Chapter 1 Introduction to International Commercial Arbitration Law

1. Chapter 1Introduction to International Commercial Arbitration Law Prof. Zhao Xiuwen

2. Classification of the Methods for the Dispute Resolution • Judicial method • Non-judicial method • ADR (Alternative dispute resolution) • Arbitration as an independent dispute resolution

3. Classification of the Disputes--by subject-matter • Sale of goods • Sale of services • Investment disputes:both foreign direct and indirect disputes • Intellectual property disputes

4. Classification of Disputes--by parties • Between different states • Between state and nationals of other states • Between nationals of different states

5. WTO DS • Disputes between WTO members • DSB under WTO Rules • Settlement disputes in accordance with WTO Rules (DSU & Various Agreements)

6. ICSID DS • Convention on the Settlement of Investment Disputes between States and Nationals of Other States

7. ICSID Jurisdiction • The jurisdiction of the Center shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Center by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Center. When the parties have given their consent, no party may withdraw its consent unilaterally.

8. DS between Nationals of Different States • Judicial method:litigation • Non-judicial method Alternative Dispute Resolution (ADR)

9. Characteristics of ADR • Alternative by the parties’ consent • Legal status of the resolution • Application of ADR

10. Expression of ADR • Negotiation • Conciliation or mediation • Good offices • Mini-trial • Joint conciliation

11. Application of ADR • Applied independently • Combination with litigation and arbitration

12. International Litigation • Jurisdiction • Applicable law • Recognition and enforcement of foreign judgment

13. Jurisdiction Determination • Territorial supremacy(属地优越权） • Personal supremacy （属人优越权） • Concurrent jurisdiction (并行管辖） BP Case

14. Parallel Litigation • Consent jurisdiction: forum shopping • Exclusive jurisdiction

15. Litigation in National Courts • Few conventions • Principle rules on the jurisdiction v. national procedure law • Difficult enforcement of foreign judgment due to lack of appropriate international convention

16. Enforcement of Foreign Judgment • Few international conventions • Domestic law & reciprocity

17. Arbitration • Voluntary method for the settlement of disputes • Based on the arbitration agreement • Binding force for the award • Enforcement mechanism based on the New York Convention

18. Sources of International Arbitration Law • Domestic arbitration law • International legislation: bilateral judicial cooperation treaty, international convention, model law

19. New York Convention • Recognition and enforcement of arbitration agreement ; • Recognition and enforcement of foreign arbitral awards

20. Other International Documents • European Convention on International Commercial Arbitration; • Geneva Conventions of 1923 and 1927 • World Bank Convention of 1965 • UNCITRAL Model Law on Int’l Commercial Arbitration of 1985 • UNCITRAL Arbitration Rules

21. Principles of International Commercial Arbitration • Parties’ autonomy • Independent and impartial settlement disputes by the arbitral tribunal • National courts’ supervision on the arbitration

22. China’s Int’l Arbitration Law • Domestic arbitration law • Bilateral judicial cooperation treaty and international convention to which China is a party

23. Arbitration Practices • Comparative studies on international commercial arbitration practices • Institutional v. ad hoc • Judicial review in different countries

24. Main Topics • Arbitration institutions • International arbitration agreement • Arbitration tribunal • Arbitration procedures • The law governing the arbitration • Award and remedies • Court supervision

25. German Zueblin v. Wuxi Woco • 22/12/00, two-page Agreement b/t the parties to construct a factory for Woco in Wuxi, Jiangsu Province, China; • FIDIC Green Book General Terms and Conditions as Appendix incorporated by reference in the Agreement; • Appendix: Arbitration: 15.3ICC Rules, Shanghai shall apply.

26. Litigation in the Court • 10/10/02，Woco sued Zueblin in the Wuxi District Court over the Construction Contract then changed to torts claims; • Zueblin challenged the jurisdiction of the Court based on the Arbitration Clause; • The District Ct. decided its jurisdiction over the case, which was confirmed by the Wuxi Intermediate Ct. on 20/02/03.

27. Zueblin with ICC Arbitration • 23/ 04/03, Zublin applied to ICC for arbitrating the dispute with Woco. • 10/11/03, ICC tribunal rendered preliminary award to confirm its jurisdiction under the applied ICC Rules. • 30/03/04, final award was made in Shanghai in favor of Zueblin.

28. Court’ Decision on the Validity of the Arbitration Agreement • 29/04/03, Zueblin applied to Wuxi district Ct. for confirmation of the validity of the arbitration agreement. • 02/09/04, Court denied the validity of the arbitration clause after the Reply from the Supreme Court on 8 July 2004 through the Report system.

29. Chinese Court’s Decision on Enforcement of the ICC Award • 30/08/04, Zueblin applied to the Wuxi Intermediate People’s Court for enforcement of the ICC Award. • 19/07/06, Wuxi Intermediate People’s Court decided to refuse enforcement of the ICC Award due to invalid arbitration agreement under New York Convention.

30. References • 《国际商事仲裁法》，21世纪国际法学系列教材，人大版，2004； • 《国际商事仲裁案例解析》，人大版，2005； • 《国际商事仲裁法参考资料》，人大版，2006。