By Wang Hongsong, Secretary-General of the BAC in 2004
I. A Brief Introduction of the Completion of Work in 2003
i. Last year, the Beijing Arbitration Commission (BAC) accepted 1029 cases, 138 more than in 2002, with a rate of increase of 15.5%. The amount in dispute was 4.8 billion, an increase of 700 million compared to last year, with a rate of increase of 17%. Among the disputes accepted last year were 33 foreign-related cases, 13 more than the year before last. The distribution of the cases was as follows:
Sale contract disputes, 37.41%;
Construction project contract disputes, 25.63%;
Leasing contract disputes, 8%;
Loan, mortgage, and pledge contract disputes, 6.71%;
Entrustment and delegation contract disputes, 5%;
Joint-venture and cooperation contract disputes, 4.67%;
Processing contract disputes, 2.2%;
Shares & capital transfer contract disputes, 1.36%;
Advertisement contract disputes, 1.26%;
Other contract disputes, 5.38%.
We concluded 850 cases last year, 3 less than last year, with a rate of conclusion of 82.6%. Compared with the 95.7% of last year, the rate of conclusion decreased by 13.1%. The average time for conclusion of a case was 79 days; 2 days longer that of the year before last. The reasons for this are as follows: first, SARS proved to be a very important factor; second, among the concluded cases last year was an increasing number of complex and sensible cases that required postponing in that they implicated comprehensive social interests; third, changeover in personnel. We will spare no efforts to settle these problems this year.
Among the cases concluded, 5 were set aside by the court, 3 were ordered to be re-arbitrated, and in 2 cases the court refused to enforce the decision. The number of cases set aside last year approached the total number of cases set aside in the previous seven years combined (6 cases). Although this does not go towards fully answering the question of whether the comprehensive quality of our awards has decreased or not, it does at least indicate that parties now impose a higher standard on the arbitrators competence and on the quality of the arbitral awards. Moreover, it shows that the court and other social institutions are paying an increasing amount of attention to arbitration. We must continue to improve our arbitration quality in order to keep abreast of these changes while maintaining the stable development of our cause.
From its inception through the end of last year, the BAC has accepted a total of 3992 cases and concluded 3615 cases, with a conclusion rate of 92%. According to incomplete statistics, among the total amount of concluded cases, 11 were set aside or partly set aside, 6 were ordered to be re-arbitrated, and 14 were non-enforced. These cases amount to less than 1% of the concluded arbitrations.
II. BAC completed the following work according to the plan made at the beginning of 2003
i. Modifying the Arbitration Rules. The new arbitration rules helped in realising the parties autonomy of willingness, and improved the impartiality and flexibility of the arbitration procedures. The most important content that we modified was as follows:
First, a new method of choosing the presiding arbitrator was added. Both parties can either directly nominate a presiding arbitrator from three candidates, or they can nominate from a candidates list provided by the BAC, provided that the whole process does not exceed the time limit for such nominations. The chairman then appoints a presiding arbitrator from the candidates nominated by both parties. This increases the probability that the presiding arbitrator will be jointly selected by both parties;
Second, the parties can choose the place for the hearing, and the limit on the number of the delegates was removed;
Third, a system and procedure for arbitrators disclosure was established, which provides that the arbitrators should disclose in writing circumstances that are likely to lead to doubts concerning their independence and impartiality. The disclosure procedure should be implemented throughout the entire arbitration process in order to strengthen the parties confidence of the arbitration court;
Fourth, arbitrators who do not sign the arbitration award should make a written statement, which will be served to the parties attached to the award. The statement, however is not part of the award;
Fifth, procedural rules for arbitration were perfected. For example, summary procedure will apply if the amount in dispute is under 1,000,000 instead of under 500,000, and the trial limit for foreign-related arbitration procedures is reduced to 6 months instead of 8 months, in order to guarantee flexibility and efficiency of the arbitration procedure.
