Fafa [2005] No. 26, promulgated by the Supreme People's Court on December 26, 2005, effective as of December 26, 2005.

In order to further implement the principle of “impartial justice and serving the people wholeheartedly”, to carry out the theme of “fairness and efficiency” during work, to regulate the judicial behavior regarding foreign-related commercial and maritime affair, to enhance the judicial capacity, to improve the judicial level, to create a new situation of the foreign-related commercial and maritime judicial trial, the Second National Working Meeting on Foreign-related Commercial and Maritime Trial Affairs was held in Nanjing, Jiangsu Province from November 15 to November 16, 2005. There were 200 people attended the meeting, including the Presidents of the Higher People's Court who are in charge of the relevant affairs, the Presidents of the Foreign-related Commercial and Commercial Maritime Trial Division, the Presidents of the Intermediate People's Court with jurisdiction over foreign-related commercial affairs, the President of the Maritime Court and the representatives of the relevant departments of the Central Government. Xiao Yang, President of the Supreme People's Court delivered a written speech, Wan E’xiang, Vice President of the Supreme People's Court delivered a speech on the meeting.  

The representatives summed up and exchanged the experience of maritime trial involving foreign commercial affairs since 2001, studied the problems found in the trial practice which urgently to be solved. They discussed measures to further standardize the maritime trial of foreign-related commercial affairs and tried to provide judicial guarantee for reform and opening-up, trade and shipping industry. The meeting reached the following consensus:

I. Jurisdiction over Cases

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6. With respect to a case in which a party applies for the determination of the validity of a foreign-related arbitration agreement, such case shall be subject to the jurisdiction of the intermediate people's court with the jurisdiction over foreign-related commercial cases at the place where the applicant or respondent is located, or where the arbitration agreement is executed; with respect to a case in which an application is filed for the execution of a foreign-related arbitral award made by a Chinese arbitration institution, such case shall be subject to the jurisdiction of the intermediate people's court with jurisdiction over foreign-related commercial cases at the place where the respondent is domiciled or where the property is located; with respect to a case in which an application is file for the annulment of a foreign-related arbitral award made by a Chinese arbitration institution, such case shall be subject to the jurisdiction of the intermediate people's court with jurisdiction over foreign-related commercial cases at the place where said arbitration institution is located; and with respect to a case in which an application is filed for the recognition and execution of an arbitral award made by a foreign arbitration institution, such case shall be subject to the jurisdiction of the intermediate people's court with jurisdiction over foreign-related commercial cases at the place where the respondent is domiciled or where the property is located. 

7.In the case that a valid arbitration agreement signed by parties to a foreign-related commercial contract has specified that any and all disputes arising from or in connection with the contract shall be settled through arbitration, if the plaintiff lodges a lawsuit with a people's court on the grounds of infringements in connection with any disputes arising from the conclusion or performance of said contract, the people's court shall not have jurisdiction over such case. 

8. Subject to the Civil Procedure Law of the People’s Republic of China, a people's court shall have jurisdiction over the disputes arising from or in connection with a master contract or a guarantee contract. Where a plaintiff lodges a lawsuit to a people's court against the principal debtor and the guarantor as the co-defendants, the people's court may have jurisdiction over the disputes arising from or in connection with the master contract and the guarantee contract. Notwithstanding the aforementioned provisions, where parties to the master contract or the guarantee contract have concluded an arbitration agreement or jurisdiction agreement specifying that disputes shall be subject to arbitration by an arbitration institution or the exclusive jurisdiction of a foreign court, no people's court may have jurisdiction over the disputes arising from or in connection with the master contract or the guarantee contract subject to said agreement. 

9.Where the principal debtor to a guarantee contract is not within China while the creditor lodges a lawsuit in China with a people's court only against the guarantor, the people's court shall exercise its jurisdiction in accordance with relevant provisions prescribed in the Civil Procedure Law of the People’s Republic of China. In the trial, where according to the governing law of the guarantee contract, the guarantor shall be entitled to the beneficium excussionis or the claim amount of the master contract involved in the case shall be determined first, the people's court may handle the case in the following ways based on the actual situations: (a) where the people's court has jurisdiction over the disputes arising from or in connection with the master contract, the people's court may require the plaintiff to add the principal debtor as the co-defendant within a specified time period; (b) otherwise, the people's court shall rule to cease the trial and require the creditor to lodge a lawsuit or file an arbitration against the principal debtor or determine the claim amount by other means, within a certain period specified by the people's court. Where the creditor lodges a lawsuit or files arbitration against the principal debtor within the specified period or where the claim amount may be determined by other means, the people's court shall resume the trial after the creditor submits the relevant effective ruling or other evidentiary documents. 

Where the creditor refuses to apply for the addition of the principal debtor as the co-defendant within the specified period, or fails to lodge a lawsuit or file an arbitration against the principal debtor, or where the claim amount is not determined by other means, and the mediation by the people's court fails, the lawsuit lodged by the creditor shall be overruled. 

