China’s International Economic and Trade Arbitration Commission

March 9, 2011 Posted by China Briefing Reading Time: 2 minutes

An introduction to the CIETC and the importance of arbitration clauses in China contracts

Mar. 9 – Arbitration: a tool used to mediate disputes that avoid the costly procedures (both in time and in money) involved in settling a dispute through litigation.

The Vienna International Arbitral Center is one of the world’s leading centers for arbitration and, with an average dispute resolution time of 12 months, is also one of the fastest centers for arbitration in the world. China’s counterpart is known as the International Economic and Trade Arbitration Commission. There are, however, some key differences.

For example, when the VIAC is helping arbitrate a dispute, all evidence must be presented during a predetermined period of time before the arbitration procedures take place. CIETAC, on the other hand, accepts evidence during any part of the conflict, as long as it is relevant to the case.

A resolution arising from either of the arbitration centers is binding to every firm from any nation subjected to agreement under the New York Convention. In the event that the conflict is between firms from different countries, the decision can be applied in any signatory country of the New York Convention, even if the country in which the conflict was generated does not wish to enforce the resolution. That means the arbitrating committee retains the right to confiscate merchandise or even stop the departure of a plane in any country.

If you are considering signing a contract, adding an arbitration clause is one important thing to consider.

Dezan Shira & Associates is boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China, Hong Kong, Vietnam and India. For assistance or advice regarding the drafting of contracts please email info@dezshira.com or download the firm’s brochure here.

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