Laws of the People's Republic of China

(Effective Date 1983.08.22)

CONTENTS

CHAPTER I GENERAL PRINCIPLES

CHAPTER II JURISDICTION

CHAPTER III ORGANISATION

CHAPTER IV PROCEDURES

CHAPTER V APPENDIX

CHAPTER I GENERAL PRINCIPLES

   Article 1. Pursuant to the "Economic Contract Law of the People's Republic of China", the present regulations are hereby formulated to correctly handle disputes over economic contracts, protect the legitimate rights and interests of disputing parties and maintain social and economic order.

   Article 2. The State General Administration for Industry and Commerce and the economic contract arbitration boards established by local administrations for industry and commerce are organs of arbitration for economic contracts.

   Article 3. Arbitration organs shall handle cases of disputes over economic contracts within their terms of reference and practise the system of arbitration award being final and conclusive.

   Article 4. In handling cases of disputes over economic contracts, organs of arbitration upholds the principle of carrying out investigations to find out facts and abide by the laws, administrative regulations and policies of the state. Disputing parties are equals in the application of the law and they are ensure of exercising equal rights.

   Article 5. In places where minority nationality people live in compact community,languages, oral or written, of local minority people shall be used in mediating, arbitrating and writing mediation documents and arbitration awards. Disputing parties who do not understand local languages commonly in use by local minority nationalities shall be provided with interpreters.

   Article 6. Disputing parties should apply for arbitration with the organs of arbitration within one year starting from the date when they get to know or ought to have known that their rights have been encroached upon. But no time limit is imposed on cases where the party which has encroached upon the rights of others is willing to assume liabilities.

   Article 7. Disputing parties or their legal representatives may entrust one or two persons to take action on their behalf. In entrusting others to take action, they must present to the arbitration board a power of attorney which should specify matters to be entrusted and their terms of reference.

   Article 8. The regulations apply to disputes over economic contracts between legal persons as well as to disputes over economic contracts signed by legal persons with self-employed or rural peasants.

CHAPTER II JURISDICTION

   Article 9. Cases of disputes over economic contracts shall be handled by arbitration organizations in places where the contracts are implemented or signed. If there is difficulty in execution, it may be referred to arbitration organizations in places of the accused.

Disputes over construction engineering contracts shall be handled by arbitration organizations in places where the project is built.

Disputes over economic contracts arising from the course of transportation by rail,road, water or through transport, shall be handled by arbitration organizations in places where the transportation control organization responsible for handling the cases are located.

Disputes over economic contracts arising from air transport shall be handled by arbitration organizations in places where the contracts are signed, or where the goods are dispatched or the place of destination or where the accidents occur.

   Article 10. Disputes over economic contracts shall be handled by arbitration organizations of counties (cities) and city districts, with the exception of the following cases:

(1) Cases that have a big influence or involve a sum of over 500, 000 to 5 million Yuan shall be handled by arbitration organizations of cities under the direct administration of provinces, or prefectures and autonomous prefectures;

(2) Major economic disputes of great impact or involving a sum of 5 million to 10 million yuan shall be handled by provincial, municipal or autonomous regional arbitration organizations;

(3) Disputes over economic contracts that will have great impact nationwide or disputes between provinces,municipalities and autonomous regions or between central departments on the one hand and provinces, municipalities or autonomous regions on the other or between central departments and involve a sum of above 10 million yuan shall be handled by the arbitration board of the State Administration for Industry and Commerce.

   Article 11. Arbitration organizations at a higher level have the right to handle cases within the jurisdiction of arbitration organizations at a lower level and they may also hand over cases within their own jurisdiction down to arbitration organizations at a lower level.

Arbitration organizations at a lower level may submit cases within their jurisdiction to arbitration organizations at a higher level if they deem it necessary.

   Article 12. Cases within the jurisdiction of two arbitration organizations may be accepted by the arbitration organization which first received the letter of appeal.

Arbitration organizations shall not accept cases where one of the disputing parties has applied for arbitration while the other has brought the cases before the law court.

   Article 13. Disputes arising from jurisdiction shall be settled through Consultation between disputing parties. Should consultation fails, the cases should be submitted to arbitration organizations at a higher level to decide on jurisdiction.

