Beijing Arbitration Commission

The work report of the Beijing Arbitration Commission in 2005

By Wang Hongsong, Secretary-General of Beijing Arbitration Commission

The publicity video that was just played was produced by the Beijing Arbitration Commission (the BAC) and records the achievements of the BAC over the past ten years. Most of us experienced this history firsthand, but we still feel unimaginably excited when witnessing the BACs rapid, healthy and vigorous growth. Together in the past ten years, we have been burdened not only by historical responsibility, but by the ideals of our conscience, our independent thinking, and our practical approach towards innovation. We diligently and steadfastly seek the truth from evidence.

But we know that sometimes, intense cultivation is insufficient to guarantee a rich reward. Thus we take into consideration the difficulty of our pioneering work, the twists and turns of the business, and the pains and loss of a failure. However, we can also possess a clear conscience and realize the value and meaning of our lifes work. In this way, society rewards us generously. We, with hearts full of appreciation, gratitude and thanks, have to continuously endeavor to repay the parties, representatives and friends from all circles of society for their trust in us, and to devote ourselves to the betterment of society. Thus, I, on behalf of the working staff of the BAC office, express thanks to every arbitrator, committee member and all leaders and friends who support the Commission. May you all have a happy Spring Festival! In the following speech, I will give the work summary report from last year.

I. The Beijing Arbitration Commission accepted 1,979 cases last year; an increase of 183 cases or 10% more cases than in 2004. We concluded 1,730 of those cases last year, 97 cases more than in 2004, at a rate of increase of 6% and a rate of conclusion of 87.4% (4% less than the previous year). The comparison between 2005 and 2004 is expressed in the following chart

Last year the disputed amount based on claims was 4.96 billion RMB while the amount from counterclaims was 0.68 billion RMB. thus bringing the total disputed amount to 5.6 billion RMB; a decrease of 9% compared with that of 2004.

Among the cases accepted last year, Sales contract disputes accounted for 38.2%; Loan, Mortgage, and Pledge contract disputes accounted for 24.55%Construction Project contract disputes accounted for 16.37%; Leasing contract disputes accounted for 5.71%; Entrustment contract disputes accounted for 6.47%; Joint-venture and Cooperation contract disputes and contracting contract disputes account for 2.53%; and other contract disputes account for 1.06%. Compared with 2004, the number of Sales contract, Construction Project contract and Cooperation contract disputes grew. However, with the increasing of other types of cases, these three kinds of disputes accounted for a smaller proportion of the total when compared to 2004. Loan, Mortgage and Pledge contract disputes increased both in number and in proportion and in the past two years, have been the second most common type of dispute accepted. The number of Technology contract disputes was 51, or 21 more cases than in the year before last, at a rate of increase of 70%. The number of case accepted regarding Computer Software Development, Service and Electronic Commerce increased by 17 compared with 2004, with a rate of increase of 70%. This reflects the rapid development of the IT industry in the past two years and the fact that disputes regarding the IT industry are increasing. The comparison of cases between 2005 and 2004 is illustrated in the following chart.


Disputes over the sale of housing accounted for 56% of the Sales contract disputes and 24% of the total disputes accepted, an increase in proportion of 51.7% and 23.2% respectively as compared with the year before last.

The number of foreign-related cases accepted was 53, an increase of 23 cases, at a rate of increase of 71%.

The Commission accepted 428 group cases, accounting for 21.63% of the total disputes accepted and representing a decrease both in number and in proportion as compared with 2004. The comparison is illustrated in the chart below:

The average length of time for the conclusion of a case was 68 days, an increase of 6 days compared to that of the year before last. Due to considerations of the consistency of applicable laws, the balancing of the parties interests, and of similar cases under the jurisdiction of the Peoples Court from the corresponding period, the BAC had to take time to coordinate and communicate with the Peoples Court to try to reach a consensus between court verdicts and arbitral awards. Therefore, the handling time for some cases exceeded the time-limits to various degrees. Certainly, the efficiency of the BAC is in need of further improvement.

