On 12 September 2025, the Standing Committee of the 14th National People’s Congress of the People’s Republic of China (“PRC”) adopted a comprehensive revision to the Arbitration Law (the “Amended Arbitration Law”) — the first major overhaul since the regime came into force in 1995, following only minor revisions in 2009 and 2017 (the “1995 Arbitration Law”). Effective 1 March 2026, the Amended Arbitration Law underscores PRC’s commitment to modernizing its arbitration regime, aligning with international best practices, and advancing broader objectives of legal reform and global economic integration.

The revision process formally began in July 2021 with the Ministry of Justice of PRC presenting a draft for public consultation, which signalled the start of a multi year effort to modernize the regime. Over the following four years, proposals evolved through several readings — November 2024, April 2025 and finally September 2025 — during which the emphasis shifted from foreign related reforms to institutional governance and judicial support. Overall, this revision represents a major improvement to the foreign-related arbitration system. The Amended Arbitration Law actively aligns with the UNCITRAL Model Law on International Commercial Arbitration (“UNCITRAL Model Law”) and international best practices, making comprehensive revisions and enhancements to the legal framework governing foreign-related arbitration.

The Amended Arbitration Law consists of 8 chapters and 96 articles — key highlights are outlined in this article in relation to: (1) the introduction of this new legal framework for the PRC’s arbitration regime; (2) developments relating to arbitral proceedings; (3) the broadening of the scope of arbitration; and (4) the recognition and enforcement of arbitral awards.

1. Introducing New Legal Framework

The Existence of an Arbitration Agreement

Article 27 introduces a pragmatic approach to validating arbitration agreements. In particular, where there are disputes between the parties regarding the existence of an arbitration agreement, such an arbitration agreement will be deemed to exist if the following conditions are satisfied:

(1) one party applies for arbitration asserting the existence of an arbitration agreement;

(2) the other party does not deny the existence of such agreement at the first hearing;

(3) the arbitral tribunal has expressly reminded the parties of this issue; and

(4) the arbitral tribunal has recorded the fact that the other party did not deny the existence of the arbitration agreement.

This provision expands the means of establishing consent while safeguarding party autonomy and permits the early determination of challenges to the existence of an arbitration agreement at the outset of a proceeding to allow claims to advance more efficiently. Notably, implied consent cannot be inferred if the respondent fails to attend the first hearing or if the tribunal does not provide the requisite reminder and record.

The Arbitration Agreement and the principle of kompetenz-kompetenz

The principle of kompetenz-kompetenz refers to the arbitral tribunal’s authority to determine its own jurisdiction, including the validity of the arbitration agreement. The 1995 Arbitration Law granted such authority to arbitral institutions and PRC courts only. This notwithstanding, in practice, arbitral institutions typically delegated this authority to tribunals pursuant to their respective arbitration rules,1 and such delegation was generally recognized by the courts.2 The Amended Arbitration Law codifies this approach by expressly confirming the tribunal’s authority to decide on the validity of the arbitration agreement.

That said, Article 31 largely preserves the substance of Article 20 of the 1995 Arbitration Law, granting courts priority in jurisdictional review where concurrent authority is present. From a functional perspective, this means that the revised law does not fully embrace the kompetenz-kompetenz principle, as the court’s priority review effectively limits the tribunal’s autonomy in determining its own jurisdiction.

The 2021 draft amendment drew heavily on the UNCITRAL Model Law, proposing to defer judicial review by the courts until the conclusion of the arbitral proceedings. Under that approach, PRC courts would only review jurisdictional determinations during annulment or enforcement proceedings. Alternatively, parties could challenge the tribunal’s preliminary jurisdictional ruling within a prescribed period, while the arbitration would continue during the court’s review. This proposal was ultimately not adopted in the final version of the Amended Arbitration Law.

Seat of Arbitration

In PRC’s arbitration legislation, the concept of the “seat of arbitration” (or place of arbitration) had long been absent. Judicial practice traditionally relied on the location of the arbitral institution to determine the nationality of foreign-related awards. Consequently, when a foreign arbitral institution conducted arbitration seated in the PRC, the resulting award was treated as a foreign award and reviewed under the New York Convention. Under internationally accepted standards, however, such an award should be considered a PRC award and subject to review by PRC courts under its arbitration regime.

