Publish time: Fri Aug 12 15:40:32 CST 2016
“For me, it was a calling to engage in arbitration work. From my perspective, arbitration is not merely a job post or a rice bowl. It is a career, a life-long support.” Dr. Chen Fuyong, the Deputy Secretary-General of Beijing Arbitration Commission/ Beijing International Arbitration Center (“BAC”), expressed the view that his passion for arbitration has enabled him to reach the current level step-by-step. Dr. Chen Fuyong has an in-depth understanding of arbitration as well as a unique viewpoint. The sense of “international mindedness” was shown repeatedly during the interview.
In 2005, Dr. Chen Fuyong joined BAC with the intention to study arbitration. He delved deep into the field of arbitration and his research results have been written into the book – “The Unfinished Transformation: An Empirical Study of the Current Status and Future Trends of China's Arbitration Institutions”. Another unique characteristic of Dr. Chen Fuyong is that he is able to see arbitration from the perspective of an outsider. This is not easy for many researchers.
Institutional change to be led by concept
When Dr. Chen Fuyong was studying in the United States in 2007, he visited the library regularly to read about the development of arbitration in the United States.
Owing to the long history, these books are placed in an inconspicuous corner where there is little attention. However, Dr. Chen Fuyong was very attracted to these books. “We have introduced the arbitration rules of the West into China, yet little is known about the development process of arbitration and how it all started from scratch. Tracing the development history of American arbitration institutions in the past century enabled me to learn about the practical experience of the U.S. in advancing, step-by-step, the role of arbitration in the society. This has imperceptibly created a frame of reference for me and gave me a clearer understanding of arbitration in China.” Perhaps it is during this time when Dr. Chen Fuyong acquired and consolidated the knowledge required for practice.
“With the development of the arbitration industry in China in the past two decades, there is now a basic market and an overall understanding of arbitration. Following this, constrains of the institutional mechanism will become increasingly prominent. In the field of arbitration, whether the market can have a decisive role in the allocation of resources depends on the flexibility of the regimes. When Dr. Chen Fuyong participated in international activities, he felt strongly that Chinese arbitration institutions are ‘dancing with hand cuffs and fetters’. “When compared with other internationally renowned arbitration institutions, sometimes I feel that it is not that we are incapable, but the regimes have offered different degrees of flexibility.”
BAC has grown out of nothing and from an unknown to a leading institution in China with a certain degree of influence internationally. In Dr. Chen Fuyong’s opinion, this is not merely a formation process of a brand, but also a process of advancing reforms for the internal and external systems. Without the support of a regime, it is not possible for arbitration institutions to develop continuously and to have a real competitive edge.
It is of utmost importance that institutional changes are led by concept. One will find that arbitrations institutions that flourish are usually led by leaders who have very strong entrepreneurial spirit. This so-called entrepreneurial spirit refers to the ability to promote greater utilization and more efficient allocation of resources by making better integration of current resources under the guidance of correct ideas. The entrepreneurial spirit is reflected by the result of a more effective composition, thereafter it is conventional management.
“Whether an institution can promote system reforms tends to reflect the extent of its social responsibility. Arbitration is embedded in the Chinese society, thus it is inevitable that it will be subject to various constrains. There are some things that many people have doubts about before they are carried out. However, those in charge must be able to look at the issues with a clear mind as well as persuade others to follow along,” Dr. Chen Fuyong reflects.
Perfecting professionalism
In recent years, the question of how to improve the credibility of arbitration has become a hot topic. The answer from Dr. Chen Fuyong is that it depends on where this credibility comes from. If the arbitrators have adequate professional competence and professional integrity and at the same the independence of the arbitral tribunal is respected, then credibility can be built up naturally. The field of arbitration relies heavily on reputation and reputation is built case by case.
“Being an arbitrator is different to doing other things. Arbitrators need to issue decisions and they must get to the core of the matter. For the arbitrators, it might just be another case. However, for the parties, it could be the only case in all their life.” Dr. Chen Fuyong spoke with a seriousness, this perhaps explains the reason for the stringent criteria for the admission to BAC’s Panel of Arbitrators.
In practice, some people complain that arbitration is getting more litigation-like. So, what has caused such deviation? Dr. Chen Fuyong explained that besides some institutional factors, much of this is because there are people who engage in the work of arbitration without adequate understanding of the specific attributes of arbitration. They lack sufficient knowledge in the field of arbitration, subsequently, they are unable to respond to problems in the field of arbitration with an arbitration approach. Instead, they refer to the litigation approach.
In fact, arbitration, mediation and litigation all have their respective advantages and characteristics. It is only by realizing its full potential that arbitration can possess incomparable superiority relative to other methods of dispute resolution. In this sense, professionalism forms the foundation of arbitration.
