Laws of the People's Republic of China

The China International Economic and Trade Arbitration Committee

Arbitration Rules of the China International Economic and Trade Arbitration Committee

(Promulgated on March 17, 1994, Revised and adopted on September 4, 1995, And shall enter into force on October 1, 1995)

Chapter I General Provisions

Section I Jurisdiction

Article 1

The arbitration rules have been formulated in accordance with the Arbitration Law of the People's Republic of China and the relevant provisions of the laws of the People's Republic of China as well as the "Decisions" of the former Administrative Council of the Central People's Government and the "Circular" and "Official Reply" of the State Council.

Article 2

The China International Economic and Trade Arbitration Committee (formerly the Foreign Trade Arbitration Committee of the China Council for the Promotion of International Trade, which was later renamed as the Foreign Economic Relations and Trade Arbitration Committee of the China Council for the Promotion of International Trade and then the "China International Economic and Trade Arbitration Committee as it is currently called, (hereinafter referred to as "arbitration committee") shall, by means of arbitration, settle independently and fairly disputes concerning international or foreign economic relations and trade bounded or not bounded by contracts as arising between foreign legal persons and/or natural persons and Chinese legal persons and/or natural persons among foreign legal persons and/or natural persons in order to protect the legitimate rights and interests of the parties concerned and promote the development of domestic and foreign economic relations and trade.

If the scope to accept cases is specially stipulated or authorized by the laws and administrative rules of the People's Republic of China, the arbitration committee may accept cases according to the specially stipulated or authorized scope.

Article 3

The arbitration committee shall accept a case upon a written application by one party concerned for the arbitration of a dispute in pursuant to an arbitration agreement reached between the parties concerned before or after the dispute arises.

An arbitration agreement refers to the arbitration clause specified in a contract between parties concerned or an agreement on arbitration reached in other forms.

Article 4

The arbitration committee has the right to decide on the existence, validity and jurisdiction of the case put to arbitration.

Article 5

Arbitration clauses of a contract shall be deemed as independent of other clauses in the same contract; an arbitration agreement attached to a contract shall also be deemed as a separate part of the contract independent of other clauses. The validity of arbitration clauses of a contract or an arbitration agreement shall not be affected by the alteration, dissolution, termination, nullification or invalidity of the contract.

Article 6

A counterclaim against the arbitration agreement and/or the jurisdiction over the case put to arbitration shall not be put forward after the first substantive defense by the respondent; the plea against the jurisdiction over counterclaim shall not be put forward after the first substantive defense against the party raising the counterclaim.

Article 7

If the parties concerned agree to put their disputes to arbitration by an arbitration committee, it shall be regarded as having agreed to have the case arbitrated according to this set of arbitration rules.

Section II Organization

Article 8

The arbitration committee shall have an honorary chairman and a number of advisors.

Article 9

The arbitration committee shall be composed of a chairman, a number of vice-chairman, a secretary-general and a number of members. The chairman shall perform the duties endowed by this set of rules and the vice-chairman may perform the duties and responsibilities of the chairman if they are so entrusted by the chairman.

The arbitration committee shall have a secretarial bureau to handle the routine affairs of the committee.

Article 10

The arbitration committee shall maintain a panel of arbitrators, who shall be appointed by the China Council for the Promotion of International Trade (China International Chamber of Commerce) from among Chinese and foreigners who have the special knowledge and practical experience in law, economic relations and trade and science and technology.

Article 11

The arbitration committee shall be headquartered in Beijing but also with a sub-committee in the Shenzhen Special Economic Zone and another sub-committee in Shanghai. The arbitration committee and its sub-committees are an integral whole.

The sub-committees of the arbitration committee each shall have a secretarial section to handle the routine affairs of the branch.

This set of arbitration rules applies to the arbitration committee and its sub-committees. If a case is handled by a sub-committee, the duties and functions prescribed to be performed by the chairman of the arbitration committee and the secretarial bureau of the arbitration committee shall be performed by the chairman of the sub-committee of the arbitration committee and the secretarial section of the sub-committee.

