Beijing Arbitration Commission

Cultivating International Commercial Arbitration Talents in the Region
Presentation at the APRAG Conference 2011
Wang Hongsong
July 9, 2011

Good afternoon, Ladies and Gentlemen!

I am delighted to participate in the APRAG Conference on behalf of BAC. The speeches delivered by my distinguished guests（/collegues） were wonderful and enlightening. I sincerely hope that my thoughts and outlooks regarding the selection and training of Asia-Pacific Arbitration professionals will be equally informative.

The current world economy has undergone great changes. The forecasts recently released by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) indicated that the economic growth rate of the Asia-Pacific region, including Russia, will reach 7.3% in 2011. The economic growth rates of China and India in 2011 are expected to be 9.5% and 8.7% respectively. It is no question，therefore, that the economies in the Asia-Pacific Region are developing dynamically and that their international status are becoming increasingly important.
This transition provides new opportunities and momentum to the development of international arbitration in Asia. With governmental support and interest in arbitration, and with the arbitration institutions becoming increasingly active, a significant growth of Asian arbitration institutions is foreseeable in the near future.

However, although the region's economic development provides opportunities for arbitration, the corresponding challenges should not be ignored. In a global perspective, the skills of commercial arbitration professionals in the Asia-Pacific are still inadequate.

Even when parties to the disputes are local, arbitrators from the region are less likely to be appointed or selected in disputes where large amounts are at stake or in disputes characterized by a high degree of complexity.

Take China and India, two Asian-Pacific regional powers, as examples; First, the ICC International Court of Arbitration Statistical Reports show that, for the 152 Chinese parties from 2003 to 2007, only 26 Chinese arbitrators were selected or designated, 3 as the sole arbitrator, and 23 as the co-arbitrators. Second, for the 192 Indian parties in the same period, 47 Indian arbitrators were selected or designated, 7 as the sole arbitrator, 1 as the presiding arbitrator and 39 as co-arbitrators. Moreover, as the ICC International Court of Arbitration is a highly international arbitration institution, the disparity may be even more alarming in other well-known, but less internationalized, arbitration institutions.

My point is illustrated by these two diagrams.The first one illustrates the statistics of parties and arbitrators from China and India from 2003 to 2007. The second diagram shows the general picture of present situation. Please note that the item Arbitration was subdivided the categories of Presiding Arbitrator, Sole-Arbitrator, and co-arbitrator.

It is clear that the development of arbitration is currently unable to keep up with the growth of domestic economy. Moreover, it causes international commercial arbitration cases to be centralized in the hands of a minority of arbitrators, which affects the quality of judgments, delays the arbitration proceedings as well as raising the arbitral costs. Thus, parties in Asia-Pacific region remain reluctant to adopt arbitration as measure of dispute resolution. Here, the selection and training of arbitration professionals in the Asia-Pacific region can be beneficial in three ways：

First, it can reduces the arbitration costs and expand the influence of arbitration.

Compared with the internationally renowned Western arbitrators, the local arbitrators’ remunerations are relatively low. At the same time, however, they are more familiar with the local law, culture, institutional environment and psychology of parties. Thus, their determination of facts and application of law is likely to be more accurate and convincing to parties, which enhances the attractiveness of arbitration to local parties.

Second, it can promote arbitration in the Asia Pacific region.

The individuals who are capable and qualified to undertake commercial arbitration often have significant local influence, prestige and extensive connections. Besides, they themselves tend to be users of arbitration. Hence, selecting and training these talents to engage in commercial arbitration will continuously expand and promote commercial arbitration in the Asia-Pacific region.

In fact, the domestic and international arbitrations are mutually reinforcing.

Similar to the fact that a country's economic development will have a positive impact on international economic development, the domestic development of Asia-Pacific commercial arbitration will also promote the development of international commercial arbitration.
Third, and finally, the selection and training of arbitration professionals in the Asia-Pacific region, can be beneficial to the development of international commercial arbitration mechanism.

