China has recently taken steps to make China an acceptable venue for international commercial arbitration. During 1994 it adopted significant reforms to its arbitration laws. China also announced in November that it has joined the International Chamber of Commerce.

New Arbitration Law

Comprehensive Chinese arbitration legislation will come into force in September 1, 1995. The Standing Committee of the National People's Congress adopted the legislation in August 1994. English-language translations have not yet been widely distributed.

The new Arbitration Law consolidates prior laws governing domestic and foreign-related proceedings. By one count, it will replace 14 national laws, 82 administrative regulations, and 190 local laws. The consolidated law will govern contractual and non-contractual claims. It will not, however, cover disputes with administrative entities or family-related disputes.

Relatively few changes are made to existing Chinese rules for international commercial arbitration. While the influence of the UNCITRAL Model Law can be seen, some commentators have expressed regret that the legislation does not incorporate more of the Model Law's provisions.

1994 CIETAC Arbitration Rules

Earlier in 1994 the China International Economic and Trade Arbitration Commission (CIETAC) published a thorough revision of its arbitration rules. These Rules were published in March and became effective on June 1, 1994. They will, however, have to be amended to conform with the new Arbitration Law.

English-language translations of these Rules have been published in the East Asian Executive Reports (Oct. 15 & Nov. 15, 1994) and in the American Review of International Arbitration (vol. 4, pp. 167-178).

Established in 1956, CIETAC has been the principal Chinese arbitral institution for disputes between foreign firms and Chinese legal persons. Its worklodad has grown rapidly in recent years. In 1985 the Commission handled 37 new cases, but by 1993 this number had grown to more than 500 new cases.

More than 80 foreigners are now among the 290 persons that make up the Commission's panel of potential arbitrators. This represents a dramatic change over a short period of time. As recently as 1989 there were no foreigners at all on the panel.

The 1994 Rules extend CIETAC's jurisdiction to disputes between foreign companies and between Chinese legal persons if the disputes contain a foreign element. What constitutes a "foreign element" is not clear. Traditionally, a joint venture between a foreign firm and a domestic entity was considered a Chinese legal person. Are disputes with such a joint venture, some commentators ask, now disputes with a "foreign element"?

New Arbitral Body

A new national arbitration body, the China Arbitration Association, will be organized. It will be a non-governmental entity established to supervise the Chinese arbitration commissions.