Article 12

The parties concerned may reach an agreement to have their disputes arbitrated by the arbitration committee in Beijing or by the sub-committees of the arbitration committee in Shenzhen or Shanghai. In the absence of an agreement, the claimant shall decide where the case should be arbitrated, in Beijing, Shenzhen or Shanghai. The first choice of the site shall be the final. Should any dispute arise in regard to places of arbitration, the arbitration committee shall make the decision.

Chapter II Arbitration Proceedings

Section I Arbitration Application, Defense and Counterclaim

Article 13

The arbitration proceedings start from the date when the arbitration notice of the arbitration committee is received by the respondents. If a case involves two or more respondents, the proceedings shall start from the date when the last respondent has received the arbitration notice.

Article 14

In applying for arbitration, the claimant shall:

1.

submit an application which should specify:

(1)

the names and addresses (postcode, telephone number, telex number, facsimile number or cable code, if any) of the claimant and the respondent(s);

(2)

the arbitration agreement on which the claimant bases himself;

(3)

the situation of the case and points in dispute;

(4)

claims of the claimant and the facts and evidence on which the claims are based.

The application for arbitration shall be affixed with the signature and/or seal of the claimant and/or the attorney authorized by the coaimant.

2.

attach to the application the documents substantiating the facts on which the claims of the claimant are based;

3.

chose an arbitrator from the list of the panel of arbitrators provided by the arbitration committee or entrust the appointment to the chairman of the arbitration committee.

4.

pay an arbitration fee in advance to the arbitration committee according to the arbitration fee table formulated by the arbitration committee.

Article 15

After the arbitration application of the claimant and the documents attached are received, the secretarial bureau of the arbitration committee shall examine them and if it deems that the procedures are not complete, it may ask the claimant to complete the procedures, and if it deems that the procedures are complete, it shall issue immediately an arbitration notice to the respondent(s), along with a copy of the arbitration application of the claimant and the documents attached and the arbitration rules and the list of the panel of arbitrators and the arbitration fee table.

The arbitration committee, after the issuance of an arbitration notice to the claimant and the respondent(s), shall assign a member of the secretarial bureau to take care of the procedural administration of the arbitration case.

Article 16

The respondent(s) shall select an arbitration from the list of the panel of arbitrators provided for or entrust the appointment to the chairman of the arbitration committee within 20 days after the arbitration notice is received.

Article 17

The respondent(s) shall, within 45 days after the receipt of the arbitration notice, submit to the secretarial bureau of the arbitration committee the related defense and relevant documents of evidence.

Article 18

The respondent(s) shall file a counterclaim, if any, with the secretarial bureau of the arbitration committee within 60 days starting from the date of the receipt of the arbitration notice.

In the counterclaim which should be in written form, the respondent(s) shall specify the claims and the reasons of the counterclaim and the facts and evidence on which the claims is based, with the relevant documents of evidence attached.

In filing a counterclaim, the respondent(s) shall pay the prescribed amount of arbitration fee in advance according to the arbitration fee table.

Article 19

A claimant may revise his claims and a respondent may also revise his counterclaims.

However, the arbitration tribunal may refuse to accept such revisions if it deems the revisions in question are too late or have affected the normal progress of the arbitration proceedings.

Article 20

In submitting an application for arbitration, defense, counterclaim and relevant documentary evidence and other documents, the parties concerned shall prepare duplicate copies according to the number of the other parties concerned and the number of arbitrations that make up the tribunal.

Article 21

The failure to provide a written defense by a respondent or the failure to provide a written defense against the counterclaims of the respondent by a claimant does not affect the progress of the arbitration proceedings.

Article 22

The parties concerned may authorize attorneys to handle affairs about arbitration and the attorneys accepting the authorization shall produce the power of attorney.

Either Chinese or foreigners can accept such authorization to act as attorneys.

Article 23

If a party concerned applies for measures to secure property against risks, the arbitration committee shall submit the application of the party concerned to the intermediate people's court in the place where the respondent resides or the property of the respondent is located for a ruling.

