China Maritime Arbitration Commission: Recent Development of China Maritime Arbitration CommissionFrom: Updated: 2022-09-21
Editor's Note: The Third Seminar of the International Commercial Expert Committee of the Supreme People's Court and Reappointment Ceremony of the First Group of Expert Members was held successfully on Augest 25, 2022. Over 40 experts from more than 20 countries and regions focused on the theme of the Development, Challenges and Countermeasures of Cross-Border Commercial Disputes during the seminar. Extensive and in-depth discussions were held within the framework of four specific issues. The texts of speeches delivered by the participants would be posted on the CICC's website.
RECENT DEVELOPMENT OF CHINA MARITIME ARBITRATION COMMISSION
China Maritime Arbitration Commission
In recent years, the China Maritime Arbitration Commission (the 'CMAC') has adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics in the New Era, coordinated Covid-19 prevention and control with business development, steadily promoted business development and continued to strengthen its reputation and credibility.
I. Steady Growth of Caseload and Improvement of Credibility in International Arbitration.
Over the past six decades, CMAC has seen a steady increase in its caseload, in particular its foreign-related caseload, representing an average rate over 50%. The parties were from nearly 30 countries and regions. While a small portion of its cases, CMAC has also seen an increase in its international caseload, with more arbitral proceedings conducted in English language, foreign laws applicable to the arbitration, both parties from outside Mainland China. CMAC has also seen a steady increase in its mediation/conciliation caseload. The court entrusted mediation mechanism between CMAC and the major maritime courts in Mainland China has become more and more popular. By making great effort to meet global standards, CMAC's reputation in international arbitration and ADR services has gained credibility.
II. The Launch of New Arbitration Rules
1. The Launch of 2021 CMAC Arbitration Rules
On 9 October 2021, CMAC introduced a revised version of its arbitration rules (the '2021 CMAC Arbitration Rules'), which came into effect on 1 October 2021. It presents the advantages of institutional arbitration as taking a 'light-touch' approach, reinforcing the importance of party autonomy and procedural transparency, while keeping in step with modern best practice in international maritime and commercial arbitration, in order to timely meet the need of the rapid changes and enhance the credibility of CMAC arbitration.
Aside from a number of general improvements, the material amendments are as follows:
Legal Tech in Arbitration: The 2021 CMAC Arbitration Rules pave the way for smooth and steady transition to virtual hearing and virtual case management in response to the COVID-19 pandemic. In a dynamic world with increasing interactions in virtual forums, Articles (8.2, 39.4, 39.6, 45.1, 51 and 81) provide for electronic delivery, video conferencing for hearings and witness examination, electronic signatures, cyber security, privacy and data protection, in order to best meet the needs of the parties.
Rules of Evidence: A new addition to the 2021Rules as the previous version did not contain a complete set of provisions regarding rules of evidence. Articles (46, 47, 48, 49, 50, 51, 52) set forth clear directions for the arbitral tribunals and the parties to identify the facts and issues in dispute more effectively.
Tribunal Secretary: Under 2018 CMAC Arbitration Rules, a case manager would be appointed by the Secretariat to assist the arbitral procedure and he/she would work for both the tribunal and the arbitration institution. To some extent, this mechanism may blur the line between the former and the latter. Article 40 provides a detailed instruction regarding the appointment, tasks, requirements and supervision of tribunal secretary who would, on behalf of the tribunal, work together with the case manager who represents the arbitration institution. Any decisions made by the tribunal would be communicated by the secretary to the case manager.
Advisory Council: Article 61 provides that the arbitral tribunal or CMAC may submit any significant or complex procedural and substantive matters in arbitration to the Advisory Council for consultation and advice. The arbitral tribunal has the discretion to decide on whether or not to follow the consultation and advice as issued by the Advisory Council. This practice actually has been followed for many years in CMAC arbitrations while it is for the first time explicitly provided in the arbitration rules so as to increase the transparency of the arbitral procedure.
Agreed Publication: Pursuant to the consent of all parties, CMAC may publish the awards encrypted to disguise the names of the parties and any other identifying details (Article 58.10).
Delivery Service: To meet the special needs of maritime arbitration, Article 8.2 provides that the arbitral documents may be sent to the Captain of the vessel concerned.
Change in Representatives: In order to ensure due process, the arbitral tribunal may take necessary measures to avoid conflict of interest due to the change in a party's representative, including excluding a newly authorized representative of a party from participating in the arbitral proceedings in whole or in part (Article 22.2).
Limitation of Liability: Article 84 provides an overall limit on liability for the arbitral tribunal, tribunal secretaries, tribunal appointed-experts, the Arbitration Court itself and its employees. None of the abovementioned is under any legal obligation to any party for any act in connection with the arbitration unless otherwise provided by the law of the seat of arbitration.
Fees& Costs of Arbitration: CMAC Fee Schedule II provides an additional option for the parties in case they have agreed to fix the fees of arbitral tribunal departing from CMAC's administrative fees.