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VI. Judicial Examination of International Commercial and Maritime Arbitration 

1. Examination of the Validity of Foreign-Related Arbitration Agreements

58. The lex causae agreed to by parties to a contract for settling disputes arising from the contract cannot be used for determining the validity of foreign-related arbitration clauses. Where parties to a contract have specified the lex causae for determining the validity of arbitration clauses, the laws agreed upon shall apply; where parties to a contract have not specified the lex causae for determining the validity of arbitration clauses, the arbitration place, the laws of the country or region of the arbitration place shall apply. Where parties to a contract have specified neither the lex causae for determining the validity of arbitration clauses nor arbitration place, or where the arbitration place is not explicitly specified, the laws of the place of the court, that is, Chinese laws, can be determined as the lex causae for determining the validity of arbitration clauses. 

59.Where the arbitration agreement reached by concerned parties specify no or unclear provisions on the arbitration matters or arbitration organizations, such arbitration agreement shall be deemed invalid, unless a supplemental agreement has been reached by the concerned parties. 

60.Where a concerned party merges, divides, or deceases after the conclusion of an arbitration agreement, the arbitration agreement shall be binding on the party enjoying the rights and undertaking the obligations with respect to the arbitration matters specified therein, unless otherwise specified by the concerned parties when signing such arbitration agreement. 

61.Where parties concerned transfer in whole or in part the liabilities or creditor's rights after signing an arbitration agreement, the arbitration agreement shall be binding on the transferee, unless the parties concerned specify otherwise or are expressly opposed to such agreement, or the transferee has no knowledge of the existence of any separate arbitration agreement when accepting the transferred creditor's right or liabilities. 

62.Where an arbitration agreement only specifies the applicable arbitration rules for dispute settlement, it shall be deemed that no arbitration institution is specified, unless concerned parties reach a supplemental agreement or an arbitration institution can be determined in accordance with specified arbitration rules. 

63.Where an arbitration agreement expressly specifies two or more arbitration institutions, concerned parties may apply to either arbitration institution through agreement; where concerned parties cannot reach an agreement on the selection of an arbitration institution, such arbitration

64. Where an arbitration agreement specifies that any disputes arising from the contract shall be subject to the arbitration of any arbitration institution of a place where there is one arbitration institution only, such arbitration institution shall be deemed as the one agreed by parties concerned. Where there are two or more arbitration institutions, concerned parties may apply to any such arbitration agencies through agreement; where concerned parties cannot reach an agreement on the arbitration institution, such arbitration agreement shall be deemed invalid. 

65.Arbitration clauses shall be independent from other clauses in the contract. Where concerned parties reach an arbitration agreement on the dispute settlement when signing a contract, nevertheless whether or not the contract has become effective, such arbitration agreement shall be deemed valid. The effectiveness of the arbitration clause shall not be effected by the circumstances where a contract fails to become effective after conclusion, or a contract is changed, rescinded, terminated, cancelled or deemed invalid after it has become effective. 

66.An arbitration agreement shall be made in writing. The determination of whether there is written form of such arbitration agreement shall be subject to the provisions prescribed in Article 11 of the Contract Law of the People’s Republic of China.  Where parties concerned quote the valid arbitration clauses in other contracts and documents in the concluded foreign-related contracts, it shall be deemed as a written arbitration agreement. 

67.Where a party applies to an arbitration institution or an arbitration court for arbitration and where the other party does not raise objections to the jurisdiction and appoints an arbitrator, in accordance with arbitration rules, and responds to substantial plea, it shall be deemed that parties concerned agree to accept arbitration. 

68. Where parties concerned specify that both parties may either apply to an arbitration institution for arbitration or lodge a lawsuit with a people's court, with respect to any disputes arising from the contract, such arbitration agreement shall be deemed invalid; unless a party applies to an arbitration institution for arbitration while another party fails to raise objections within the period prescribed in Paragraph 2 of Article 20 of the Arbitration Law of the People's Republic of China. 

69.Where the name of the arbitration institution specified in an arbitration agreement is not correct, but the specific arbitration institution for accepting the disputes can be determined, it shall be deemed that the arbitration institution has been selected. 

70.Where relevant international treaties, that are applicable to a foreign-related contract, contain arbitration provisions, concerned parties shall file an application for arbitration in accordance with such provision, in the case of any disputes arising from the contract. 

2. Examination of Foreign-Related Arbitral Awards

71.A people's court shall examine the arbitral award made by an arbitration committee legally established in China by applying different laws on the basis of whether the case involves foreign-related factors. An arbitral award involving no foreign-related factors made by said arbitration committee shall be examined in accordance with provisions prescribed in Chapters V and VI of the Arbitration Law of the People's Republic of China and Article 217 of the Civil Procedure Law of the People's Republic of China ; a foreign-related arbitral award made by said arbitration committee shall be examined in accordance with provisions prescribed in Chapter VII of the Arbitration Law of the People's Republic of China and Chapter XXVIII of the Civil Procedure Law of the People's Republic of China. Whether the case involves any foreign-related factors shall be determined in accordance with provisions prescribed in Article 178 of the Opinions of the Supreme People's Court on the Implementation of the General Principles of Civil Law of the People's Republic of China (Trial).  

