Ten Issues Needing Attention in Concluding Arbitration Clauses(Part Two)
Wang Ze ^*

VI. Arbitration rules

Arbitration rules always reflect the respect on the autonomy of will of the parties and enable the parties to reach special agreement on arbitration procedures. Article 2 of Beijing Arbitration Commission Arbitration Rules (hereinafter referred to as BAC Arbitration Rules) implemented as of April 1, 2008 provides that “Where parties to a dispute provide for arbitration of the dispute by BAC, these Rules shall apply, save to the extent that the parties have agreed to the application of a different procedure or a different set of arbitration rules, in which case their agreement must comply with the mandatory law of Arbitration seat and be enforceable”. Therefore, even if the parties agree to provide for arbitration of the dispute by BAC, the arbitration rules of other institutions may also be applied and the parties may agree otherwise on arbitration procedures, which has the uttermost respect to the autonomy of will of the parties so that the dispute can be settled thoroughly as soon as possible. As a result, where arbitration clauses are concluded, the arbitration rules to be applied may be chosen while the arbitration commission is chosen. Where one arbitration commission is chosen, yet the arbitration rules of another arbitration commission are agreed to be applied, then whether the appointed arbitration commission can accurately apply the arbitration rules depends on the profession and experience of the arbitration commission and its secretaries.

VII. Arbitration procedures

    Article 47 of BAC Arbitration Rules has provided the application of the summary procedure: (I) Unless otherwise agreed by the parties, the summary procedure shall apply if the amount in dispute does not exceed 1,000,000 Yuan (RMB, similarly hereinafter). (II) The parties may agree to apply the summary procedure even if the amount in dispute exceeds 1,000,000 Yuan, in which case the costs of the arbitration shall be reduced accordingly. (III) If the parties choose to apply the ordinary procedure even if the amount in dispute does not exceed 1,000,000 Yuan, they shall bear any ensuing additional costs of the arbitration. It is indicated therefrom that the parties can agree upon the procedure to be applied.

    Besides, the arbitration procedure is determined by the amount in dispute claimed by the applicant during the acceptance of the case. In accordance with Article 51 of BAC Arbitration Rules, the application of the summary procedure is not affected by mere reason that, as a result of any amendments to the Application for Arbitration or the submission of a Counterclaim, the amount in dispute exceeds 1,000,000 Yuan. However, if the sole arbitrator finds that the application of the summary procedure may be affected, he may make a request to the Chairman for the Arbitral Tribunal to be constituted by three arbitrators, unless otherwise agreed upon by the parties. Therefore, even if the amount in dispute exceeds 1,000,000 Yuan as a result of any amendments to the Application for Arbitration or the submission of a Counterclaim and the sole arbitrator requests the ordinary procedure be applied, the summary procedure can be still applied on the special agreement between the parties.

    Generally speaking, the basic procedure of arbitration will be the following steps: applying for arbitration on the part of the parties, accepting the case, serving the parties with arbitration notices (serving the applicant with the Notice of Acceptance and the respondent with the Request for Submission of Defence), composing the arbitral tribunal, holding a hearing and closing the case. The time limits involved thereof mainly include: the time limit from applying for arbitration on the part of the parties to accepting the case on the part of the arbitration commission, that from accepting the case on the part of the arbitration commission to serving the parties with arbitration notices, that for the parties to appoint arbitrators, that from the composition of arbitral tribunal to the first hearing, as well as that from the composition of arbitral tribunal to making an award, the latter three of which have been provided differently in the ordinary procedure provided from Chapter III to Chapter VI and in the summary procedure provided in Chapter VII of BAC Arbitration Rules. The time limit in the ordinary procedure is relatively longer, while that in the summary procedure is relatively shorter. As to how to choose proper arbitration procedure, the parties shall consider to which party the dispute may attribute, the complexity of the dispute, the possible amount in dispute or contract amount and etc..

VIII. Composition of arbitral tribunal

    Corresponding to the above arbitration procedures, cases applying for the summary procedure will be heard by a sole arbitrator, while those applying for the ordinary procedure will be heard by an arbitral tribunal composed of three arbitrators. The parties may also agree on the number of the arbitral tribunal and the mode of composition in arbitration clauses. Article 18 of BAC Arbitration Rules also provides that the presiding arbitrator will be selected from the list of candidates for the presiding arbitrator, which applies to the determination of the sole arbitrator. What calls for attention is that the list of candidates may only be provided on the application or agreement of the parties. Besides, in practice, there are parties agreeing that the presiding arbitrator will be jointly determined by the arbitrators appointed by the parties or directly agreeing in arbitration clauses the presiding arbitrator, under which circumstance, the parties shall consider how to re-nominate a presiding arbitrator where the one determined in such a way refuses the nomination.

IX. Mode of hearing

    Article 23 of BAC Arbitration Rules has provided the mode of hearing: (I) The Arbitral Tribunal shall hold a hearing to examine the case. (II) If the parties agree on documents-only arbitration, or if the Arbitral Tribunal considers a hearing to be unnecessary and has the consent of the parties, the Arbitral Tribunal may decide the case on the basis of documents submitted by the parties. (III) Regardless of the mode of hearing adopted, the Arbitral Tribunal shall treat the parties fairly and impartially and give each party a reasonable opportunity to present and argue its case. It is indicated from the provision that arbitration may be held on the basis of documents submitted by the parties in addition to ordinary hearing. Documents-only arbitration may to some extent avoid the circumstance where a hearing cannot be arranged as the time of the parties conflicts to that of the arbitrators and the arbitration procedure has to be postponed therefor. However, documents-only arbitration is lack of interaction, and in complicated disputes, the parties have to deliver documents to each other many times, which can be completed in one hearing.

X. Special provisions for international commercial arbitration

    Chapter VIII of BAC Arbitration Rules has specially provided international commercial arbitration, the most outstanding characteristics of which include the following aspects: Arbitrators could be chosen by the parties from or outside the Panel of Arbitrators (which has greatly expanded the range of choice of the parties); the parties may choose to apply the substantial law; the Arbitral Tribunal shall decide cases by taking into account the relevant international trade usages. The part of international commercial arbitration procedure of Beijing Arbitration Commission Arbitration Rules (Exposure Draft) published on October 31, 2013 has provided the determination of the place of arbitration and the applicable law, as well as provisional measures. What is more important is that the provisions of the Civil Procedural Law and the Arbitration Law as to the reasons of revoking and denying the implementation of arbitration awards concerning foreign affairs are different from those of domestic arbitration awards, the former of which is generally thought to focus more on procedures and be more loose.

    Even if the above ten issues may not cover all elements involved in the conclusion of arbitration clauses, they may at least provide the parties willing to refer their disputes to arbitration with a range of thinking. With richer and richer practical experience, a mature arbitration user will include more elements into the range of thinking, as well as strengthen the understanding of each element, which enables arbitration to better serve the parties and earn popularity among more parties.

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