The Amended Arbitration Law introduces an important change: formal recognition of the “seat of arbitration” as a concept. Article 81 provides that parties may agree in writing on the seat of arbitration limited to foreign-related arbitration. By linking the applicable procedural law and judicial jurisdiction to the seat, Article 81 primarily encapsulates scenarios where a foreign arbitral institution administers arbitration proceedings seated in the PRC. In such cases, the applicable procedural law will be PRC law, and PRC courts will have supervisory jurisdiction over the proceedings — marking a significant departure from the previous practice of relying on the location of where an institution is situated (such as its headquarters) rather than the seat.3

Property, Evidence and Conduct Preservation

The Amended Arbitration Law introduces important changes to the preservation of property (Article 39) and evidence (Article 56) in support of arbitral proceedings. Previously, applications for such preservation were generally made after an arbitration was commenced, with requests submitted to the relevant arbitral institution, which then passed any preservation order to the court for approval. Under the new framework, parties may apply directly to the court for preservation of property or evidence before commencing arbitration in “urgent situations”. However, as the law does not define what constitutes “urgent situations”, the circumstances under which this revision can be deployed will likely require clarification through judicial interpretation from PRC courts.

Other revisions include requiring courts to handle preservation applications promptly (Articles 39 and 58) and giving parties the ability to request conduct preservation (maintaining the status quo) — e.g., ordering the other party to perform or refrain from certain actions that may render enforcement otherwise difficult (Article 39). Although the 1995 Arbitration Law did not explicitly include conduct preservation within the ambit of preservation measures, judicial practice has seen occasional cases supporting applications for such preservation during arbitration proceedings.4

However, these applications often encountered obstacles due to the absence of a statutory basis. After the implementation in the Amended Arbitration Law, parties to an arbitration may directly apply to competent judicial authorities for conduct preservation based on statutory provisions. This enables more timely and effective preventive measures, safeguarding a party’s legitimate rights and interests. Finally, parties may now proactively request expert appraisal on specialized factual issues (Article 56), rather than relying on the tribunal’s own initiative.

2. Procedural Development

Online Arbitration Proceedings

Historically, arbitral proceedings conducted online were not expressly recognized as a lawful form of arbitration under the applicable legal framework in the PRC. Consequently, it was not uncommon for parties to seek the annulment of arbitral awards on the grounds that virtual meetings or hearings compromised the fairness and integrity of the proceedings. Such challenges, however, were consistently dismissed by PRC courts.5 With the promulgation of the Amended Arbitration Law, the legality of virtual arbitration proceedings and the enforceability of awards rendered thereunder have now been unequivocally affirmed. Accordingly, arbitral proceedings conducted online can no longer be challenged solely by reason of their virtual nature.

Article 11 of the Amended Arbitration Law formally incorporates online arbitration into the PRC’s arbitration framework. It expressly provides that arbitration proceedings may be conducted online unless a party expressly objects, in which case the proceedings shall no longer be conducted online. By adopting a default opt-out mechanism, the Amended Arbitration Law modernizes the PRC’s arbitration regime while preserving party autonomy. Furthermore, online arbitration proceedings are accorded the same legal effect as in-person hearings, ensuring procedural integrity and enforceability. This provision aligns with UNCITRAL Model Law, adopted by more than 120 jurisdictions, which unequivocally allows for remote or virtual hearings provided the tribunal issues procedures, unless there is any contrary agreement by the parties. The introduction of online arbitration proceedings is expected to enhance procedural efficiency, reduce costs, and help facilitate cross-border arbitration.

The current arbitration rules of many major PRC arbitral institutions, i.e., CIETAC, SCIA, the Beijing International Arbitration Court (“BIAC”) and the Shanghai International Arbitration Center (“SHIAC”) provide that, the arbitral institution and/or the arbitral tribunal has discretion to determine whether proceedings should be conducted online. Following the recent amendments to the Amended Arbitration Law, it is anticipated that these rules will be revised to reflect the new legislative framework, in particular, that online arbitration proceedings may be conducted unless a party expressly objects.

Appointment of Arbitrators and Disclosure Obligations

Article 43 adds a new method for selecting the presiding arbitrator: parties may now jointly designate the chair, whereas under the previous regime this role was designated by the relevant arbitral institution. Article 44 provides that if the parties fail to constitute the arbitral tribunal within the prescribed time, the chairperson of the institution will make the appointment. These revisions increase party autonomy and bring appointment procedures in line with international standards.

