Wang Hongsong, Secretary-General of Beijing Arbitration Commission
Beijing Arbitration Commission (the "BAC") have been paying more attention to learning from the practice and experience in international commercial arbitration since it set the goal of developing into "an arbitration institution with certain international status and influence" within the 21th century. By study tours to the international prestigious arbitration institutions such as the International Court of Arbitration of the International Chamber of Commerce and the London Court of International Arbitration and researches in the foreign legislation, rules and other materials related to international commercial arbitration, we realized that the existing Ethical Standards for Arbitrators of Beijing Arbitration Commission (the "Ethical Standards"), the Administrative Measures for the Engagement of Arbitrators of Beijing Arbitration Commission (the "Administrative Measures") and the Several Provisions on Raising Arbitration Efficiency of Beijing Arbitration Commission (the "Several Provisions") have a big gap to the similar regulatory documents in international commercial arbitration. In order to narrow this gap, we comprehensively amended the abovementioned documents (the "Three Documents"). We specially invited the experts and scholars engaged in the theoretical researches and practical work in arbitration experts to participate in the process. Many discussions and argumentations were made on the contents to be amended within the existing legal framework and based on the principle of being maximally in line with the international practice before a unanimously agreed text of amendment was ultimately formed. The amended contents are briefly explained as follows:
I. On the Relations among the Three Documents
The first step to amend the Three Documents is to position them according to the internationally accepted arbitration practice and straighten out the relations among them. As the T three Documents were formulated and amended at different times and have vague positioning, they had many overlapping contents. After studying the relevant rules of international arbitration institutions, we first positioned the Ethical Standards as guidance on ethical norms for arbitrators, and then put the contents related to the consequences of breaching the Ethical Standards in the Administrative Measures, and those involving the efficient case handling in the Several Provisions. After being clearly positioned, the Three Documents were adjusted to have independent but coordinated roles and comply with the principles to be followed by international arbitration institutions in developing their internal rules.
II. On the Amendment to the Ethical Standards
Ethical Standards is the focus of the amendment efforts. After studying the Chartered Institute of Arbitrators Code of Professional and Ethical Conduct for Members, the Code of Ethics for Arbitrators in Commercial Disputes jointly made by the American Arbitration Association and the American Bar Association and the Rules of Ethics for International Arbitrators of the International Bar Association (collectively the "Codes of Ethics for Arbitrators"), and with thorough discussions, we conducted major modifications to the Ethical Standards, adjusting it from 14 articles to 26 articles. Specific modifications are as follows:
1. The amended Ethical Standards for the first time explicitly provide for the positioning of the document (Article 1)
The previous versions of the Ethical Standards never covered the positioning, and this is precisely an important cause to the complexity and lack of logic in the contents of the document. The amended version clear positions the Ethical Standards as guidance on ethical norms for arbitrators with reference to the abovementioned Codes of Ethics for Arbitrators. Therefore the contents that should be provided for in the arbitration rules or other special regulatory documents are deleted from the new version of Ethic Standards, making the text more concise and the provisions more consistent and logical.
Moreover, in practice some parties applied for withdrawal or non-enforcement of the arbitration award on the grounds of the breaches of the Ethical Standards by arbitrators. To avoid this, the amended version for the first time explicitly states that the Ethical Standards are rules of conduct for arbitrators but do not form a part of the Arbitration Rules.
2. The amended version stresses the professional ethics of arbitrators in three stages, making the text well-structured
The previous versions of the Ethical Standards gave a sense of disorder and were unimpressive as the structure of contents was not paid attention to and the provisions were rather diverse. Therefore the amended version pays special attention to this and provides for the due professional ethics of arbitrators in three stages of the whole process of arbitration: First, when accepting the nomination or the appointment, an arbitrator shall disclose "any circumstance likely to give rise to justifiable doubts as to his/her impartiality or independence" and shall devote adequate time and attention to hear the case as expected by the parties (Articles 3 and 5); second, during case hearings, an arbitrator shall treat all parties with equality and fairness and independently and impartially promote the arbitration proceedings without any delay (Articles 6 to 10); and third, an arbitrator shall impartially formulate arbitral awards and shall bear the obligation of keeping secrets about the case hearings (Articles 11 and 12). In this way the amended Ethical Standards have a clear overall structure.