Among the cases concluded, 5 were set aside by the court, 2 were decided to be re-arbitrated, and 2 were non-enforced. Cases set aside and non-enforced do not necessarily reflect errors of the Arbitral Tribunal. However, the number of applications for the setting aside of arbitral awards reached 153 in 2005; 64 more instances than the 89 of the year before last. Even excluding the differences between court verdicts and arbitral awards on the same kinds of cases, which induced 39 parties to apply for the setting aside of arbitral awards, the number of applications still increased by 25 at a rate of increase of 16%. The complaints of parties have increased when they do not agree with the arbitral awards. Certainly, most complaints arise due to the fact that the parties and their representatives misunderstand the laws and the facts, which explain to some extent the decrease in both the recognition of parties and their representatives of arbitral awards and the recognition of the service of arbitration. In other words, the improvements in arbitral quality and efficiency have not yet kept pace with the rising requirements of parties and their representatives towards arbitration. The nature of arbitration is to provide a service, where arbitration institutions and arbitrators are subject to the choice of parties and to the principle of survival of the fittest. Therefore, the quality of case handling cannot only be measured by whether the arbitral award was set aside or non-enforced by the Peoples Court, but must also be measured by whether the parties are satisfied with the arbitral award. Arbitrators render awards not based on the parties emotions, but in consideration of the overall situation and the long development of business circumstances from the parties point of view. This is done so that the quality of arbitration can be at a higher level than the level which the parties demand, and the quality of professionalism can be improved at a faster pace than the changing situation.

Quite simply, we want to clarify the above issues, in that seeking truth from fact is our basic principle. In the past ten years, we have grown in the course of conquering difficulties and making up for our shortcomings. Problems should not be feared. Rather, the dreadful thing is to be numb, ignorant or avoidant of problems; blinded by our own glory. This much is clear, problems should be solved by everyones hard work, which will allow us to push arbitration to a new level. The development of the Commission and the arbitration business has a bearing on everyone here, so conquering difficulties and improving the quality of arbitration are the common responsibility of us all. We believe that we have enough courage and wisdom to deal with problems.

In every case, there is a winner and a loser, so it is impossible to satisfy everyone. In light of the increasing number of concluded cases and the increasing awareness of being able to defend ones rights, the growing number of applications for the setting aside or disallowing of arbitral awards is a normal phenomenon. Moreover, it is a common problem for governmental institutions for complaints and appeals to increase, which to some extent reflects the conflicts that arise during the course of social reform. However with our special talents we can, on our own initiative, better understand and meet the demands and opportunities around us, and do so rationally and expediently. We cannot change anyone but ourselves. We can do the job superbly, transform challenge to opportunity, and do our work more effectively.

We hope that arbitrators can strengthen their learning and improve their ability to handle cases and the quality of their arbitral awards as soon as possible. We hope arbitrators can study the documents and materials regarding cases on a deeper level and with greater clarity, consider the claims and reasoning of the parties more comprehensively and considerately, examine the evidence and facts more carefully and firmly, and manage the arbitral procedures more positively, uniformly and efficiently. Reasoning in arbitral awards should be more adequate in illustrating the character of arbitral awards. In this way, the reasoning behind the award and the professional level of the specialists and scholars who drafted it will convince people of the awards validity. Arbitrators should strengthen the mediation and harmonizing of conflicts, and urge the parties to settle disputes rationally through honesty and hard work. Our goal is to conclude a case as the dispute comes to an end, and in the process achieve both a legal and social harmony.

In order to help arbitrators understand the reaction towards arbitral awards by the parties and their representatives, we will compile rulings of the Peoples Courts on the dismissal, revocation and denial of enforcement of arbitral awards as internal reference materials. At the same time, the staff of the Office should strengthen its service and improve the quality and efficiency of secretaries. We hope you can put forward any advice as to this matter.
As of the end of last year, the BAC has accepted 7,699 cases and concluded 6,840 cases, with a rate of conclusion of 89%. According to incomplete statistics, among the concluded cases 26 cases were set aside or partly set aside, 8 cases were ordered re-arbitrated, and 18 cases were disallowed.

