A brief outline of the development of legal regulation of international commercial arbitration in the People's Republic of China
In this article, the author reviews the development of the legal system of international commercial arbitration (ICA) in China in its relationship with the history of legislation in this area. According to the author, the development of arbitration legislation in the field of ICA in China is strongly influenced by the degree of openness of the country. It is argued that the legislative regulation of the ICA in the People's Republic of China (PRC) began precisely with the policy of reform and openness and took place in constant interaction with it, and the "One Belt, One Road" initiative brought it to a new level. The author concludes that the arbitration legislation in the PRC needs further updating.
Keywords: international commercial arbitration in China; China's reform and openness policy; China's Arbitration Law; Regulations of the Supreme People's Court of China; legal support for the "One Belt, One Road" initiative.
An overview of the development of China's legal system related to international arbitration is inseparable from an overview of the history of legislation in the field of ICA. Arbitration is a social method of dispute resolution, the emergence and development of which is closely related to the level of economic development. The development of arbitration legislation in the field of ICA is strongly influenced by the degree of openness of China. It can be said that it began precisely with the policy of reform and openness and developed in constant interaction with it.
Chinese legislation in the field of ICA in the 1950s - 1980s.
Chinese legislation in the field of ICA dates back to the 1950s. After the formation of new China in 1949, the country received strong support from the Soviet Union, primarily economic assistance. In the first half of 1950 The Governments of China and the Soviet Union have consistently signed the Treaty on Soviet-Chinese Friendship, Alliance and Mutual Assistance and other related agreements on credit issues, on cooperation in the field of civil aviation, on contracts with Soviet experts and on a number of other economic and trade issues. Thus, the new China, i.e. The People's Republic of China began to present itself in the foreign economic trade market.
In 1954, the State Council issued a decision on the establishment of a foreign trade arbitration commission within the framework of the Chinese Council for the Development of International Trade <1>, which initiated the creation of the Chinese ICA system. In accordance with this decision, in 1956, on the model of the Arbitration Court at the CCI of the USSR, the Foreign Trade Arbitration Commission was officially established, which met the requirements of the development of foreign trade and was designed to protect China's interests in the foreign market. The Provisional Rules of Arbitration Procedures of the Foreign Trade Arbitration Commission adopted by it became the first arbitration rules of the ICA of China <2>. Although these rules were not systemic, they settled a number of important arbitration issues, such as the limits of arbitration competence, the process of proceedings, the application of interim measures, enforcement of an arbitral award, etc.
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<1>
<2>
In 1957, the Ministry of Foreign Economic Relations of the USSR and the Ministry of Foreign Economic Relations and Foreign Trade of the People's Republic of China, proceeding from the desire to develop trade and economic relations between the USSR and the People's Republic of China, signed a Protocol on the General conditions for the supply of goods from the USSR to the People's Republic of China and from the People's Republic of China to the USSR. Chapter XIII "Arbitration" of this protocol provided for the binding nature of arbitration. In p . 1 it was stated that all disputes arising out of or in connection with the contract and not amenable to settlement by negotiation or correspondence, they are not subject to the jurisdiction of general courts and must be resolved in the Arbitration Court at the CCI of the USSR in Moscow in accordance with the Rules of this Arbitration Court (if the defendant is an enterprise or organization of the USSR) or in the Foreign Trade Arbitration Commission at the Chinese Committee for the Promotion of International Trade in Beijing in accordance with the Rules on the Proceedings before this Commission (if the defendant is a foreign trade enterprise or organization of the People's Republic of China).
In 1958, the State Council decided to create a maritime arbitration committee. In 1959, the Maritime Arbitration Commission of the China Council for the Promotion of International Trade (CCPIT) was established, which adopted the relevant arbitration rules. In the 1960s and 1970s, China's economic development slowed down <3>, and the country's democratic and legal systems were destroyed, but the ICA legal system created at that time laid the foundation for the rapid restoration of Chinese arbitration after the proclamation of a policy of reform and openness.
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<3> The "Cultural Revolution" in China in 1966 - 1976.
The work of the third plenum of the Central Committee of the 11th convocation of the Communist Party of China in 1978 opened the historical curtain on the policy of reform and openness, and the focus of the work of the party and the country gradually shifted to economic construction and the construction of a socialist legal system.
The Law of the People's Republic of China "On Mutual Joint Ventures of Chinese and Foreign Capital" <4> (hereinafter - the Law on Joint Ventures), adopted in 1979, assumed a leading role in settling disputes between the parties to Chinese joint ventures with foreign investments through arbitration (Article 16). According to this Law, if the parties to a joint venture have a dispute and the board of directors cannot come to an agreement, then this dispute is transferred to Chinese arbitration institutions or, by agreement of the parties, to foreign arbitration institutions for mediation or arbitration. If the parties to the joint venture do not have an arbitration clause in the contract or have not reached a written arbitration agreement, they can file a lawsuit with the People's court.
