Commercial Dispute Resolution In China

This book focuses on the law and development of major dispute resolution mechanisms in China, examining the design and legal framework of civil litigation, arbitration and mediation, their operations, challenges, and past-decade reforms.

2020 marked a remarkably unusual year for all, tough and impressive enough. Along with the prevalence of COVID-19 and the deepening of economic globalization, work and production in China were resumed in an orderly manner, bringing positive economic growth against the trend. In this context, commercial dispute resolutions in China were faced with new challenges and endured new reforms while embracing new developments. The promulgation of new laws and regulations in 2020, including the Civil Code of the People’s Republic of China and the Supplementary Arrangements on Mutual Implementation of Arbitral Awards in Mainland China and Hong Kong Special Administrative Region, has elevated the arbitration system to a higher level. Arbitration institutions such as the Beijing Arbitration Commission/Beijing International Arbitration Center (hereinafter referred to as “BAC/BIAC”) carried out anti-pandemic measures in a timely manner to ensure the well-functioning of the arbitration procedures. Meanwhile, China’s judicial supervision on arbitration and arbitration disclosure have undergone impressive developments. In 2020, the procedural standards of commercial mediation were further optimized, and commercial mediation institutions continued to expand and grow, while the number of mediation cases increased steadily. The “one-stop” diversified dispute resolution system was fully advanced, and the systems of litigation-mediation and arbitration-mediation have been constantly improved. Online mediation mechanism was rapidly developed in response to the new norms of pandemic prevention and control. Sino-foreign joint mediation mechanism has been gradually established, and international commercial mediation rules and systems are continuously refined. While rolling out countermeasures in full scale to mitigate impacts of pandemic, China achieved some eye-catching accomplishments in terms of legal system development and dispute resolution practices in 2020. To present an in-depth and systematic report on the 2020 practices and developments in the aforementioned fields, BAC/BIAC has called upon industry experts to contribute to the Annual Review and Preview of Commercial Dispute Resolution in China (2021) (“2021 Annual Review”), and released it in both Chinese and English to facilitate a better understanding of the status quo of China’s commercial dispute resolutions among interested parties at home and abroad. The 2021 Annual Review is compiled based on the following principles: First, focus on the state of the art. The 2021 Annual Review strives to showcase the latest developments in relevant industries and the leading trends in legal systems and judicial practices. It selected annual hot topics for in-depth analysis, aiming to deliver timely observations and cutting-edge contents while providing detailed information thereof. Second, focus on consistency and systematises. By inheriting previous compilation rules, the 2021 Annual Review presents an annual overview of various industries, crucial laws and policies, typical cases, analyses of heated issues and prospects, such that the readers are able to grasp the practices and developments of key industries from a multi-angle, holistic perspective. Third, focus on practicability. The 2021 Annual Review pays attention to the pragmatic value in order to help commercial entities improve their abilities of risk prevention and dispute resolution. The Editorial Committee is composed of seasoned professionals who deliver observations and opinions based on their rich experience on the industry’s frontline, providing practical references for the readers.

China and International Commercial Dispute Resolution is a unique collection of papers which deal expertly with legal issues arising from international commercial dispute resolution in China, utilizing a multiplicity of approaches including doctrinal, comparative, empirical, economic and legal analyses.

In 2021, the COVID-19 pandemic continued to affect economic development. In addition, due to the changing global situation, international competition was increasingly fierce. Under the circumstances of major changes and a pandemic unseen in a century, commercial dispute resolution in China is confronting new challenges, facing new changes and ushering in new developments. In the field of commercial arbitration, the promulgation of the Arbitration Law (Revision) (Draft for Comment) brought about many reforms to China’s current arbitration system, aroused widespread attention and discussion in the industry, and boosted arbitration research and the arbitration legal system to new levels. Arbitration institutions, including the Beijing Arbitration Commission/Beijing International Arbitration Center (hereinafter referred to as the “BAC/BIAC”), have duly issued new rules according to the needs of case handling and pandemic prevention and control in order to guide new arbitration practices, and the highlights of China’s judicial supervision and opening-up of arbitration are eye-catching. In the field of commercial mediation, the Supreme People’s Court has continuously promoted the development of a “one-stop” diversified dispute resolution system to support international commercial mediation organizations in providing mediation services in free trade zones; the Shenzhen Intermediate People’s Court has innovatively introduced third-party mediation organizations to participate in bankruptcy reconciliation; and practices in coordination between arbitration and mediation have been constantly enriched. Commercial mediation is playing an increasingly important role in alternative dispute resolution in China. In key professional fields, while actively responding to the impacts of the pandemic and focusing upon the resumption of work and production, legal construction and dispute resolution have also been developing.

