Clarifying the PRC Arbitration Law: Questions and Answers

Since the introduction of the PRC Arbitration Law (中华人民共和国仲裁法), there have been concerns over the validity of arbitration agreements and enforcement of arbitral awards in China. Have these concerns been addressed in the Supreme People's Court's recent Interpretation on Several Issues Relevant to the Application of the PRC Arbitration Law, and if so, to what extent?

By John Choong, Freshfields Bruckhaus Deringer, Hong Kong

On August 23 2006, the Supreme People's Court (SPC) promulgated its long-awaited interpretation on selected issues relating to the application of the PRC Arbitration Law(SPC Interpretation). The SPC Interpretation, which became effective on September 8 2006, is a significant document consolidating previous judicial interpretations, as well as providing additional guidance on two key issues in arbitration: the validity of arbitration agreements and challenges to arbitral awards. In general, the SPC Interpretation applies to both domestic and foreign-related arbitrations, which are subject to PRC law.