Professor Stefano Porcelli1
Introduction
A new version of the People’s Republic of China Arbitration Law was promulgated on September 12, 2025, and will enter into force on March 1, 2026. Changes have been made throughout all eight chapters of the Law, with the total number of articles rising to 96. The reform marks the final step of a long journey during which preliminary versions have been made available for public comments. Initially, a 2021 Draft seemed to propose a bold reform, while a subsequent 2024 Draft indicated a more conservative approach. The final version of the text appears to settle somewhere in between. However, a gradual approach to reforms won’t come as a surprise to those who are familiar with China and its legal environment.
The purpose of this article is to offer an overview of the key changes that will have a relevant impact on the arbitration practice in China such as the formal recognition of online arbitration, the reduction of the time limit to apply to set aside an award, the newly introduced possibility of undertaking ad hoc arbitrations, as well as the opportunity of applying directly to the relevant People’s Court for conservative and interim measures, the recognition and enforcement of foreign awards, etc.
(Not merely) Terminological amendments
Along with relatively minor changes, such as those representing settlements of the legal terminology, some more substantial changes have been introduced. For example, the term zhongcai weiyuanhui (仲裁委员会) “arbitration commission”, the wording of which carries more administrative and bureaucratic connotations, has been substituted with zhongcai jigou (仲裁机构) “arbitral institution”, which, as clarified by art. 90 of the newly revised Arbitration Law, has a broader scope, including “arbitral courts” (zhongcaiyuan, 仲裁院) and other institutions. In addition, such an amendment has a certain relevance to other matters such as those related to the seat of arbitration, the arbitration awards rendered by foreign institutions or ad hoc arbitrations, etc., further aligning China’s foreign-related arbitration legislation with the international practice.
Arbitration agreement
An important novelty brought about by the reform regards the existence of an arbitration agreement. Art. 27, par. 2 of the newly revised Arbitration Law prescribes that if one of the parties claims that there is an arbitration agreement when applying for arbitration and the other party does not deny it before the first hearing, the arbitral tribunal shall recall it, record it in the minutes, and it shall be deemed that an arbitration agreement exists between the parties.
According to art. 31, a decision on the validity of the agreement can now be submitted to the “arbitral institution” or to the “arbitral tribunal” and, nonetheless, to a People’s Court. As with the previous regime, in case one of the parties filed a request to a People’s Court, its decision will prevail over eventual decisions rendered by the arbitral institution or tribunal.
Transparency, credibility and the public interest
In accordance with the recently introduced provisions of the Civil Code (art. 87 and following), arbitral institutions are designated as non-profit legal persons of public interest (art.13 of the amended Law). Strict requirements have been expressly provided for the establishment of an arbitral institution as well as its registration (and further modifications), its structures, its executives and other employees, information disclosure (arts. 14-20), the professional qualities and moral standing of the arbitrators (art. 21). Art. 45 concerns the duty of arbitrators to disclose in written form information that may give raise to reasonable doubts about their independence or impartiality. The good faith principle is recalled as a general principle (see the new art. 8) and therefore it should be considered as an overarching principle. Further, in the name of public interest, the arbitral tribunal shall reject arbitration claims if it finds out that a party may use the arbitration to infringe the national interest, the social public interest, or legitimate rights and interests of third parties (art. 61) etc. These provisions, as well as those regarding the supervision and planning of the development of the arbitration industry (art. 26) etc., should not come as a surprise to those who are familiar with the Chinese culture and legal environment.
Legal effects of online arbitration
Article 11 clarifies the status of online arbitration, stipulating that unless the parties explicitly disagree, arbitration proceedings can be conducted online with the same legal effects as offline. By making online arbitrations the default proceedings, with an opt-out mechanism that allows the parties to opt out if they expressly disagree, the Chinese legislator adopts a pragmatic approach to modern dispute resolution that may also have a significant impact in terms of cost reduction, in particular when it comes to cross-border arbitration.
Documents service, protection of business secrets and personal privacy, conservative and interim measures, setting aside
The new art. 41 clarifies that all relevant documents shall be served in a reasonable manner agreed upon by the parties, otherwise (or if the agreement is not clear), parties should abide by the prescription of the arbitration rules.