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<4>
At the third meeting of the Fifth National People's Congress in 1980. Yao Yilin, Vice Premier of the State Council, pointed out that in order to develop economic legislation and achieve economic justice, the positions of commercial arbitration should be strengthened. In accordance with this, in 1981, the Law of the People's Republic of China on Economic Contracts was adopted <5>, Chapter V of which ("Mediation and arbitration of disputes related to economic contracts") provided for the settlement of disputes related to economic contracts through arbitration.
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<5>
Thus, Article 48 of this Law ordered the parties to immediately negotiate in the event of a dispute over an economic contract. According to this article, if negotiations fail, either party can contact the contract management agency appointed by the State for mediation or arbitration, or directly file a lawsuit with the People's Court. In art . 49 it prescribed the mandatory execution of the agreement reached through mediation, and also provided for the possibility of filing a claim with the people's court within 15 days from the date of receipt of the arbitration decision in case one or both parties disagree with this decision. Article 50 defined the period during which mediation or arbitration could be resorted to - one year from the day when the parties learned or should have learned about the violation of their rights. Exceeding this deadline deprived the parties of the right to demand mediation or arbitration.
The Rules of the People's Republic of China on Arbitration of Economic Contracts <6>, promulgated by the State Council in 1983, contains more detailed provisions on the construction of China's arbitration system, including specific provisions on the nature of institutions, the scope and jurisdiction of arbitration.
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<6>
It should be noted, however, that all laws and regulations adopted at that time were focused on the settlement of internal disputes over economic contracts and deliberately avoided regulating the ICA. It can be said that although the arbitration legislation at an early stage of the reform and openness policy began to pay attention to the settlement of international commercial disputes, the main focus at this stage was still on the creation of an internal arbitration system.
As for the ICA, the Civil Procedure Law of the People's Republic of China (experimental version) <7>, adopted in 1982 (hereinafter referred to as the Civil Procedure Law (experimental version)), has taken a leading role in creating legislation in the field of ICA. Chapter 20 of this Law separately defines the jurisdiction of the ICA, the validity of decisions, the preservation and enforcement of ICA decisions. In general, the conditions he created were optimal and the procedures were simple, which was a good start for the ICA of China.
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<7>
The Law of the People's Republic of China on Foreign Economic Contracts <8>, adopted in 1985, also contains provisions on the levels of substantive law, clarifying that disputes should be resolved through arbitration in the presence of an arbitration clause or a separate written arbitration agreement.
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<8>
The promulgation of the General Principles of Civil Law of the People's Republic of China (hereinafter - the General Principles of Civil Law) <9> in 1986 marked the initial formation of the civil legal system of China, in which the regulation of the ICA and commercial legal relations provided legal protection for civil and commercial activities with foreign elements. Chapter V of this Law regulates the procedures of civil proceedings, consideration of cases related to the ICA, as well as the jurisdiction of ICA institutions, interim measures, and legal assistance.
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<9>
With the development of civil and commercial activities involving foreign elements, dispute resolution methods in this area, including arbitration, have also attracted the attention of legislatures. A significant event in the development of the legal system of the ICA of China was the ratification of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter - the New York Convention) <10> by the Standing Committee of the National People's Congress in 1986. Even at the beginning of the reform and openness policy, Deng Xiaoping pointed out that it was necessary to intensify the study of international law, therefore, China's accession to the New York Convention was an extremely important event from the point of view of building a global system for the enforcement of arbitral awards.
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<10> Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) [in Russian].
From a legislative point of view, the ratification of international conventions means their inclusion in the legal sources of China, therefore the New York Convention has become an important source in the legal system of the ICA of China. From the point of view of legal development, international and domestic legal norms not only achieve internal harmony and consistency within the framework of China's unified legal systems, but also become interconnected and develop in interaction. Thus, directly or indirectly, the New York Convention plays an important role in the development of the ICA of China.
At the level of international law, when joining the Convention, China made reservations, according to which it distinguishes domestic arbitration from the ICA in building its legal arbitration system and focuses on commercial arbitration in general. With regard to the domestic application of treaties, the New York Convention has also profoundly influenced China's legislative work on specific issues such as determining the validity of arbitration agreements and judicial review of arbitral awards.
Thus, China's arbitration legislation in the field of ICA at the initial stage of the reform and openness policy was mainly focused on the creation of an arbitration system and its implementation in practice. On the one hand, the functions of the arbitration institutions of the ICA in China, which were gradually restored due to the legislation in the field of ICA, consistently provided legal support for the policy of reform and openness. On the other hand, by joining the New York Convention, China contributed to its integration into the international arbitration legal system, which, in turn, became one of the incentives for the development of the legal system of the ICA of China.