ii. We modified the Ethical Standards of the Arbitrators, Administrative Measures for the
Employment of Arbitrators, and Regulations of Strengthening the Trial Limit. We also looked into perfecting the arbitrators system, for example, by specifying the scope of the arbitrators disclosure system; by specifying the scope of cases that arbitrators cannot delegate; and by making it clear that the arbitrators are forbidden from voluntarily pursuing the parties nomination in a case. Additionally, we have improved the standards of engaging arbitrators and imposed a higher standard on the arbitrators in terms of professional knowledge, experience, capability, as well as sense of duty. For example, if the award does not go through private sittings or a basic consent is not reached, the arbitrator who does not draft the award should put forward suggestions in writing on the making of the award.
iii. We drafted a new fees-schedule; however it was not ratified by the related department. As a result, the BAC drafted the Standard of Compensation for Arbitrators, in order to gather information so that it may later complete the modification to the fees-schedule. The Standard of Compensation for Arbitrators sticks to the principles of respecting and embodying the labour values of the arbitrators and of balancing between rights and duties. This both greatly improved the payment to arbitrators and also publicized the standard of payment in order to improve transparency. In view of the fact that the drafting of an arbitration award constitutes a large proportion of the work done in a case, this Standard provides that the payments for making awards should amount to 40%-70% of the tribunal payments and that this amount will be paid directly to the arbitrators who draft the award, with the rest of the payment split between the presiding arbitrator and the other arbitrators. In view of the important role that the presiding arbitrator plays, and the comparatively large amount of work he/she does, this Standard also provides that the rewards to the presiding arbitrator should amount to 46% of the tribunal payments, with the other arbitrators each getting 27%. This Standard also provides for a reduction of payments when arbitrators do not properly implement their duties.
Although we have been consistently drafting new rules like the Ethical Standards for Arbitrators of BAC, the Arbitration Rules, Administrative Measures for the Employment of Arbitrators, Several Regulations, and Fees Schedule, the modification undertaken this time was the largest in both scale and effort. This signifies that the BAC has made a substantial step towards the final goal. In order to make the BAC an influential arbitration institution in the world, we have no choice but to behave according to the spirit of the Arbitration Law, the development regulation of arbitration, and the general rules of international commercial arbitration. We will face many difficulties on our way forward but also with many opportunities for success. Only if we overcome all the difficulties without fear, can we reach our goal. The modification this time also illustrates the BACs value orientation that impartiality should always come first. The impartial trial has been not only the dream of the Chinese commoner for thousands of years, but at the same time, serves as the ideal and pursuit of the Arbitration Circle. Even if we will be faced with greater pressure and risk, we will also contribute more and make more sacrifices. We will spare no effort to stride towards this goal. This recent modification reflects the ambition and determination of the BAC to respond immediately when issues arise and to carry out the response completely. We know that when turning ideas and decisions into reality, boldness is even more important than intelligence. This most recent modification illustrates our self-confidence in implementing innovative measures, and we firmly believe that we can achieve more success and realise a mutually-benefitting goal for the parties, arbitrators and the Arbitration Commission if we work independently, impartially and efficiently, and satisfy the requirements of the parties to the maximum extent.
iv. We carried out theoretical studies, communications on the working experience, and training programs. Last year the BAC organised lectures and training programs on six occasions, including a lecture on the Several Regulations on the Civil Evidence of the Supreme Court, a lecture on the Problems in Terms of the Review of the Arbitration Awards, and training programs on Arbitration Rules, Ethical Standards for Arbitrators of the BAC,, Rules of Handling Cases for Arbitrators, and the Rules on the Draft of Awards. We also organised a lecture on American and English Evidence Law by the famous Hong Kong Arbitrator Yang Liangyi on November 28th of last year, as well as a lecture entitled Application and Understanding of the Judicial Interpretation on the Hearing of the Commodity Housing Disputes on November 29th. We also organised a lecture by the famous Hong Kong Arbitrator Zheng Ruohua on Understanding Dispute Resolution of the International Construction Contract, in which over 700 arbitrators, judges, lawyers, and enterprise counsels participated. Last year, the BAC cooperated with professors of the Wuhan University Law School and adopted their opinions in the modification of the Arbitration Rules and the establishment of the arbitrators system. The BAC also organised five expert symposiums and seminars on the modification of the Ethical Standards for Arbitrators of the BAC, Arbitration Rules, opinion- collection on the Draft of the Civil Code, and on the application of the Supreme Courts Regulations on the problems arising in the deal of commodity houses. The BAC also organised seven communication conferences on real estate, construction projects, and arbitrators financial undertaking in which more than 100 people participated. These conferences actively broadened the arbitrators mind, enriched their experience, and improved their competence in handling cases. Meanwhile, the arbitrators are now more interested in learning new fields, and are more enthusiastic about exploring the arbitration work.
