Beijing Arbitration Commission

Beijing Arbitration Commission 2001 Annual Review

By Wang Hong-song, the Secretary-General of the Beijing Arbitration Commission (BAC)

I. Situation of Cases Acceptance

Generally speaking, the number of cases accepted by BAC has continued to increase in 2001. 666 cases were accepted during the year, an increase of 217 cases with a rate of increase of 48.3% as compared with that in 2000. The rate of increase in 2001 was the most drastic in the past 6 years since the BAC was established. Among the cases accepted, were 10 foreign-related cases that accounted for 1.5% of the total. The proportions of the cases were as following: Sales-contract disputes accounted for 39.7%; Construction project contract disputes accounted for 31.23%; Leasing contract disputes accounted for 5.86%; Entrustment, Delegation, as well as proxy sales contract disputes accounted for 4.8%; Loan, pledge, and mortgage contract disputes accounted for 4.5%; Joint-management, joint-construction, and joint-exploration contract disputes accounted for 2.85%; Contracting disputes accounted for 2.5%; Technology and IP contract disputes accounted for 1.65%; and other contract disputes accounted for 6.9%. Among these cases, sales-contract and construction project contract disputes still constituted a comparatively large percentage of cases. At the same time, however, the types of disputes are continuously increasing, for instance, the disputes concerning mortgage, property management, labour, franchise transfer, etc. Although these disputes hold a relatively small proportion of the total, they reflect the variety of cases under a market economy condition. Among the cases accepted, 93.84% of the parties had written in their arbitration agreement that they would choose BAC as the arbitration institution, which has maintained its normally high rate.

We concluded 643 cases in 2001, an increase of 252 cases with a rate of increase of 64% as compared with that of 2000. The concluded cases accounted for 96.55% of the accepted cases, an increase of more than 9% compared with the 87% in 2000. This indicates that the BAC has sped up its handling of cases, and the rate of increase of concluded cases is higher than that of the accepted cases at the same period. The average time for concluding a case is 76 days from the constitution of the tribunal to the final conclusion, which has been reduced by 12 days compared with that of the year of 2000. This indicates that the arbitrators have strengthened their sense of efficiency and sped up the case handling. Among the concluded cases, 317 cases were settled by awards, accounting for 49.3% of the concluded cases; 139 cases were settled by conciliation, accounting for 21.6%, 144 cases were settled by private negotiation, accounting for 22.4%; and 42 cases were withdrawn by the BAC because of problems with the subject matters of the parties or other reasons, accounting for 6.5% of the total.

Among the concluded cases in the year 2001, 1 case was set aside by the court, and 3 cases were non-enforced.

Through the end of 2001, BAC has accepted a total of 1998 cases: 7 cases in 1995; 149 cases in 1996; 168 cases in 1997; 233 cases in 1998; 326 cases in 1999; 449 cases in 2000; and 666 cases in 2001. Since 1998, the rate of increase of the accepted cases by BAC has been above 37%. Among the accepted cases, the parties who definitely choose BAC as the arbitration tribunal in their arbitration agreement has increased with the years: 25.5% in 1996; 33.3% in 1997; 85.28% in 1998; 90.8% in 1999; 87.7% in 2000; 93.84% in 2001. The BAC has concluded 1797 cases with a rate of conclusion of 89.9%. Among these cases, 579 cases were settled through awards, which amounted to 48.6% of the total; 288 cases were settled through conciliation, which amounted to 24% of the total; and 236 cases were settled by private negotiation, which amounted to 19.8% of the total. 89 cases were withdrawn by the BAC because of problems with subject matter or other reasons, amounting to 7.4% of the total.

Among the concluded cases, 5 cases were set aside or partially set aside, and 2 cases were decided to be re-arbitrated. In 9 cases, the court refused to enforce the decision. The cases that were set aside or were refused enforcement by the court accounted for 2.4% of the total cases settled through awards, and accounted for less than 1% of the concluded cases. The BAC ranks in the front among domestic arbitration institutions with regard to the number of accepted cases and concluded cases, as well as in award quality and working efficiency.

II. Completing the Session Alteration on time

Pursuant to the Charter of the BAC and the State Council documentation, the BAC began preparations for the session alteration in May 2001. We completed all the work concerning the session alteration on August 30th after more than three-months effort. Among the members of the 3rd session, three committee members were newly recruited in this session at a personnel alteration rate of 23%. In the 2nd Session 7th Conference, we discussed and modified the Charter of the BAC, in which we removed the provision that one-third of the personnel should be altered in each alteration session. This was done because the work of arbitration requires a high-level of professionalism and the members of the BAC should relatively maintain stable. This modification makes things more practicable.

