Laws of the People's Republic of China

The Interpretation of the Supreme People's Court concerning Several Matters on Application of the Arbitration Law of the People's Republic of China, has been adopted at the 1375th meeting of the Judicial Committee of the Supreme People's Court on December 26, 2005. It is hereby promulgated and shall enter into force on September 8, 2006. The Supreme People's Court

August 23, 2006

Interpretation of the Supreme People's Court concerning Several Matters on Application of the Arbitration Law of the People's Republic of China

Fa Shi [2006] No. 7

(Adopted at the 1375th meeting of the Judicial Committee of the Supreme People's Court on December 26, 2005)

Under the Arbitration Law of the People's Republic of China, the Civil Litigation Law of the People's Republic of China and other legal provisions, the following interpretation concerning several matters on application of law for the people's courts to try arbitration-related cases are hereby given to you:

Article 1

Arbitration agreements in other written forms as stipulated in Article 16 of the Arbitration Law shall comprise of the agreements on requesting for arbitration by means of contracts, letters or data message (including telegraph, telefax, fax, electronic data interchange and e-mail), etc.

Article 2

In case the interested parties resumptively agree that the matters to be arbitrated are contractual disputes, the disputes arising from formation, validity, modification, transfer, performance, liabilities for breach, interpretation, rescission, and etc. of the contract may all be affirmed as matters to be arbitrated.

Article 3

In case the name of an arbitration institution as stipulated in the arbitration agreement is not accurate, but can still determine the specific arbitration institution, it shall be deemed that the arbitration institution has been chosen.

Article 4

In case an arbitration agreement only stipulates the arbitration rules that applies to the dispute, it shall be ascertained that the arbitration institution is not agreed, except that the interested parties reach a supplementary agreement or can conclude the arbitration institution in light of the arbitration rules stipulated between them.

Article 5

In case an arbitration agreement stipulates more than two arbitration institutions, the interested parties may apply for arbitration choosing either arbitration institution upon agreement; the arbitration agreement shall be invalid if the interested parties cannot agree upon the choice of the arbitration institution.

Article 6

An arbitration institution shall be regarded as the stipulated arbitration institution when an arbitration agreement stipulates that the disputes shall be arbitrated by the arbitration institution at a certain locality and there is only one arbitration institution in this locality. The interested parties may agree to choose one arbitration institution for arbitration upon agreement if there are two or more arbitration institutions; if the interested parties fail to agree upon the choice of the arbitration institution, the arbitration agreement shall be invalid.

Article 7

In case the interested parties agree that they may apply for arbitration to an arbitration institution or initiate an action with people's court due to any dispute, the arbitration agreement shall be invalid. Except that one party applies to the arbitration institution for arbitration, the other party fails to raise any objection within the term as stipulated in Paragraph 2 of Article 20 of the Arbitration Law.

Article 8

In case an interested party is merged or divided after concluding an arbitration agreement, the arbitration agreement shall be binding upon the successor of its rights and obligations.

In case an interested party is dead after concluding an arbitration agreement, the arbitration agreement shall be binding upon the inheritor that assumes his rights and obligations in the matter to be arbitrated.

The circumstances as stipulated in the preceding two paragraphs shall be applicable unless the interested parties have otherwise agreed between each other when concluding the arbitration agreement.

Article 9

In case the credits or debts are completely or partly assigned, the arbitration agreement shall be binding upon the assignee, unless the interested parties have otherwise agreed, or the assignee objects specifically to the assignment of the credits or debts or is unaware that there is a separate arbitration agreement.

Article 10

In case a contract has been invalid or cancelled after being formed, Paragraph 1 of Article 19 of the Arbitration Law shall apply to determine the validity of the arbitration agreement.

In case the interested parties reach an arbitration agreement concerning a dispute when signing the contract, the validity of the arbitration agreement may not be affected if the contract is not formed.

Article 11

In case a contract stipulates that the disputes shall be settled subject to an effective arbitration article in another contract or document, the interested parties shall resort to arbitration in accordance with the said arbitration article when a contractual dispute arises.

In case an arbitration provision is included in a related international treaty that apply to the contracts involving foreign interests, the interested parties shall resort to arbitration under the arbitration provision in the international treaty when a contractual dispute arises.

Article 12

As regards a case in which an interested party applies to the people's court for determination of the validity of an arbitration agreement, it shall be under the jurisdiction of the intermediate people's court in the place where the arbitration institution agreed upon in the arbitration agreement is located; if the arbitration institution in the arbitration agreement is not clearly stipulated, the said case shall be under the jurisdiction of the intermediate people's court in the place where the arbitration agreement is concluded or where the object of the application resides.

As regards a case on applying for determination of the validity of an arbitration agreement involving foreign interests, it shall be under the jurisdiction of the intermediate people's court in the place where the arbitration institution agreed upon in the arbitration agreement is located, where the arbitration agreement is concluded, or where the applicant or object of the applicant resides.

As regards a case on the validity of an arbitration agreement of a maritime dispute, it shall be under the jurisdiction of the maritime court where the arbitration institution agreed upon in the arbitration agreement is located, where the arbitration agreement is concluded, or where the applicant or object of the applicant resides; if there is no maritime court at the aforesaid places, it shall be under the jurisdiction of the nearest maritime court.

