Ad hoc arbitration measures of China offer new ideas for dispute resolution

The Shanghai Municipal Bureau of Justice issued on 13 June 2024 and entered into force on 1 August 2024 the Measures for the Promotion of Ad Hoc Arbitration in Shanghai for Foreign-related Matters in Commercial and Maritime Fields (For Trial Implementation) which refers to Ad Hoc Arbitration Measures in this article.

For most people, ad hoc arbitration is a relatively unfamiliar concept. Unlike an arbitration institution, ad hoc arbitration is a form of arbitration in which a tribunal is composed of appointed arbitrators by parties to deal with the corresponding disputed case and is automatically dissolved upon the case’s conclusion. Ad hoc arbitration is translated from the expression of “ad hoc arbitration”. The word “ad hoc” in Latin means “for this purpose only”.

In the international community, international conventions have clearly defined the status of ad hoc arbitration, such as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the United Nations Model Law on International Commercial Arbitration, and the Inter-American Convention on International Arbitration, etc., and there is also more mature judicial practice experience. However, in China, ad hoc arbitration is still in the ascendant. The Supreme People’s Court issued the Opinions on Providing Judicial Guarantees for the Construction of Pilot Free Trade Zones on 30 December 2016, which conditionally allows ad hoc arbitration between enterprises registered in Chinese Free Trade Zones. The Standing Committee of the Shanghai Municipal People’s Congress issued the Regulations of Shanghai Municipality on Promoting the Construction of the International Commercial Arbitration Centre on 22 November 2023, which provides guidelines for exploring ad hoc arbitration in specific areas. On 15 July 2024, the first case of ad hoc arbitration in China was held in the Hainan Free Trade Zone, which is of great significance for the exploration of ad hoc arbitration in practice.

As one of the forms of commercial arbitration, ad hoc arbitration can safeguard party autonomy to a greater extent. However, at the same time, ad hoc arbitration also has certain limitations and may face some obstacles and difficulties in its implementation. In recent years, China has made many useful explorations in the field of ad hoc arbitration and promulgated a series of measures and regulations to promote ad hoc arbitration, which will help China build a system that is in line with the international commercial arbitration system, and also provide a new way for the parties to resolve conflicts and settle disputes.