Publish time: Tue Sep 13 14:33:55 CST 2016
“Arbitration is inherently an international business”, said Dr. Chen Fuyong, Deputy Secretary General of the Beijing Arbitration Commission / Beijing International Arbitration Center (the “BAC/BIAC”). In spite of the differences in the legal systems and legal structures of China and Australia, the two states share a good many arbitration practices that are well accepted worldwide.
This seminar, hosted by the BAC/BIAC jointly with the Australian Centre for International Commercial Arbitration (the “ACICA”) and the Arbitrators’ and Mediators’ Institute of New Zealand(the “AMINZ”), convened on August 30 2016 in the BAC/BIAC’s international conference hall. The 2018 International Council for International Arbitration (ICCA) Congress will be held between April 15 and 18 2018 in Sydney, Australia, and the BAC/BIAC is the exclusive diamond sponsor thereof.
The BAC/BIAC has been actively integrated into the international arbitration community, and “so far has been basically keeping in line with the international practice in its frameworks of arbitration rules and arbitration services”, said Mr. Lin Zhiwei, Secretary General of the BAC/BIAC. The BAC/BIAC Arbitration Rules has adopted the up-to-date international practice such as joinder of additional parties, interim measures and the emergency arbitrator procedure.
Mr. Lin Zhiwei
Dr. Chen Fuyong
Mr. Alex Baykitch, President of the ACICA that is the hosting institute of the 2018 ICCA Congress, disclosed that the ACICA and the AMINZ have jointly bided for the congress, and the opening ceremony of the event will be hosted on April 15 2018 in the well-known Sydney Opera House. Meanwhile, he reminded the audience that the event will be followed up by special topic seminars between April 19 and 20 in Queenstown, New Zealand.
Mr. Alex Baykitch
The ICCA is a core nongovernmental organization within the international arbitration community. The ICCA Congress, having been held biennially since 1961, is the top level conference on international arbitration and its practice, and has become the most important and core exchange platform worldwide for the international arbitration community, which is honored as the “Grand Olympic Party” of arbitration. The research findings and discussions on trends of international arbitration practice of each ICCA Congress are often reflected in negotiations and revisions of a number of international rules and treaties.
China-Australia Legal Service Exchange Promoted by Bilateral Economic and Trade Development
“It is revealed in a statistics by one of Australia’s most important think tank that Australia now taking China as its best friend in Asia, whereas in the past it was Japan”, said Ms. Elizabeth Peak, Minister-Counsellor (Economic), Australian Department of Foreign Affairs and Trade.
“The China-Australia bilateral relationship has achieved substantial development during the past two decades, and the bilateral trade value has increased from AUD 7 billion in 1994 to RMB 784.6 billion today. It’s 20 times in 20 years, which means the China-Australia trade has been doubled every year during the past 20 years”, introduced by Mr. Dan Tebbutt, Senior Trade Commissioner, Austrade.
On June 17 2015, China and Australia officially executed the Free Trade Agreement between China and Australia (the “FTA”), which came into effect with tariff reduction on December 20 of the year. Thereafter, some 85% of Australian exported goods have been imported in China with zero tariff or the most favored tariffs, and this figure is expected to be 93% by January 2019.
Statistics revealed that Australia has increased 20% in its exports to China last year, including exports of education, health care, nursing and the like. Ms. Elizabeth Peak thought that the conclusion of the FTA as well as the growth of China-Australia trade will result in an increasing requirement of both states for arbitration, a dispute resolution method that is widely enforceable and procedurally flexible. And this will substantively promote the exchange and cooperation between the two countries’ legal industries. “The FTA is China’s first bilateral agreement that covers legal service trade, which ensures that law firms can help provide services to commercial entities of both countries”, said Ms. Peak. Mr. Khory McCormick, Vice President and Executive Member of the ACICA, started his speech from the aspect of the FTP’s selection of arbitration as the dispute resolution method, and interpreted the significance of arbitration to the China-Australia bilateral trade, as well as the important opportunities it brings to legal service industries of both countries. “The conclusion of the China-Australia Free Trade Treaty lies not only in the efforts of government, but also the promotion of many non-governmental entities, including our endeavor on dispute resolution methods selection”, said Mr. McCormick.
Ms. Elizabeth Peak
Mr. Khory McCormick
“Australian courts inclined to uphold the validity of arbitral awards”
During the seminar, Ms. Caroline Kenny QC, International Arbitrator and Director of the ACICA, introduced that Australia has adopted the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”) in its legislation on international arbitration, and is also a member state of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). The Model Law and the New York Convention are two cornerstones of international arbitration. In 1974, Australia promulgated its International Arbitration Act, applicable in the recognition and enforcement of international arbitral awards in Australia.
Arbitration between TCL Air conditioner (Zhongshan) Co Ltd and Castel Electronics Pty Ltd has received wide attentions. On December 23 2010, the arbitral tribunal upheld the claims of Castel in its award.