3. The amended version for the first time provides that an arbitrator shall not act as a representative in any case accepted by the BAC (Article 9)
There have always been heated debates on whether an arbitrator may act as a representative in a case accepted by his/her arbitration commission. Actually there were discussions on this during the process of amending the Ethical Standards in 2001. At that time as there was no international practice to prohibit arbitrators from acting as representatives in such cases, the 2001 amendment only regulated such conduct instead of completely prohibiting it. The main reason for this amendment is that: As China adopts the system of institutional arbitration, the parties can only select arbitrators from the list of arbitrators of an arbitral institution. As the same time, the arbitrators of an arbitral institution of limited number and from a relatively narrow range, plus the fact that the arbitrators frequently work together and exchange experiences, therefore it is likely that an arbitrator acting as a representative in one case serves as a member of arbitral tribunal in another together with the arbitrators of the case he is representing. This will affect the impartiality of arbitration. Although years of experience shows that the impartiality of an arbitral tribunal depends on the quality of its members instead of whether the representative is an arbitrator, and the abovementioned possibility can be avoided by the withdrawal of arbitrators with the implementation of the system of disclosure by arbitrators, it is still unfair for the challenged arbitrators and the parties if the case hearings are delayed because any member of an arbitral tribunal has to withdraw due to another arbitrator's acting as a representative. Given that impartiality is the soul and life of arbitration, BAC considers everything from the perspective of safeguarding the legitimate rights and interests, and therefore through trade-offs, we decided to explicitly to explicitly prohibit any arbitrator from acting as a representative in a case accepted by BAC (including the cases involving canceling or enforcing an award may by BAC). In addition, it is an arbitrator's responsibility to maintain the credibility of the arbitral commission and the overall image of arbitrators by avoiding any conduct that may lead to reasonable doubts of the parties, even at the expense of their own interests. Moreover, it is a free option whether or not to serve as an arbitrator. We believe that the majority of the arbitrators (including those used to act as a representative in the cases accepted by BAC) will understand this decision.
4. Provisions on the specific contents of disclosure by arbitrators are added (Article 5)
During the process of soliciting opinions for the amendment, the participants made heated discussions on whether to provide for the specific contents of the disclosure by arbitrators and the scope of the disclosure. According to most participating experts and arbitrators, as the system of disclosure by arbitrators was totally new in China, people are unfamiliar with the scope of the disclosure, and therefore the Ethical Standards should specify the contents of disclosure to enhance the operability of the disclosure system and maximally achieve the goal of setting the system. But considering that an excessively wide scope of disclosure not only increases the burden on arbitrators but also make it difficult for the parties to find proper arbitrators, the scope of the disclosure should be controlled at an appropriate level. With reference to the relevant practices of some international arbitration institutions, the amended Ethical Standards add 11 items that may lead to reasonable doubts of the parties in Article 5 as the specific contents that an arbitrator must disclose. At the same time, in order to ensure the parties' right to know and the impartiality of arbitrators throughout the arbitration proceedings, the amended version specially add the requirement of "continuous disclosure" (Paragraph 2 of Article 5). With this approach the system of disclosure by arbitrators of BAC is close to the common practice in international commercial arbitration.
5. Stricter requirements are made on the independency and impartiality of arbitrators
Article 4 of the amended Ethical Standards provides that "It is inconsistent with the rules of conduct for arbitrators to contact the parties in order to solicit appointment as an arbitrator". By such a behavior the arbitrator seeks favor from others and thus violates the principle of independence and impartiality for an arbitrator. There are also similar provisions in the Codes of Ethics for Arbitrators. This article in the new amendment is to reduce the occurrence of these behaviors incompliant with the rules of conduct for arbitrators in practice.
