The Shenzhen Court of International Arbitration (“SCIA”), formerly CIETAC's Shenzhen Sub-commission, published its latest rules (the "Rules") on 26 October 2016. The Rules will take effect on 1 December 2016.

This is the first time that SCIA has revised its rules since its launch in 2012, in the wake of the so-called "CIETAC split". The key feature of the new rules is that they enable SCIA to hear investor-state disputes and to administer arbitrations under UNCITRAL rules in mainland China.

Jurisdiction

Under the Rules, SCIA will accept arbitration cases related to investment disputes between states and nationals of other states. This makes SCIA the first arbitration institution in mainland China to administer investor-state arbitrations.

The decision to expand the scope of SCIA's jurisdiction follows the approach taken by other leading institutions, such as ICC and SIAC, which initially committed to administering commercial arbitrations, but have recently revised their rules to encompass investment disputes.

Arbitration Rules

Article 3 of the Rules provides that, where the parties submit an investor-state dispute to SCIA for arbitration, SCIA shall administer the case according to the UNCITRAL Arbitration Rules and the SCIA Guidelines for the Administration of Arbitration under the UNCITRAL Arbitration Rules ("SCIA Guidelines"). All parties involved in the arbitration, including arbitrators and counsel, should follow the SCIA Guidelines, which explain how the UNCITRAL rules apply to SCIA cases.

In addition, SCIA may also hear international commercial disputes in accordance with the UNCITRAL Rules.

Place of Arbitration

For commercial arbitrations, the Rules prescribe that if the parties have not agreed on the seat of arbitration, the seat shall be the domicile of SCIA. Depending on the circumstances of each case, SCIA may also determine another seat.

Notably, Article 3 of the SCIA Guidelines provides that, if there is no agreement on the seat for an investor-state arbitration and the tribunal does not decide otherwise, the seat of arbitration shall be Hong Kong.

The inclusion of investor-state disputes and the selection of Hong Kong as the default seat, are both welcome indications of SCIA's desire to expand and internationalise its offering. However, it remains to be seen whether investor-state arbitration will take off in Asia, which has so far seen far fewer of these cases than other regions. If so, it will be interesting to see whether other Chinese arbitration institutions follow in SCIA's footsteps.