v. We strengthened our work on publicity and communication with the outside world. The BACs English website was re-constructed and the information published on schedule, as a result, we noticed a consicupous increase in visitors, with more than 100 hits per day instead of the usual 50 per day from the year before last. According to a test by the Sarahland Consulting & Information Services (SCIS) of America, one of the top seven search engines in North America, the BAC English website was judged outstanding among 330,000 arbitration institutions websites. In 2003, the BAC published more than 50 articles on arbitrations in a variety of newspapers, magazines, and websites. The BAC organised or participated in more than 20 different publicity conferences, training conferences, and symposiums, and had over 1000 persons participate in the training program. On July 10th of last year, the BAC and Korean Arbitration Institution co-sponsored the China, South Korea, and Japan Arbitration Theoretical Symposium, with the chairman and arbitrators of the BAC introducing the Chinese arbitration system and the current situation of our Arbitration Commission. More than 40 scholars and arbitration experts participated in the symposium. The BAC and the South Korean Arbitration Institution established a friendly and cooperative relationship which has achieved good effect. We also participated in the Symposium on the Arbitration Practice, and the Symposium on the International Construction Contract Dispute Settlements sponsored by the ICC (International Chamber of Commerce). There representatives of the BAC gave lectures and contacted representatives from other countries. Last year we also hosted the American CDR Disputes Conciliation Institution and the U.S. Arbitration Institution, and visited the U.S. Chamber of Commerce Law Committee. Additionally the BAC met with the head of the European and American Alumni Association and the head of Beijing Harvard Alumni Association, and overall expanded the influence of BAC in the outside world.
vi. Last year, the BAC recruited 53 arbitrators, among which were 6 foreign arbitrators, and 15 experts on FIDIC clauses, thus further improveing the BACs competence to deal with construction project disputes and international commercial disputes.
vii. We perfected our computer checking system for arbitrators and the arbitrators name list. The BAC redesigned and printed the list of arbitrators according to career, title, major, nationality, place of residence, foreign language capability, etc. Simultaneously, we modified the arbitrators computer checking system and designed a form investigating the arbitrators background. We then put the professional information as fed back by 130 arbitrators into the computer. As a result it is now much easier for parties to learn about the arbitrators backgrounds.
viii. The BAC recruited several postgraduates of law who have mastered a foreign language and who possess the requisite professional knowledge to act as sectaries. Simultaneously, the BAC cooperated with a human resource consulting company and established the Achievements-Testing Management system, which greatly improved the level of management.
The above is the work summary of last year.
Our emphasis this year is
To fully implement the newly-modified Arbitration Rules, Ethical Standards for Arbitrators of BAC, Several Regulations on Improving the Arbitration Efficiency, as well as the Standard of Compensation for Arbitrators;
To introduce the Information Platform Technology to perfect the Arbitration management system and improve the impartiality of arbitration;
To further improve the arbitrators quality and competence to handle cases so as to improve the quality and efficiency of awards;
To perfect every working system so as to improve our arbitration work.
We will do our best to realise these goals step by step from the ground-up. To close, Id like to quote an advertisement: We will keep on making efforts all the time, and we will do it better!