THE “ONE-STOP PLATFORM”: A NEW ROUTE ON THE SILK ROAD
One of the most difficult issues in arbitration is to enforce abroad an interim measure[1] granted by the arbitral tribunal or to receive judicial assistance to obtain such a measure.
This is a key factor in determining the seat of arbitration while you are drafting and negotiating the dispute resolution clause.
Now, the People’s Republic of China has moved a step forward.
On 2 April 2019, an arrangement has been signed “Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region”[2].
Under this arrangement, a party in a Hong Kong arbitration may apply to the Intermediate People’s Court[3] in Mainland China for an interim measure and vice versa.
There are more than 300 Intermediate People’s Courts in Mainland China[4]; so, it can be discrepancies among them in interpreting the law.
To solve this issue and to speed up Belt and Road Initiative-related disputes[5], Mainland China has created the China International Commercial Court[6] (CICC) and it has vested CICC with the power to grant interim measures in BRI-related disputes and other large international disputes[7], during arbitration proceedings before some selected arbitral institutions.
What CICC really is?
For the sake of clarity, there is not a single CICC, there are two (and – potentially – many others[8]) CICCs.
Currently, there is the Court n. 1 in Shenzhen[9] and the Court n. 2 in Xi’an[10].
CICCs “are permanent adjudicatory bodies[11] of the Supreme People’s Court”[12] and they are under the supervision of the 4th Civil Division of the Supreme People’s Court[13].
On 22 June 2022, the Supreme People’s Court issued the Note[14] No 326 deciding that “Hong Kong International Arbitration Centre to be included in the second group of arbitration institutions in the "one-stop" diversified international commercial dispute resolution mechanism”; this is a dramatic step forward, because – currently – HKIAC is the only arbitral institution outside Mainland China that can enjoy the CICC assistance in granting interim measures and in recognition and enforcement of the final award.
Because of this, Hong Kong (and – in particular – administered arbitration under HKIAC rules) is becoming a more attractive seat in international disputes with a large amount at stake in which there is involved a Chinese party or is foreseeable that could arise the necessity to apply for an interim measure in the Mainland China territory or to enforce the arbitral award there.
[1] Like asset protection, evidence protection, and freezing a bank account.
[2] Full text available at cicc.court.gov.cn/html/1/219/208/210/1204.html. The Arrangement came into force on 1 October 2019.
[3] 终极人民法院 (Pinyin: zhōngjí rénmín făyuàn)
[4] There are also 13 Intermediate People’s Courts specialising in railway disputes and 5 that are dealing with maritime cases.
[5] I mean any dispute arising of a contract related to a BRI project (for instance, the construction of a highway or the renovation of a port) and any dispute arising from an investment made under the “umbrella” of BRI.
[6] This is the common translation. However, it should be more precise to translate it as China International Commercial Tribunal, because the Chinese text uses the word 法庭 (Pinyin: fătíng) instead of the word 法院 (Pinyin: făyuàn) which indicates “court”. See note 1 of the Provisions of the Supreme People’s Court on Certain Issues Concerning the Establishment of International Commercial Courts (hereinafter the “Provisions”), available at https://cgc.law.stanford.edu/wp-content/uploads/sites/2/securepdfs/2018/10/BRText-20180701-provisions-re-intl-commercial-courts-english.pdf. In the above-mentioned note 1, there are also interesting references to artt. 29 and 31 of the Organic Law of the People’s Courts. A special “Court” can be created only by the Standing Committee of the National People’s Congress (art. 29), while – pursuant to art. 31 – “The Supreme People’s Court shall set up criminal tribunal(s), civil tribunal(s), economic tribunal(s), and such other tribunals as deemed necessary”. The ground of the CICC is the above-mentioned Provisions of SPC; so, the CICC is a “Tribunal” and not a “Court” under Chinese Law.
[7] Art. 34 and 35 of the Procedural Rules clarify that the supporting role is limited to arbitration proceedings “in which the amount in dispute exceeds 300,000,000 Chinese Yuan or significant influence otherwise exists”.
[8] Under Article 1 of the Provisions “The Supreme People’s Court establishes international commercial courts” (emphasis added).
[9] The No. 1 International Commercial Court mainly handles commercial disputes for the Maritime Silk Road, which connects China, Southeast Asia, Africa, and Europe (Stephan Wilske, International Commercial Courts and Arbitration — Alternatives, Substitutes or Trojan Horse?, pp. 24-25, available at: https://ssrn.com/abstract=3295784).
[10] The No. 2 International Commercial Court mainly handles commercial disputes for the Silk Road Economic Belt, which connects western China, Central Asia, the Middle East, and Europe (Stephan Wilske, International Commercial Courts and Arbitration — Alternatives, Substitutes or Trojan Horse?, p. 25, available at: https://ssrn.com/abstract=3295784).
[11] Actually, CICCs are something more than mere adjudicating bodies. Under Article 1 Procedural Rules for the China International Commercial Court of the Supreme People’s Court (For Trial Implementation) (the “Procedural Rules”): “The China International Commercial Court provides an international commercial dispute resolution mechanism that integrates litigation, mediation and arbitration for the parties to resolve disputes fairly, efficiently, conveniently and economically”.
[12] Art. 1 of the Provisions.
[13]最高 人民 法院(Pinyin: zuìgāo rénmín făyuàn)
[14] 法办 (Pinyin: făbàn)
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