II. The BAC completed the following other work

1. Publicity and Foreign Exchange

Last year, we took the opportunity of the tenth anniversary of the implementation of the Arbitration Law and the establishment of the BAC to energetically carry out publicity. According to the incomplete statistics, there were more than 20 publications in Chinese and foreign languages which contained 48 essays reporting on the BAC. These initial publications were later published a hundreds-times over on the internet. Indeed, the internet has seen the publishing or transferring of hundreds of essays reporting on the BAC. There were up to four reports aired on the Legal Channel and Economic Channel of CCTV that were relevant to the BAC. The BAC organized or attended up to 15 arbitral forums, meetings, and lectures, with meeting attendance reaching more than 1,000 people. In addition, we edited 4 issues of Beijing Arbitration, published the Theory and Practice of Commercial Arbitration Collected Essays on the Establishment of BAC, and created Korean and Japanese versions of the BAC website. Compared with the past, the publicity and exchange with foreign countries have had the following character:
(1) Exploring the mode of win-win by cooperation and stressing actual effect. Seeing that conducting our own publicity lacked enough influence, we stressed cooperation with multiple units to improve the effect of publicity in diverse forms last year. On July 28 of last year, the BAC cooperated with the International Arbitration Centre of Singapore and the International Laws Association of China to host the International Investment Protection Forum in Beijing, which was assisted by Legal Daily. Some investment specialists were invited to make lectures. Attendants included not only more than 120 chief managers of enterprises both domestic and overseas, legal counsellors, lawyers and responsible persons of the departments of the Municipal Government, but also included staff members from the embassies of the United States, Singapore and Japan. More than 10 media outlets such as the Legal Channel of CCTV, Beijing News of Beijing TV, Peoples Court News, Legal Daily, New Capital Daily, Beijing Daily, Economic Daily, 21st Century Economic Report, Enterprise in China, Invest in Beijing, China Daily, Beijing Weekly, and more than 10 internet sites such as China Lawyer and the Peoples Legality reported on the Forum. There were 2,870 pages on the internet regarding the Forum. The Forum wielded broad influence over society. On September 28 of last year, based on cooperation with the Peoples Court News in setting up the column, Soliciting Articles on the 10th Anniversary of the BACs Establishment, we held the Forum Regarding the 10th Anniversary of Enforcing the Arbitration Law, in which we introduced our past experiences and invited several specialists attending the forum to give talks. Huang Songyou, Vice-President of Supreme Peoples Court, made an important speech on Carrying out Judicial Review and Control of Arbitration according to the Laws, and Developing the Multiple Settlement Mechanism on Disputes, in which he indicated that the Peoples Courts should support arbitration with an open and encouraging attitude. The speech won the acclaim and attention from people both within and without the arbitration circle. Many media outlets, including the Economic Channel of CCTV, Beijing News of Beijing TV, Peoples Court News, Legal Daily, Beijing Daily, Economic Daily, Economic Report, and Beijing Weekly covered the forum on the spot and made reports in real-time. On November 24 of last year, the BAC cooperated with the Finance and Economics of Sohu, during which 3 BAC arbitrators exchanged ideas with internet citizens, as visitors to Finance and Economics of Sohus column, Face-to-Face

(2) Emphasizing the social responsibility of the Commission and setting up a good social example. Peter Druc, the specialist in management once said that enterprises push themselves forward by their products, services or financing, thereby distinguishing themselves from their competitors. Nowadays, however, enterprises prove themselves outstanding by showing their social responsibility.

  • Last year the Commission participated in and actively assisted the Half an Hour of Economics on CCTV to work out a programme on resolving economic disputes through arbitration, which was broadcast on October 28 and could be watched online on the CCTV website. Arbitration attracted much attention from society after the programme was aired. The special was serialized in at-home and arbitration institution websites with thousands of viewers.
  • On April 7 of last year, the Commission assisted the Supreme Peoples Court in holding a forum on suggesting judicial explanations for the Arbitration Law of the PRC, which some arbitration institutions and arbitrators attended. After the forum, we collected the suggestions and drafted feedback.
  • In mid-September of last year, the Party Branch of the BAC office and the Youth League Union members endowed money and books to the poor students at Taipusiqi County in Inner Mongolia Autonomous Region. After acknowledging the insufficiency of the libraries of the local primary and middle schools, the working staff and some arbitrators of BAC donated money and books to the libraries by collecting over 70,000 books covering some of 3,800 subjects from schools in Beijing and by purchasing discounted books from some big publishing houses. This was done to satisfy the reading and teaching needs of teachers and students. The donation touched the hearts of the local people. As a result, the leaders of the Local Party Committee, the Peoples Congress, the local government, and the local Peoples Political Consultative Conference specifically came to Beijing to express their thanks. All these activities improved the social image of the Commission.

(3) Publicity focused on problems at a deeper level, including the direction of the development of arbitration, and the reform and theory of arbitration.

The purpose of such publicity is the promoting of research and discussion on important issues in arbitration theory and practice, and the accumulating of ideas for arbitrations sustainable and healthy development.