Chinese arbitration legislation of the 1990s related to foreign countries
Deng Xiaoping's policy of reform and openness established a socialist market-based economic system, and China initiated negotiations to restore its status in the General Agreement on Tariffs and Trade and to join the World Trade Organization (WTO). These events became significant for China in the 1990s and influenced China's legislative work in various fields, including, to a certain extent, legislation in the field of ICA.
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<11> The General Agreement on Tariffs and Trade (eng. General Agreement on Tariffs and Trade, GATT, GATT) is an international agreement concluded in 1947 with the aim of restoring the economy after World War II.
Since 1986, negotiations on China's restoration of its status in the GATT have become the main focus of China's work on the development of an openness policy in the 1990s. During the resumption of negotiations at the initial stage of WTO accession, China adopted a large number of legislative acts and laws in accordance with the principles of unification of the legal system, equality, openness and transparency. The legislative regulation of the ICA in the 1990s began with several provisions in Chapters 28 and 29 of the Civil Procedure Code of the People's Republic of China, promulgated in 1991. (hereinafter referred to as the Civil Procedure Code of 1991) <12>. Firstly, the issues of jurisdiction were worked out. This law, based on the Code of Civil Procedure (pilot version), allowed the parties to choose "other arbitration institutions" for arbitration, in addition to the Chinese institutions of the ICA, continuing to use the provisions of the Law on Joint Ventures, and abolished the provision according to which "foreign parties must choose Chinese arbitration institutions for arbitration", which demonstrates respect for the autonomy of the will of the parties. Secondly, the changes affected interim measures. The Code has changed the procedure of judicial proceedings: the application is submitted to the court of second instance not at the location of the arbitration institution, but at the location of the defendant. This ensured the convenience of further enforcement of the arbitral award and at the same time unified the Chinese legal system. Thirdly, the provisions concerning the enforcement of arbitral awards have been finalized. The 1991 Code of Civil Procedure added specific circumstances and consequences for the annulment of arbitral awards. Thus, the Code introduced the principles of the New York Convention into the practice of judicial proceedings and transformed domestic law in accordance with international law. As a result, this allowed the parties to re-arbitrate or sue after the annulment of the award. Fourthly, thanks to the accession to the New York Convention, Chinese arbitration institutions were no longer required to seek judicial assistance from Chinese courts for the enforcement of judgments outside the country, since the Convention provides that the parties can apply for recognition of an arbitral award and its enforcement directly to foreign courts. In addition, China was also required to recognize and enforce the decisions of foreign arbitration institutions in accordance with international conventions or the principle of reciprocity, fulfilling relevant international legal obligations.
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<12>
The relevant provisions of the 1991 Code of Civil Procedure were in fact a summary of relevant legislation and international conventions adopted since the reform and openness policy was implemented, and to a certain extent completed the initial systematization of the Chinese ICA legal system. However, although the 1991 Code of Civil Procedure played an important role in the arbitration legislation of China, it could not serve as a full-fledged instrument for regulating either the entire civil sphere in general or the ICA in particular. Chinese arbitration legislation was still relatively fragmented and needed its own unified legislative framework.
In fact, even at the beginning of the reform and openness policy, Chinese scientists, creating the Chinese legal system of international commercial arbitration, began to pay attention to the legislation in the field of ICA of foreign states and call for the development of appropriate laws. In 1980 Zhou Jia and Lu Shengzu wrote a Study of International Commercial Arbitration <13>. In 1983, Fang Zhiyin translated and published the European Convention on Foreign Trade Arbitration <14>, the UNCITRAL Model Law on ICA <15> and the Inter-American Convention on International Commercial Arbitration <16>. However, since China was still at the initial stage of a policy of reform and openness at that time, there was not only a lack of legislative technology, but also an awareness of the objective need for such legislation.
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<13>
<14> European Convention on Foreign Trade Arbitration (Geneva, April 21, 1961) [in Russian].
<15> The UNCITRAL Model Law on International Commercial Arbitration of 1985 With amendments adopted in 2006. [in Russian].
<16> Inter-American Convention on International Commercial Arbitration (Panama, January 30, 1975) [in Russian].
