Beijing Arbitration Commission

The work report of the Beijing Arbitration Commission in 2004

By Wang Hongsong, Secretary-General of BAC

Today we are holding our tea party of spring festival in the newly purchased and decorated international meeting room at 17th floor just like five years ago we had our tea party in the multifunctional meeting room bought and decorated in 2000. It seems to be a coincidence and as if it hints that the BAC has made essential progress to step higher in each historical phase in the past. Thus, our life will run short of many excitements and pleasures without expected development of the BAC and the process of adventure to harvest in the future. Looking back on the beginning of its establishment, the BAC worked in the rented side building of a resident building in the North Road of The Temple of Heaven with the office area of only one thousand square meters. But nowadays, we have possessed 3,000 square meters office space in the China Merchants Tower besides International Trade Center Bridge and 59 parking stalls. The modernized electronic information technology and equipments have met our demand in automation in our daily work. Moreover, the BAC has kept self-reliance and hardworking and become a competitive arbitration institution with good faith and become a leading arbitration institution in China concerning the number of cases, quality and efficiency of case handling. The accumulated tax amount we have paid is several times of the financial funds at the beginning. These wonders we created together make all of us take pride in being members of the BAC. Now on behalf of the Office staffs, I express our heartfelt thanks to all arbitrators, including those devoted to the BAC before, all commissioners and the leaders and friends caring about and supporting the BAC.

Happy Lunar New Year to you.

Next, I will make a report on our work last year.

1. The BAC accepted 1,796 cases in 2004, with an increase of 767 and the increasing rate of 74.5 percent. Although the number of cases keeps on going up since establishment of the BAC, the case number still went up with the greatest strides last year. The disputed amount of cases arrived at 5,060,000,000 Yuan RMB, a rise of 3 percent than that in the previous year and, if adding the sum in counterclaims, the disputed amount rose to 6,140,000,000 Yuan RMB growing up by 17.6 percent than that in 2003. This result was not achieved easily due to the base of 5,220,000,000 Yuan RMB in 2003. Of these cases handled in 2004, there were 31 foreign-related cases, a decrease of 2 compared with that in 2003.

Chart 1 The distribution of the categories of total cases accepted by the BAC in 2003 and 2004

The proportions that each type of cases are as follows: sales contractual disputes account for 39.64 percent; loan, mortgage and security contractual disputes account for 22.56 percent; engineering and construction contractual disputes account for 17.6 percent; lease contractual disputes account for 5.3 percent; entrustment and deputy contractual disputes account for 3.7 percent; joint venture, joint operation contractual disputes account for 2.7 percent; processing work contractual disputes account for 1.6 percent; shares and asset transferring contractual disputes account for 1.6 percent, and the other type of contractual disputes account for 5.4 percent.

Chart 2 Rate of Real Estate Disputes in 2003 and 2004

Of sales disputes, the proportion of purchase of commodity housing disputes accounting for 56 percent, or 24 percent of the total cases in 2004, and rose up slightly than those (respectively 51.7 percent and 23.2 percent) in 2003

The proportion of loan, mortgage and security contractual disputes rose from 6.71 percent in 2003 to 22.56 percent in 2004 and ranked from the fourth in 2003 to the second in 2004; the number increased by 336 and 487 percent compared with that in 2003. The share transferring disputes held a little higher proportion (1.6 percent in 2004 and 1.4 percent in 2003) and absolute number went up by 125 percent. The proportion of engineering and construction decreased from 26.8 percent in 2003 to 17.6 percent in 2004; joint venture and joint operation contractual disputes decreased from 4.6 percent in 2003 to 2.7 percent in 2004; but the absolute number of these two types of disputes respectively increased by 17.9 percent and 8.6 percent compared with those in 2003. These above data showed that the BAC had new development and made new progress in finance and investment disputes on the basis of persisting on reinforcing the core business of the engineering and construction.

