In August 2012, the Shanghai and South China (Shenzhen) Sub-Commissions of CIETAC declared that they had separated from the CIETAC headquarters in Beijing. In response, CIETAC Beijing issued a notice stating that:-
The South China Sub-Commission changed its name (on 22 October 2012) to the Shenzhen Court of International Arbitration (SCIA) and the Shanghai Sub-Commission changed its name (on 8 April 2013) to the Shanghai International Arbitration Commission (SHIAC).
As a result of the above, there was confusion in relation to the validity of arbitration agreements referring to the two former Sub-Commissions as the administering institution and whether the PRC or overseas Courts would recognise arbitration awards rendered by SHIAC or SCIA.
On 15 July 2015, the PRC Supreme People’s Court issued guidance to clarify the position where parties have agreed to submit their disputes to “CIETAC Shanghai sub-commission” or “CIETAC South China sub-commission” (“Reply of the SPC to the questions of Shanghai Higher People’s Court etc on Judicial Review over Arbitral Award of CIETAC and its original sub-commissions” )(the Reply), as follows:-
1. What is the position where the arbitration agreement designates either CIETAC South China Sub-Commission” or CIETAC Shanghai Sub-Commission” as the administering institution?
2. What is the position in respect of cases already accepted by CIETAC, SHIAC or SCIA before the Reply i.e. before 17 July 2015?
Where CIETAC, SHIAC or SCIA has accepted a case before 17 July 2015, without complying with (a) to (c) above, the PRC People’s Courts will not support an application to set aside an award or resist its enforcement on the basis of lack of jurisdiction of the arbitral institution in question.
3. Court Assistance
The Reply clarifies that the court will accept a Respondent’s application to determine the validity of an arbitration agreement (in view of the CIETAC split) even after the relevant arbitration commission has confirmed its validity and decided on jurisdiction, provided the Respondent makes such application before the first arbitral hearing.
The long awaited clarification of the Supreme People’s Court is welcomed. However, parties seeking to enforce PRC arbitral award should note that in order to enforce a PRC arbitral award in Hong Kong relying on the arrangement for reciprocal recognition and enforcement of PRC arbitral awards in Hong Kong, the award must be rendered by recognised arbitration commissions in Mainland China. The list of recognised arbitration commissions have yet to be updated to include SHIAC and SCIA. Unless the Hong Kong Court accepts that SHIAC and SCIA are the predecessors of CIETAC Shanghai and South China Sub-Commissions respectively, the applicant will need to rely on section 84 of the Arbitration Ordinance which empowers the Court to enforce awards made in or outside Hong Kong generally.