Article 13

In case an interested party fails to object to the validity of the arbitration agreement before the first hearing in the arbitral tribunal, and then applies to the people's court for determining the arbitration agreement as invalid, the application may not be accepted by the people's court as stipulated in Paragraph 2 of Article 20 of the Arbitration Law.

In case an interested party applies to the people's court for determining the arbitration agreement as valid or applies for revoking the arbitration institution's decision after an arbitration institution has made a decision on the validity of an arbitration agreement, the application may not be accepted by the people's court.

Article 14

The first hearing as referred to in Article 26 of the Arbitration Law means the first trial in court that is organized by the people's court after expiration for defense, excluding all procedural activities before the trial.

Article 15

A people's court shall form a collegial panel to make examination when trying a case for determination of the validity of an arbitration agreement, and shall inquire of the interested parties.

Article 16

The laws agreed upon between the interested parties shall apply to the examination of the validity of an arbitration agreement involving foreign interests; where the interested parties did not agree upon the applicable laws but have agreed upon the place of arbitration, the laws at the place of arbitration shall be applicable; where they neither agreed upon the applicable laws nor agreed upon the place of arbitration or the place of arbitration is not obviously agreed upon, the laws at the locality of the court shall apply.

Article 17

In case an interested party applies for revocation of an arbitral award not subject to the provisions of Article 58 of the Arbitration Law or Article 260 of the Civil Litigation Law, the people's court may not support the application.

Article 18

No arbitration agreement as stipulated in Subparagraph (1) of Paragraph 1 of Article 58 of the Arbitration Law means that the interested parties did not reach an arbitration agreement. If the arbitration agreement is affirmed as invalid or is revoked, it shall be regarded that there is no arbitration agreement.

Article 19

In case an interested party applies for revocation of an arbitral award for reason of the matter under arbitration going beyond the scope of the arbitration agreement, if it is proven true upon examination, the people's court shall revoke the excessive part in the arbitral award. But, if the excessive part is indivisible from other matter under arbitration, the arbitral award shall be revoked by the people's court.

Article 20

Violation of legal procedures as stipulated in Article 58 of the Arbitration Law means the violation of the arbitration procedures as stipulated in the Arbitration Law or a circumstance under which the arbitration rules chosen by the interested parties may influence the correct award for the case.

Article 21

In case a case concerning which an interested party applies for revoking the domestic arbitral award is under any of the following circumstances, the people's court may inform the arbitral tribunal to re-arbitrate the case within a certain term in accordance with Article 61 of the Arbitration Law:

(1)

The evidence on which the arbitral award is based is fake; or

(2)

The other party concealed any evidence that is sufficient to impact the impartial award.

The people's court shall explain the specific reason for requiring re-arbitration in the circular.

Article 22

In case an arbitral tribunal fails to start the re-arbitration within a certain term specified by the people's court, the people's court shall make a ruling of finalizing terminate the revocation procedures; if the re-arbitration is not begun, the people's court shall make a ruling to resume the revocation procedures.

Article 23

In case an interested party disagrees with a re-rendered -arbitral arbitration award, it may apply to the people's court for revocation of the re-arbitral arbitration award within six months as of re-service of the re-arbitral arbitration award under Article 58 of the Arbitration Law.

Article 24

As regards a case concerning which an interested party applies for revocation of the arbitral award, a collegial panel shall be formed by the people's court, and the interested parties shall be inquired.

Article 25

In case a people's court accepts the application submitted by an interested party for revocation of the arbitral award, and then if the other party applies for enforcement of the same arbitral award, the people's court accepting the said enforcement application shall make a ruling to suspend the enforcement after the acceptance.

Article 26

In case the application submitted by an interested party to the people's court for revocation of the arbitral award is rejected, and then if the said party proposes its demur to no enforcement in the enforcement procedures on the same ground, the people's court may not support the said demur.

Article 27

In case an interested party did not object to the validity of an arbitration agreement in the arbitration procedures, and requests revocation of the arbitral award or proposes demur to no enforcement on the ground of invalidity of the arbitration agreement after the arbitral award is made, the request or demur therefrom shall be supported by the people's court.

In case an interested party objects to the validity of an arbitration agreement in the arbitration procedures, but requests revocation of the arbitral award or proposes demur to no enforcement on that ground after the arbitral award is made, the people's court shall support the request or demur therefrom if it is proven upon examination to comply with Article 58 of the Arbitration Law or Article 217 or 260 of the Civil Litigation Law.

Article 28

In case an interested party requests no enforcement of a letter of arbitral reconciliation or an arbitral award made according to the reconciliation agreement between the parties, the people's court may not support the said request.

Article 29

A case concerning which an interested party applies for enforcement of the arbitral award shall be under the jurisdiction of the intermediate people's court in the place where the party under enforcement resides or where the properties are to be enforced.

Article 30

The people's court may ask the arbitration institution to make an explanation or may consult arbitration files from the related arbitration institution according to circumstances of the trial of a case on revocation or enforcement of an arbitral award.

The ruling made by a people's court in the process of handling a case involving arbitration may be served to the related arbitration institution.

Article 31

This Interpretation shall enter into force as of the promulgation date.

In case any previous judicial interpretation promulgated by this court does not comply with this Interpretation, this Interpretation shall prevail.