CIETAC Clauses

Whilst, technically, they can be used in conjunction with any choice of seat, the CIETAC Rules are most likely to be deployed, in circumstances where the parties require the seat of arbitration to be in mainland China (see PRC Arbitration/CIETAC). Our CIETAC clause below therefore proceeds on this basis and may require amendment if use with a seat outside mainland China is required (in which case please contact one of our Asian arbitration specialists in our Hong Kong or Singapore offices). Note that where mainland China is chosen as a seat and the governing law of the contract is not PRC law, it has become common place to express a separate choice of law to govern the arbitration clause (see Express Choice of Law to Govern Arbitration Clause for an introduction, from an English law perspective, as to the rationale for this – and for an appropriate precedent clause). In PRC seated arbitrations the current trend is to express the governing law of the contract because, in particular, PRC law sees a number of matters as non-arbitrable (as always it will be necessary to ensure the clause is properly drafted and works under the chosen law).

Single arbitrator

"Any dispute arising out of or connected with this Agreement, including a dispute as to the validity or existence of this Agreement and/or this clause [number], shall be resolved by arbitration administered by the Beijing headquarters of the China International Economic and Trade Arbitration Commission (“CIETAC”). The seat (or legal place) of the arbitration shall be Beijing.

The arbitration shall be conducted in the [language] by one arbitrator pursuant to the CIETAC Arbitration Rules save that, unless the parties agree otherwise:

(i) the parties may nominate arbitrators from outside CIETAC’s Panel of Arbitrators;

[(ii) all hearings of the arbitration shall be conducted in [location]];

[(iii) neither party shall be required to give general discovery of documents, but may be required only to produce specific, identified documents which are relevant to the dispute.]"

Where the parties have agreed for the Beijing headquarters of CIETAC to administer their arbitration, any oral hearings will, by default under Article 36(2) CIETAC Rules, also be held in Beijing. That rule is, however, subject to the agreement of the parties so, if this is not convenient, and they wish any oral hearings to be held elsewhere in the PRC (for example, in Shanghai), then sub-paragraph (ii) can be inserted to specify a preferred location for hearings irrespective of the fact that the Beijing headquarters of CIETAC will continue to administer the case/Beijing is the seat of arbitration.

Three Arbitrators

"Any dispute arising out of or connected with this Agreement, including a dispute as to the validity or existence of this Agreement and/or this clause [number], shall be resolved by arbitration administered by the Beijing headquarters of the China International Economic and Trade Arbitration Commission (“CIETAC”). The seat (or legal place) of the arbitration shall be Beijing. The arbitration shall be conducted in the [language] by three arbitrators pursuant to the CIETAC Arbitration Rules, save that, unless the parties agree otherwise:

(i) the parties may nominate arbitrators from outside CIETAC’s Panel of Arbitrators;

[(ii) all hearings of the arbitration shall be conducted in [location]];

[(iii) neither party shall be required to give general discovery of documents, but may be required only to produce specific, identified documents which are relevant to the dispute];

[(iv) no arbitrator shall be of the same nationality as any party]"

Regarding sub-paragraph (ii), see drafting note to the single arbitrator clause, above. Sub paragraph (iv) may be inappropriate in normal commercial contracts, but it can be important in commercial contracts with States. Its inclusion will prevent the State from appointing as its arbitrator its own national, thus mitigating risks of unjust interference from the State. This provision should be difficult for a State to resist at the negotiation stage but will be valuable if a dispute arises: faced with a genuinely independent tribunal, a State is more likely to be willing to do a deal than go through arbitration. Note that, under PRC law, certain contractual disputes with the State (e.g. PRC authorities) may be classified as disputes arising from administrative agreements (e.g. agreements on the assignment of mineral rights or natural resources) and therefore non-arbitrable.

Click on PRC Arbitration CIETAC for more on CIETAC and the drafting and use of this clause.

Note: Where, as in our precedent CIETAC clauses above, the seat of arbitration is in mainland China, unless parties have expressly chosen a foreign law to govern the arbitration clause (permissible with respect to a "foreign-related" arbitration agreement), we do not recommend that an arbitration clause is prefaced by any form of separate ADR clause or any reference to court proceedings in addition or as an alternative to the arbitration agreement. Under PRC arbitration law an arbitration agreement must clearly and unequivocally state the parties’ intention to refer all disputes to arbitration. The risk is that the PRC courts may potentially see a separate ADR clause or reference to court proceedings as rendering the arbitration clause unclear or equivocal for such purposes.