1.  Background:

On 29 August 2016 the Jiangsu High People's Court made a judgement that anti-monolpoly disputes between two companies are not arbitrable. In the said case, the plaintiff as a distributor of the defendant initiated a lawsuit against the defendant and claimed that the latter abused its dominant market position and imposed vertical restrainsts. The defendant then argued that the disputes shall be subject to arbitration to the exclusion of the jurisdiction of the court pursuant to the distribution agreement. After two instances of hearing lasting for around one year, the Jiangsu High People's Court finally rejected the argument of the defendant mainly based on the ground that anti-compatitive behaviours not only involve the interests of the contractual parties but also the interests of the public, third parties and consumers. In the opinion of the Jiangsu High People's Court, unless the law clearly provides that anti-monopoly disputes can be submitted to arbitration, the said disputes are not arbitrable.

On 1 April 2016 the Shenzhen Intermediate People’s Court also made a similar judgement in the case (Coolpad vs. Ericsson) by making reference to the Provisions of the Supreme People's Court on Several Issues Relating to Laws Applicable for Trial of Civil Dispute Cases Arising from Anti-competitive Behaviours (the “SPC Interpretations”). According to the SPC Interpretations, where a plaintiff files a civil lawsuit in terms of anti-monopoly disputes directly with a People's Court, the People's Court shall accept such case.

2. Comments

The above judgements raise debate on the scope of arbitration under PRC law. Under the PRC Arbitration Law, contractual disputes and disputes over property rights between citizens, legal persons and other organizations are arbitrable. Disputes expressly excluded from arbitration are those related to (i) marriage, adoption, guardianship, support and succession disputes; and (ii) administrative disputes. 

Given the above, anti-monopoly disputes between the independent business operators are arbitrable, and therefore, the court should have no jurisdiction over the case provided that arbitration has been agreed between the parties under the agreement from which the anti-monopoly dispute arise.

Further, the SPC Interpretations quoted by the Shenzhen Intermediate People’s Court in its ruling clearly provide that the acceptance of anti-monopoly dispute cases shall be made upon the fulfilment of other criteria for acceptance of lawsuit stipulated by the laws. Pursuant to the PRC Civil Procedure Law, where the parties have concluded on arbitration agreement, the People's Court shall not accept the case, unless the arbitration agreement is void. Therefore, the SPC Interpretations do not necessarily lead to the conclusion that only the courts have jurisdiction over the anti-monopoly disputes.

Notwithstanding the above, it is noteworthy that there is a potential risk that an arbitration clause so agreed may not be upheld for anti-monopoly disputes. Due to the lack of clear guidance about the arbitrability of anti-monopoly disputes, it cannot be excluded that courts in China may follow the existing rulings of the Jiangsu High People’s Court and the Shenzhen Intermediate People’s Court. It would be good if the above uncertainties can be solved by an official interpretations from the Supreme People’s Court.