If a party concerned applies for measures to secure evidence, the arbitration committee shall submit the application of the party concerned to the intermediate people's court in the place where evidence is located for a ruling. Section II Composition of Arbitration Tribunal

Article 24

After each of the two parties has chosen one arbitrator from among the list of the panel of arbitrators of the arbitration committee or has entrusted the appointment to the chairman of the arbitration committee, the chairman of the arbitration committee shall choose a third arbitrator from among the list of the panel of arbitrators of the arbitration committee as the presiding arbitrator to form an arbitration tribunal to hear the case.

Article 25

The two parties concerned may jointly appoint or entrust the chairman of the arbitration committee to appoint an arbitrator as the sole arbitrator to form a tribunal to hear the case alone.

If the two parties have agreed on the joint appointment of a sole arbitrator to hear their case alone, but failed to agree on the choice of such a sole arbitrator within 20 days starting from the date when the respondent receives the application for arbitration, the chairman of the arbitration committee shall make the decision.

Article 26

If a respondent fails to appoint or entrust the chairman of the arbitration committee to appoint an arbitrator according to the provisions of Article 16 of this set of rules, the chairman of the arbitration committee shall designate an arbitrator for the respondent.

Article 27

If there are two or more claimants and/or respondents in a case for arbitration, the claimants side and/or respondents side shall each appoint one arbitrator from the list of the panel of arbitrators of the arbitration committee through consultation. If the claimants side fails to make such appointment at the time when the claimants submit their application for arbitration and/or respondents side fails to appoint one arbitrator within 20 days from the date when the last respondent receives the application for arbitration, the chairman of the arbitration committee shall do so for them.

Article 28

If an arbitrator appointed has personal interests in a case, the arbitrator shall reveal it to the arbitration committee and ask for withdrawal.

Article 29

If a party concerned doubts with good reasons the fairness and independence of an arbitrator appointed, the party may file a written application with the arbitration committee, requesting the withdrawal of the arbitrator by stating the facts and reasons on which the doubt is based.

The request for withdrawal of the arbitrator shall be raised in written form 15 days before the first hearing. If the occurrence and knowledge of the reasons for requesting withdrawal happen after the first hearing, the request shall be raised during the time after the first hearing and before the last hearing.

Article 30

The Chairman of the arbitration committee shall decide on whether the arbitrator in question should withdraw or not.

Article 31

If an arbitrator is unable to perform his duty due to withdrawal or other reason, a substitute shall be made according to the arbitrator appointment procedures.

After a substitute is made, the arbitration tribunal shall decide whether or not the hearing held should be repeated completely or in part.

Section III Hearing

Article 32

The arbitration tribunal shall hold oral hearings. However, when the parties concerned request or agree and the arbitration tribunal also deems it unnecessary to hold oral hearings, oral hearings may be omitted and the arbitration tribunal may examine the case and pass an award on the basis of documents only.

Article 33

The date of oral hearing shall be decided upon by the arbitration tribunal after consultation with the secretarial bureau of the arbitration committee and the secretarial bureau shall notify the two parties concerned 30 days before the date of hearing. With justified reasons, a party concerned may request for postponement of the hearing and the request shall be raised with the secretarial bureau 12 days before the date of hearing. The decision on the postponement of the hearing shall be made by the arbitration tribunal.

Article 34

The notice for the date of the hearings following the first one shall not be restricted by the 30 days limit.

Article 35

Cases accepted by the arbitration committee shall be heard in Beijing and they may also be heard in places other than Beijing with the approval of the chairman of the arbitration committee. Cases accepted by sub-committees of the arbitration committee shall be heard in the location of the sub-committees and they may also be heard elsewhere with the approval of the chairmen of the sub-committees.

Article 36

The arbitration tribunal shall not hear cases in open sessions. If the parties concerned request the case heard in open sessions, the decision shall be made by the arbitration tribunal.