Twenty-eighteen marked the 40th anniversary of China’s reform and opening-up policy. Profound changes have been seen internally and externally, prior to 2018, during 2018, and continuing beyond 2018, which echo China’s great quest for reform and engaging with the world and shape the future of the dispute resolution industry in China. “Economic stability”, “economic restructuring and upgrading”, and “Sino-US trade friction” are clues to internal and external changes in 2018. Reviewing changing conditions in dispute resolution across a wide range of industries, the authors of Commercial Dispute Resolution in China: An Annual Review and Preview (2019) [hereinafter referred to as the “An Annual Review and Preview (2019)”] preview challenges that are yet to come. In Annual Review on Real Estate Dispute Resolution in China (2019), for example, the authors present a case study on the Linkage of the First and Second Level Projects and preview potential disputes of Securitization of real estate. In Annual Review on Investment Dispute Resolution in China (2019), the authors describe the arrangement of fixed income and equity repurchase under the backdrop of a slowing economy. In Annual Review on Energy Dispute Resolution in China (2019), the author focuses on policies and cases relating to Chinese transnational M&As, illustrating opportunities and challenges for future “Going Global” transactions in the energy sector. In Annual Review on International Trade Dispute Resolution in China (2019), the authors analyze the challenges posed by the China-US Trade War, and call for better compliance, industrial upgrading, and better understanding of the legal environment and trade protection measures in different jurisdictions in the process of “Going Global.” Decentralization and a continuing opening-up of China’s markets are also key in understanding economic and international changes. In Annual Review on Construction Dispute Resolution in China (2019), the authors introduce two examples, namely the promulgation of the Interpretation II on Issues Concerning the Application of Law for the Trial of Cases of Dispute over Construction Contracts by the Supreme People’s Court, and cancellation of construction contract record-filing by the Ministry of Housing and Urban-Rural Development, which reflect the ongoing transformation of social governance and the reforms of “delegate power, improve regulation and optimize services” (“DIO” reform) in the construction sector. In Annual Review on Financial Dispute Resolution in China (2019), the author describes the opening of the futures market, clearly demonstrating the Chinese government’s determination to open financial and capital markets.

In 2019, the world economic slowdown already under way reflected common influence across the countries. The cyclical and structural slowdowns in China have fueled disputes in the marketplace and thus created a rising number in the statistics of commercial dispute resolution in China. Many developments in the field of arbitration and mediation mark the milestones of building the rule-based practice. Some of these developments have already brought positive effects in the dispute resolution industry amid the slowing down economy. To present an insightful understanding of the developments of commercial dispute resolution in China, the Beijing Arbitration Commission/Beijing International Arbitration Center (hereinafter referred to as the "BAC/BIAC") continuingly invites experts to author 12 chapters of this book, namely, the chapters on commercial arbitration, commercial mediation, construction, real estate, energy, international trade, investment, finance, intellectual property, civil aviation, entertainment, and sports. The impact of economic slowdown also projects profound changes in each different specialized sector. More detailed and targeted legislation and regulations have emerged in 2019 as the response to the changing climate of the business environment. In this book, experts from the front line gathered and wrote each chapter as the reflection of their first-hand experience on the overview, updates of legislation and regulation, case studies, debated issues, and outlook of the industries. It is the eighth edition of the Annual Review and Preview of the Commercial Dispute Resolution in China. In this edition, for the first time, experts from in-and-out China co-authored one of the chapters, i.e.., the chapter on sport, which is a new creation of this book. The authors of this new chapter examine the Chinese legislation, regulation, and cases in the field of sport from different perspectives. For example, the athlete Yang Sun’s arbitration case has been debriefed and may help readers gain the pulse of the dispute resolution of sport in China. In general, the book presents to all stakeholders a reference of the commercial dispute resolution in China and unlocks intricacies of each different sectors. This book endeavors to record the development of rules, leading cases, and the pulse of the field. By reading this book, practitioners will understand what to look for when solving commercial disputes in China.

China's ever-expanding commercial influence has attracted global attention on how its civil and commercial disputes are resolved. This compelling new book, Dispute Resolution in China, offers a detailed examination of the elements in the Chinese legal system and the relevant reforms to the multiplicity of approaches to civil and commercial disputes in China today. This book reveals how civil litigation, commercial arbitration, mediation, and their hybrid dispute resolution have distinctly responded to, reformed, and developed in the context of China’s transformational economic growth, societal development, and international interaction in the last two decades. It situates these developments and continued experimentation within a unique hybrid of empirical, contextual, and comparative analytical framework, while paving productive pathways towards the future. This book argues that, rather than being a legal project, China’s civil and commercial dispute resolution system is essentially a social development project, which distinguishes the Chinese approach to civil justice reform from contemporary civil justice movements elsewhere. Among the primary methods of dispute resolution, commercial arbitration in China today uniquely transcending the traditional socio-political constraints, its reform has developed in favor of market-oriented considerations and shaped by China’s socio-economic dynamics and internationalization needs. By contrast, civil litigation and mediation being more instrumentalist in nature, their reform is socio-politically embedded and continues to prioritize social stability. This book also shines a fresh light on comparative assessments of top-down and bottom-up changes in China’s dispute resolution discourse, as well as on how China speaks to international dispute resolution systems. Original and rich in its analysis, this book will be essential reading and invaluable reference tool for scholars with a focus on Chinese law, comparative and international dispute resolution, and on broader legal, institutional, economic, social, political and cultural dimensions of dispute resolution development.