Reconsidering arbitration in China

International parties concluding commercial contracts in China have always had to pay careful attention to their dispute resolution clauses. China-seated arbitration proceedings can be seen as a distinctive and sometimes restrictive process, filled with traps for the unwary. For this reason, foreign parties unfamiliar with Chinese dispute resolution procedures often attempt to ensure that any potential disputes are referred to arbitration institutions located outside the mainland.

Following several changes in PRC legislation affecting arbitration as well as the rules of various Chinese arbitral institutions, some international parties will begin to rethink this position. Many others, however, will continue to negotiate hard for arbitration clauses specifying an offshore seat and, where this is impossible, will insist that these clauses contain various protections intended to render onshore arbitration consistent with arbitral procedures normally found outside mainland China.