72.A people's court shall examine the arbitral award made in the Hong Kong Special Administrative Region or made by an arbitration institution in Taiwan Region in accordance with the Arrangement of the Supreme People's Court for the Mutual Enforcement of Arbitral Awards Between the Mainland China and the Hong Kong Special Administrative Region or the Provisions of the Supreme People's Court on the Recognition by the People's Courts of Civil Judgements of Courts in Taiwan Region. 

73. Fees and examination period relating to the implementation of an arbitral award made in the Hong Kong Special Administrative Region, the Macau Special Administrative Region, or Taiwan Region shall be subject to the Provisions of the Supreme People's Court on the Issue concerning the Fees Collection and the Period of Review for the Recognition and Enforcement of Foreign Arbitral Awards (Fa Shi [1998] No. 28). 

74. Where a people's court accepts the application filed by a party for cancellation of a foreign-related arbitral award, and another party applies for the implementation of the same, the people's court accepting the application for implementing the arbitral award shall rule to suspend the implementation. 

75. In the case that a party fails to raise objections to the jurisdiction of the arbitration court in the arbitration process, after an arbitral award has been made, the party claims to cancel or raises a plea against the execution of the arbitral award, the relevant people's court shall not uphold such plea or claim. 

76. Where the application filed by a party to a people's court for the cancellation of an arbitral award is overruled, and such party raises a plea against the execution of the arbitral award, the people's court shall not uphold such plea. 

77. Where a party claims against the execution of a mediation ruling or a arbitral award made based on the reconciliation agreement for the lack of enforcement of the arbitration mediation or the arbitral award made in accordance with the reconciliation agreement reached by parties, a people's court shall not sustain. 

78. Where a foreign-related arbitral award is beyond the arbitration agreement, the excessive ruling can be cancelled; where such ruling is an integral part of other rulings, the arbitral award shall be cancelled. 

79.In case a foreign-related arbitral award was made under any circumstances prescribed in Article 260 of the Civil Procedure Law of the People's Republic of China,  a people's court may require the arbitration court to re-arbitrate within a specified term, as the case may be. In requiring the arbitration court to re-arbitrate, it shall rule that the cancellation procedure shall be suspended; where such arbitration court re-arbitrates within the specified term, it shall rule to terminate the cancellation procedures; where such arbitration court refuses to re-arbitrate or fails to re-arbitrate within the specified term, it shall inform the arbitration court of or rule the resumption of the cancellation procedure. Parties concerned may lawfully apply for the cancellation of the ruling made by an arbitration court in re-arbitration where such parties demur to the same.

80. According to the actualities of cases, a people's court may have access to case dossiers of relevant arbitration agencies or require the same to make statement. Relevant ruling made by the people's court may also be sent to relevant arbitration agencies. 

3. Examination of Foreign Arbitral Awards 

81. In case a party applies to a people's court for the recognition and enforcement of an arbitral award made by a foreign arbitration institution or interim arbitration court outside of China, the people's court shall deal with such application in accordance with the provisions of Article 269 of the Civil Procedure Law of the People's Republic of China.  

82. Where a party only applies for the recognition of a foreign arbitral award with enforcement contents but fails to apply such enforcement, the people's court shall only examine whether or not to recognize the same. Where such party applies for the enforcement thereof after the people's court recognized the same, the people's court shall accept such application and examine whether or not to enforce the same. 

83. Where a party provides evidence proving that the foreign arbitral award has not come into force, or the execution thereof has been cancelled or suspended, the relevant people's court shall refuse to recognize and enforce the same. Where a foreign arbitral award is applied for cancellation or suspension of enforcement procedures abroad and has not been closed, the people's court may suspend the recognition and enforcement procedures; where a foreign court does not suspend the recognition and enforcement procedures under the same conditions, the people's court may adopt the principle of reciprocity. 

84.In the case that a foreign arbitral award requires concerned parties to pay arbitrators' fees, the relevant arbitrator may not apply for the recognition and enforcement of the ruling with respect to arbitrators' fees because the arbitrator is not a concerned party of arbitral award, but the arbitrator may lodge a separate lawsuit regarding the arbitrator's fee with a people's court with jurisdiction on the ground of the arbitral award. 

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127.After the insurer actually pays insurance compensation to the insured and obtains the right of subrogation in respect of the compensation claim, the agreement on jurisdiction and arbitration reach by and between the insured and the third party for settling disputes shall not be binding on the insurer. 

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第二次全国涉外商事海事审判工作会议纪要

*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.