Beijing Arbitration Commission

Explanations on 1999 Amendment to Beijing Arbitration Commission Arbitration Rules

Wang Hongsong, Secretary-General

The Beijing Arbitration Commission Arbitration Rules implemented on March 1, 1998 (the “Original Rules”)has played a positive role in implementing the Arbitration Law, regulating the arbitral proceedings and protecting the rights of the parties in arbitration. In practice, however, some of the content of the Original Rules urgently needs to be improved and supplemented, and the development of arbitration has imposed higher requirements on the arbitration rules. In view of this, Beijing Arbitration Commission (BAC) made an amendment to the Original Rules on the basis of compliance with the Arbitration Law and the principle of autonomy of will of the parties, which is the fourth amendment to the Arbitration Rules of the Commission. In order to ensure the stability of the new Rules in a certain period of time, BAC listened to the opinions of some arbitrators and the stakeholders including the people's courts before making the amendment. The amended contents are mainly in the following aspects:

1. Provisions on the legal consequences on the failure of the parties to raise an objection against the validity of an arbitration agreement (see Article 6 of the new Rules). The Original Rules quoted the relevant provisions of the Arbitration Law on the time requirement concerning the parties’ raising of objection against the validity of an arbitration agreement, that is: the objection shall be raised before the first hearing or before the submission of the first statement of defense where the parties agree on documents-only arbitration. But what legal consequence shall a party bear for failing to raise an objection against an arbitration agreement according to the relevant provisions There is no provision on this question in the Arbitration Law or the Original Rules. Without departing from the principles of the Arbitration Law and in accordance with the general principles of law, this amendment expressly provides that a party that fails to raise an objection against the validity of an arbitration agreement according to the relevant provisions shall be deemed as admitting such validity. This is not to restrict on the rights of the parties but to urge them to exercise their rights in a timely manner.

2. Provisions on the parties’ defence against a claim or counterclaim (see Article 14 of the new Rules). The Original Rules provided that a party may change the arbitration claim or counterclaim within a certain period of time, but did not specify the right of the other party to make a defence. Although the arbitral tribunal generally gives the other party the opportunity to make a defence in practice, the lack of relevant provisions is likely to cause an impression of unequal rights between the parties in this respect. Therefore this amendment adds a Paragraph 2 to Article 14, which reads, “The other party shall submit a written statement of defence to the Arbitration Committee on the part to be changed within fifteen days upon receipt of the application for changing the arbitration claim or counterclaim.”

3. Provisions on the number of authorized representatives in arbitration (see Article 17 of the new Rules). The Original Rules provided that a party shall entrust not more than two lawyers or other authorized representatives in arbitration. But in practice, the parties complained that this limited their participation in arbitration to some extent and suggested to amend it. Unnecessary limit on the number of authorized representative can in some cases lead to the abuse and repeated exercise of the relevant rights of the parties and affect the order of tribunal hearing and the timely closing of the case. Therefore, this amendment combines principle with flexibility and provides that a party may generally entrust not more than three authorized representatives for arbitration, but the number may be increased as proper with the consent of the arbitral tribunal where the party has a justifiable reason to apply for the increase.

4. The procedures for nomination of arbitrators where there are two or more claimants or respondents (see Article 20 of the new Rules). There were no specific provisions in the Original Rules in this respect. In practice, the two or more claimants or respondents are informed to jointly nominate an arbitrator or jointly entrust the Chairman of BAC to appoint an arbitrator. The new Rules make it clear by adding: Where one of the parties is composed of two or more persons, they shall jointly nominate an arbitrator after consultation; where no agreement is reached on whether to nominate or entrust the Chairman of BAC to appoint an arbitrator within fifteen days upon reception of the notice of arbitration, the arbitrator shall be appointed by the Chairman of BAC.

5. Provisions on the withdrawal of arbitrators (see Article 23 of the new Rules). Article 22 of the Original Rules provided that an arbitrator shall withdraw from his/her designation if he/she “has served or is serving as a legal counsel or representative for any of the present parties”.. According to this provision, so long as an arbitrator has or had such a relation with a party or an authorized representative of the party, he/she has to withdraw no matter how long has such relation ceased to exist. Such a provision is too extensive in practice and is likely to cause operational difficulties. In addition, relevant amendments have been made in the Code of Conduct for Arbitrators of Beijing Arbitration Commission. The new Rules amend this term of withdrawal as “the arbitrator is the legal counsel or representative of one of the parties, or acted as the legal counsel of one of the parties within the previous two years”.