On this 10th anniversary of the implementation of the Arbitration Law of the PRC, the Commission has set up a modern arbitrator system by maintaining its independence and non-governmental nature, promoting the internationalization of arbitration and drafting a decade review of the BAC, and inviting specialists in economics and law to research the values and meanings of the BACs experiences from the perspectives of perfecting the arbitration system and the legal reformation of the institutional system. The BACs experiences and practices attracted widespread attention from the media. Peoples Court News, Legal Daily, Economic Daily, and Asia Legal Business published special-column reports entitled Setting Up the Independent, Impartial, Professional and Efficient Arbitrator Team, Arbitration, Competing by Public Credibility, Arbitrating in the Past Ten Years, and Breaking the Monopoly, respectively. Nearly 150 internet sites mirrored the articles.
In addition, The Administrative Measures for the Engagement of Arbitrators of BAC has been published by the Peoples Website, Legal Governing Net, China Human Resource Net, China Arbitration Net and China Commercial Arbitration Websites. In order to further spread the theory of arbitration and demonstrate the culture of the BAC, the Commission cooperated with the Beijing on-line Broadcasting Culture Centre to make a DVD establishing its public credibility. The English version of the DVD is still in production and could be finished by the end of February of this year.

(4) We have made breakthroughs in foreign exchange.

  • First, we engaged 21 more foreign arbitrators with rich international commercial experiences and established reputations. Thus far, we have 39 foreign arbitrators from 13 countries, including the United States, Great Britain, France, Germany, Singapore and South Korea.
  • Second, we actively took part in international conferences and organizations. On March 9 of last year, we, together with the leaders from around 100 enterprises, government offices, universities and colleges and districts attended the summit Business as a Leader of Positive Social Change, co-hosted by Pepperdine University and Case Western University and made a speech on the social contribution of various enterprises. From September 22 to 23 of last year, at the invitation of the Singapore International Arbitration Centre (SIAC), we took part in the forum of the 25th anniversary of the issuing of the United Nations Convention on Contracts for the International Sale of Goods and the 20th anniversary of the issuing of the Model Law of International Commercial Arbitration co-hosted by International Chamber of Commerce (ICC) and SIAC. There, we gave a speech entitled Taking Actions for Improving the Efficiency of International Commercial Arbitration, in which we introduced the BACs newly revised arbitration rules. More than 30 lawyers and arbitrators, from both domestic and international markets attended the forum. On December 9 of last year, we attended a remote telephone meeting regarding the Disputes Resolutions Body (the DRB) at the invitation of the World Bank, in which we introduced the arbitration system of China and the Beijing Arbitration Commission. The meeting was held simultaneously in Washington, Hanoi, Bangkok, and Beijing. And on April 8 of last year, we formally became a member of the Asia-Pacific Region Arbitration Group.
  • Third, the Chinese and English websites of the BAC were updated and enriched, and served as the basis for the Korean and Japanese versions of the BAC website. The number of people visiting our websites rose conspicuously and the daily number of website hits increased from about 100 to about 150.
  • Fourth, foreign visitations increased. We received more than 20 visiting delegations from foreign arbitration institutions, trade associations, learned societies, famous enterprises and law firms, including leaders of the International Commercial Arbitration Academy, Singapore International Arbitration Centre, Hong Kong International Arbitration Centre, The United States Pepperdine University, and General Electricity Co., as well as partners from famous international law firms. Moreover, the general office accepted a student intern from New York University so that he could learn about the arbitration system of China.

2. Training on and Research of Arbitration

In accordance with the Decisions on Strengthening the Training and Appraisal of Arbitrators, Tsinghua Universitys Law School, assisted by the BAC, held two arbitrator training programs which were attended by 29 arbitrators and other professionals interested in arbitration. Since 2002 when training arbitrators on the rules were first carried out, the BAC has strictly followed the stipulations that the Chairman of the Commission shall prevail to designate arbitrators who have attended the training program and passed appraisal to hear cases. Arbitrators who have handled or are handling cases accounted for an average of 70% of the total registered arbitrators, but the arbitrators who have attended the training program account for more than 90% of the arbitrators handling cases. Among the arbitrators who were newly engaged last year, more than 60% attended the training and appraisal.