Article 45 requires arbitrators to promptly disclose in writing any circumstances that reasonably give rise to doubts regarding their independence or impartiality. Major arbitral institutions in the PRC (in particular CIETAC, SCIA, BIAC and SHIAC) already stipulate disclosure obligations in their rules, this amendment seeks to elevate these requirements to the legislative level. While the Amended Arbitration Law does not specify circumstances which might give rise to reasonable doubts, parties may draw guidance from to widely recognized standards such as the IBA Guidelines on Conflicts of Interest.

3. Expanding the Scope of Arbitration

Measured Recognition of ad hoc Arbitration

As the PRC is a contracting state to the New York Convention, PRC courts are, in principle, obliged to recognize and enforce arbitral awards rendered in ad hoc proceedings under that rubric. However, due to restrictions under the 1995 Arbitration Law, the recognition and enforcement of such awards have faced significant legal obstacles, in particular in relation to domestically seated proceedings. For a long time, PRC courts were compelled to adopt compromise solutions in judicial practice: for ad hoc awards rendered outside the PRC, PRC courts generally recognized their validity and enforced them; and for ad hoc awards rendered within the PRC, courts initially refused recognition and enforcement altogether. Subsequently, recognition and enforcement were granted only for ad hoc awards rendered in the PRC involving foreign parties until PRC courts began to grant limited recognition of ad hoc awards under specific conditions in December 2016.

Article 82 recognizes ad hoc arbitration on a limited basis for foreign-related maritime disputes or disputes between enterprises registered in free trade pilot zones, the Hainan Free Trade Port or other similarly designated areas within the PRC. For these cases, parties may designate the PRC as the seat and file details of the arbitration with the arbitration association(s) that are regulatory bodies of PRC arbitral institutions or commissions. Previously, PRC law did not recognize ad hoc arbitration, meaning courts generally enforced foreign ad hoc awards but not those made within the PRC. Ad hoc arbitration is widely used internationally for maritime disputes and disputes in specific industries, and this revision opens the door slightly for eligible parties seeking flexibility and greater procedural autonomy, though its availability remains restricted to specific foreign-related contexts.

Investment Arbitration

Article 94 explicitly authorizes arbitral institutions and tribunals to resolve investment disputes arising under international treaties and agreements, applying rules agreed upon by the parties. This amendment establishes a clear legal foundation for investor–State arbitration under the revised PRC arbitration regime, which was absent under the existing framework that limited the arbitrable disputes to those between natural persons, legal persons and unincorporated organizations. By providing a legal foundation for investor-State arbitration, the Amended Arbitration Law seeks to align the PRC with international practice.

Opening the Door to Foreign Arbitral Institutions

Foreign arbitral institutions have historically been prohibited from directly conducting arbitration within PRC, as they did not fall within the statutory definition of an “arbitration commission” under the 1995 Arbitration Law. This restriction created a disconnection between legislation and judicial practice. Initially, PRC courts treated awards rendered by foreign institutions within PRC as foreign awards, applying the New York Convention for recognition and enforcement. Over time, however, courts shifted toward classifying such awards as foreign-related Chinese awards, subject to review under Article 291 of the PRC Civil Procedure Law for annulment or non-enforcement.

In 2015, the State Council issued the Plan for Further Opening-Up and Reform of the China (Shanghai) Pilot Free Trade Zone (“FTZ”), which, for the first time, expressly supported the establishment of representative offices by internationally renowned commercial dispute resolution institutions within the zone. This was regarded as a significant institutional innovation. Following this policy, leading foreign arbitral institutions — including the Hong Kong International Arbitration Centre (“HKIAC”), the International Court of Arbitration of the ICC, the Singapore International Arbitration Centre, and the Korean Commercial Arbitration Board (“KCAB”) — established representative offices in the FTZ. HKIAC further expanded its presence by inaugurating its Beijing Representative Office in late 2024. Although the scope of work of these representative offices is limited to promotional activities, this development marked a significant milestone, as the PRC opened its market to foreign arbitral institutions, thereby encouraging Chinese arbitration users to consider foreign arbitral forums.