With the establishment of the socialist market economy system at the 14th National Congress of the Communist Party of China and at the third plenary session of the 14th Central Committee, legislatures became more aware of the role of arbitration in the economic development of the country. In 1994, the Law of the People's Republic of China on Arbitration (hereinafter referred to as the Arbitration Law) was introduced <17>. It became an important milestone in the process of systematizing China's arbitration legislation and had a serious impact on the legislation in the field of ICA, as it became the first law to streamline China's arbitration system after the proclamation of a policy of reform and openness. He stressed the autonomy of the will as a whole (according to Article 8 of Chapter 1 of the Law, arbitration is an independent activity, and administrative bodies, public organizations and citizens should not interfere in it), and also pointed out that the arbitration is final (Article 9 of Chapter 1. If, after the arbitration decision, the parties continue to have controversial issues and the parties again apply to arbitration or file a claim with the people's court, the arbitration commission and the people's court may refuse to consider the case). Along with the basic principles, the Arbitration Law also stipulated such specific issues as the creation of arbitration institutions, the selection and appointment of arbitrators, etc. Thus, a distinction was made between arbitration and litigation in order to distinguish arbitration as a separate method of public dispute resolution. In addition to the general provisions on arbitration, Chapter VII of the Law also contains special provisions on specific ICA issues, such as the scope of the ICA, ICA procedures, annulment of arbitral awards, etc., as well as recognition and enforcement of foreign arbitral awards.
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<17>
Although the promulgation of the Arbitration Law has contributed to the further systematization of Chinese arbitration legislation relating to foreign affairs, it has also caused controversy on many aspects. Firstly, there were debates in academic circles on the issue of the procedural mechanism for the supervision of the ICA, namely, whether the supervision of internal arbitration and the ICA should be unified throughout the country or carried out independently on the ground. In the 1990s, a group of scientists led by Professor Chen An and Professor Xiao Yongping conducted an in-depth analysis of the problem of supervision of ICA. Professor Chen An pointed out in the article "Review and Analysis of the Chinese mechanism for the arbitration supervision of Foreign Affairs" <18> that the Chinese Arbitration Law prescribes separate mechanisms for the supervision of domestic arbitration and the ICA. Hindering the necessary judicial control and supervision of the content of ICA arbitral awards does not correspond either to the actual national conditions of China, nor to the relevant international treaties in which China participated, nor to the advanced general provisions of modern arbitration legislation in the world. This does not contribute to China's rapprochement with international practice and the modernization and internationalization of the legal system of the ICA of China.
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<18> Chen An. Review and analysis of the Chinese mechanism of arbitration supervision of foreign affairs // Chinese Social Sciences. 1995. Issue 4. p. 29.
Professor Xiao Yongping in the article "Analysis of the mechanism of supervision of the ICA in China - comments and discussion of the article" notes that the correct establishment of the scope of measures for supervision of arbitration by Chinese courts determines the direction of development of the arbitration legal system of China <19>. At this stage, it is absolutely necessary to introduce a separate system of internal arbitration supervision and external (international) arbitration supervision, which also corresponds to international practice. Only after the internal arbitration legal system is fully developed, these two supervisory mechanisms can be integrated, however, the purpose of integration is not to expand, but rather to narrow the scope of judicial supervision, i.e., to bring the internal arbitration system closer to the ICA legal system, because the parties often choose arbitration in order to achieve greater efficiency, than justice. The arbitration law should meet such expectations of the parties.
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<19> Xiao Yongping. Analysis of the mechanism of supervision of ICA in China - comments and discussion of the article // Chinese Social Sciences. 1998. Issue. 2. p. 97.
Nevertheless, Professor Chen An, in his article "On the mechanism of supervision of ICA in China", argues that the finality and effectiveness of arbitration should be understood dialectically, avoiding unilateral emphasis on effectiveness and ignoring fairness <20>.
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<20> Chen An. On the mechanism of supervision of ICA in China // Social Economy of China. 1995. Issue 4. pp. 19-30.
From the point of view of developing specific provisions of the Chinese Arbitration Law, problematic topics such as mandatory arbitration agreements on the selection of arbitration commissions that ignore the contractual nature of relationships, denial of ad hoc arbitration, lack of a concept of nationality of arbitral awards and improper application of the procedure for the cancellation of arbitral awards, to a certain extent prevented the convergence of the legal system of the ICA of China with international standards. In the face of these problems, the Supreme People's Court had to give judicial interpretations on specific cases based on the application of the Arbitration Law and to unify standards of judicial supervision to solve practical problems by creating a "reporting system" <21>.
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<21> Notification of the Supreme People's Court on People's courts dealing with issues related to foreign arbitration (Law [1995] N 18) and Notification of the Supreme People's Court on issues related to the cancellation of foreign arbitral awards (Law [1998] N 40).
In 1992, a judicial interpretation of the 1991 Code of Civil Procedure was published ("The Conclusion of the Supreme People's Court on a number of issues related to the application of the Code of Civil Procedure of the People's Republic of China" <22>), which settled the ICA in China and further clarified the subject and object of legal relations to determine the nature of the ICA, thereby unifying the relevant judicial standards.