Article 37

For cases heard not in open sessions, the parties concerned or their agents, witnesses, arbitrators, consulting experts of the tribunal, appraisers designated, the members of the arbitration committee and its secretarial bureau shall not reveal to outsiders the substance of the case and the goings-on of the proceedings.

Article 38

The parties concerned shall provide evidence for the facts on which their claims or defense are based. The arbitration tribunal may, if it deems it necessary, make investigations and collect evidence on its own initiative.

In carrying out investigations or collecting evidence, the arbitration tribunal should request the presence of the parties concerned if it deems it necessary. The absence of a party or two parties concerned shall not affect the action of the arbitration tribunal to carry out the investigations or collect evidence.

Article 39

The arbitration tribunal shall consult experts or appoint appraisers on some special problems involved in a case. Such experts or appraisers may be Chinese or foreign organizations or foreign citizens.

The arbitration tribunal has the right to request the parties concerned and the latters are obliged to provide or produce to experts/appraisers any related materials, documents or property and goods for inspection, examination and/or appraisal.

Article 40

Copies of the expert report and the appraisal report should be sent to the two parties concerned for their respective comments. If any party requests the experts/appraisers to be present at the hearing, the latters may be present upon the approval of the arbitration tribunal for their explanations of the reports when circumstances arise.

Article 41

The arbitration tribunal shall examine the evidence provided by the parties concerned to decide upon whether or not to adopt the expert reports and appraisal reports.

Article 42

If a party concerned refuses to be present at the hearing, the arbitration tribunal shall proceed with the hearing and make an award by default.

Article 43

During hearings, the secretarial bureau of the arbitration committee shall take minutes and/or make tape-recordings. The arbitration tribunal may, if it deems it necessary, order the parties and/or their attorneys, witnesses and/or other persons involved to sign on the minutes about the main points of the hearing.

The minutes and tape-recordings taken by the secretarial bureau shall be used for reference by the arbitration tribunal only.

Article 44

If the two parties concerned have reached a settlement by themselves outside the arbitration tribunal, they may ask the arbitration tribunal to make an award and dismiss the case according to the agreement they have reached or may ask for cancellation of the case. If the application for dismissal of the case is filed before the arbitration tribunal is formed, the chairman of the arbitration committee shall make the decision; if the application for dismissal of the case is filed after the arbitration tribunal is formed, the arbitration tribunal shall make the decision.

If the party or parties concerned refer again the case dismissed to the arbitration committee for arbitration, the chairman of the arbitration committee shall make the decision on whether or not to accept the case.

Article 45

If a party concerned knows or should have known that this set of arbitration rules or any clauses, or details of the arbitration agreement are not observed, but still participates the arbitration proceedings or continue the arbitration proceedings without taking exceptions in writing timely and explicitly the non-observance, it shall be regarded as having given up the right of taking exceptions.

Article 46

If the two parties concerned have the desire for mediation or one party concerned has the desire for mediation and with the consent of the other party, the arbitration tribunal may conduct mediation in the process of the arbitration proceedings.

Article 47

The arbitration tribunal may conduct mediation by the way it deems fit.

Article 48

If any party requests, in the process of mediation, the termination of mediation or the arbitration tribunal deems that there is no possibility of a success in the mediation, the mediation shall be terminated and arbitration shall continue.

Article 49

If the two parties concerned have reached reconciliation outside the arbitration tribunal in the process of mediation, the reconciliation shall be regarded as having reached under the mediation of the arbitration tribunal.

Article 50

Having reached reconciliation under the mediation of the arbitration tribunal, the parties concerned shall sign a written reconciliation agreement. The arbitration tribunal shall pass the award and dismiss the case in accordance with the contents of the reconciliation agreement reached by the two parties, except otherwise agreed upon by the parties concerned.

Article 51

Should mediation fail, any party shall not, in the subsequent arbitration proceedings, judicial proceedings or other proceedings, quote as the basis for charges, defense and/or counterclaims, any opinions, views or suggestions or facts that have been mentioned by the other party or that have been said, proposed, admitted, ready to accept or negated by the arbitration tribunal in the process of mediation.

