In order to enforce arbitration awards in China, the arbitration clause stipulated in the contract must be considered valid under China’s Arbitration Law. In particular, the items that are necessary for ensuring the validity of an arbitration agreement or clause are:

• Both parties’ expression of interest to proceed with arbitration, which should be referred to explicitly;
• Clear definition of the items for arbitration, which must be arbitrable (e.g. administrative agreements and antitrust civil disputes, etc.);
• Indication of the juridical seat of arbitration and applicable laws;
• Written and executed by legal persons with full civil capacity.

A standard arbitration clause recommended is “Any dispute arising from, or in connection with, this Contract shall be submitted to [arbitration institution name] for arbitration, and shall be subject to the laws of [country where the arbitration institution is located] in effect at the time of applying for arbitration. The arbitral award is final and binding upon both parties”.

There are a number of arbitration institutions in mainland China that are more experienced in handling cases relating to foreign companies, for instance:

• China International Economic and Trade Arbitration Commission (CIETAC);
• Shanghai International Economic and Trade Arbitration Commission – also called Shanghai International Arbitration Centre (SHIAC);
• South China International Economic and Trade Arbitration Commission – also called Shenzhen Court of International Arbitration (SCIA);
• China Maritime Arbitration Commission (CMAC);
• as well as arbitration commissions in different cities such as the Beijing Arbitration Commission (BJAC) and the Xi’an Arbitration Commission.

Among these, CIETAC and SHIAC are probably the most experienced in handling foreign-related arbitration, also thanks to their high number of arbitrators being non-residents of mainland China.

It is advisable to recur to arbitration for high-value or very technical or complex contracts. Otherwise, ordinary courts are in general able to act faster, plus they are relatively impartial and reliable, especially those in first tier cities. At the same time, arbitration awards cannot be appealed.