Fashi［1998］No. 27, adopted at the 1,029th meeting of the Judicial Committee of the Supreme People's Court on October 12, 1998.

To the High People's Court of Shandong:

Your Request for Instructions on Several Issues Relating the Validity of an Arbitration Agrement Concluded Before the Re-established of the Arbitration Institution ([1997] No. 84, HPC, Shandong Province) has been received. Upon deliberation, the following reply is hereby made:

1. In the situation where the arbitration agreement reached by the parties only stipulated the place of arbitration instead of the arbitration institution after the Arbitration Law of the People's Republic of China is implemented and before the arbitration institution is re-established, if the parties can jointly select an arbitration institution in the supplementary agreement, the arbitration agreement shall be valid; if the parties fail to do so in the supplementary agreement, then the arbitration agreement shall be invalid.

2. In the situation where the parties have agreed upon the arbitration institution in the arbitration agreement after the arbitration law is implemented and before the arbitration institution is re-established, when one party applies for arbitration and the other party files a lawsuit with the people's court, the people's court shall conduct examination. If the arbitration institution can be determined according to the relevant stipulations, the arbitration agreement shall be valid, and the people 's court shall not accept the suit.

3. In the case where the parties are against the validity of the arbitration agreement, if one party applies to the arbitration institution to confirm the validity of the arbitration agreement while the other party requests the people's court to decide that the arbitration agreement is invalid. If the arbitration institution has accepted the application before the people's court and has made a decision, the people’s court shall not accept the case; If the arbitration institution has not made a decision after accepting the application, the people's court shall accept the application and notify the arbitration institution to terminate the arbitration proceeding.

4. Where one party applies for arbitration in respect of a contract dispute or other property rights dispute, while the other party challenges the validity of the arbitration agreement and requests the people's court to confirm that the arbitration agreement is invalid and files a lawsuit with the court regarding the contract dispute or other property rights dispute, the people's court shall accept the suit and notify the arbitration institution to suspend the arbitration proceeding. Where a people's court makes a ruling on the validity of an arbitration agreement, it shall serve a copy of the written decision on the arbitration institution, and the arbitration institution shall resume the arbitration proceeding or revoke the arbitration case according to the ruling of the people's court.

Where the people's court makes a ruling on the invalidity of the arbitration agreement, if the other party refuses to response to the suit, the court may enter a default judgment. If the arbitration institution that originally accepted the arbitration application does not revoke the arbitration case after the people's court confirms that the arbitration agreement is null and void, the arbitration institution shall not affect the hearing of the case by the people's court.

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*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.