of the commercial dispute resolution in China and unlocks intricacies of each different sectors. This book endeavors to record the development of rules, leading cases, and the pulse of the field. By reading this book, practitioners will understand what to look for when solving commercial disputes in China.

It is our sincere hope that this book will become a guide for the marketplace, helping different entities manage their commercial risks and disputes. BAC/BIAC's team invited authors’ bids and conducted multi-layers review of the content for this book and will do the same in the future publication of this series. We spare no efforts to present the annual edition as an important reference and useful guide for readers who are keen to take a closer look at the commercial dispute resolution in China.

In return, we would like to invite all readers to share the information in this book and in other editions of this series, and to make it a platform for the knowledge exchange between Chinese practitioners and international counterparts. Towards this end, on one hand, we publish this book in both Chinese and English, in collaboration with the Chinese and English publishers, namely the China Legal Publishing House and Wolters Kluwer. On the other hand, the concurrent event, namely the Annual Summit of the Commercial Dispute Resolution in China, has been and will be continuingly organized in different cities around the globe. It is BAC/BIAC's mission to promote internationalization of Chinese theories and practice on the commercial dispute resolution. We have been doing and will continue to exert all efforts to unite practitioners from different jurisdictions to help us achieve this mission.

Last but not least, BAC/BIAC notices the COVID-19 pandemic has brought great uncertainties to the commercial field and its dispute resolution practice. Many constructive thoughts have been expressed in some chapters of this book, addressing issues amid the pandemic. Both BAC/BIAC and the authors keep eyes on the development of this pandemic and propose Chinese wisdom to overcome the uncertainties.

We sincerely thank all the authors, readers, and publishers to endorse our effort in the series publication of the Annual Review and Preview of Commercial Dispute Resolution in China. We welcome your continued support in the future and firmly believe in the brighter future of an open-minded, inclusive, and diversified commercial dispute resolution in China.