Considering that the impact of an arbitrator “working in the same work unit as a party or its representative” is as much as that of being “legal counsel or authorized representative of a party”, in order to ensure impartiality of arbitration, the item is amended as “the arbitrator works, or has worked within the previous two years, in the same work unit as one of the parties or its representative”.

6. Amendment to the provisions on summary procedure (see Articles 62, 65 and 68). The Original Rules specified a summary procedure. But in practice, the parties suggested that such procedure should be further streamlined. In order to further demonstrate the advantages of the summary procedure, based on the full protection of the rights of the parties and according to the characteristics of such procedure, the new Rules has revised the original summary procedure. The amendment involves the following aspects: First, the time for a party to change a claim and the right and time concerning the defence of the other party are added; second, the time limit of issuing a notice on hearing is amended from the original ten days before the hearing (or fifteen days for the cases involving foreign matters) to three days before the hearing (or ten days for the cases involving foreign matters); and third, Article 66 of the Original Rules, which reads, “the application of the procedure and the award by the arbitral tribunal shall not be affected by any amendment to the application for arbitration or the submission of a counterclaim”, is amended as “the application of the summary procedure and the award by the arbitral tribunal shall not be affected by any amendment to the application for arbitration or the submission of a counterclaim, unless the arbitral tribunal believes the contrary”.

7. Additional provisions on the suspension and termination of arbitration (see Chapter 7 of the new Rules). In practice, the arbitral proceedings cannot proceed temporarily or are not able or necessary to proceed due to specific causes. The Original Rules had no provisions on how to deal with such a situation. This amendment draws on the provisions in the Civil Procedure Law on the suspension and termination of litigation and sets a special chapter (Chapter 7) for the suspension and termination of arbitration. It lists the legal causes for the suspension and termination of arbitration; and provides that a decision shall be made by BAC or the arbitral tribunal before or after the constitution of arbitral tribunal when the occurrence of any cause of the suspension or termination is determined.

8. Provisions on the validity of arbitration agreement in particular circumstances (see Article 92 of the new Rules). In practice, though in some cases an arbitration clause is not expressed in a sufficiently precise way, the parties’ true willingness for arbitration in BAC can be inferred from the clause. In this case, the validity of the arbitration clause shall be recognized. Therefore, an article is added in the supplementary provisions, which reads, “an arbitration agreement on arbitration by the Beijing Arbitration Commission or the Beijing Municipal Arbitration Commission shall be deemed as a consensus between the two parties to be subject to the arbitration of Beijing Arbitration Commission. Where the parties of a domestic dispute case stated in the arbitration agreement to have arbitration by the arbitration authority (institution) of Beijing (municipality) or any other expression from which it can be inferred without ambiguity that the arbitration shall be made by the Beijing Arbitration Commission, it shall be deemed that the parties agree on arbitration by Beijing Arbitration Commission. ”

9. Other revised provisions. First, the new Rules provide that the parties shall raise an objection against the arbitration agreement, apply for an amendment to the arbitration claim or submit a counterclaim in writing (see Articles6 and 14 of the new Rules); second, article 36 of the Original Rules is amended as “evidence shall be presented during the hearing and produced within the time limit prescribed by the arbitral tribunal, and the parties may challenge the authenticity, admissibility and relevance of the evidence”(see Article 37 of the new Rules); Third, the expression in Article 80 of the Original Rules on service is amended as “All relevant arbitral documents, notices and other materials may be served on the parties or their authorized representatives in person or by mail, telex, facsimile, placement and public announcement”(see Article 87 of the new Rules)and fourth, it is explicitly provided that the Beijing Arbitration Commission shall have the right to interpret the Rules (see Article 93 of the new Rules).

The new Rules are to be formally implemented on April 1, 1999. We believe that the new Rules will further standardize the arbitration of BAC and create a more suitable environment for arbitration.

Model Arbitration Clause Arbitration Clause
All disputes arising from or in connection with this contract shall be submitted to Beijing Arbitration Commission / Beijing International Arbitration Center for arbitration in accordance with its rules of arbitration. The arbitral award is final and binding upon both parties.
Events
More >>>
Copyright© Beijing Arbitration Commission. All Rights Reserved.link   |   Copyright