Shanghai Arbitration Commission: Milestones and Prospects: Advancing the International Rule of Law and Embarking on the Expedition of ReformFrom: 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.
MILESTONES AND PROSPECTS: ADVANCING THE INTERNATIONAL RULE OF LAW AND EMBARKING ON THE EXPEDITION OF REFORM
Shanghai Arbitration Commission
The Shanghai Arbitration Commission (hereinafter referred to as "SHAC"), one of the first pilot arbitral institutions in China, was founded on September 18, 1995 by the Shanghai Municipal People's Government. Since its establishment, SHAC has administrated over 45,000 cases, which accounted for 60-70% of the arbitration cases in Shanghai and covered contractual disputes arising in various sectors, including finance, real estate, construction, intellectual property, maritime, international trade, international agency, international projects, international investment, international technology cooperation, etc. The total amount in dispute for these cases was approximately RMB 250 billion. In 2021, 70.34% of arbitration cases accepted by SHAC involved at least one party who was not from Shanghai. While promoting Shanghai's economic and social developments and improving its business environment, SHAC provides professional and efficient arbitration services to market participants from all over China.
To implement the strategic arrangement of the Central Committee of the Communist Party of China and the State Council of China on arbitration reform, under the guidance of the Ministry of Justice of China, SHAC implemented "the General Plan for Deepening Reform of SHAC" (hereinafter referred to as "General Plan") issued by Shanghai Municipal People's Government by comprehensively deepening its institutional reform and striving to build a domestically leading and internationally renowned arbitral institution. The reformed SHAC safeguards the systemic advantages of professionalism, independence, efficiency, and confidentiality of arbitration. While innovating service approaches, it benchmarks practices against the highest standards. In this process, SHAC draws on the advanced management philosophies and operational mechanisms of international arbitral institutions, enhances the international competitiveness and influence of itself, and consistently contributes to the development of Shanghai as a globally oriented Asia-Pacific arbitration hub.
1. Deepening Institutional Reform and upgrading Arbitration Services
During the reform, SHAC has continuously adjusted and optimized its internal organizational structure. Under the fundamental structure suggested by the General Plan, with the Governing body as its decision-making body and the Secretariat as its executive body, SHAC has established several special committees for strategic development, arbitrator selection and evaluation, and other responsibilities. It has also fine-tuned the inner organizational structure to three pillars, namely the departments for case management, business development, and administrative support. Besides scaling out Shanghai Court of Financial Arbitration, Shanghai Court of Intellectual Property Arbitration, Shanghai Court of International Shipping Arbitration and Shanghai Court of Construction Arbitration, General Civil and Commercial Department has been established as an incubator for potential cases in emerging industries.
SHAC has established strategic partnerships with industry management organizations and departments in key areas such as finance, real estate, and shipping, including the Asset Management Association of China, China Real Estate Association, and Office of the Shanghai Combined Port Management Committee. With these partnerships, SHAC effectively enhances Shanghai's business environment and improves the legal and regulatory environment by providing high-quality dispute resolution services to market participant.
Moreover, SHAC has set an example among domestic arbitral institutions by adhering to the non-profit nature of arbitral institutions and taking up social responsibility actively. On March 31, 2022, SHAC issued "Special Measures for the Convenience of the Parties During the Pandemic" (hereinafter referred to as "Special Measures") as the policy responding to the Covid-19 Pandemic and providing critical assistances to the Parties. As of June 15, 2022, it has reduced arbitration fees by a total of more than RMB 6 million by applying Special Measures. On April 24, 2022, via its official WeChat Platform, the Ministry of Justice of China published an article to praise SHAC for "consciously taking the initiative to serve the overall situation, actively responding to the impact of the COVID-19 Pandemic", and "taking multiple relief measures for parties to effectively maintain a stable, orderly and fair business environment, achieving positive results and showing the non-profit nature and social responsibilities of arbitral institutions"
Besides, in accordance with "the Notice of the Ministry of Justice, Ministry of Education, Ministry of Science and Technology, State-owned Assets Supervision and Administration Commission of the State Council, All-China Federation of Industry and Commerce and China Council for the Promotion of International Trade on Effectively Implementing the Foreign-related Arbitration Talents Training Program," SHAC has introduced the "Arbitration Clinic" program, which resembles pro bono legal services. The program encourages law schools with "foreign-related legal talent training base" or "foreign-related arbitration talent training base" to hire practicing lawyers to mentor senior law students in arbitration cases involving MSMEs. SHAC also provides necessary financial support for the development of such talent training bases. This will not only further provide relief for MSMEs during the COVID-19 epidemic, but also support the development and improvement of practical skills of legal and arbitration personnel. On July 26, 2022, the General Office of the Ministry of Education and the General Office of the Ministry of Justice jointly issued the "Notice on the Implementation of the Postgraduate Training Program for LLM Professional Degree (International Arbitration)" (Jiao Yan Ting Han  No. 5), which named several arbitral institutions with considerable expertise in foreign-related legal services as joint training institutions. SHAC, as one of the named institutions, will actively explore and innovate the way of training high-level talents on foreign legal affairs and improve the foreign-related arbitration talents training system.
2. Raising the professional standard and enhancing the credibility of arbitration
After the reformation, SHAC started to promote the professionalization of arbitration services, unleashes the potential of its specialized arbitration platform, while simultaneously expanding new specialized arbitration platforms, and promotes the further upgrading and transformation of arbitration services according to professional requirements. On the other hand, SHAC aims at improving the specialization of the institution itself, developing institutional knowledge and capacity for future use, and lay a solid foundation for the professionalization of arbitration services.
