III CIETAC’s So-called “Authorization” and its Nature
As is well known to all, the foundation of the arbitration system lies with the right of autonomous choice of the parties. The selection of an arbitration institution through negotiation is a fundamental right of the parties; the jurisdiction of an arbitration institution over arbitration cases originates from the agreement of the parties, it is also one of the basic principles of modern commercial arbitration. According to the Arbitration Law, as duly established arbitration institutions, the respective jurisdiction of CIETAC Shanghai and CIETAC South China come from the agreement of the parties, rather than the “authorization” from any other institutions, not to mention the so-called “suspension of authorization”. Nowhere in the Arbitration Law ever provides that an arbitration institution may grant so-called authorization with regard to jurisdiction over cases. However, CIETAC fabricated a theory of “authorization” and “suspension of authorization” in its Administration Announcement, trying to distort the selection of an arbitration institution already made by the parties. The action has harmed the rights and interests of the parties and is detrimental to the image of China’s arbitration institutions.
CIETAC violated Article 6 of the Arbitration Law which provides that “the arbitration commission shall be selected by agreement of the parties concerned”, and betrayed the basic principle of “party autonomy” in the arbitration system. By forcing the parties to apply for arbitration with CIETAC in Beijing in disregard of the arbitration agreements under which the parties have already selected CIETAC Shanghai or CIETAC South China as the arbitration institution, CIETAC has harmed the right of the parties to select a nearby arbitration institution at their own will. By forcing parties to go to Beijing, CIEATC has imposed higher costs on the parties, and thus deprived the parties of their right to seek judicial remedy with a court where their selected arbitration institution is located. All this brings great legal risks to the parties with respect to arbitration procedures, legality of the award and their substantive rights and interests.
As its non public-interest purpose cannot be realized through legal and normal means, CIETAC does not hesitate to infringe upon the legitimate rights and interests of the parties and to sacrifice public interest. Consequently, CIETAC pushed its conflict with its cooperative institutions to the society and gravely harms the interests of parties. By making the Administrative Announcement, CIETAC has further damaged the goodwill of China’s arbitration institutions and brought unstable factors to the economic and social development.
IV Statement on Acceptance and Management of Arbitration Cases
In order to respect the autonomy of the parties in selecting arbitration institutions and protect their legitimate rights and interests, CIETAC Shanghai and CIETAC South China, as independent arbitration institutions and subject to the Arbitration Law, will overcome all the improper disturbances from CIETAC, continue to accept and manage arbitration cases as agreed upon by the parties. The so-called Administrative Announcement has no binding effect on the CIETAC Shanghai, CIETAC South China and the parties, and will not affect the acceptance and management of cases or the normal operation. The parties can continue to apply for arbitration with CIETAC Shanghai and CIETAC South China according to their arbitration agreements.
As a product of China’s reform and opening and of the modernization process of arbitration, CIETAC Shanghai and CIETAC South China will, as always, by pushing aside all kinds of interference, give full respect to the autonomy of the parties, strictly adhere to the independent, fair and professional adjudication standards, and provide high-quality and efficient arbitration services to the parties. CIETAC Shanghai and CIETAC South China will stick to reform and innovation, and with the support from people in various circles and together with the arbitrators and other arbitration institutions, will continue to promote the modernization and globalization of China’s arbitration, improve the international image of China’s arbitration, and contribute to the constant improvement of rule of law and economic and social stability.
If you have any questions, please feel free to contact us by the information below:
Tel: 86-21-6387 5588; Fax: 86-21-6387 7070
Address: 7/F, Jinling Mansion, No. 28, Jinling Road (W), Shanghai
CIETAC South China
Address: 19/F, BOC Tower, No. 5015 Caitian Road, Futian District, Shenzhen
China International Economic and Trade Arbitration Commission Shanghai Commission
China International Economic and Trade Arbitration Commission South China Commission (Shenzhen International Arbitration Court)
August 4, 2012