In May 2013, the Suzhou Intermediate People’s Court refused to enforce an arbitral award rendered by the China International Economic and Trade Arbitration Commission Shanghai Sub-commission (“CIETAC Shanghai”), which changed its name in April 2013 to the Shanghai International Arbitration Centre (“SHIAC” or 上海国际仲裁中心), and also became known as the Shanghai International Economic and Trade Arbitration Commission (“SIETAC” or 上海国际经济贸易仲裁委员会). The official logo of the new organisation uses “SHIAC” for short.
In essence, the decision was based on the following findings:
- The parties chose CIETAC as the arbitration commission to resolve their disputes.
- Before the declaration of independence, CIETAC Shanghai was an integral part of CIETAC and thus had jurisdiction.
- However, after the declaration, and with the registration as an independent arbitration commission in December 2011, CIETAC Shanghai was no longer the arbitration commission chosen by the parties, and thus has no jurisdiction.
- The true will of the parties has not been given effect given that there was a failure to explain to the parties that an independent arbitration commission has been formed, in which case the parties may decide whether to continue the arbitration or select another arbitration commission.
- Accordingly, the Suzhou Intermediate People’s Court decided that the Award was rendered without the relevant jurisdiction and refused to enforce the Award.
However, the decision is contradictory to a decision made by the Shenzhen Intermediate People’s Court in December 2012.
The decision will impact on arbitration in China. For example, it will be interesting to see whether SHIAC will, as suggested by the Suzhou Court, explain to the parties that an independent arbitration commission has been formed, and allow the parties to decide whether to continue the arbitration or select another arbitration commission.
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