Art. 52 (the new version of art. 40), stipulates that the arbitration is not open to the public unless otherwise agreed by the parties. As in the past, it should not be open to the public in case matters involving state secrets are touched upon. Furthermore, based on the new provisions, publicity is forbidden whether third parties business secrets or personal privacy related matters are involved.
Relevant novelties, introduced by par. 2 of art. 39 and par. 2 of art. 58, give the parties the possibility, in urgent circumstances, to apply directly to the relevant People’s Court for conservative and interim measures (see also art. 104 of the PRC Civil Procedure Law, prescribing to file the arbitration request within 30 days from the adoption of the conservative measure by the People’s Court and art. 84).
Article 72 of the Amended Arbitration Law significantly shortens the time limit for the parties to apply to set aside an arbitral award, cutting it down from six to three months from the date of receipt of the arbitration award.
‘Seat’ of arbitration
Important clarifications concerning the ‘seat’ of arbitration (仲裁地, zhongcaidi) are provided in the new art. 81. While in the past it was used to refer to the place where the arbitral institution administering the arbitration was located, by also taking into account a new trend in the Chinese judicial practice, art. 81 of the amended Law prescribes that parties can agree on the seat of arbitration in writing and, unless they have otherwise agreed on the law applicable to the arbitration procedure, the seat of arbitration shall serve as the basis to determine the applicable law and the jurisdiction of the court. Furthermore, art. 81 states that the arbitral award is deemed to have been made at the seat of arbitration. Needless to say, such a solution has a significant impact on matters related to the recognition and enforcement of awards rendered in cross-border cases.
Ad hoc arbitration
In compliance with the spirit of the provisions of art. 12, even if to a lesser extent than what was proposed in art. 91 of the 2021 Draft, which allowed ad hoc arbitration for all commercial disputes with foreign elements, art. 82 of the new Law opens the possibility of ad hoc arbitration only for maritime law disputes with foreign elements as well as for disputes with foreign elements between enterprises registered in free pilot trade zone approved by the State Council, the Hainan Free Trade Port or other areas designated by the State. The arbitrators must meet the requirements that are in general provided by the law for arbitrators and the arbitral tribunal, within 3 working days from its formation, shall file the names of the parties, the seat of arbitration, information about the composition of the tribunal and the arbitration rules to the China Arbitration Association. If a party applies for a conservative or interim measure, the arbitral tribunal should forward the request to the relevant People’s Court.
Foreign arbitral institutions and Chinese arbitral institutions abroad
Art. 86 emphasizes that support is given to Chinese arbitral institutions to open offices and engage in activities outside of China as well as that, in accordance with the relevant regulations, foreign institutions may receive permission to open offices in a free pilot trade zone approved by the State Council, the Hainan Free Trade Port or other areas designated by the State in order to put in place foreign-related arbitration activities. Art. 87 encourages parties to choose China, including its Special Administrative Regions (Hong Kong and Macau), as a seat of arbitration.
Recognition and enforcement of foreign awards
Art. 88, dealing with the enforcement and recognition of foreign awards, provides that parties may apply directly to the Intermediate People’s Court at the place where the assets are located or at the place of residence of the person subject to enforcement (also if outside of PRC territory, unless parties may prefer to do otherwise), providing furthermore that the People’s Court should handle the case on the basis of the international treaties to which China is party or based on reciprocity.
International investment arbitration
Finally, it is worth mentioning that art. 94 prescribes that arbitral institutions and arbitral tribunals, in accordance with the arbitration rules agreed upon by the disputing parties, can handle international investment disputes based on the provisions of the relevant investment treaties or agreements on the submission of investment related disputes to arbitration.
Conclusions
To sum up, it can be noted that, once again the Chinese legislator opted for a measured approach in handling the Country’s legal system reform. On the one hand, if the new version of the China Arbitration Law further aligns with international practice, on the other hand, it retains some unique features, mirroring choices made in the light of China’s specific socio-economic conditions as well as its multi-millennial legal culture.
- Associate Professor, School of Law, University of Brescia. Adjunct Professor, “Global Governance”, University of Rome “Tor Vergata”. Adjunct Professor, College of Comparative Law, China University of Political Science and Law. ↩︎