2. The Launch of CMLA Ad Hoc Arbitration Rules and CMAC Rules as Appointing Authority in Ad Hoc Arbitration
On 18 March 2022, China Maritime Law Association (CMLA) and CMAC jointly held a press conference in Beijing to simultaneously release the CMLA Ad Hoc Arbitration Rules and CMAC Rules as Appointing Authority in Ad Hoc Arbitration, in line with their commitments to serve the China's expanding arbitration markets going global, to keep up with the latest trends in the international maritime arbitration, and to meet the demand for ad hoc arbitration services by parties at home and abroad. Both rules came into force on 18 March 2022. The CMLA Ad Hoc Arbitration Rules are designed as model rules for ad hoc arbitration, and CMAC Rules as Appointing Authority in Ad Hoc Arbitration are designed to provide external support for ad hoc arbitrations with limited involvement. Upon the tradition that ad hoc arbitration rules are generally formulated and issued by industrial associations, the CMLA and CMAC jointly take an experimental but important step forward in promoting the development of ad hoc arbitration in China and the high-quality development of trade in services.
III. The Launch of the White Paper on Mediation Commissioned by China Maritime Arbitration Commission and Shanghai Maritime Court (2011-2021)
On 5 November 2021, CMAC and Shanghai Maritime Court jointly released the White Paper on Mediation Commissioned by China Maritime Arbitration Commission and Shanghai Maritime Court 2011-2021 (the 'White Paper').
The White Paper systematically summarizes the court-entrusted mediation in serving the development of ship industry over the past 10 years, and selects ten typical cases in both Chinese and English, reviewing the collaboration between Shanghai Maritime Court and CMAC Shanghai Headquarters by focusing on the overall development, work effectiveness and experience.
Over the past ten years, Shanghai Maritime Court has entrusted CMAC Shanghai Headquarters to administrate over 200 mediations involving 42 countries/regions, with an increasing number of cases involving ever more complex issues year by year. The total amount in dispute exceeded RMB500 million. The success rate of CMAC mediation is at close to half, and achieves 62% over the past five years, doubled from the previous five years. In particular, the success rate of marine pollution, personal injury at sea, and ship collisions mediated disputes is over 85%.
According to the White Paper, the entrusted mediation mechanism between the CMAC and the Shanghai Maritime Court has been running smoothly since 2011, representing innovations and breakthroughs in four aspects. Firstly, CMAC and the Shanghai Maritime Court have jointly updated the rules for entrusted mediation and have formulated 'one-stop' diversified foreign-related maritime dispute resolution mechanism on entrusted mediation. Secondly, the two sides have jointly selected a team of mediators consisting of 186 experienced CMAC panel arbitrators, highlighting the professionalism. Thirdly, CMAC and the Shanghai Maritime Court fully consider the characteristics of individual cases such as foreign-related factors and professional knowledge, and accurately select cases suitable for entrusted mediation mechanism, in order to improve the efficiency of dispute resolution. Fourthly, CMAC and the Shanghai Maritime Court jointly facilitate a fair and efficient arbitration by incorporating entrusted mediation mechanism into a 'one-stop' diversified dispute resolution online platform, and implementing entrusted mediation management specialists on case-by-case basis.
IV. Organization of Event Series on Maritime and Commercial Arbitration and Promotion of High-quality Development of Arbitration in China
1. Organization of the China High-Level Dialogue on Maritime and Commercial Arbitration
Since its foundation in 2021, the China High-Level Dialogue on Maritime and Commercial Arbitration (CHDMACA) has been successfully held twice, respectively on 16 July 2021 and 16 June 2022. The CHDMACA focuses on discussing the trends and best practice of global maritime and commercial arbitration, exploring the advantage of international cooperation on arbitration and other ADR services, promoting sustainable development of dispute resolution in the international trade and investment context. The CHDMACA seeks to build on the success of the previous events by bringing together experts around the world and providing a high-level forum at which to discuss the hot topics in maritime and commercial arbitration law. It is worth to mention that the 2022 event, with the opening ceremony, keynote speech, and panel discussions, attracted more than 100 attendees on-site and over 360,000 online audiences.
2. Organization of the 1st CMAC Cup in International Maritime and Commercial Arbitration Essay Contest
The CMAC Cup in International Maritime and Commercial Arbitration Essay Contest (the 'CMAC Cup') was initiated and co-organized by CMAC and over 20 renowned law faculties and universities in late 2021. With the goal of cultivating the young generation of international arbitration professionals, the CMAC Cup is a significant platform for bringing young practitioners for a discussion on recent developments in the field of maritime and commercial arbitration, promoting China's traditional legal culture upon contemporary arbitration practice in China, and promoting in-depth and sustainable development of maritime commercial arbitration. After review and scrutiny, 13 essays have been nominated and announced for publicity since 1 August, 2022. The CMAC Cup award ceremony and an attached conference will take place in late August 2022.
3. Publication of China Newsletter on Maritime and Commercial Arbitration in 5 languages
China Newsletter on Maritime and Commercial Arbitration (CHNOMACA)isa quarterly newsletter published by CMAC since 2021, covering important news and events of CMAC, latest news of the shipping and legal industry. It is oriented to enhance information flow within the arbitration industry and thereby pushes the foreign trade and shipping economy forward. The Newsletter is simultaneously issued in five languages: Chinese, English, French, Russian, and Spanish, both at home and abroad.
4. Publication of China Maritime and Commercial Arbitration Review
China Maritime and Commercial Arbitration Review (CHMACAR)is a bilingual collection of papers in Chinese and English, and is published once a year. Combined with the CMAC conference discussions and collections over the past year, the CHMACAR addresses the latest theoretical research, hot issues, published typical cases, relevant laws and regulations on maritime and commercial arbitration. Upon a collection of professional essays with the unique feature of CMAC, the CHMACAR aims to promote exchange and communication in the field of international maritime and commercial arbitration, and therefore enhance the reputation of CMAC and credibility of CMAC arbitration.
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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.