Section IV Ruling

Article 52

The arbitration tribunal shall render an arbitration award within nine months after the tribunal is formed. Upon the request of the tribunal, the period may be postponed if the arbitration committee deems it indeed necessary and there are really justifiable reasons.

Article 53

The arbitration tribunal shall make the ruling independently and fairly according to facts, the provisions of laws and contracts, in reference to international practices and in observance of the principle of fairness and reasonableness.

Article 54

The arbitration tribunal shall state the reasons on which the ruling is based unless the ruling has been made according to the contents of the reconciliation agreement reached by the parties concerned. The arbitration award shall be signed by all or majority of the arbitrators in the arbitration tribunal and shall contain the date and place in which the award is given. The date when the arbitration award is given shall be the date when the arbitration ruling becomes valid.

Article 55

When a case is heard by an arbitration tribunal of three

arbitrators, the ruling shall be made by the majority of the arbitrators. The opinions of the minority may be recorded and attached to the award. The arbitrator with differences of opinion may sign or may not sign the arbitration award.

Article 56

Should an arbitration tribunal fail to make a ruling by the majority, the ruling shall be made according to the opinion of the first arbitrator.

Article 57

The arbitration tribunal may, if it deems it necessary or the parties concerned so request and it agrees, make an interlocutory or partial ruling on any issue of the case and at any time in the process of arbitration. The failure of any party to perform the interlocutory ruling shall not affect the continuation of the arbitration proceedings nor prevent the arbitration tribunal from making the final ruling.

Article 58

The arbitration tribunal has the right to decide, in the arbitration award, on the arbitration fees and other expenses the two parties should pay to the arbitration committee.

Article 59

The arbitration tribunal has the right to decide, in the arbitration award, on part of the justifiable expenses to be compensated by the losing party to the winning party for the expenses paid for handling the case. But the amount of compensation shall not exceed 10 percent of the amount involved in the case won by the winning party.

Article 60

The arbitration award is final, binding to both parties. No party shall bring a suit before a law court or make a request to any other organization for altering the arbitration award.

Article 61

Any party concerned may request in writing the arbitration tribunal to correct any errors in writing, topography or computation or other error found in the arbitration award within 30 days after the arbitration award is received. If there are indeed errors, the arbitration tribunal shall make written corrections within 30 days after the request is received. The arbitration tribunal may also make written corrections of any errors it has found within 30 days after the arbitration award is issued and such corrections shall become part of the arbitration award.

Article 62

If any matter is found to have been left out in the ruling, any party may request in writing the tribunal to make supplementary rulings on the matter left out within 30 days after the arbitration award is received.

If any matter has been proved to have been left out in the ruling, the arbitration tribunal shall make supplementary rulings within 30 days after the request in question is received. The arbitration tribunal may also make supplementary rulings on its own initiative when it has found any matter left out within 30 days after the arbitration award is issued and the supplementary ruling shall be part of the original arbitration award.

Article 63

The parties concerned shall automatically abide by the arbitration award within the time limit specified in the award. If no time limits is specified in the award, the parties shall perform the award immediately.

If one party fails to perform the award, the other party may, pursuant to the Chinese law, apply for the enforcement of the award with a Chinese court or according to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitration Awards or other international treaties that China has concluded or acceded to, apply for enforcement of the award with a foreign court that has the jurisdiction.

Chapter III Simplified Proceedings

Article 64

Unless otherwise agreed upon by the parties concerned, any case in dispute involving less than RMB 500,000 or a case in dispute involving more than RMB500,000 in which one party files a written application and has the consent of the other party, is applicable to these simplified proceedings.

Article 65

When a party concerned has filed an application for arbitration with the arbitration committee and the case is deemed acceptable after examination, unless the parties concerned have already chosen a sole arbitrator from the panel of arbitrators of the arbitration committee, the chairman of the arbitration committee shall immediately appoint a sole arbitrator from the panel of arbitrators to form an arbitration tribunal to handle the case. The secretarial bureau of the arbitration committee shall immediately issue a notice to parties concerned.

