Arbitration/jurisdiction clause and Chinese court judicial practices (III): “Shanghai arbitration” Philip Peng Lawyer at Hai Tong & Partners, Beijing; LMAA supporting member; in-coming PhD of Dalian Maritime University Law School Top Contributor Trial court: Supreme People’s Court of PRC Case no.: [2013] MSTZ No. 52 Dated: Nov. 4, 2013 Key words: Gencon C/P, “Shanghai arbitration” clause, jurisdiction objection Summary to this case: Applicant A concluded a F/N with Respondent B and clause 21 provided that all the disputes should be referred to arbitration in Shanghai; Clause 23 provided that: “other terms per Gencon 1994”. A applied to Ningbo Maritime Court (NMC) to declare invalidity of arbitration clause in this C/P for reason that there were more than one arbitration commissions in Shanghai which could accept maritime cases. B defended that the court should apply English law as provided in the Gencon C/P to determine the validity of the arbitration clause; although it did not expressly mention to arbitrate by CMAC Shanghai, CMAC Shanghai should be the most suitable arbitration commission in this case. This case is finally channeled to Supreme Court and Supreme Court decided that this arbitration clause shall be invalid for reason that: 1. As per Art. 18 of Law of the Peoples Republic of China on Application of Laws to Foreign-Related Civil Relations, parties concerned may agree upon the laws applicable to an arbitration agreement. Where the parties have made no such choice, laws of the domicile of the arbitration commission or laws of the place of arbitration shall apply. 2. The parties had not chosen the law applicable to the arbitration clause itself, but had chosen the seat of arbitration. As such, Chinese law shall be applied to determine the legal effect of this arbitration clause. 3. As per Art. 16 and 18 of Arbitration Law of PRC, arbitration agreement shall contain the following particulars: “…a designated arbitration commission…If an arbitration agreement contains no or unclear provisions concerning the arbitration commission, the parties may reach a supplementary agreement. If no such supplementary agreement can be reached, the arbitration agreement shall be null and void.” 4. Because there are more than one arbitration commissions in Shanghai, it is not sufficient to view it as submitting to CMAC Shanghai simply basing on the said “Shanghai arbitration” clause. 5. Under circumstance that one party launched arbitration, the other party raised objection to jurisdiction of arbitration and also applied to court for declaring that the arbitration clause is invalid, it can be deemed that no such supplementary agreement can be reached. 6. As such, the involved arbitration clause is null and void.
Posted on: Wed, 17 Dec 2014 10:02:33 +0000
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