CHAPTER III ORGANIZATION

   Article 14. Economic contract arbitration boards of the state administration for industry and commerce at all levels are composed of one chairman, one to two vice-chairmen and a number of members. The chairman, vice-chairmen and members of the arbitration boards should be assumed by people with rich experience and professional knowledge.

Economic contract arbitration boards designate a number of arbitrators to handle cases of disputes over economic contracts.

   Article 15. Arbitration organizations at all levels may appoint according to needs part-time arbitrators from among prominent figures, professional technicians or judicial workers as part-time arbitrators, who shall enjoy equal rights with professional arbitrators in fulfilling their duties.

Part-time arbitrators should have the support of their own units in performing their duties.

   Article 16. In handling cases of disputes over economic contracts, arbitration organizations shall form arbitration tribunals each composed of two arbitrators and one umpire appointed by the arbitration board concerned.

In discussing cases, the arbitration tribunal should follow the principle of the minority subordinating to the majority. Records should be kept for the discussions and signed by members of the tribunal. Differences of opinions should be faithfully recorded.

Difficult cases may be submitted for discussion and decision by the arbitration boards. The decisions by the arbitration boards shall be executed by the tribunals.

Simple cases may be handled by one arbitrator appointed.

   Article 17. If any member of the arbitration tribunal is deemed unsuitable for handling a case, he should apply for "withdrawal", If any of the disputing parties discovers any member of the tribunal is associated with the case, it has the right to apply, orally or in writing, for his or her withdrawal.

   Article 18. The withdrawal of the umpire shall be determined by the arbitration board. The withdrawal of arbitrators shall be decided by the Chairman or vice-chairmen of the arbitration board.

An arbitration organization may inform the disputing parties orally or in written form of its decision on withdrawal.

CHAPTER IV PROCEDURES

   Article 19. Application should be filed with the arbitration organization for arbitration according to the provisions of the regulations and duplicated copies of the application should be provided according to the number of people accused.

The application must specify the follow items:

(1) Name and address of the accuser, name and function of the legal representative.

(2) Name and address of the accused, name and function of the legal representative.

(3) Reasons and claims of the application.

(4) Evidence and the name and address of witnesses.

   Article 20. The arbitration organization should put the case on file for investigation and prosecution within seven days after the application for arbitration is received if it proves in conformity with the provisions of the present regulations after examination. If the application does not accord with the provisions, the accuser should be notified within seven days of the unacceptability of the case, with reasons stated.

After a case is accepted, the duplicates of the application should be delivered to the accused within five days from the date of acceptance. The accused should, within 15 days of the receipt of the duplicates of the application presents a letter of reply and related evidence.

The handling of a case is not affected whether the accused has presented the letter of reply or not within the prescribed period of time.

   Article 21. An arbitrator must make a careful study of the application, reply and carry out investigations to collect evidence.

In order to obtain evidence, an arbitration organization may request the permission to examine files related to the case, data and original vouchers or documents related to the case. The units concerned should present the materials as they are and assist it in the investigations and, if necessary, produce certificates.

Arbitration organizations must keep secret evidences involving state secrets.

   Article 22. When conducting the spot survey or technical examinations, the disputing parties and personnels involved should be informed present; if necessary, the arbitration organization can ask for help from the personnels of the departments concerned.

The records on the spot survey and technical examinations should specify the time, place and the result of the survey or examination and have the signatures or seals of the personnel involved in the survey or examination.

If a unit is entrusted to carry out the technical examination by an arbitration organization, it should conduct the testing according to the item and standards as entrusted.

   Article 23. If an arbitration organization is required to carry out the investigations, items and requirements should be specified. The arbitration organization entrusted should conduct the investigations carefully and may carry out additional investigations within the required limits and gives a timely reply. If the investigations cannot be carried out within 3 days after the letter of trust is received, the trustee must notify the trustee of it while continuing the investigations and striving for an earliest possible reply.

   Article 24. While the handling of a case is in process, the arbitration organization may rule to take measures to prevent more serious property losses according to the applications of the disputing parties. Measures to save from damage is confined to the property within the scope covered by arbitration as applied or associated with the case.

In deciding measures to save damage,the arbitration organization may demand the applicant of providing a guarantor. If the applicant refuses to provide the guarantor, the application shall be turned down.