Article 7 of the amended Ethical Standards provides that "An arbitrator should not accept any invitation to entertainment, gift or other benefit provided by any party or its representative directly or indirectly". This is more stringent than Article 13 of the original Ethical Standards, which reads "During their term of office, arbitrators may not accept hospitality, gifts or any other benefits offered or provided by any of the parties or its representatives." Because an arbitrator also violates the professional ethics and damage the image of arbitrators by accepting hospitality, gifts or any other benefits offered or provided by any of the parties or its representatives outside his/her "term of office". If such behaviors are left unchecked, the promises of the parties or their representatives about the "rewards afterwards" may affect the impartiality of arbitration. It is also a general practice in international commercial arbitration to make such a requirement on arbitrators. For example, Paragraph 4 of the Article 2 in the Ethics Code for Arbitrators at Financial Disoute Resolution Center in Hongkong, which has been formulated by the Chartered Institute of Arbitrators, provides that "an arbitrator shall not accept any gift or substantial hospitality, form any party to the arbitration, except in the presence of and with the consent of the other party." Canon I C. in the Code of Ethics for Arbitrators in Commercial Disputes of the American Arbitration Association and the American Bar Association provides that "after accepting appointment and while serving as an arbitrator, a person should avoid entering into any business, professional, or personal relationship, or acquiring any financial or personal interest…For a reasonable period of time after the decision of a case, persons who have served as arbitrators should avoid entering into any such relationship, or acquiring any such interest." Therefore, this modification is made to ensure the impartiality of arbitration and maintain the credibility of arbitrators.
6. The amended Ethical Standards for the first time state that an arbitrator shall act in good faith (Article 3)
In practice, most complaints of the parties against some arbitrators are because of their failure to devote the appropriate time and effort and to diligently conclude the cases in time. The amendment defines the serious performance of obligations by arbitrators as "good faith" and once again stress the consistent principle of BAC – an arbitrator shall act in good faith and shall not accept nomination or appointment when being not sure that he/she has the corresponding time, energy and abilities; and once accepting the nomination or appointment, he/she should devote the appropriate time and energy and diligently seek to conclude the case without delay.
7. Attention is paid to the tone and wording
Considering that an arbitration institution and its arbitrators should be in a relationship of independence and coexistence and that the Ethical Standards should be widely understood and recognized by arbitrators, some tough wordings in the original Ethical Standards are replaced in the amended version to maintain a general tone of advice and guidance. On one hand, this is more in line with the positioning of the Ethical Standards, which is not mandatory binding rules, but to provide moral guidance on the behaviors of arbitrators; and on the other hand it is also conducive to the arbitrator's understanding and implementation of the Ethical Standards.
III. On the Amendment to the Administrative Measures
A fundamental guiding principle of the amendment to the Administrative Measures is to raise the criteria of the engagement of arbitrators and make more detailed provisions on the administration of the engagement and the circumstances for not being re-engaged or the dismissal of arbitrators based on the constant development of the business of BAC and the emergence of talents of arbitration to build a team of highly competent arbitrators meeting the expectations of the parties and make the Administrative Measures more reasonable, operable and transparent. The amended version is extended from 10 articles to 15 articles, with the following modifications:
1. The amended version reasonably classifies the professional fields of arbitrators and imposes higher criteria for engagement
The amended Administrative Measures make a reasonable classification of professional fields of arbitrators in Article 3. The text "an arbitrator serving in a governmental organ or administrative department" in Item 4 of the same Article in the original version is modified into "those dealing with other legal affairs" in Item 5, Paragraph 1. This is mainly out of the consideration that an arbitrator is engaged not because of his/her status of serving in a "governmental body" but because of his/her expertise, experience and ability. In addition, the concept of "governmental body" is too broad and does not help reflect the professional nature and fields of the work of those people. This makes the corresponding criteria for engagement not relevant enough, unable to reflect the distinctive nature of this category and likely to overlap with the other categories. After the modification, the criteria for the engagement of arbitrators of BAC become more relevant and operable and they avoid the possible overlaps or omissions that may arise in the original criteria.