Since the parties are free to choose any arbitration institution, competition between arbitration institutions is inevitable. However, Dr. Chen Fuyong is not concerned about BAC’s case volume and he said with confidence: “It is fortunate that BAC has always had a good number of cases and disputed amount. In recently years, half of our cases have at least one party which is from places other than Beijing and there are a large portion of our cases where both sides are from outside of Beijing.” His confidence is largely based on the professionalism which the institution has accumulated. ” In the past twenty years, BAC has handled over twenty thousand cases and we have dealt with most issues that may appear during arbitrations. Even if there are new issues, we are experienced enough to cope with it confidently.”
The professional standard of case managers often affects the parties’ perception towards arbitration services. BAC demands professionalism from its case managers. In addition to that, Dr. Chen Fuyong focuses on whether they have a passion for arbitration deep down. “In other words, there must be a burning passion. If they are willing to do the work at hand to the best of their abilities even when leaders and colleagues are not watching, this is a win-win situation for both the institution and the individual.” Of course, BAC will also strive to provide adequate room for the development of each case manager. “The cultivation of talents is not simply measured by time, but also opportunities.”
Internationalization of arbitration is imperative
When Dr. Chen Fuyong was asked about his strongest emotion having worked in the field of arbitration for many years, he reflected for a few seconds then said: “First is to respect objective law. Actions in line with the objective law of the industrial development has vitality. Conversely, arrangements that do not conform to the objective law will not survive after all. Internationalization of arbitration in China is an effort to conform to objective law. Nowadays all fields are concerned about internationalization, and they are actively engaging in global activities. BAC following their path reflects the general trend.”
The 3rd International Arbitration Conference was held in Sydney on 24 November 2015. BAC was the only arbitration institution in China which was invited to attend and Dr. Chen Fuyong, the Deputy Secretary-General of BAC attended the event with his team.
Nevertheless, this inevitable trend does not mean that the process is easy. Dr. Chen Fuyong explained that internationalization of arbitration is in fact very difficult and has always been controversial. Some people are very realistic to think that there are not many international cases and it is not easy to attract international cases, therefore it is enough to fight for domestic ones. Why must we internationalize?
In response, Dr. Chen Fuyong asserts that we must first understand what is internationalization. The essence of internationalization is that the standards of service and professionalism must reach an international level. Even if there are not many international arbitration cases, the Chinese parties are entitled to world-class dispute resolution services. Of course it is unfortunate to be in dispute, however, it is hoped that parties can feel that the process of dispute resolution is a civilized one. In fact, in the internationalization of BAC, a lot of effort is not seen by others. It is certainly not simply a matter of participating in a few international conferences.
The second reason given by Dr. Chen Fuyong for internationalization is the strategy of brand building. For arbitration institutions, as long as it establishes a high-end brand image, it is easy to expand its business to the middle-low end market. If China is unable to establish an international brand in the field of arbitration, it will always be in a passive state in the competitions of global dispute resolution practice. “In recent years, we have continuously held summits in places such as London and Paris. People have asked us why we do not hold the summits in Arica or the countries along the Belt and Road Initiative. The rationale is simple. If you cannot prove yourself in places where arbitration is well-developed and you go directly to countries where arbitration is not as well-developed, it is difficult to gain recognition from others.”
The third reason for internationalization is the internationalization of cases. Dr. Chen Fuyong thinks that even from this point of view, BAC’s performance is quite good. So far, BAC has handled over 600 international cases (some of which used English as the language of arbitration) and parties were from over 30 countries and regions. In addition, none of these arbitral awards have been revoked or non-enforced.
As to how to build an international arbitration institution, Dr. Chen Fuyong thinks that it is a system project. There needs to be an international outlook and an ability to configure and integrate resources globally. For example, one can consider appointing well-known international arbitration experts as committee members or increase the ratio of foreign arbitrators. “I look forward to hiring a foreigner one day to help us enter the international market, just as some internationally renowned arbitration institutions hire Chinese nowadays to help them enter the Chinese market.”
“While some may see arbitration as slightly marginal, such marginal status provides greater room for exploration and trial and error. For example, from the perspective of management, arbitration institutions can strive to become a classic example of reform of Institutional Unit; from a operational perspective, arbitration institutions can be the first to deliver decisions independently, efficiently and professionally under the current social conditions; from the angle of internationalization, the internationalization of arbitration institutions can simultaneously provide support for the internationalization of enterprises. Consequently, arbitration is catching up with modern times and it can fully enjoy being a front-runner. All of our little efforts and endeavors could be an epoch-making development.” Dr. Chen Fuyong has shown professionalism in the field and thoughtfulness in industrial understanding. Perhaps he is destined to go further.