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<22>
Thus, in China in the 1990s, the legislative framework of the ICA sphere was gradually formed, based on the 1991 Code of Civil Procedure and the Arbitration Law. In the process of continuous systematization of legislation limited by the peculiarities of time, the above-mentioned two Laws revealed certain problems, which caused discussions in academic circles and forced the Supreme People's Court to use various judicial interpretations to specify the text of the Arbitration Law in matters of its application in practice.
Legislation in the field of ICA in China at the beginning of the XXI century.
Since the 21st century, the policy of reform and openness has faced a new situation in the country, and a new stage has also begun in the development of the ICA in China. In 2007, 2012 and 2017, at the legislative level, i.e. at the level of the National People's Congress and its Standing Committee, the 1991 Code of Civil Procedure was significantly revised, and all three of its editions also had a certain impact on arbitration legislation in China, including the ICA sphere.
Firstly, the amendments of 2007, 2012 and 2017 eliminated the difference between the 1991 Code of Civil Procedure and the Law on Arbitration in matters of judicial review of arbitral awards, and also unified the standards of judicial review for commercial arbitration. In particular, the possibility of using the fact of incorrect application of the law as a basis for non-enforcement of an arbitration award was eliminated. In addition, these amendments narrowed the scope of the basis for verifying facts and evidence, changing the wording "insufficient evidence" to "forgery or concealment of evidence". This standard transformed the system of consideration of arbitral awards on the merits and to a large extent made Chinese arbitration consistent with the principles of autonomy and civil procedure and the principles of procedural supervision adopted in the modern world <23>.
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<23> Fu Yulin. A study of important issues of revision of civil procedure law // Journal of the East China University of Political Science and Law. 2012. Issue 4. p. 91.
Secondly, changes have been made to the enforcement of interim measures. There are relevant provisions on filing an application for interim measures before the start of arbitration, affecting issues of property and evidence. In addition, the scope of the concept of "interim measures" also includes measures related to the provision of evidence. On the one hand, such an extension of the concept is in accordance with other laws of China; On the other hand, it also corresponds to the direction of development of temporary arbitration measures, which contributes to bringing Chinese arbitration legislation in line with international standards <24>.
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<24> Li Jing. New development of interim measures in international commercial arbitration in China: from the point of view of amendments to civil procedural legislation and amendments to the rules of arbitration // Journal of Northwestern University (edition on philosophy and social sciences). 2014. Issue 6. pp. 22-23.
In addition, back in the 1980s, Chinese scientists began to pay attention to the substantive law in the ICA. For more than 20 years, Chinese law and justice have also tried to solve this problem. The Law of the People's Republic of China on the Application of Law in Civil Relations Related to Foreign States, adopted in 2010, is the first legislative act that established the applicable substantive law in relation to the ICA <25>.
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<25> Lu Shengzu. Regarding the application of the law in commercial arbitration related to foreign countries: discussion of the differences between legal arbitration, friendly arbitration and mediation // Review of Laws. 1984. Issue 1. p. 11.
The Law on Arbitration has not undergone significant changes since its promulgation in 1994 and to some extent did not correspond to the current development of arbitration. Thus, since 1994, despite the amendments of 2007, 2012 and 2017, significant work has not been carried out to review and update legislation in the field of ICA, but ICA issues have arisen in judicial practice constantly, therefore, the publication by the Supreme People's Court of judicial interpretations and other documents to resolve issues arising in practice became an appropriate measure. The delay in updating the Law on Arbitration has led to the fact that the judicial authorities have faced a lot of problems in judicial practice. Therefore, in 2006, the Supreme People's Court, based on the generalized experience of past court proceedings, issued a Judicial Interpretation of the Arbitration Law of the People's Republic of China <26>. The interpretation consists of 31 articles with more detailed provisions on the form of the arbitration agreement, the subject of the arbitration agreement, the choice of arbitration institutions, acceptance by other parties of the arbitration agreement, autonomy and validity of the arbitration agreement. Looking at the relevant provisions, it can be concluded that the interpretation has made obvious improvements in determining the validity of the arbitration agreement.
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<26>
In addition, the interpretation concerned judicial supervision procedures, mainly the procedure for filing an application for the annulment of an arbitral award and the procedure for filing an application for enforcement of an arbitral award. As for the cancellation procedures based on the application of the Arbitration Law and the relevant provisions of the Code of Civil Procedure, the interpretation clarified the standards for interpreting the relevant provisions at the level of judicial practice, standardized specific procedures and strictly limited the possibility of re-applying to arbitration before the cancellation of the award. With regard to the enforcement of arbitral awards, the interpretation revealed the relationship between annulment and enforcement of an arbitral award, emphasized the effectiveness of rejecting objections, clarified the characteristics of estoppel in decisions made as a result of mediation and a peace agreement. In general, the accepted interpretations led to the fact that the provisions of the Arbitration Law were revised with an emphasis on the implementation of the concept of arbitration support from the point of view of procedural norms, and complex problems of judicial supervision of arbitration that arose earlier were solved.