The amended Administrative Measures generally impose higher criteria for the engagement of arbitrators in all professional fields. For example, the basic condition for the arbitrators engaged in legal education or research is to be "professor, research fellow"; that for those engaged in economic and trade activities is to have "obtained a bachelor's or higher degree" and "have possessed a senior or associate senior title of the technical post or to have served on a technical leading post equivalent to or higher than a chief or deputy chief of division"; those working in an organ of legislation, law enforcement or other legal affairs shall "have obtained a bachelors or higher degree in law", "have obtained the senior title such as senior economist, senior engineer" or "have taken office of leadership post such as a division chief or a higher officer ", and have worked for at least eight years; and those who are "retired or resigned judges" shall have obtained a bachelor's or higher degree in law, and "have ever been a seniority and prestige judge such as chief justice or deputy presiding judge or other higher than those with good reputation and proficiency in the specialty and outstanding competence in the case handling".
2. The amended Administrative Measures make clear the criteria for the engagement of arbitrators from other countries and Hong Kong, Macao and Taiwan
The original Administrative Measures do not cover the criteria for engagement of arbitrators from foreign countries and Hong Kong, Macao and Taiwan, but in fact BAC has employed some arbitrators there, and their number will be increasing with the development of foreign-related business. To make up for this loophole in the original Administrative Measures, the Paragraph 2 of Article 3 in the amended version specially provide for the criteria for the engagement of "a person from Hong Kong, Macao or Taiwan or a foreigner" as an arbitrator. Taking into account that due to long distance, it is impossible for these people to frequently participate in the BAC's business trainings and experience exchanges for arbitrators, the provision requires that "a person from Hong Kong, Macao or Taiwan or a foreigner" shall, besides coming up to the general criteria for an arbitrator, "have abundant experience of arbitration practice and can devote adequate time and attention to the case handling". This, on one hand, reflects that BAC pays more attention to the actual ability of an arbitrator to handle cases and the possibility for his/her participation in case handling, and on the other hand, prevent the parties' right to select arbitrators from being affected when any arbitrator is unable to hear cases.
3. The amended Administrative Measures place more emphasis on the professional background, ability of case handling and experience of an arbitrator
To successfully advance the arbitration proceedings and make proper judgments on arbitration cases, an arbitrator must process the appropriate expertise and ability of case handling. Therefore this amended version places a special emphasis on the professional knowledge and ability of an arbitrator, which is embodied as follows:
(1) The amended Administrative Measures require that the arbitrators engaged in legal education or research must "have directly pursued education or research work in civil and commercial law" (Item 2, Paragraph 1 of Article 3). Compared to the general provision "engaged in legal education or research work" in the original Administrative Measures, the amended version pay more attention to the direction connection between theory and practice. After all, the scope of the cases of arbitration is civil and commercial disputes. Therefore scholars in civil and commercial law as arbitrators have more suitable professional background and knowledge.
(2) For the arbitrators who are lawyers, the amended version emphasizes their experience in litigation or arbitration practice and ability to act as a presiding or sole arbitrator (Items 2 and Item 4, Paragraph 2 of Article 3). In practice, many lawyers apply for serve as arbitrators. Because of their profession, lawyers generally have better legal expertise and professional skills. But it is impossible to have all BAC's positions of arbitrators taken by lawyers, and they can only account for a certain percentage. Therefore, we have to select the best from the good among the lawyers applying for the positions. They must not only "have a higher level of specialty and good reputation in the Bar", but also experience in litigation or arbitration practice and the ability to work as a presiding or sole arbitrator, so that BAC may get the most suitable talents for arbitration from lawyers.
4. The amended Administrative Measures enhance the contents on the administration of arbitrators during their tenures of office
In spite of the word "administrative" in its title, the document has few texts covering "administration". Actually the purpose of administration is to further standardize the engagement of arbitrators, enable cooperation, mutual promotion and strong connections between arbitrators and the arbitration institution, and improve the quality and efficiency of the arbitration hearings. The amended version intentionally makes up for the deficiency in this aspect mainly by the following modifications:
(1)A new provision is added, which reads: "An arbitrator, during his/her tenure of office, shall communicate betimes to the BAC any change in the way of contact, the mailing address or the information recorded in the Panel of Arbitrators or input into the computer inquiry system" (Article 5). It ensures that the BAC may contact the arbitrator at any time during his/her tenure of office.