If the applicant loses the case, he should compensate for the losses in property inflicted by taking the measures to save from damage.

Measures to save from damage may include termination of the execution of the contract, sealing up and detain the goods, selling of the goods difficult to preserve and keeping the proceeds, ordering the object of application to provide a guarantor or other methods allowed by law.

   Article 25. An arbitration organization should first exercise mediation in handling a case, either by an arbitrator or by an arbitration tribunal.

   Article 26. An arbitration organization should mediate on the basis of finding out facts and affixing responsibilities so as to promote mutual understanding and reach agreement.

The agreement should be reached on a voluntary basis and should not be forced upon the disputing parties.

The contents of the agreements shall not violate the law, administrative regulations or other rules and regulations and policies or at the expense of the public interests or the interests of others.

   Article 27. When an agreement is reached through mediation, a letter of mediation should be written, which should specify the names and addresses of the disputing parties and the names and addresses of the representatives or agents, main facts about the disputes, responsibilities, contents of agreement and the bearer of expenses. The letter of mediation should have the signatures of the disputing parties, the arbitrators and the secretaries and the seal of the arbitration organization.

   Article 28. When the mediation letter is delivered, the disputing parties should automatically observe it.

   Article 29. If no agreement is reached through mediation or one disputing party or both parties have backed up their commitments, the arbitration tribunal should conduct arbitration.

   Article 30. Before an arbitration tribunal hears a case, the disputing parties should be informed in written form of the time, place of the hearing of the tribunal. If any of the disputing parties refuses to show up at the tribunal without justifiable reasons after it is informed twice, arbitration may be conducted by default.

   Article 31. In hearing a case, the umpire should announce the list of arbitrators and secretaries and ask whether the disputing parties request withdrawal.

The tribunal should carefully listen to the statements and replies of the disputing parties and the presenting of evidences, then inquire about for the last time the opinions of the accuser, the accused in that order before another round of mediation is carried out. If the mediation still fails, arbitration awards shall be passed after discussion by the tribunal.

   Article 32. Arbitration awards should specify:

(1) The names, addresses of the representatives or agents of the accuser and the accused.

(2) Reasons for application, facts about the disputes and claims.

(3) Facts established by the ruling, reasons and the law provisions applied.

(4) Result of the ruling and the bearer of the arbitration fees.

(5) Time limit for appeal if the ruling is not accepted.

The arbitration awards must be signed by the arbitrations and sealed by the arbitration organizations.

   Article 33. If one of the disputing parties or both refuse to accept the arbitration award, he or they may bring the case before the people's court within 15 days from the date of receiving the arbitration award. If no action is taken within the prescribed time limit, the arbitration award becomes legally binding.

   Article 34. If the chairman or vice-chairmen of the economic contract arbitration board find there is indeed errors in the ruling which has already become legally binding, he or they may submit it for discussion and decision by the economic contract arbitration board if a re-arbitration is necessary.

If an arbitration organization at a higher level discovers errors in an arbitration award that has already become legally binding, it has the right to revoke the award and demand re-arbitration.

A new arbitration tribunal should be formed in re-arbitration.

   Article 35. Parties to an economic contract should automatically implement the mediation instruments or arbitration awards that have already become legally binding according to regulations. If one party refuses to implement within the prescribed time limit, the other party may apply for enforcing the implementation with the people's court within its jurisdiction.

CHAPTER V APPENDIX

   Article 36. Disputing parties shall be charged arbitration fees, which include acceptance fees and handling fees.

Case handling fees (including fees for testing, survey and investigation, examination, travel expenses and the subsidy for witnesses for absence in work) should be paid in the actual amount spent.

Case acceptance fees are paid in advance by the applicant.

After the case is completed, the arbitration fees should be borne by the losing party. If the disputing parties partially lose or win, the expenses should be borne according to a certain percentage each.

The standard of arbitration fees shall be fixed by the State Administration for Industry and Commerce.

   Article 37. If the mediation works, the arbitration fees should be borne by both parties through consultation.

   Article 38. The present regulations becomes effective from the date of promulgation. Other regulations on economic contract arbitration promulgated by the people's governments at all levels and State Council departments shall be superseded.