The return of Hong Kong and Macau to China in the late 1990s and the weakening of relations between mainland China and Taiwan led to China gradually turning from a single jurisdiction into a country with multiple jurisdictions. It also had a direct impact on the construction of the ICA legal system in China, which led to the promulgation of new regulations:
- Agreements of the Supreme People's Court on Mutual Enforcement of Arbitral Awards between Mainland China and the Special Administrative Region of China - Hong Kong (hereinafter - the Hong Kong Agreement) <27>;
- Agreements of the Supreme People's Court on the Mutual Enforcement of Arbitral Awards between Mainland China and the Macao Special Administrative Region (hereinafter referred to as the Macao Agreement) <28>;
- The Provisions of the Supreme People's Court on the Recognition and Enforcement of Arbitral Awards in Taiwan (hereinafter referred to as the Taiwan Rules <29>).
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<27>
<28>
<29>
Prior to the return of Hong Kong to China, <30> the recognition and enforcement of arbitral awards between them were regulated by the New York Convention. After the return, issues of jurisdiction, arbitration procedures and refusal to recognize and enforce arbitral awards are regulated by the Hong Kong Agreement. Being the first interregional arbitration agreement of China, the Hong Kong Agreement based on the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China <31> effectively filled in the gaps in this area, implemented the construction and coordination of mechanisms for the legislative regulation of the ICA in China.
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<30> Hong Kong (Hong Kong) On July 1, 1997, it returned to the jurisdiction of China after a 99-year lease of this territory by the United Kingdom. According to the Beijing Convention of 1898, Hong Kong, along with 235 adjacent islands, was leased to the British for 99 years from July 1, 1898.
<31>
Unlike Hong Kong, Macau did not apply the New York Convention before its return to China <32>, so the recognition and enforcement of arbitral awards between Macau and mainland China at that time was largely consistent with the Law on Commercial Arbitration involving Foreign Elements adopted in Macau in 1998 <33>.
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<32> The transfer of Macau to the People's Republic of China (officially "Portugal's transfer of sovereignty over Macau to the People's Republic of China"; December 20, 1999) marked the end of the Portuguese colonial Empire. Macau has become the second special administrative region of China under the "One Country, two Systems" policy, whose special status is guaranteed until 2049.
<33>
After the return of Macau to China, the Chinese Government, on the one hand, extended the New York Convention to it under the premise of mutual reservations, and Macau began to recognize and enforce arbitration decisions of foreign States adopted in accordance with it. On the other hand, the Supreme People's Court, based on the model of the Hong Kong Agreement, also formulated the Macau Agreement. However, although the Macau Agreement is structurally modeled after the Hong Kong Agreement, it has also introduced new rules in areas such as property regulation measures, suspension of enforcement of arbitral awards and information exchange. This has further increased the level of judicial assistance between mainland China and Macau.
In comparison with the Hong Kong and Macao Agreements, the recognition and enforcement of arbitral awards between mainland China and Taiwan is more complicated, and the process of developing relevant regulations took longer. Since 1949, mainland China and Taiwan have been in political opposition for a long time <34>, therefore recognition and enforcement of arbitral awards was practically impossible. As relations improved after the start of the reform and openness policy, recognition and enforcement of arbitral awards gradually became possible. Since the New York Convention does not apply to Taiwan, Taiwan initially recognized and enforced the arbitral awards of mainland China in accordance with the Taiwan Rules of Commercial Arbitration <35>, published in 1961 and revised twice in the 1980s. The appearance of the Taiwan Arbitration Law in 1998 brought additional clarity to the issue of recognition and enforcement of arbitral awards of mainland China in Taiwan. In mainland China, Taiwanese arbitral awards were recognized and enforced on the basis of the 1991 Code of Civil Procedure and the Arbitration Act. In 1991, when Ren Jianxin, Chairman of the Supreme People's Court, made a statement that the Supreme People's Court recognizes decisions in civil cases in Taiwan, the recognition and enforcement of civil and commercial judgments and arbitral awards between mainland China and Taiwan moved to a new level of development. In 1998 The Regulations of the Supreme People's Court on the Recognition of Civil Court Decisions in the Taiwan Region (hereinafter referred to as the 1998 Regulations) were published, aimed at recognizing civil court decisions and arbitral awards in the Taiwan region based on the principle of "One country, two systems" <38>. However, due to differences in arbitration legislation between mainland China and Taiwan, some problems have emerged in practice. In response to these questions, the Supreme People's Court in 2015, based on the 1998 Regulations, issued the Taiwan Rules replacing the 1998 Regulations. The Taiwan Rules further clarify the meaning and scope of arbitral awards in Taiwan, and the New York Convention is more conducive to the recognition and enforcement of Taiwanese arbitral awards on the mainland.