Due to the difference in legal, cultural, institutional and economic conditions among countries, the practice of international commercial arbitration will necessarily be diversified. The selection and training of the Asia-Pacific arbitration talents will meet such demand.
(Moreover) arbitration institutions in the Asia Pacific region can play an important role in the selection and training of arbitration talents. The practice at BAC is illustrative of this and I would like to share this with you:

First, raising the recruitment criteria for the arbitrators.

The Arbitration Law of the PRC clearly stipulates the criteria for selecting arbitrators. (The diagram shows the relevant legal provisions regulating the Arbitrators).

BAC imposes more stringent requirements based the abovementioned criteria.

For example, a lawyer arbitrator must be senior, well-educated, and have abundant experience and a good reputation. Foreign arbitrators shall have abundant experience in arbitration practice and be able to devote adequate time and attention to the case handling, in addition to meeting the aforementioned standards.

After the engagement of arbitrators, the BAC will evaluate and assess the individual arbitrator according to his or her performance in handling the disputes in order to decide whether or not to renew the arbitrator’s appointment.

BAC now has 369 arbitrators in the panel, all of whom are renowned international or domestic experts and scholars, highly proficient in law and experienced professional in the relevant trade and commerce area.

Moreover, there are 71 foreign arbitrators from 15 different countries and regions in our panel. With the development of the arbitration system and the growth of international commercial arbitration caseloads, BAC will gradually strengthen the selection and training of foreign arbitrators. (Diagrams on Arbitrator academic qualifications, occupational distribution, geographical distribution, proportion of arbitrators whose appointments were not renewed. BAC cases over the years, including foreign-related cases. Arbitrators’ case-handling statistics from 2002 to 2010. )

Second, implementing continuous professional training for arbitrators.

Pre-engagement training

BAC has been holding annual training for the arbitrators since 2002. From 2004, BAC has cooperated with the Tsinghua University School of Law to organize annual or semi-annual professional trainings and assessments for arbitrators on professional ethics, arbitration rules, arbitration procedure, the production of arbitral awards etc.

BAC requires that only by attending and passing the training and assessment, can the arbitrator undertake cases.

Post-engagement training.

In order to constantly improve the professional standards of arbitrators, BAC has been holding monthly arbitrator salons and professional workshops since 2005. These events are free and open to the public.

Until now, BAC has held 88 arbitrator salons and various professional workshops with over 5657 attendance. These activities enhance arbitrators’ professionalism and enthusiasm for learning, and promote BAC’s influence. These pictures show Arbitrators’ Salon, Chartered Arbitrator Membership training, Joint Construction Management Talks co-held with the Chartered Institute of Building (CIOB) and Tsinghua University.

ADR professional training

BAC adopted independent mediation rules. It has several advantages as you may see on the slide.

To promote the correct implementation of the mediation rules, BAC conducted 3 mediation trainings with the Straus Institute for Dispute Resolution of the Pepperdine University School of Law.

Since the mediation rules became effective on April 1 2008, BAC has accepted 6 cases, 5 of which have successfully reached a settlement agreement. 2 of them were international commercial mediations, which were both successfully resolved by co-mediation with each party selecting a mediator from their own countries.

In January 2009, BAC formulated the Construction Dispute Board Rules. In concert with its implementation, we organized a course for the construction dispute board personnel, inviting domestic and international Dispute Board experts to give lectures. 104 people attended this training.

The above-mentioned is BAC’s experience on the selection and training of arbitration professionals. We hope further that Asia-Pacific arbitration institutions will strengthen their cooperation and communication. We also propose that the institutions introduce and recommend (gifted) arbitration professionals reciprocally, exchange relevant experiences, interlink websites, and finally help the arbitrators and professionals understand more about the development of arbitration throughout this region.

Finally, thank you for your patience. I really appreciate being able to share my thoughts with all of you and hope we can strengthen our relationships and thus develop even further and better together! Thank you again and please enjoy your lunch.

Cultivating International Commercial Arbitration Talents in the Region