217 arbitrators were recruited in the 3rd session, 38 less than that of last session (where 255 arbitrators were recruited). Among these arbitrators, there were 41 newly recruited arbitrators. 78 previous arbitrators were not re-engaged, accounting for 31% of the arbitrators from last session. Among the 217 arbitrators recruited, there are 48 doctors of law (including 4 post-doctors), accounting for 22.1% of the total, or an increase of 8.7% compared with that of the last session. There are 85 postgraduates, accounting for 39.2% of the total, or an increase of 8.7%. There are 66 holders of a bachelors-degree, accounting for 30.4% of the total, or a decrease of 9.5%; in total, personnel who are postgraduates and who have obtained a doctoral or bachelors degree account for 91.7% of the total, an increase of 8% compared with last session. There are also 18 arbitrators with a college or other diploma, accounting for 8.3% of the total, a decrease of 8.1%. Overall, the comprehensive level of education of the arbitrators has been further improved, and the average age of the arbitrators is 49.

From the perspective of career distribution, lawyers account for 19.35%; legal researchers and teaching scholars account for 24.9%; the economic and trade practice experts account for 27.8%; government officials (who focus on the legislation and other legal affairs) account for 16.8%; and retired judges account for 7.4%.

The arbitrators of the 3rd Session were chosen strictly according to the standards and procedures provided for by the Method of Recruiting and Management of the Arbitrators (hereunder abbreviated as Method of Management), which illustrates the determination and careful attitude of the BAC to construct a highly-qualified group of arbitrators. Soon after the Session alteration, the BAC issued the recruiting certificate and printed the new arbitration rules, the arbitrators list, as well as other relavant documents.

We have completed the modifications to the Arbitration Rules of BAC (hereunder abbreviated as Arbitration Rules), BAC Code of Arbitrators, as well as the Management Method, etc. On the basis of further investigation, research, and the repeated debate of our collection of minds, the Arbitration Commission has discussed and passed the newly-modified Arbitration Rules, Code of Arbitrators, Method of Management, BAC Method of Collecting Case Acceptance Fees, Method of Collecting Fees of Case Settlements, etc. This series of modifications relate to many aspects, for instance, the Arbitration Rules has increased to 107 articles from the original 94, and is a very bold expansion. For example, the modifications relate to problems dealing with incorporated trials in the Arbitration Rules, decisions relating to challenges to arbitration jurisdiction, parties consent in modifying the rules, as well as on the arbitrators signature of the statement. In order to improve arbitration efficiency, the Arbitration Commission stipulated both the requirements of parties in the production of evidence and liabilities that arise when exceeding the deadline for such evidence production. Additionally, the Commission stipulates that arbitrators should implement their duties impartiality, intelligently, and efficiently. At the same time, the Arbitrators Code has clarified the time limits on tribunal openings, case commenting, awards drafting and reviewing and has made the rules more practical and concentrated. The modifications reflect not only the mature and deep nature of the arbitrators recognition of the arbitration rules, but also reflect the progressive and innovative spirit of our Arbitration Commission. The implementation of the above regulations and methods has achieved very good effect and has been positively appraised by the outside.

. The work on the Theoretical Study and Publicity

The BAC has carried out theoretical research in 2001. First, in order to improve the external environment for the BAC, we sponsored a seminar on the problems in the enforcement of the arbitration law. Participants included the Supreme Court Research Department, experts and scholars in the field, as well as the heads of 15 arbitration institutions. Based on the seminar discussion and the problems encountered by the BAC in practice, we summarized our findings in a nearly 20,000-word suggestion, which has become a reference for the Supreme Court research department; second, we organized a panel of experts, scholars and the heads of arbitration institutions of several cities to discuss the establishment of the Association of Arbitration and sent the resulting suggestions to the State Council of Legal Affairs office; third, some of the arbitrators who did well in construction projects sponsored an arbitrator salon on two occasions (supported by the BAC) where they carried out study and research in their field.

The Legal Daily, Beijing Daily, as well as other magazines and newspapers published 24 articles on arbitration law and the Arbitration Commission in 2001. We have also edited and published six volumes of the Arbitration Communication, and cooperated with relative departments to train more than 2000 managers. Some of the arbitrators put on a model arbitration tribunal in the Sino-England Construction Disputes Arbitration Symposium sponsored by the P. R. China Construction Ministrys training center, which has achieved positive effect. In 2001, the BAC focused on perfecting its website, updating not only the home website and improving the English version, but also adding information on (1) international arbitration conventions, (2) the legislation from other countries, (3) the rules of domestic and oversea arbitration institutions, (4) arbitration document forms, (5) model contracts, and other relavent information. After we perfected the website, we got more visitors. According to incomplete statistics, since the establishment of the BAC more than 390 articles have been published, over 35 programs concerning arbitration law and BAC have been broadcasted on television and radio, and the BAC has held special lectures in the form of training programs and seminars, in which over 31,000 people have participated.

V. The level of the management and service of our office has also been further improved. After training, the secretaries recording speed could keep simultaneous pace with the tribunal hearing. As of now, the opening of the tribunal, comments, and expert inquiries can be recorded by computer, which has greatly improved the amount of information and the degree of clarity of the tribunal record. Our office has entrusted a computer company to explore the 3rd generation arbitration management software. The new management software has added a lot of new functions in terms of time statistics of arbitration, reminders on case handling, reviews of the cases, as well as in terms of the secretaries case handling statistics. This has made the recording and management of cases more convenient. Our office has also established a computer checking system, so that the parties and delegates can easily know about the arbitration procedure and obtain the relevant materials. The parties and delegates can use the touch-screen computer to learn about the professional background of the arbitrators, the status of their case, the rules of arbitration, arbitration communication, etc.