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<34> Taiwan is one of the provinces of China. Taiwan is also called the Republic of China, unlike mainland China, the People's Republic of China. Communism and capitalism have been at war in China since the 40s of the XX century. The capitalist system was defeated, and capitalism actually remained only in Taiwan. Communism, due to the influence of the United States, could not fully strengthen its position, and therefore political opposition existed for a long time.
<35>
<36>
<37> Ren Jianxin, born in August 1925, a native of Fencheng, Shanxi (now Xiangfen), joined the Communist Party of China in June 1948. Lawyer, graduated from the School of Chemical Engineering, Peking University. Chairman of the Supreme People's Court, secretary of the party group in 1997 and Secretary of the political department. Chairman of the Legal Committee of the CPC Central Committee. After April 1998, he held the position of Honorary Director of the 14th China International Economic and Trade Arbitration Commission and the Chinese Maritime Arbitration Commission.
<38> "One country, two systems" is the constitutional principle of the People's Republic of China, describing the governance of Hong Kong and Macau since they became special administrative regions of China in 1997 and 1999, respectively.
Finally, at the fourth plenary meeting of the 18th Central Committee of the Communist Party of China, a clear course was taken to improve the diversified dispute resolution mechanism, including arbitration, which once again demonstrated the determination to support and develop arbitration. As for the prospects for the general development of arbitration, the Supreme People's Court in recent years has followed the direction indicated by the central Government and has consistently issued many court documents to create a variety of dispute resolution mechanisms, including arbitration. Through special provisions on judicial supervision of arbitration, enforcement of arbitral awards, etc., the issues of the relationship between state courts and arbitration were further clarified, possible local protectionism was consistently overcome and the judicial position regarding the support and development of arbitration was expressed.
The PRC is actively working to promote the Silk Road Economic Belt and the Maritime Silk Road of the XXI Century initiatives (together included in the One Belt, One Road project). This work raises questions about the development of international arbitration as a system aimed at the legal protection of the "One Belt, One Road", since the ICA acts as an effective mechanism for resolving disputes that are in the spotlight. China has begun to pay attention to the creation of a modern arbitration system with international recognition. In 2015 The document "Several opinions providing judicial services and guarantees for the One Belt, One Road initiative", issued by the Supreme People's Court, has appeared. This document began to promote international commercial and maritime arbitration within the framework of the "One Belt, One Road" initiative. In p . 35 of the document states that "The Chinese government will support national arbitration institutions in establishing a joint arbitration mechanism with arbitration institutions of the participating countries of the One Belt, One Road project, conduct an ad hoc mechanism study for enterprises registered in the pilot free trade zone, authorize and support branches established by foreign arbitration institutions, conduct arbitration in Shanghai's Lingang New District" <39>.
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<39>
A free trade zone is an integral part of the implementation of the One Belt, One Road project. In 2015 The State Council issued a document entitled "Comprehensive program for the reform and opening of the pilot free Trade Zone of China (Shanghai)" <40>, in which it proposed "further alignment" with international standards of provisions related to the resolution of commercial disputes with a foreign element, optimized arbitration rules in the experimental free trade zone, expressed support for the entry of well-known international institutions entered the experimental free trade zone and improved the internationalization level of the ICA of China. Thus, this document opened the possibility of creating a national alliance of arbitration services in the free trade area and defined a mechanism for exchange and cooperation between Asia-Pacific arbitration institutions, thereby indicating the direction for the creation of a free trade zone and the development of the ICA of China.
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<40>
In 2016, the Supreme People's Court issued an Opinion of the Supreme People's Court on ensuring judicial protection during the construction of experimental free trade zones <41>. It contains specific provisions on arbitration in the free trade area, as well as expands the criteria for determining the ICA in the free trade area. The Conclusion states that "an arbitration agreement is recognized as valid if an agreement has been reached between enterprises registered in the experimental free trade zone that the relevant dispute will be resolved by arbitration in a certain territory of China and a specific arbitrator in accordance with specific arbitration rules." This provision creates prerequisites for the development of special (ad hoc) arbitration in the free trade area, thereby effectively contributing to the development of the international arbitration industry in China. In addition to central political support, the free trade area is also constantly introducing internationally recognized arbitration rules into its practice. For example, the Arbitration Rules of the Experimental Free Trade Zone of China (Shanghai) <42>, promulgated by the Shanghai International Economic and Trade Arbitration Commission (CIETAC) in 2014, emphasize the features of the free trade zone by introducing an open list of arbitrators, emergency arbitration, friendly arbitration and other systems.