Statistics of Arbitrators handling cases from 2002 to 2005:

Year The Number of Arbitrators handling cases The Number of the Total Registered Arbitrators Ratio of arbitrators handling cases to total registered arbitrators

















In order to encourage more arbitrators to study and research arbitration and to improve the effect of such studies, we modified the manner of the Arbitrators Salon as follows:

  • First, the schedule for holding Arbitrators Salons was switched from irregular intervals to regular intervals (Arbitrators Salons will be held on the afternoon of the last Thursday of each month). The General Office will publish the half-year plan of the Salons in advance and the details of each term in the middle of that month.
  • Second, the content of the Salon will be confirmed according to the advice of arbitrators, and we try our best to meet their diverse requirements and interests.
  • Third, specialists can be invited to give lectures at the Salon based on the advice of arbitrators, and arbitrators also may volunteer to act as lecturers. An arbitrator will serve as host of the event. Arbitrators may volunteer to participate according to their interests and schedules. The Salons were held 6 times last year with content related to trial practice on economic contracts, legal research in conflicts of international trade, general principles of international commercial contracts, institution innovation and of the new Corporation Law and its impact on arbitral practice and so on. In order to help arbitrators learn the specific procedures of international commercial arbitration, we invited Yang Liangyi, the Chairman of the Hong Kong International Arbitration Centre and a famous international arbitrator, to lecture on a Case Study of International Commercial Arbitration. The activities created a warm response and were supported by the arbitrators. The number of arbitrators attending the activities added up to over 350 per event.

In order to improve the quality and efficiency of appraising project costs and guaranteeing the smooth conducting of arbitral procedures, we organized 19 appraisal units and some arbitrators to hold a meeting for exchanging experiences in the appraising of construction project costs. And based on the investigation, research, and collecting advice, we drafted the Temporary Regulations for the Organizations of Appraising Project Cost and their Work (the Temporary Regulations) in order to regulate the appraisal units, and the General Regulations on Appraising Cost Procedures of Hearing the Construction Project Disputes (for discussion) (the General Regulations) in order to provide arbitrators with guidelines on the procedures. The Temporary Regulations and the General Regulations were published in the 56th Term of the Beijing Arbitration and compiled as the Arbitrators Manual (II).

3. Construction of an Automated Office

First, we improved the arbitration information search system and added to the system the arbitrators case-handling status. Parties that input the case number and the name of the chief arbitrator in the search fields, can now access the status of the arbitrator who has been appointed by one or both parties and their representatives. Parties, representatives and arbitrators will have access to this specific information.

Second, we cooperated with the Net Communication of Beijing University Co. to develop an instant message system based on Socket technology and the Java Language. The system is being tested and partially performs the functions of automatically sending procedural notices, reminders of hearings and time limits of hearings to arbitrators, parties and representatives by computer, cell phone text message, email and telephone. This system improves the quality and efficiency of the service of our secretaries.

Third, the Office cooperated with domestic professional corporations in forum software to reform the forum system based on the PHP language and MySQL Database. The forum system was applied to the office LAN thus creating an online office, which allowed the staff to exchange and communicate interactively and in real-time. The forum promotes the share and exchange of information, knowledge, experience and skills between secretaries, and improves their professional skills.

4. Construction of Offices

At the end of last year, we purchased at auction the 15th floor of the China Merchants Tower for a reasonable price thereby leaving enough room for future development of the BAC. The office area available is now 4,994 square meters.

In addition, the office employed new secretaries and improved the training for new secretaries in last year.

This year is the 11th anniversary of the implementation of the Arbitration Law. In the past ten years, in improving the quality and efficiency of arbitration, we have focused on (1) the publicity of the Arbitration Law; (2) the rules for arbitrators; the formulation of arbitration rules, procedure and regulations; and (3) the improvement of working conditions. In the coming ten years, we shall continue to improve the quality and efficiency of arbitration, which means we shall pay further attention to the selection of arbitrators, the strengthening of the arbitration experience and the research of arbitral theory and practice. We hope that the BAC will be a window into the spirit of the arbitration community and the courage and personality of our pursuit of fairness and justice. We hope the BAC to be a cradle, from which will arise excellent people engaged in the arbitration business. With their integrity and talent they will establish themselves not only domestically but internationally, and in the process become the elites of the arbitration world. We hope that the BAC will be a platform on which elites from every industry exchange and share with each other their knowledge, experience and wisdom. Thus they will contribute to the enriching and developing of legal theories, legal thoughts and legal cultures. Lets strive side by side for the realization of this goal!

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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