(2)The amended version specifies that arbitrators shall participate in the training courses regarding the Arbitration Rules, the Ethical Standards and arbitration practices, and the Chairman of the BAC will not appoint those to hear arbitration cases for their lack of such training participation (Article 8). Such a provision is because arbitration is a very professional and practical work, requiring the arbitrators to have the knowledge, experience, skills and professional ethics necessary for resolving disputes. It is impossible for the experts and scholars in a field to become professional and competent in arbitration without appropriate trainings and practice. It is also irresponsible to the parties to have their cases heard by untrained arbitrators, which will inevitably affect the quality of case hearing. Therefore, an arbitrator must receive necessary trainings before handling cases. We believe that arbitrators are all learned and studious experts and scholars in legal, economic and trade fields and they will take this kind of learning as a pleasure and need rather than as a burden.
5. The amended Administrative Measures for the first time provides for the obligation of arbitrators to keep a good faith
Article 9 of the amended Administrative Measures for the first time provides for the obligation of arbitrators to keep a good faith and lists the breach of this obligation as one of the reasons for not being re-engaged. As an umpire on the rights and obligations between the parties, an arbitrator should undoubtedly keep a good faith. If the arbitrators lack good faith, a fast, fair and confidential arbitration procedure is simply out of the question. Given that in practice a handful of arbitrators accept cases at will without considering whether they have corresponding time, energy and ability, conceal the matter that should be disclosed and violate the confidentiality provisions, the amended version for the first time explicitly provides for the obligation of good faith and "not being re-engaged" as the consequence of beaching it, so as to urge the arbitrator to act in accordance with good faith.
6. The texts on dismissal and not being re-engaged are readjusted to more reasonably arrange them.
As the original Ethical Standards also contained provisions on "dismissal of arbitrators", the provisions on the dismissal and not being re-engaged in the documents before amendment appeared disorderly and scattered. The amendment of the Ethical Standards made it possible to integrate these provisions. Following the principle of concision and clear emphasis, before listing the reasons for "being dismissed or not being re-engaged", the readjusted text first summarize the breaches of the Ethical Standards, the Administrative Measures and the Several Provisions by arbitrators into "breach of the obligation to keep a good faith" (Article 9), "breach of the obligation to keep diligence" (Article 10), and "incompetent in the case handling" (Article 11), and then provide that an arbitrator shall "not be engaged" if he/she is under any of these three circumstances (Article 12). After that it provides for the circumstances for dismissal in Article 13. This well-structured arrangement is both conducive to the concision of the text and helpful for the BAC and the arbitrators to have knowledge of various circumstances and their consequences.
IV. On the Amendment to the Several Provisions
The 2004 amendment to the Several Provisions is mainly to proceed from a higher level and make provisions on the management concerning the time limits of case hearings as a part of the measures for improving the "efficiency of arbitration". In addition, as many provisions on improving the efficiency of case handling have been deleted from the amended Ethical Standards, it is necessary to include these provisions into the Several Provisions and form a complete new text through the amendment. The amended version is extended from 8 articles to 14 articles, with the following modifications:
1. The title is changed into Several Provisions on Raising Arbitration Efficiency of Beijing Arbitration Commission
As mentioned above, the amended text is no longer limited to the contents on the time limits, but aimed to make provisions on the whole arbitration procedures from the perspective of improving the efficiency of arbitration. Therefore the present title is used to match the specific contents.