Chart 3 Distribution of arbitrators' academic qualifications in the

In 2004, the number of concluded cases went up to 1,633 in total with a rise of 783 or 92 percent than that in 2003 and the rate of case conclusion was 90.9 percent. The average duration for each case from the composition of an arbitral tribunal to the conclusion of a case was 63 days, decreased by 16 days than that in 2003, which was not only related with the increase in proportion of relatively simple group cases in all concluded cases (the proportions of group case in all concluded cases are 19.4 percent in 2003 and 36.8 percent in 2004) but also mainly on account of efficiency improvement of case handling of arbitrators.

Of the concluded cases, 8 arbitral awards were set aside by the Peoples Court, including 1 case being partly set aside and 2 interlocutory awards being set aside. Besides, there are 3 arbitral awards were non-enforced in 2004.

By the end of 2004, the BAC had handled a total of 5,788 cases, concluded 5,248 cases and the ratio of conclusion of cases reached 90.67 percent. According to incomplete statistics, of the concluded cases the Peoples Court had set aside 20 arbitral awards in part or in whole. 6 cases are re-arbitrated and 16 cases are non-enforced. All these numbers account for less than 1 percent of the total.

Chart 4 The Number and Ratio of Group Cases in 2003 and 2004

2. The BAC accomplished eight tasks in line with work plan last year as follows:

(1) The renewed Arbitration Rules, Ethical Standard of Arbitrator, Administrative Measures for the Engagement of Arbitrators and the Several Provisions on Strengthening the Management of Exceeding Time Limit of the Arbitral Case Handling and the standard of compensation for Arbitrators of the BAC were enacted from March 1, 2004 with good result, which not only received high praise from parities, representatives and social various fields but also gained understanding and supporting from the arbitrators. As a result, the quality of arbitration further is increased with high efficiency.

(2) In order to raise the quality of the case handling and the capability of arbitrators, the BAC held training courses for newly engaged arbitrators, in which 75 newly engaged and other arbitrators participated last year. In an effort to formalize the procedure of engaging arbitrators and improve the specialization of arbitrators, the BAC also discussed and passed the Decision on Strengthening Training and Examining of Arbitrators on August 25, which emphasized on that the BAC will entrust training institutes to carry out training and examining of arbitrators in the future and BAC will give priority to those who satisfy the Administrative Measures for the Engagement of Arbitrators and passed the training and examination as arbitrators; the Chairman will give preference to appoint those arbitrators who passed the training and examination to handle cases. At the end of December last year, the Tshinghua University, entrusted and assisted by the BAC, had successfully held the first training courses for arbitrators and provided 4-day systemic and professional training and examining for 31 arbitrators and 17 other professionals concerned about arbitration. Therefore, it is concluded that to stipulate the Decision on Strengthening Training and Examining of Arbitrators is another measure of the BAC to perfect arbitrator system and realize the internationalization strategy after the revision of the Arbitration Rules, Ethical Standard of Arbitrator and Administrative Measures for the Engagement of Arbitrators. Only if this measure is carried out thoroughly, will the BAC lay the good foundation for and guarantee the sustainable development.

(3) The BAC discussed and passed the revised Constitution of the BAC, regulating that the Chairman and the office staff of the BAC shall not be appointed concurrently as an arbitrator; the Vice-Chairmen and members of the Committee shall not accept the appointment to act as an arbitrator by a party nor shall the Chairman of the BAC appoint him as an arbitrator except when he has been jointly appointed by both parties.
All those provisions not only formalize the behaviors and but also exhibit the self-discipline spirit of the BAC Committee members and the staff.

