Authored by Arthur Dong (dongxiao@anjielaw.com)

Beijing Arbitration Commission (‘BAC’) was founded in 1995 by Beijing Municipal government and later became a financially independent institution. Since its founding, BAC has received great reputation among the business and legal community and growing very fast in recently years. [1] Many foreign companies choose CIETAC and BAC as the top two choices for their arbitration forum in Mainland China.

The last amendment of the Beijing Arbitration Commission’s (‘BAC’) Arbitration Rules (‘Rules’) was made in 2007 and went into effect in 2008. On October 31, 2013, BAC announced its latest amended Rules seeking for public comments. BAC claims that the new revision of the Rules reflects the valuable experience BAC has gained in application and enforcement of its 2008 Rules in the last 5 years. The discussion below will address numerous amendments to the 2008 Rules and the reasoning behind those revisions. Continue Reading Significant Changes Proposed in Beijing Arbitration Commission’s (‘BAC’) New Rules

Authored by Arthur Dong ( dongxiao@anjielaw.com)

While foreign invested companies in China, either operating as a joint venture or wholly-owned entity, may have a strong desire to apply the rules and administration of an international arbitration commission due to their unfamiliarity with the Chinese arbitration system, there is a common misunderstanding that they can just draft an arbitration clause in their commercial contract to designate a foreign arbitration forum to arbitrate the case. The most recent decision rendered by the Supreme People’s Court illustrates that corporate users need to be very cautious in reviewing the “foreign-related” requirement before choosing a foreign arbitration forum.

On August 31, 2012, the Supreme People’s Court, in its certiorari, affirmed Jiangsu Higher People’s Court’s decision in Jiangsu Aerospace Wanyuan Wind Power Co., Ltd. vs. LM Wind Power (Tianjin) Co., Ltd. ("Wanyuan vs. LM”).  The Supreme People’s Court held that the parties cannot choose ICC arbitration because there is no basis in Chinese law that permits parties to choose arbitration at a foreign arbitration institution or ad hoc arbitration outside the PRC’s territory if the dispute fails to present any “foreign-related” element. 

Continue Reading China Supreme People’s Court Holds That a Dispute Must Meet “Foreign-Related” Requirement for Arbitration at Foreign Arbitration Forums

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com)

One of the questions in China is whether an insurer should go to arbitration or litigation in subrogation cases.

1. The contradiction between bulks of insurance disputes and less efficient resolution channels

China is facing an increasing number of insurance disputes in respect of all business lines such as construction insurance, credit insurance, marine insurance, product liability insurance, car insurance, D&O liability insurance, environment protection insurance, investment-linked insurance, and life insurance. According to a speech of the Assistant Chief Justice of the PRC Supreme People’s Court, 14,465 insurance litigations were formally accepted by courts in 2005, and in 2010, the number of cases accepted reached 59,747 cases. Some legal experts have estimated that the number of insurance litigations in 2012 is around 1.5 times of that in 2010. Insurance disputes frequently arise from disagreements on the scope of clauses limiting or excluding coverage (“excluding clauses”), the obligation of the insurer to clearly explain the excluding clauses to the applicant, and the disclosure obligation of the applicant and insured.

The biggest proportion of insurance disputes belongs to automobile insurance disputes. Continue Reading To Go to Arbitration or Litigation in Subrogation Cases?

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com), Dr. Song Ying (songying@anjielaw.com)

It has recently been reported that the plaintiff in a private antitrust litigation, heard by the Xian Intermediate People’s Court, was successful in bringing a lawsuit involving abuse of dominant market position.  Given that there have been very few cases won by plaintiffs in China’s private antitrust enforcement since the Anti-Monopoly Law (“AML”) entered into force in 2008, a plaintiff victory is quite rare and encouraging. According to the statistics, there has not been a single plaintiff victory in civil antitrust litigations brought in China since June 2012. In this regard, the concerning case is full of significance and reflects to some extent the effect of the Judicial Interpretation on private antitrust litigation (“the Judicial Interpretation”) published in May of 2012.

Case Description

On June 4th, 2012, Wu Xiaoqin, a consumer located in Xianyang of the Shanxi province, sued Shanxi Broadcast & TV Network Intermediary (Group) Co., Ltd. (“the Company” or “the defendant”) in the Xian Intermediate People’s Court (“the Court”) claiming that the Company, as the only local cable service provider, has tied basic cable TV program services with value-added paying TV programs by taking advantage of its dominant market position. Through the court proceedings, involving further investigation and debate, the Court upheld the plaintiff’s suit, finding that the Company’s practice violated Article 17(5) of the AML regarding tying sales and imposition of unreasonable trading conditions.Continue Reading Plaintiff Victory in China Private Antitrust Litigation

Authored by Gao Ping (gaoping@anjielaw.com)

The preservation of property is a very important step in civil actions. The timely and effective preservation of property plays a vital role in the smooth execution of the case in the future. In practice, the property of the defendant or the person subject to enforcement is often insufficient to meet the requirements of the preservation and enforcement, but at the same time, it is found that the defendant enjoys a large claims owed to it by an outside party. How should these claims be preserved and enforced?

As provided in Article 105 of the "Opinions on Certain Issues Concerning the Application of the Civil Procedure Law of the People’s Republic of China by the Supreme People’s Court" the People’s Court may rule that in accordance with the creditor’s application, where the debtor’s property cannot fulfill the injunction but has debts owed to it by a third party, the third party may not settle with the debtor. When the third party is required to pay, the third party must hold the property or price in escrow. It can be seen that the credit due to the defendant may be preserved by ruling that the third party may not settle the debt to the defendant. This kind of "credit preservation" is different from the preservation of the defendant’s property, and its function is limited. It can only prevent the defendant from privately transferring the property after receiving payment from the third party. But it cannot prevent the third party from paying off other creditors, nor prevent the third party from disposing their own property. Therefore, the ruling cannot be deemed as the preservation of the third party’s property.Continue Reading How to Exercise the Preservation and Enforcement of the Debts Owed to the Defendant

The question of whether a Chinese case with purely domestic elements is capable of being arbitrated in foreign forum has been pondered by many foreign and Chinese lawyers. The results have led to confusion. Recently a major International law firm posed the question before Dr. Zhan Hao, we have summarized Dr. Zhan Hao’s reply below.

In short, if parties opt to arbitrate in a foreign forum, for example, Hong Kong; and opt to use English Law or the law of another foreign jurisdiction; the likelihood of the award being enforced is strong. However, the position is unclear under Chinese law as there are no specific regulations addressing the adjudication of a purely domestic dispute by a foreign arbitral institution. We will now consider the question in further detail.
 Continue Reading A Purely Domestic Case (China) Arbitrated in Foreign Forums?