Briefing of expedited procedure (summary procedure, emergency procedure), appointment of arbitrators, re-hearing after replacement of arbitrators, tribunal’s power as for interim measures, fees, scrutiny of draft award, and terms of reference under CIETAC Arbitration Rules (2015).
1. Expedited Procedure
Under CIETAC rules, some specific rules are set up to help parties when they need to resolve disputes more quickly or encounter some emergency situations (i.e. when preservation measures are needed to prevent transferring assets or destroying evidences, etc.) --- Summary Procedure and Emergency Procedure.
Unless otherwise agreed by the parties, Summary Procedure shall be applied to any case where the amount in dispute does not exceed 5,000,000 CNY; or to any case where the amount in dispute exceeds 5,000,000 CNY, yet both parties agree or one party applies for arbitration under the Summary Procedure and the other party agrees in writing. (Article 56)
Summary Procedure vs Ordinary Procedure:
The main advantages of Summary Procedure are as follows: the case will be heard by a sole arbitrator; the time limit of defense and counterclaim is reduced from 45 days (20 days for domestic arbitration) to 20 days; the time limit for rendering awards is reduced from 6 months (4 months for domestic arbitration) to 3 months. (Article 15, Article 16, Article 48, Article 59, Article 62, Article 68, Article 71)
Emergency relief and emergency arbitrator:
Where the arbitral tribunal has not yet been formed, a party may apply for emergency relief pursuant to CIETAC Emergency Arbitrator Procedures (Appendix III). The parties shall advance emergency arbitrator fees of 30,000 CNY. The emergency arbitrator may decide to order or award necessary or appropriate emergence measures, and its decision shall be binding upon both parties. The Emergency Arbitrator shall have no power to act after the Tribunal is constituted. (Article 23, Article 77, Appendix III Emergency Arbitrator Procedures)
2. Appointment of Arbitrators
Under CIETAC rules, parties do have certain kind of party antonym to appoint arbitrators but still subjected to some minimum limitation.
CIETAC has a roster of arbitrators (Panel of Arbitrators). The parties may select arbitrators from the Panel provided by CIETAC or agree to nominate arbitrators not listed.
While parties can freely appoint someone from the Panel, their off-Panel nomination is still subjected to confirmation from the Chairman of CIETAC.
Under normal situation (not in Summary Procedure) an arbitration tribunal shall be composed of three arbitrators unless otherwise agreed by the parties or stipulated by relevant Rules. (Article 25, Article 26)
3. Re-hearing after Replacement of Arbitrators
The Chairman of CIETAC shall make a final decision on whether an arbitrator shall be replaced or not with or without stating the reasons therefor.
Under special circumstances (an arbitrator of a three-member arbitration tribunal being unable to participate in the deliberation and/or render the award due to his/her demise or removal from the Panel of Arbitrators after the conclusion of the last oral hearing, etc.), the other two arbitrators may request the Chairman of CIETAC to replace the arbitrator, or continue the arbitration after consulting with the parties and upon the approval of the Chairman.
After the re-selection or re-appointment of the arbitrator, the arbitration tribunal shall decide whether the case shall be re-heard and the scope of re-hearing. (Article 33, Article 34)
4. Tribunal’s Power as for Interim Measures
Where a party applies for property preservation and evidence preservation under Chinese law, CIETAC shall hand over the preservation application to the competent court in accordance with Chinese law---any application for preservation of property and evidence need to be submitted to people’s court whereas the arbitral tribunal has no right to decide.
If necessary, parties can apply for property preservation. Parties can apply for preservation before or during the arbitration proceedings. It shall be noted that if the applicant fails to apply for arbitration within 30 days from the adoption of preservation measures by the People’s Court, the People’s Court shall discharge the preservation. (Article 101 of Civil Procedure Law of PRC)
Where a party applies for the property preservation, the arbitration commission shall submit the application to the People’s Court. Where there is a wrongful application, the claimant shall compensate the respondent for losses incurred during the property preservation procedures. (Article 28 of the Arbitration Law of PRC)
In domestic arbitrations, if the party makes an application for property preservation, which is submitted to the People’s Court by the arbitration institution, the local court of the domicile of the respondent or the locality of the properties shall decide the case and enforce the property preservation order. (Article 11 of the Provisions of the Supreme People’s Court on Several Issues Concerning Judicial Enforcement by the People’s Courts (for Trial Implementation))
In foreign-related arbitrations, if the party makes an application for property preservation, which is submitted to the People’s Court by the arbitration institution, the intermediate people’s court of the domicile of the respondent or the locality of the properties for which preservation is applied shall decide the case and enforce the property preservation order. (Article 12 of the Provisions of the Supreme People’s Court on Several Issues Concerning Judicial Enforcement by the People’s Courts (for Trial Implementation))
Where evidence is vulnerable to being destroyed or lost and would be difficult to recover, the parties may apply for the preservation of the evidence.
