- Since April 2012, there has been an ongoing dispute among China International Economic and Trade Arbitration Commission (CIETAC) and CIETAC Shanghai Sub-commission (CIETAC Shanghai) and CIETAC South China Sub-commission (CIETAC South China). The internal division and disagreement among them gradually intensified and the disputes continue to bring about confusion and uncertainties.
- Following the implementation of the CIETAC Articles of Association (2012) and CIETAC Arbitration Rules (2012) (CIETAC Rules 2012) on 1 May 2012, where there is a CIETAC arbitration clause in the agreement but the contracting parties have not specified in the agreement where to submit their CIETAC arbitration, the dispute will be handled by CIETAC (Beijing). These rules are quite different from the old rules (i.e., CIETAC Rules 2005) which provided that the parties could refer their disputes to either CIETAC (Beijing) or one of its sub-commissions of their choice unless their agreement provided otherwise, and the sub-commissions would then have the power to administer cases so submitted to them.
- As the CIETAC Rules 2012 have reduced the number of new cases referred to the CIETAC sub-commissions quite significantly, CIETAC Shanghai and CIETAC South China, as the two most popular sub-commissions, refused to apply the new rules and to form part of CIETAC. The dispute between CIETAC and these two sub-commissions has been ongoing for almost a year now and no resolution has so far been reached.
- On 30 April 2012, CIETAC Shanghai made an announcement declaring its independence and the adoption of a new set of arbitration rules as well as a new panel of arbitrators. On 16 June 2012, CIETAC South China made a similar move by using the concurrent name of "Shenzhen Court of International Arbitration" (SCIA) and announcing that it would implement its own set of arbitration rules and set up a new panel of arbitrators.
On 1 August 2012, CIETAC (Beijing) published the "Announcement on the Administration of Cases Agreed to be Arbitrated by CIETAC Shanghai and CIETAC South China" (CIETAC August Announcement) and declared that with effect on 1 August 2012:
- CIETAC (Beijing) would suspend its authorisation to CIETAC Shanghai and CIETAC South China for accepting and administering arbitrations; an
- parties who had agreed to commence arbitration in CIETAC Shanghai or CIETAC South China would still be able to hold the arbitration hearings in the place as provided under the agreement, but they would first have to submit their applications to CIETAC (Beijing) to enable the CIETAC Secretariat to administer the case.
- In response to the CIETAC August Announcement, CIETAC Shanghai and CIETAC South China (or SCIA) made two joint statements on 4 August 2012 and 28 August 2012 respectively (collectively, the "2012 Joint Announcements"). They maintained that they were "independent legal persons" and refused to adopt the CIETAC Rules 2012. According to the two sub-commissions, the CIETAC Rules 2012 were passed “unilaterally” by CIETAC and had no binding effect. Meanwhile, they emphasised that the “suspension of authorisation” as claimed by CIETAC was invalid and that where an arbitration agreement referred the disputes to CIETAC Shanghai or CIETAC South China for arbitration, such disputes had to be submitted to CIETAC Shanghai or CIETAC South China (or SCIA) respectively and not to CIETAC (Beijing).
Thereafter, CIETAC South China took further steps to show its independence:
- On 22 October 2012, CIETAC South China was re-named “South China International Economic and Trade Arbitration Commission” (South CIETAC), concurrently using the name “SCIA”.
- On 24 November 2012, the Shenzhen Municipal Government, as a special economic zone, took advantage of its special legislative powers and the Project on Qianhai Shenzhen - Hong Kong Modern Service Industry Cooperation Zone, which is endorsed by the State Council to pass the Administrative Provisions for SCIA (Trial Implementation), which provides that SCIA is founded by the Shenzhen Municipal Government and is an independent legal person which has a right to adopt its own set of arbitration rules and set up its own panel of arbitrators.
- On 1 December 2012, SCIA announced that it would implement its own set of arbitration rules and use its own new panel of arbitrators.
On 31 December 2012, CIETAC (Beijing) published the “Announcement on Issues concerning CIETAC Shanghai and CIETAC South China” (the “CIETAC December Announcement”) and further declared, inter alia, that:
the case accepted and administered by CIETAC Shanghai or CIETAC South China before 1 August 2012 should be concluded in accordance with the CIETAC Rules 2012 and under the uniform leadership of CIETAC in respect of case administration as provided in the CIETAC Rules 2012.
- what CIETAC South China had done in paragraph 7 above was null and void as a matter of law;
- CIETAC Shanghai and CIETAC South China were forbidden to continue in any way and in any form to use the name, brand and relevant logo of “CIETAC”, either in Chinese or English, and to conduct any further arbitration activities in the name of “CIETAC Shanghai Sub-commission” and “CIETAC South China Sub-commission”;
- authorisation of the CIETAC Shanghai and the CIETAC South China for accepting and administering arbitration cases was terminated;
- where parties had agreed to arbitrate their disputes by CIETAC Shanghai or CIETAC South China, the parties had to submit their requests for arbitration to CIETAC (Beijing) and the CIETAC Secretariat was to accept such requests and administer such cases. Unless otherwise agreed by the parties, the place of arbitration and the place of oral hearing was to be held in Shanghai or Shenzhen respectively