In 2022, drawing on the success stories of world-renowned arbitral institutions, SHAC introduced and implemented its team-based approach for case management to provide more efficient services. It has set up the Innovation and Research Center (IRC), which aims to develop neotype of dispute resolution mechanism, including assisting arbitration, mediation and other alternative dispute resolution services in virtue of artificial intelligence, big data and other technical methods; and the Information Studies Center (ISC), which focuses on the comprehensive study of economic situation at the macro-level, the industry development at the medium-level , and the arbitration services at the micro-level. Aiming at identifying the trend and the underlying logic of development with in-depth theoretical research, ISC provides knowledge base for the further development of arbitration and other dispute resolution services.
Meanwhile, SHAC vigorously push the development of digital system for case management, and will continually promote the digital transformation of its services. To achieve the goal of integral digital platform for the parties, the arbitral tribunals, the tribunal secretaries, and other participants, SHAC will gradually input resources in the collection of data and information and the development of knowledge maps for similar cases, as the preparation for upcoming digital transformation.
3. Beholding the global outlook and enhancing the international influence
The newly reformed SHAC focuses on the overall goal of building a globally-oriented Asia-Pacific arbitration center. It will benchmark its practices against the highest and best international standards, learn from the experience of leading seats of international arbitration and first-class arbitral institutions, and significantly internationalize itself.
SHAC officially applied for and obtained the observer seat of the United Nations Commission on International Trade Law (hereinafter referred to as "UNCITRAL"), becoming the first Chinese arbitral institution to participate in the international commercial legislation work of UNCITRAL Working Group I (Micro, Small and Medium-sized Enterprises). In May 2022, SHAC submitted a high-quality legislative proposal report when it participated in UNCITRAL Working Group I's session for the first time. The report was recognized by the UNCITRAL and SHAC became the first Chinese arbitral institution whose legislative proposal report was published in full on UNCITRAL's website.
In order to build a professional arbitration team, SHAC has worked on two fronts – arbitrators and institutional personnel – to import international talents and internationalize the team. In terms of the panel of arbitrators, a total of 387 arbitrators from 111 countries and regions were selected into the new panel (the seventh) of arbitrators of SHAC after the reform. The above-mentioned arbitrators cover all ASEAN and RCEP countries and 77 countries along the "Belt and Road", and can conduct arbitration proceedings in 42 languages. In terms of institutional personnel, SHAC has been joined by, at the level of decision-making body, Prof. Xiaohong Liu, the former the Vice Chairman of the Commission on Arbitration & ADR of the International Chamber of Commerce; Dr. Mingchao Fan, an arbitrator of the Court of Arbitration for Sport and the former Director of Arbitration and ADR for North Asia of International Chamber of Commerce; Prof. Philip Yang, the former Chairman of the Hong Kong International Arbitration Centre; Prof. Anselmo Reyes of the Singapore International Commercial Court; Dr. Anna P. Mantakou, the Secretary-General of the Hellenic Association for Arbitration, and other well-known experts in the field of international arbitration. At the executive level, SHAC recruited Dr. Jian Chen, the former Deputy Secretary-General of the China Academy of Arbitration Law, Ms. Yiwen Huang, the former Asia-region centre director of the Singapore International Mediation Centre, Ms. Dixin Deng, former assistant to the chief justice of the Dubai International Financial Centre Courts, and Ruian Guo, former assistant to the judge of the International Court of Justice, whose international work experiences enriched the team. At the same time, SHAC has launched SHAC Academy, chaired by Mr. Philip Yang, an internationally renowned arbitrator, and has established various training courses such as "International Arbitration Panoramic Training", "International Commercial Law Series Courses" and "Arbitration Clinic Program".
4. Aligning arbitration services with the national strategy and strengthening research capacity.
In 2018, the Supreme People's Court of China established its First International Commercial Court in Shenzhen, Guangdong province, and the second in Xi'an, Shaanxi province. It was the first step of China's effort in constructing its international commercial court system. In the past three years, under the guidance of the Supreme People's Court, the operating mechanism of China's international commercial courts has begun to take shape, gradually becoming a stronghold for serving and safeguarding the construction of the "Belt and Road", and an epitome of the coordinated promotion of the rule of law with its domestic and foreign-related dimensions.
On June 22, 2022, the General Office of the Supreme People's Court issued the "Notice of the General Office of the Supreme Peoples' Court on Inclusion of the Second Group of International Commercial Arbitral institutions in the ‘One-Stop' Diversified International Commercial Dispute Resolution Mechanism". Shanghai Arbitration Commission was officially included in the "one-stop" diversified international commercial dispute resolution mechanism.
The "one-stop" platform promotes the procedural coherence and cooperation between litigation, arbitration and mediation. It focuses on the improvement and implementation of supportive measures for dispute resolution. On the one hand, SHAC will actively explore new ways to effectively integrate mediation and arbitration, and strengthen the legal effect of mediation agreements. On the other hand, SHAC will support the International Commercial Court's arrangements regarding interim measures in arbitration, and actively cooperate with courts in judicial supervision of the arbitration proceedings.
With the vision of building up a market-oriented, law-based, professionalized environment for dispute resolution, SHAC will pursue to enhance its competitiveness, credibility, and influence to forge a domestically leading and internationally renowned arbitral institution. In the new chapter SHAC will stands firm on convictions, endeavors to revise internal governance mechanism, and improves quality, efficiency, and the credibility of its services by means of professionalization and digitalization.
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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.