(4) Emphasized training, researching and propaganda. The BAC organized or cooperated with universities, the Court and industrial associations to organize various seminars or meetings of propaganda, trainings and informal discussions for 24 times, attracting 3500 participants. These activities are as follows: from May 20 to 21, the BAC, together with International Construction Engineering Consultation League and Tshinghua University, held Symposium of Settlement and Arbitration about International Construction Engineering Contractual Disputes and more than 230 arbitrators, legal consulters of corporations and lawyers took part. In this symposium, experts adept at construction and arbitration from Ireland, Germany, Korea, Hong Kong, Taiwan and our mainland introduced the settlement of international construction engineering contractual disputes and the problems and experiences of applying the clauses of FIDIC involving in international construction engineering. On June 10, the BAC cooperated with the Research Office of the Supreme Peoples Court to conduct expert discussions on the Several Supplementary Explanations about applying the Arbitration Law of P.R. China (draft for suggestion). More than 10 arbitrators and staffs participated this discussion and summarized opinions and suggestions for references of the Research Office of the Supreme Peoples Court. From December 25 to 26, the BAC sponsored together with the Supreme Peoples Court Symposium of Settlement for Construction Engineering Contractual Disputes with more than 430 participants including arbitrators, judgers, legal consulters of corporations and lawyers. After the Symposium, some arbitrators and some chief judgers and directors in charge from Civil Division of Municipal Peoples Court carry out informal discussion about common problems of construction engineering contractual disputes handling. From May to December, we also held coursed about the Arbitration Law or the Contract Law in Peking University, Tshinghua University, China University of Political and Science and Law, Diplomat College, Changjia Commercial College and some corporation for 12 times and organized Salons and special symposiums about several problems of construction cost appraisal and real estate case handling for 9 times.

In February, we cooperated with the International Law Research Institute and Legal Press to launch the Beijing Arbitration publicly and raise the academic level and influence. In July, the column of Reward Article Soliciting for one Decade Ceremony of the BAC was added in the theory page of Peoples Courts News by cooperation with Peoples Courts News and experts, scholars, arbitrators, judges and lawyers engaging in teaching, research and practice eagerly contributed. By now, the BAC has delivered more than 50 articles about arbitration and the BAC in various newspapers and magazines and in the Internet. In addition, we also entirely renovated our Chinese and English to improve its immediateness and readability of information. As a result, visitors of our web site increased greatly.

(5) Enlarged publicity and exchanges. On January 30, 2004 the Secretary-General attended the Ninth Ceremony of International Trade Credit Awards and had a speech on invitation of Korea Arbitration Association. More than 100 celebrities took part including the Chairman of Korea Arbitration Association, master of Korea Commercial Arbitration Tribunal, president of Korea Supreme Court, Congressmen of Korea and others engaging in academy, lawyer, business management and news press. The MBN, Economic Daily and Economic News in Korea played and reported about the Ceremony. On May 17, the BAC as a sponsor participated in the seventeenth ICCA. In March and September, we also respectively joined judicial delegations of Finland and attended International Engineering Meeting in Denmark, meeting officials, senior lawyers and arbitrators from International Lawyer Association, Judger Delegation from Massachusetts in U.S., International Center of Singapore, Arbitration Association of Argentina and some famous international law offices, which extended international influence of the BAC.

(6) Accomplished membership change of the forth BAC. The BAC was engaged in the preparation of membership change from the May last year. Through preparation for more than 3 months, the various tasks had been completed as scheduled. The forth BAC engaged 270 arbitrators in all, a decrease of 38 persons compared with that in the previous BAC (the previous BAC engaged 294 arbitrators) and there are 39 arbitrators newly engaged. 62 arbitrators, 24 percent of all the arbitrators recruited by the previous BAC, are not re-engaged. This engagement was carried out in complete accord with the standards and procedures regulated in the Administration Measures s for the Engagement of Arbitrators, and the holistic knowledge competence of these arbitrators increased further. Among all engaged arbitrators in forth BAC, the proportion of arbitrators with doctors degree rose to 24 percent, an increase of 3.3 percent than that in the previous BAC; that with masters degree took up 37.4 percent, growing by 1.71 percent; that with bachelors degree held 34 percent, declining by 2.34 percent; the total proportion of arbitrators with doctors degree, masters degree and bachelors degree arrived at 95.6 percent and going up by 3.3 percent than that in the previous BAC.