We have made great progress in 2001; however, there still exist some problems and shortcomings. First of all, some of the arbitrators lack a sense of responsibility. A few sometimes postpone case proceedings, or are late for the tribunal comments. As a result, some of the cases exceed the time limit because of these arbitrators behavior. The parties in some cases have complained about the postponing of their cases, which has damaged the reputation of Arbitration Commission. Second, the quality of the awarding process should be improved, and the reasoning behind the awards should be more detailed in order to make them more convincing. Third, the work of publicity and training is not being done well enough.

Prospect of the work of 2002

The guiding principle of the BACs work in 2002 is this: taking the opportunity arising from Chinas entrance into WTO and the successful application for the 2008 Olympic Games to further improve our working efficiency in case handling. to strengthen our experience, communication, training programs and publicity, to further construct BACs inner offices, to make BAC step to a new stage. The concrete working plan is as following:

I. to further perfect the working system and arbitration procedure, and improve the efficiency in case handling on the basis of guaranteeing the quality;

i. to adopt necessary measures to prevent postponement of the arbitration procedure in excess of the time limit. The Code of Arbitrators and Arbitrators Recruitment and Management Method that the BAC modified in 2001 has contributed to improving our working efficiency greatly. BAC will establish and strictly implement the BAC Regulations in terms of Strengthening the Management of Arbitration Time Limit, in order to guarantee the implementation of the two Regulations and solve the problem of postponement.

ii. to strengthen the collection of parties opinions. Besides sending feedback forms on the cases to the parties, the BAC will periodically investigate the parties evaluation of their arbitration case and solve the problems that arise from his work.

iii. to adapt the internationalization trend of the BAC. We will modify the arbitration rules when the circumstances are proper.

iv. We will modify the Contemporary Method of BAC Entrusting Appraisal to perfect the procedure for the parties and arbitration tribunal to choose an intermediate institution, and to strengthen the appraisal of the accepted cases amount in dispute, and to strengthen the management, choice, and review of the audit institutions.

v. to modify the arbitration fees collection method, to make it more reasonable.

vi. to improve the arbitrators payment according to the situation of the BACs income, and especially to improve the payment of the arbitrator who makes the award and works efficiently.

II. to further Strengthen the Construction of the Arbitrators Team

i. to strengthen the training of the arbitrators and theoretical research. First, we will implement a new arbitrator training system, which requires the newly-recruited arbitrators or arbitrators without previous training experience to participate in the training program on the Code of Arbitrators, Management Method, the rules of case handling, the making of the awards, etc., as organized by the BAC; second, to organize all of the arbitrators to communicate with each other and discuss their work; third, to organize symposiums and seminars on arbitration law and arbitration procedures; fourth, to help the arbitrators in areas other than law to organize arbitrators salons if possible and if they are willing to; fifth, to edit and issue arbitrators handbook (the handbooks are now in the process of printing).

ii. to expand the scope of arbitrator recruitment. Considering the developing orientation and aim of arbitration, the BAC will make an investigation into recruiting foreign arbitrators, and we will recruit some foreign arbitrators when the circumstances are proper.

iii. to perfect the procedure of recruiting arbitrators. The BAC will cooperate with institutes in other careers and choose arbitrators from the candidates in a more reasonable fashion. The institutions of these other careers should make an evaluation on the morality and professional competence of the arbitration association members, or the institutes can recommend proper candidates to the BAC, and the BAC will make the final decision.

III. to Strengthen the Work of Publicity and Contact

i. to further strengthen the communication with the Peoples court;

ii. to go abroad for visits and publicity, establishing necessary working contacts with overseas arbitration institutions;

iii. to organize lectures and training programs on arbitration law among enterprises and lawyers, and to continue to produce and issue the materials that relate to the BAC;

iv. to strengthen the communication and contacts with the News Media;

v. to perfect the construction of the BAC website.

IV. to Strengthen the Offices Construction and Improve our Service

i. We will implement the principle of responsibility per position and further improve service quality and efficiency;

ii. We will continue the exploration of the arbitration management system software, and perfect the recording, statistics, and checking systems in terms of the implementation of the Code of Arbitrators and Method of Management and Recruitment of Arbitrators, and according to the newly-modified Arbitrators Code. In doing so, we can objectively evaluate the quality and quantity of the Arbitrators work.

iii. to rebuild the arbitration tribunal, and use the technology of data in the tribunal recording, and to establish the Computer Distance facilities and PC Camera facilities for distance arbitration.

iv. to purchase books and materials from abroad to enrich the BAC Library.

Model Arbitration Clause Arbitration Clause
All disputes arising from or in connection with this contract shall be submitted to Beijing Arbitration Commission / Beijing International Arbitration Center for arbitration in accordance with its rules of arbitration. The arbitral award is final and binding upon both parties.
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