Ms. Caroline Kenny QC introduced that in the subsequent enforcement proceedings, TCL raised its objection. The Federal Court of Australia rejected TCL’s request for a substantive review of the award for the reason of breaching the principle of natural justice, and stressed that the arbitral procedure, if realized “scrupulously fair”, shall not constitute a ground for annulment or non-enforcement of arbitral awards. The Federal Court is of the opinion that “if the rules of natural justice required probative evidence for the finding of facts and logical reasoning to factual conclusions, there was a grave danger that the international arbitral system would be undermined by judicial review.”.
Meanwhile, the Federal Court’s understanding of public policy in the TCL case is also worthy of attention. In that case, the Federal Court thought that “when dealing with questions of public policy it is essentialto have regard to the reasoned decisions of other countries where their laws are based on international conventions or instruments,such as the Model Law and the New York Convention.”. This reveals Australian courts’ prudence in dealing with public policy.
Ms. Caroline Kenny QC was of the view that “Australian courts’ interpretation of the New York Convention and the Model Law is inclined to uphold the validity of arbitral awards, ‘the New York Convention shall be strictly applied and we shall enforce this arbitral award in time’”.
Ms. Caroline Kenny QC
China: a free and easy environment for arbitration development
Needless to say, the attitude and position of the judiciary to arbitration is of high significance.
“The internal reporting system of Chinese courts for foreign related arbitration and foreign arbitration has won consistent praise from both Chinese and foreign legal communities, which is a vivid case in point to show the Chinese court system’s support to arbitration”, said Mr. Lu Song, Associate Professor of the China Foreign Affairs University.
Specifically, the Supreme People’s Court (the “SPC”) has taken a reporting system level by level. If a court is inclined to refuse to recognize or refuse to enforce an international arbitral award, it has to report to its local high court, and ultimately to the SPC, and the court shall not make such decision unless its report is affirmed by the SPC.
“It means the SPC has the final say over all issues relating to foreign related arbitration and foreign arbitration, so this approach guarantees a uniform judicial practice throughout China”. Mr. Lu Song believed that few jurisdiction could make it.
According to Mr. Lu Song, this reporting system is originated from the SPC’s two notices on foreign related arbitration and foreign arbitration, issued in 1995 and 1998, respectively. They were relating to the validity of international (incl. Hong Kong, Macau and Taiwan) arbitration agreements and the recognition and enforcement of international (incl. Hong Kong, Macau and Taiwan) arbitral awards, as well as the setting-aside and re-arbitration of foreign related arbitral awards.
Justice Liu Jingdong, Associate Chief Judge of Civil Division No.4 of the SPC, disclosed during the seminar that the SPC’s relevant department is now conducting a feasibility research on the adoption of the reporting system of international commercial arbitration’s judicial review in domestic arbitration cases. If proved workable and thus included in relevant judicial interpretation the SPC is now drafting, it will have a positive and profound effect on Chinese arbitration, and will result in a remarkable reduction of setting-aside or non-enforcement of arbitral awards.
In recent years, setting-aside or non-enforcement of domestic arbitral awards are not uncommon, and the inconsistency of the judicial review criteria is one of the reasons. To solve such problem, Justice Liu’s another viewpoint brought a glimmer of hope to the arbitration community, “we are now taking steps to promote the progress of the uniformity of arbitral awards’ judicial review”.
Apart from that, Chinese courts’ attitude toward the enforcement of international arbitral awards is becoming more and more open.
For example, last year, in a case concerning a Singaporean arbitral award, the SPC allowed judges to broaden the scope of foreign related factors and upheld the validity of the international commercial arbitral award. “We accurately understood the key spirit of the New York Convention’s relevant provisions, and took a fairly enlarged interpretation of Art. II (2) of the New York Convention”.
“Moreover, we have strictly limited the application of public policy, and made it clear that the violation of the state’s administrative mandatory rules is not equivalent to the violation of public policy”, said Justice Liu. Mr. Lu Song thought that currently, the SPC pays more attention to whether the awards are against fundamental principles of Chinese laws and whether they are against public interests, including public order and social conventions, namely the most fundamental moral points of view, when reviewing claims concerning public policy.
With Chinese courts’ growing openness to arbitration, the Chinese arbitration is bound to embrace a new round of high-speed development. It is reasonable to believe that China will surely become one of the mostly selected seats of arbitration in international arbitrations.
Justice Liu Jingdong
Mr. Lu Song
Final Word
As commented by Dr. Chen Fuyong before the end of the seminar, “this is the first exchange between the two institutes and we are full of confidence in next ones”. The BAC/BIAC as the exclusive diamond sponsor of the 2018 ICCA Congress will seize the opportunity that the congress is to be held in Sydney, meet the trend of the fast developing China-Australia economy and trade cooperation, and forge the new platform for China-Australia arbitration exchanges. At the same time, the BAC/BIAC looks forward to working with more professionals of insight to jointly promote the internationalization of Chinese arbitration, and to make a new business card of Chinese arbitration with the highest standard of international arbitration, so as to contribute to the Chinese arbitration’s further development.
Cocktail Reception