2. A new provision is made to prevent arbitrators from exceeding the time limit of hearings due to their failure to arrange adequate time. The amended version states that "An arbitrator shall promptly notify the BAC and decide whether to accept the nomination or appointment or to withdraw from the case hearing as the case may be if he/she fail to be able to participate in case hearing for 20 consecutive days after the arbitral tribunal is constituted, and shall refuse to accept the nomination or appointment or withdraw from the case hearing if he/she fail to be able to participate in the case hearing for 60 consecutive days within the time limit of hearing" (Article 3). Such provisions can effectively prevent the breach of time limit in case hearing due to some arbitrators' failure to arrange adequate time. Taking advance measures to prevent the breach of time limit is arguably a distinctive feature of the 2004 amendment. After all, the Several Provisions are designed to improve the efficiency of arbitration rather than simply hold arbitrators liable, thus prevention beforehand is better than remedies or punishments afterwards.
3. The amended version specifies the times concerning hearings and rendering of awards and requires that every step be in schedule to ensure the efficient and smooth progress of the entire process.
The contents on the time of first hearing, the time intervals between hearings and the time for the rendering of awards were originally in the Ethical Standards. After the amendment these provisions are included in the Several Provisions (Articles 7 and 9) after being supplemented and improved. The amendment of the Several Provisions is to provide for the time periods for hearing in each stage of the arbitration proceedings. Meanwhile, in the provisions on the drafting of arbitral awards in Paragraph 2 of Article 9, the methods and time requirement on the drafting in the circumstance that "the arbitral tribunal does not hold a private sitting or fails to reach a basic agreement after private sitting". This is to ensure that each step is closely connected with the next one without any delay while maintaining the quality of hearings and the award, so that the arbitral tribunal may conclude cases as soon as possible within the stipulated period, and thus give play to the advantages of arbitration.
4. The amended version adds the obligation of arbitrators to provide written comments on the rendering of awards within the specified time limit
Paragraph 2 of Article 9 of the amended Several Provisions provides that "where the arbitral tribunal does not hold a private sitting or fails to reach a basic agreement on the award after private sitting, the arbitrators shall propose his/her comments in writing on the case facts, evidence, nature, liabilities, applicable laws, opinions on award and reasons within 5 days from the date of the end of the hearing or the date of the private sitting, which shall be summarized by the presiding arbitrator or any arbitrator designate by the presiding arbitrator to draft the award". At the same time, Article 10 of the Administrative Measures lists "failing to make written comments upon the rendering of the award in violation of Article 9 of Several Provisions" as a breach of the obligation to keep diligence. This is out of the following considerations: First, rendering awards is a shared responsibility and obligation of the members of arbitral tribunal. Internationally, arbitral awards are produced by an arbitrator. In addition to the one responsible for drafting the award, the other arbitrators also provide the drafting member with their own written comments on the "case facts, evidence, nature, liabilities, applicable laws, opinions on award and reasons". The Several Provisions make this provision to enhance the sense of responsibility of arbitrators and constrain the irresponsible behavior of not reading case files or providing comments on award. Second, providing comments on the rendering of awards (the presiding arbitrator also should provide his/her comments when designating another arbitrator to draft the award) help arbitrators to study case facts and improve the quality of awards. Third, it helps to fully reflect different views as soon as possible and improve the efficiency of arbitral tribunal by brainstorming of the arbitral tribunal.
5. The amended version endows the BAC with the power to replace an arbitrator when he/she delays case hearings
The Several Provisions before amendment only dealt with the delays of arbitrators by providing that the Chairman shall no longer appoint them as arbitrators and not re-engage or dismiss them in the corresponding circumstances. After amendment the text adds a provision that "If the case hearing exceed the stipulated time limit due to the delay of an arbitrator, where the circumstance is serious, the Chairman of the BAC shall have the power to replace the arbitrator concerned with the consent of the parties (Paragraph 4 of Article 12). Such a provision both ensures a timely remedy for the parties and increases the sense of crisis of arbitrators, as the provision on replacement targets on the cases being heard by them and thus helps to urge the arbitrators to promote the arbitration proceedings in accordance with the stipulated time requirements.
The 2004 amendments to the Three Documents made bold reform and explorations in many aspects based on the principle of being maximally in line with the international practice and the experience of the BAC in its years of practice. We believe that these reform and explorations will help the BAC to become more international and modern and enter a new stage of development.