SHIAC Developments

Promoting collaboration in arbitration on a regional basis in the context of the development of international arbitration

Global economic integration has also seen moves towards regional economic cooperation. This has posed challenges for commercial arbitration, requiring parties from different countries to proceed towards integrating arbitration concepts and practice. It appears that the UNCITRAL Model Law and the UNCITRAL Arbitration Rules were excellent guides. However, different countries’ legal systems, with their associated unique mindsets, significantly affect the development of arbitration in each jurisdiction. Thus, it is necessary for both arbitration institutions and practitioners to communicate and cooperate closely, in order to improve upon the mechanism of arbitration, and to promote a greater sense of affinity and common identity between parties from different countries. In this way, arbitration, as a mode of dispute resolution, will be able to become more widely accepted and adopted within regional business communities.

Since the establishment of the Shanghai International Economic and Trade Arbitration Commission (SHIAC) in 1988, the SHIAC has focused on administering cases and developing international arbitration business. During this period, it has developed a deep understanding of the importance of close communication and cooperation between different arbitration service providers in different countries. The State Council of China released Framework Plan for the China (Shanghai )Pilot Free Trade Zone on 27 September 2013, which emphasised the improvement of the regulatory system and the creation of a sound business environment based on internationalism, legalisation and marketisation. Against this background, the SHIAC established the China (Shanghai) Pilot Free Trade Zone Court of Arbitration, in October of 2013, and then issued the most up-to-date arbitration rules specifically for the Free Trade Zone on 1 May 2014, which introduced in China, for the first time, temporary measures, the emergency tribunal, amiable arbitration and the association of ad hoc arbitration under the UNCITRAL Arbitration Rules with the institution arbitration, improving the third-party joinder and consolidation of arbitration as well as the creation of pre-arbitration mediation rules and a small claims dispute resolution procedure. These efforts laid a solid foundation for the SHIAC to engage in and to promote collaboration in international arbitration.

In 2014, the SHIAC started to intensify its cooperation with domestic and foreign organisations. The SHIAC signed a strategic cooperation agreement with the International Air Transport Association and China Air Transport Association and created the first aviation arbitration court in the world, the Shanghai International Aviation Court of Arbitration, which signified a new development mode for institutional cooperation and drew the attention of enterprises and law firms engaged in aviation-related business.

In 2015, in order to realise the idea of regional arbitration collaboration and business development, the SHIAC started to plan feasible steps for regional arbitration collaborations. Proposed and introduced by the China Law Society, the SHIAC not only launched the commercial arbitration cooperation mechanism between BRICS countries and created communication platforms for dispute resolution bodies from BRICS countries, including Brazil, Russia, India and South Africa, but also initiated the discussion about regional commercial arbitration collaboration between countries in Africa to achieve the goal.

The Model Arbitration Clause reads as follows:

Any dispute arising from or in connection with this Contract shall be submitted to Shanghai International Economic and Trade Arbitration Commission/Shanghai International Arbitration Center for arbitration.

Establishing the BRICS Dispute Resolution Center Shanghai and taking the lead in regional cooperation in arbitration

With the aim of deepening collaboration in the area of arbitration among BRICS, the SHIAC initiated a proposal for the establishment of the BRICS Dispute Resolution Center Shanghai, and an Experts’ Committee.

With the initiation and support of the China Law Society, as well as the host organisation of the 2015 BRICS Legal Forum, East China University of Political Science and Law, the BRICS Dispute Resolution Center Shanghai, and its Experts’ Committee, were established on 14 October 2015, during the 2015 BRICS Legal Forum. It is one of the first permanent settlement bodies under the mechanism of regional cooperation and the first institution dedicated to commercial dispute settlement among BRICS.

The Experts’ Committee consists of 24 experts from BRICS. The main responsibilities of the Experts’ Committee are to support and guarantee the smooth operation of the BRICS Dispute Resolution Center Shanghai, to provide advisory opinions for the optimisation of arbitration procedure, and to facilitate the development of arbitration business and the legal system of each BRICS. Recently, several companies and financial institutions from BRICS discussed the feasibility of arbitrating in the BRICS Dispute Resolution Center, and the operation of the new platform.

Jointly building a China–Africa joint arbitration mechanism and taking the lead in multilateral institutional cooperation for the development of arbitration business

In respect of China and Africa commercial dispute resolution, the SHIAC made a proposal to work closely with South African institutions. With the help of the China Law Society and under full consultation with the Arbitration Foundation of South Africa, the Association of Arbitrators of Africa and Africa ADR, the SHIAC proposed to establish a groundbreaking dispute resolution mode under the China-Africa joint arbitration mechanism. Meanwhile, the Guiding Committee for the China-Africa Joint Arbitration Centre (the Guiding Committee) was also created as the supreme unified decision-making authority.

After three rounds of negotiation within the Guiding Committee, the China-Africa Joint Arbitration Centre Shanghai, and the China-Africa Joint Arbitration Centre Johannesburg, were officially launched on 26 November 2015 in Johannesburg, South Africa. This was announced in conjunction with innovative collaboration modes together with separate arbitration rules, the sharing of arbitrator resources, and a common model arbitration clause. This cooperation mode leaves space for African arbitration institutions and Chinese arbitration bodies of different cities to join this mechanism as well as for new members to create their own arbitration centres.

Early in 2016, some arbitration institutions from African countries have already expressed strong interest in joining the China-Africa joint arbitration mechanism. Meanwhile, the SHIAC communicated more closely with many foreign arbitration institutions by entering bilateral cooperation agreements. Recently, by jointly organising seminars, hosting forums and sharing best practices with peers overseas, the SHIAC has already built an excellent foundation for regional arbitration cooperation.

The progress made thus far demonstrates the advantages of regionally based arbitration cooperation and resource sharing. The SHIAC fully expects these advantages to become even more pronounced over time. The future of regional arbitration is bright and the SHIAC fully intends to remain in the forefront of this movement in the Asia-Pacific region.