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<41>
<42>
In January 2018, China published an Opinion on the establishment of mechanisms and institutions for the settlement of international commercial disputes within the framework of the "One Belt, One Road" initiative <43>. Currently, some success has been achieved in the implementation of the One Belt, One Road project, and in the process of generalizing the experience, the Supreme People's Court selected a number of typical cases within the framework of the project to unify the rules of judicial supervision.
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<43>
On this basis, in July 2018, the Supreme People's Court of the People's Republic of China officially established the International Commercial Court. He also actively supports the introduction of international commercial arbitration as one of the ways to resolve international commercial disputes.
Thus, Article 11 of the document on the establishment of the International Commercial Court <44> states that the Supreme People's Court establishes a committee of international commercial experts and selects qualified international commercial mediation institutions and international commercial arbitration institutions to create a single dispute resolution platform that will combine mediation, arbitration and litigation. Within the framework of this single platform, the parties choose an alternative dispute resolution method (arbitration, mediation, mediation, etc.) that they consider appropriate for resolving international commercial disputes. Article 2 (4) states that the scope of activity of the International Commercial Court includes cases requiring interim measures of arbitration, as well as applications for the cancellation or enforcement of decisions of international commercial arbitration institutions (in accordance with Article 14 of this document). Article 14 provides that, when choosing an arbitration institution to resolve a dispute, the parties may apply to the International Commercial Court for the preservation of evidence and property before the request for arbitration or after the commencement of the arbitration process.
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<44> Adopted at the 1743rd meeting of the Judicial Committee of the Supreme People's Court on June 25, 2018, entered into force on July 1, 2018 (Fa Shi [2018] N 11).
In December 2018, the Central Cabinet of the Government of the People's Republic of China published a document "Several conclusions on improving the arbitration system and increasing confidence in arbitration" <45>. This document indicates that the multi-level arbitration system based on China's national conditions and adapted to the development of internationalization will be improved; the management system and mechanism combining administrative leadership and industry self-discipline will be improved; the quality and capabilities of the arbitration staff will also be improved and expanded. The speed of mediation and reaching a settlement agreement, as well as the speed of voluntary enforcement of a court decision, will be significantly increased, trust in arbitration will increase, and the international influence of the global and regional Chinese arbitration brand will be expanded. For market participants and individuals, arbitration will become the preferred method of civil and commercial dispute resolution. A new standard of arbitration work will be fully formed, including accountability to the party committee, institutional independence, sectoral self-discipline, judicial and social supervision. The arbitration legal system will become one of the elements of a socialist market economy.
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<45>
The key tasks to achieve these goals are:
1) full support and development of arbitration centers with national and even global influence;
2) ensuring the availability of arbitration on public legal services platforms;
3) promotion of Internet arbitration, big data platforms and development of information and communication technologies;
4) comprehensive solution of problems affecting the development of arbitration;
5) implementation of comprehensive pilot reforms to improve the internal management structure of arbitration institutions;
6) development of amendments to the Law on Arbitration;
7) Speeding up the process of establishing the Chinese Arbitration Association.
It should also be noted that the revision of the Arbitration Law was included in the legislative plan of the Standing Committee of the 13th National People's Congress <46> and again became the subject of heated discussions. On July 30, 2021, the Ministry of Justice of China issued a notice of public discussion of the new draft Arbitration Law of the People's Republic of China. Currently, the main arbitration institutions, research institutes and law firms in China are actively discussing this project. It is worth noting that it creates an opportunity for the development of ad hoc arbitration in China.
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<46>
We can conclude that since the beginning of the XXI century, Chinese legislation in the field of ICA has the following characteristics. Firstly, it follows the trends of the time and serves the development of the country. The return of Hong Kong and Macau to China led to the emergence of relevant interregional agreements, and the "One Belt, One Road" initiative contributed to the further development of the ICA system. All this indicates that China's legislation in the field of ICA and judicial work are in line with the policy of reform and openness.
Secondly, judicial interpretations are issued on the basis of relevant laws to resolve issues that arise in practice. Looking back at the path that legislation in this area has taken over the past 20 years, we have to admit that the Law on Arbitration needs to be updated, since it does not meet the requirements of modern law enforcement practice. Only amendments to the Code of Civil Procedure made some changes to it, which, however, were not significant. Undoubtedly, since the beginning of the XXI century. The policy of reform and openness is being implemented at a rapid pace, and the work of legislative bodies is becoming increasingly stressful, especially in the field of arbitration. Perhaps you should not rush to a legislative initiative. However, legislation should reflect the needs of arbitration practice, especially since the Law on Arbitration has not been amended for a long time, which forced the judicial authorities to issue a number of interpretations of the law based on law enforcement practice.
In general, more attention is being paid to the development of both domestic and international arbitration. This branch of law is developing, and solutions to urgent problems related to arbitration are being sought.