Chart 5 Distribution of arbitrators' academic qualifications in the forth BAC

In the aspect of vocation, arbitrators acted as lawyers accounted for 16.3 percent of all the arbitrators; scholars engaged in law researching and teaching, 41.5 percent; experts engaged in economic or trade work, 27.4 percent; civil servant engaged in legislation and legal affairs, 9 percent; and retired or resigned judgers, 5.9 percent.

Chart 6 Profession backgrounds of arbitrators

The BAC after membership change soon sent out the letters of engagement and published and sent out the renewed Arbitration Rules, the list of arbitrators and related materials.

(7) Purchased and decorated the new office and renovated official management software. Last year the BAC newly purchased 1,059 square meters office space at the 17th floor of Zhaoshang Building and three parking stalls and as a result we has possess a total of 3,307 square meters office space and 59 parking stalls. After the reconstruction and decoration, there are five arbitration rooms, one international meeting room and affiliated library and achieves room, etc. at the 17th floor. In order to meet the needs of international development in the future, we adopt assistant multimedia schemes convenient for meeting and hearing holding in the decoration of meeting rooms and arbitration rooms. The schemes involved in the following aspects: integrated wiring system, intelligent entrance watching system, central control system, digital video and audio recoding system, simultaneous interpretation system, wireless network system, long-distance teleconference system, electronic white board facilities and object projection equipments. All these systems may provide arbitrators, parties and representatives located in different regions and countries to participate simultaneously in long-distance oral hearing and conciliation activities. The BAC may also cooperate and exchange simultaneously with partners all around the world.
The arbitration rooms and conference room are outfitted with the intelligent open system of integrated wiring. 4 arbitration rooms are fitted up with digital audio and video recording equipments, and 3 arbitration rooms and conference room are furnished with the simultaneous interpretation and long-distance teleconference facilities.

Moreover, we correspondingly renovated the arbitration management software in line with requirements of the renewed Arbitration Rules, adding columns favorable to record disclosures of arbitrators, inquire and make statistics and developing the notice and information system of case handling benefiting for raising service quality of secretaries and efficiency. This system is tested in operation and will be applied to practice. In addition, we also offered free E-mail address for arbitrators to provide convenient for exchanges and communications among arbitrators and between arbitrators and secretaries.

(8) The Office engaged new secretaries to made further improvement in institutional organization and set up the First Division of Secretary and the Second Division of Secretary to enhance the middle level management of the BAC.

This year is the tenth anniversary of the Arbitration Law enacting and we will continue to promote the amendment work for the Arbitration Law together with other arbitration institutions, advanced colleges and relevant departments at the same time of getting on well with handling cases, publicizing arbitration, research, training and maintaining and developing of the arbitral software.

This year is also the tenth anniversary of the BAC. We will pioneer enterprise with painstaking efforts with attitude of starting from scratch no matter what achievements we have made; we will persist in our ideals and beliefs, stick to our moral quality, conscience and integrity, regard impartiality as soul and life of arbitration and spare no efforts to try to in every possible way to eradicate corruption and injustice whether we are in favorable circumstances or adverse circumstances and whether at present or in the future; we will all the time adhere to the independent and impartial development direction, keep on probing into successful experiences of the ideas, rules and routines of international commercial arbitration integrated into our domestic arbitral practices with perseverance and make advantages of latter development to fill the gap between us and international partners as soon as possible and consequently win our status and reputation of our arbitration in the international competence; We will also continue to hold the thirst and enthusiasm for pursuing perfection and excellence, keep on studying and searching, maintain to discover and innovation to challenge our capability and limit, transform challenges to treasures, realize our dreams and create new wonders and splendid future.

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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