The new Arbitration Rules of the China International Economic and Trade Arbitration Commission (CIETAC)

On 1 January 2015, the new CIETAC Arbitration Rules ("2015 CIETAC Rules") came into effect.　

According to CIETAC, its rules have been revised in an effort to adapt to newest developments in international arbitration practice and to better accommodate the parties’ needs. This newsletter provides an overview of the key changes.

Single arbitration under multiple contracts (Article 14)

The 2015 CIETAC Rules permit a Claimant to initiate a single arbitration concerning disputes arising out of or in connection with multiple contracts, provided that:

1. such contracts consist of a principal contract and one or more ancillary contract(s), or the contracts involve the same parties as well as legal relationships of the same nature; and
2. the disputes arise out of the same transaction or the same series of transactions; and
3. the arbitration agreements in such contracts are identical or compatible.

Joinder of additional parties (Article 18)

Under the 2015 CIETAC Rules, a party may file a Request for Joinder with CIETAC on the basis that the arbitration agreement invoked in the arbitration prima facie binds the additional party. The Request for Joinder will be decided by CIETAC, not the arbitral tribunal.

Consolidation of arbitrations (Article 19)

Consolidation of parallel CIETAC arbitrations into a single arbitration has already been possible under the existing CIETAC Rules where all parties agree to the consolidation. The possibility to consolidate is further extended under the 2015 CIETAC Rules which give CIETAC the power to consolidate, at the request of a party, two or more arbitrations under the 2015 CIETAC Rules into a single arbitration if:-

1. All of the pending claims are made under the same arbitration agreement; or
2. The claims are made under multiple arbitration agreements that are identical or compatible and either the arbitrations involve the same parties as well as legal relationships of the same nature or the multiple contracts involved consist of a principal contract and one or more ancillary contract(s).

Emergency Arbitrator (Article 23.2 and Appendix III)

Many international arbitration institutions, such as the HKIAC, ICC, SIAC and LICA provide the possibility of appointing an emergency arbitrator.

The 2015 CIETAC Rules follow this trend in international arbitration by permitting a party to apply to the CIETAC Arbitration Court for emergency relief pursuant to newly introduced CIETAC Emergency Arbitrator Procedures (in Appendix III to the 2015 CIETAC Rules).

If the CIETAC Arbitration Court decides to apply the Emergency Arbitrator Procedures, its President shall appoint an emergency arbitrator within one day from receipt of both the application and advance payment of the costs for the Emergency Arbitrator Procedures.

The emergency arbitrator may decide to order or award necessary or appropriate emergency measures. The decision of the emergency arbitrator shall be binding upon both parties. The emergency arbitrator’s powers and the emergency arbitrator proceedings cease upon formation of the arbitral tribunal.

However, the Arbitration Law of Mainland China does not (yet) allow for enforcement of emergency relief granted by an emergency arbitrator. Instead, emergency relief is to be obtained from the Chinese state courts. Accordingly, CIETAC’s Emergency Arbitrator Procedures will, at least for the time being, be relevant mainly to arbitrations administered by the CIETAC Hong Kong Arbitration Center ("CIETAC HK") where emergency relief granted by an emergency arbitrator – whether in or outside Hong Kong – is enforceable, with the leave of the court, in the same manner as an order or direction of the court.

Summary procedure available where amount in dispute does not exceed RMB5m (Article 56)

Application of the summary procedure under the 2015 CIETAC Rules will be extended to arbitrations where the amount in dispute does not exceed RMB5m. Under the existing CIETAC Rules the threshold is RMB2m (around US$325,000).

In comparison, under the Rules of the Hong Kong International Arbitration Centre (HKIAC), the threshold for the expedited procedure is around US$3.2m.

Special provisions for Hong Kong arbitration (Articles 73 to 80)

In September 2012, CIETAC HK was established. CIETAC HK is a sub-commission of CIETAC and CIETAC’s first branch outside Mainland China.

In Chapter VI of the 2015 CIETAC Rules, new provisions are introduced which apply only to arbitration cases administered by CIETAC HK. These new provisions state, amongst others, that:

• Unless otherwise agreed by the parties, the place of CIETAC HK administered arbitrations shall be Hong Kong, the law applicable to the arbitration shall be Hong Kong arbitration law and that the award shall be a Hong Kong award (Article 74);
• The arbitral tribunal shall have the power to determine the existence and validity of the arbitration agreement and its jurisdiction (Article 75);
• The parties may nominate arbitrators from outside CIETAC’s Panel of Arbitrators (Article 76); and
• Unless otherwise agreed by the parties, the arbitral tribunal has the power to order appropriate interim measures at the request of a party (Article 77).

Other revisions

Other revisions of note include:

• CIETAC has established a new Arbitration Court to perform case administration functions under the 2015 CIETAC Rules (Article 2.2).
• Article 2.6 provides that the CIETAC Arbitration Court shall accept the arbitration application and administer the case where parties have agreed on arbitration administered by a sub-commission which does not exist or whose authorisation has been terminated or where the agreement is ambiguous. This provision aims at removing uncertainties that have arisen from the secession of CIETAC Shanghai and CIETAC South China sub-commissions from CIETAC in 2012.