Subsequently, both the Shanghai and Beijing FTZs permitted international dispute resolution institutions to establish business offices and conduct foreign-related arbitration services, including case administration and facilitating applications for interim measures before PRC courts. This regulatory framework was first introduced through the Administrative Measures for the Registration of Business Offices Established by Foreign Arbitral Institutions in the China (Shanghai) Lingang Pilot Free Trade Zone (effective 1 January 2020), later replaced by the Administrative Measures for the Establishment of Business Offices by Foreign Arbitral Institutions in Shanghai (effective 1 August 2024). Similarly, Beijing adopted its own measures in 2020 under the Administrative Measures for the Registration of Business Institutions Established by Foreign Arbitral institutions in the China (Beijing) Pilot Free Trade Zone. In 2023, the KCAB became the first foreign arbitral institution to establish a business office in the PRC. Article 86 codifies these measures, expressly allowing foreign arbitral institutions, upon approval, to establish business offices in designated areas for the purpose of conducting foreign-related arbitration.

4. Recognition and Enforcement of Arbitral Awards

Article 85 introduces a streamlined mechanism for enforcing foreign-related arbitral awards rendered in the PRC where the party subject to enforcement or the assets subject to enforcement are located outside of PRC. Parties may now apply directly to a competent foreign court for recognition and enforcement, eliminating intermediate steps in the PRC that were in place under the previous regime. This reform enhances efficiency, supports offshore enforcement, and bolsters the PRC’s attractiveness as a seat. Its practical effect, however, will depend on recognition by foreign jurisdictions under applicable treaties and/or domestic law.

Article 88 clarifies procedures for recognizing and enforcing foreign arbitral awards within the PRC that align with the provisions of the PRC’s Civil Procedure Law. Applications may be filed with the Intermediate People’s Court where the party being pursued or the assets subject to enforcement are situated, or, if neither is in the PRC, where the enforcing party is domiciled or the location where there is a reasonable connection to the dispute. Courts will apply international treaties to which the PRC is a signatory or the principle of reciprocity.

On the principle of reciprocity, Article 88 also provides for a procedure whereby, if any offshore arbitral institution imposes restrictions or discriminatory measures against parties from the PRC, then the applicable bodies in the PRC may then implement reciprocal measures targeting parties from those jurisdictions.

The Amended Arbitration Law introduces “violation of public interest” as an additional ground upon which PRC courts may refuse enforcement of domestic (Article 76) and foreign-related (Articles 83 and 84) arbitral awards. This new provision establishes a substantive judicial basis beyond traditional procedural fairness. It will be useful for parties to closely monitor how PRC courts interpret and apply the concept of “public interest” under this new ground.

Conclusion

The Amended Arbitration Law represents a watershed moment in the evolution of the PRC’s dispute resolution landscape. By introducing the concept of the seat of arbitration, validating online proceedings, expanding the remit of interim measures, and cautiously embracing ad hoc and investment arbitration, the Amended Arbitration Law seeks to align the PRC more closely with international best practices while preserving distinctive features of its legal system.

Alignment with international standards is not merely symbolic — it brings the PRC’s arbitration framework into closer conformity with widely accepted norms such as those reflected in the UNCITRAL Model Law and practices adopted by leading arbitration jurisdictions. This harmonization enhances legal certainty for foreign parties and multinational corporations, reduces friction in cross-border enforcement, and strengthens the PRC’s stance as a neutral and reliable forum for resolving cross-border and complex disputes. For international stakeholders, these changes offer enhanced predictability, procedural flexibility, and enforcement clarity — critical factors for cross-border commerce and investment.

Notwithstanding the above, the practical impact of these reforms will hinge on judicial interpretation and institutional implementation, particularly regarding undefined concepts such as “urgent situations” in the case of asset and evidence preservation and “public interest” in the case of recognition and enforcement of awards in the PRC. Among others, these areas will require close monitoring to ensure consistency and predictability as the new regime comes into force during the first quarter of this year.

Looking ahead, the reform signals the PRC’s ambition to position itself as a leading arbitration hub in Asia and beyond. As the Amended Arbitration Law takes effect, parties engaging in China-related transactions should reassess their dispute resolution strategies to leverage the opportunities — and navigate the uncertainties — presented by this new legal landscape. For businesses operating in sectors with high exposure to cross-border disputes, proactive engagement with these reforms will be essential to optimize risk management and maintain competitive advantage.