Article 66

The other party concerned shall submit, within 30 days of the receipt of the arbitration notice, his defense and relevant documents of evidence to the secretarial bureau of the arbitration committee. The counterclaims, if any, shall also be submitted together with relevant documents of evidence within this period.

Article 67

The arbitration tribunal shall handle the case by the way it deems fit. It may determine whether to handle the case according to the written materials and evidence or hold oral hearings.

Article 68

The parties concerned shall submit to the arbitration tribunal, written materials and evidence needed in arbitration according to the requirements and time limit set by the arbitration tribunal.

Article 69

In holding oral hearings, after the date of hearing is fixed, the secretarial bureau of the arbitration committee shall notify the parties concerned 10 days ahead of the date of hearing.

Article 70

If the arbitration tribunal has decided to hold oral hearings, it shall hold one hearing only and shall not hold a second, unless there is the necessity.

Article 71

In the process of conducting the simplified proceedings, the failure of any party to observe the simplified proceedings shall not affect the goings-on of the proceedings or prevent the arbitration tribunal from making the final ruling.

Article 72

The alteration of the arbitration claims or the raising of counterclaims shall not affect the proceedings, except for cases when the alteration and the raising of the counterclaims come into conflict with the provisions of Article 64 of this set of arbitration rules.

Article 73

For oral hearings, the arbitration tribunal shall pass the arbitration award within 30 days starting from the date of the opening of the hearing. For cases handled according to written materials, the arbitration tribunal shall pass the award within 90 days starting from the date of the formation of the tribunal. If necessary, the arbitration committee may postpone such time limits.

Article 74

The provisions of this chapter are applicable to the relevant provisions of the other chapters of this set of rules.

Chapter IV Supplementary Provisions

Article 75

The Chinese language shall be the official language of the arbitration committee. If the parties concerned have agreement concerning the language to be used in arbitration, the agreement shall be followed.

At hearings, if parties concerned or their attorneys or witnesses need interpreters, the secretarial bureau shall provide interpreting services for them or the parties concerned may bring their own interpreters.

The secretarial bureau of the arbitration committee shall, if it deems it necessary, ask the parties concerned to translate the documents and evidence they have provided for into Chinese or other languages.

Article 76

Unless there are agreements between the parties concerned or the arbitration has made decisions, all the arbitration documents, notices and materials may be delivered to the parties concerned and/or their attorneys by messengers or by registered mails or by air express mail service, fax, telex, telegraph or any other means the secretarial bureau of the arbitration committee deems fit.

Article 77

Any written communication from the arbitration committee to the parties concerned is deemed to have been received if it is delivered to the receiver personally or to the addresses of business operations or habitual residence or mailing addresses; or if none of these can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it.

Article 78

The arbitration committee may collect from the parties concerned, in addition to the arbitration fees according to the arbitration fee table, reasonable fees as actually spent, including arbitrators' remuneration and their travel and boarding expenses in dealing with the case and the fees and expenses for experts, appraisers and interpreters appointed by the arbitration tribunal.

The arbitration committee may also collect certain amount of fees according to the amount of work done or actual expenses incurred if a case is dismissed after the parties have reached a settlement agreement by themselves.

Article 79

If the arbitration agreement or arbitration clause in a contract specifies that the arbitration shall be conducted by the arbitration committee or its sub-committee or by the former Foreign Trade Arbitration Committee of the China Council for the Promotion of International Trade or the Foreign Economic and Trade Arbitration Committee, the case shall be deemed that the two parties concerned have agreed to have the cases arbitrated by the arbitration committee or its sub-committees.

Article 80

This set of arbitration rules shall enter into force as of June 1, 1994. For cases accepted by the arbitration committee or its sub-committees before the implementation of this set of arbitration rules, the arbitration rules that entered into force on January 1, 1989 shall apply or this set of arbitration rules can be applied if the parties concerned so agree.

Article 81

The power of interpretation of this set of arbitration rules rests with the arbitration committee.