In domestic arbitrations, where a party applies for evidence preservation, the arbitration commission shall submit the application to the local People’s Courtof the locality of the evidence. (Article 46 of the Arbitration Law of PRC)
In foreign-related arbitrations, the foreign-related arbitration commission shall submit the application to the intermediate People’s Court of the locality of the evidence. (Article 68 of the Arbitration Law of PRC)
If parties apply for property or evidence preservation in accordance with Chinese law, arbitration commissions shall submit the application to the People’s Court which has the jurisdiction (the arbitral tribunal has no power to make the decision). Otherwise, the arbitral tribunal can make the decision of those interim measures. Under such circumstance, the parties may apply to CIETAC for emergency relief pursuant to Appendix III, and the emergency arbitrator may decide to order or award necessary or appropriate emergency measures. The arbitral tribunal may require the requesting party to provide appropriate security if it deems necessary or appropriate. (Article 23, Appendix III)
CIETAC divides cases into three genera categories, namely i. foreign and foreign-related cases; ii. cases relating to Hong Kong, Macau, and Taiwan; iii. domestic cases (article 3). For case types i and ii, administrative fees are charged ad valorem (i.e. based on claimed/actual amount in dispute) according to fee schedule plus a 10,000 CYN registration fee. For case type iii, registration fee and administrative fee are both charged ad valorem according to fee schedule.
In addition to standard fees, CIETAC may charge the parties for any other additional and reasonable costs, including but not limited to arbitrators’ special remuneration and their travel and accommodation expenses, engagement fees of stenographers, as well as the costs and expenses of experts, appraisers or interpreters appointed by the arbitral tribunal.
For arbitration cases administered by the CIETAC Hong Kong Arbitration Center under Chapter VI of the CIETAC Rules (hereinafter referred to as CIETAC HK cases), the registration fee is HKD 8,000 while the administrative fee is calculated ad valorem according to fee schedule.
Unlike abovementioned general types of cases, for cases administered by CIETAC HK, arbitrator’s fee is charged separately from registration/administrative fees. The maximum/minimum arbitrator’s fee is calculated ad valorem, then CIETAC has discretion to decide the final fees between the corresponding maximum and minimum amounts. The arbitrator’s fees may exceed the corresponding maximum amount listed in the schedule provided that the parties so agree in writing or CIETAC so determines under exceptional circumstances. However, parties may agree in writing that the arbitrator’s fees and expenses are to be based on an hourly rate.
For emergency arbitrators, fees are based on an hourly rate. (Article 52, Article 79, Article 82, Appendix II)
CIETAC can also request parties to make prepayment. The prepaid expenses include but not limited to: fees of engaging a stenographer to make a stenographic record of an oral hearing; advancing a deposit for costs as the special remuneration, travel and accommodation expenses of the nominated arbitrator (if a party fails to advance such a deposit, it shall be deemed not to have nominated the arbitrator); where the parties have agreed to hold an oral hearing at a place other than the domicile of CIETAC or its relevant sub-commission/arbitration center, parties shall advance a deposit for the actual costs such as travel and accommodation expenses incurred thereby ( if the parties fail to do so within the time period specified by CIETAC, the oral hearing shall be held at the domicile of CIETAC or its relevant sub-commission/arbitration center); advancing an amount of 30,000CNY as the costs of the emergency arbitrator proceedings. (Article 40, Article 82, Article 7 of Appendix III)
6. Scrutiny of Draft Award
The arbitration tribunal shall submit its draft award to CIETAC for scrutiny before signing the award. CIETAC may remind the arbitral tribunal of relevant issues (either formative or substantive issues) in the award on condition that the arbitration tribunal’s independence in rendering the award is not affected. (Article 51)
7. Terms of Reference
The arbitration tribunal may produce terms of reference when necessary. (Article 35) The claimant may apply to amend its claim and the respondent may apply to amend its counterclaim after the terms of reference (if any) has been made, however, the arbitral tribunal may not permit any such amendment if it considers that the amendment is too late that the arbitration proceedings may be delayed. (Article 17)