Beijing Arbitration Commission
Encyclopedia
The Beijing Arbitration Commission (BAC) (Chinese: 北京仲裁委员会; pinyin: Bei Jing Zhong Cai Wei Yuan Hui) is an independent non-profit organization
Non-profit organization
Nonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...

 based in Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...

 offering services in arbitration
Arbitration
Arbitration, a form of alternative dispute resolution , is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons , by whose decision they agree to be bound...

, mediation
Mediation
Mediation, as used in law, is a form of alternative dispute resolution , a way of resolving disputes between two or more parties. A third party, the mediator, assists the parties to negotiate their own settlement...

, and other dispute resolution
Dispute resolution
Dispute resolution is the process of resolving disputes between parties.-Methods:Methods of dispute resolution include:* lawsuits * arbitration* collaborative law* mediation* conciliation* many types of negotiation* facilitation...

 mechanisms. The BAC was established in 1995 following the passage of the Arbitration Law of the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...

. In accordance with the theories of other ADR channels, the BAC encourages arbitration and mediation forums as "win-win" alternatives to litigation. The BAC's caseload has seen a dramatic increase since its founding over a decade ago. The BAC serves both domestic and international clients. An article in Business China declared the Beijing Arbitration Commission (BAC) as "the only local arbitration commission which meets or surpasses global standards.”

Any contract containing the following model arbitration clause is referred to the BAC:
"All disputes arising from or in connection with this contract shall be submitted to the Beijing Arbitration Commission for arbitration in accordance with its rules of arbitration in effect at the time of applying for arbitration. The arbitral award is final and binding upon both parties."

The BAC's caseload has seen a dramatic increase since its founding over a decade ago. In 2009, the BAC concluded 1,981 cases involving over 8.8 billion Yuan
Chinese yuan
The yuan is the base unit of a number of modern Chinese currencies. The yuan is the primary unit of account of the Renminbi.A yuán is also known colloquially as a kuài . One yuán is divided into 10 jiǎo or colloquially máo...

 in dispute.

History

The Beijing Arbitration Commission (BAC) was founded on September 28, 1995, as one of seven pilot local arbitration commissions (LACs) established under the Arbitration Law of the People's Republic of China
Judicial system of the People's Republic of China
The judicial system of the People's Republic of China has both broad and narrow meanings. Broadly speaking, the judiciary means law enforcement activities conducted by the country's judicial organs and organizations in handling prosecuted or non-prosecuted cases...

. The Arbitration Law reformed China's arbitration organizations and applied international arbitration practices in China. The Arbitration Law delegated the establishment of the BAC to the Office of Legislative Affairs of the Beijing Municipal Government (BMG). Ms. Hongsong Wang, then a research fellow in the Legal Affairs Office of the BMG and current Secretary-General of the BAC, took charge of this task.

BAC's annual caseload continues to increase rapidly, as does its compilation of international arbitration cases.

Organization

BAC headquarters is located in the Central Business District
Central business district
A central business district is the commercial and often geographic heart of a city. In North America this part of a city is commonly referred to as "downtown" or "city center"...

 (CBD) of Beijing. The office includes multiple international arbitration halls equipped with simultaneous translation systems and videoconferencing for oral hearings or international seminars. The BAC Committee — the BAC's governing body — is composed of one Chairman, four Vice-Chairpersons, and ten Committee Members. Many of the previous and current Vice-Chairpersons and Members are experienced specialists in law, economics, and trade. The Members' responsibilities include formulating and revising the BAC's Constitution and rules, creating a Panel of Arbitrators, and selecting and dismissing arbitrators. In pursuit of fair and unbiased arbitrations, the Commission does not participate in specific arbitral proceedings. The Arbitral Tribunal, a body of arbitrators independent of the Commission, alone determines awards of specific cases. The Commission's involvement only occurs when an arbitral tribunal makes technical and major substantive errors. The Commission members' participation with the organization is pro bono work, as they are unpaid.

Secretarial Qualifications

The Office of the BAC and its Secretariat manage cases and other day-to-day affairs. The majority of the Secretariat hold Master's Degrees from renowned universities and many are multilingual, offering convenient services for parties who speak Chinese
Chinese language
The Chinese language is a language or language family consisting of varieties which are mutually intelligible to varying degrees. Originally the indigenous languages spoken by the Han Chinese in China, it forms one of the branches of Sino-Tibetan family of languages...

, English
English language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...

, Korean
Korean language
Korean is the official language of the country Korea, in both South and North. It is also one of the two official languages in the Yanbian Korean Autonomous Prefecture in People's Republic of China. There are about 78 million Korean speakers worldwide. In the 15th century, a national writing...

, or Japanese
Japanese language
is a language spoken by over 130 million people in Japan and in Japanese emigrant communities. It is a member of the Japonic language family, which has a number of proposed relationships with other languages, none of which has gained wide acceptance among historical linguists .Japanese is an...

. New recruits undergo an intensive training program. The Secretariat oversees arbitral tribunals in the case of technical or typographical errors, miscalculations, failures to include matters decided during the arbitration in the award, or decisions inconsistent with how the same dispute was decided in a previous case. Case managers use a comprehensive, computerized case-management system that monitors the entire arbitration procedure, contains a searchable arbitrator database, and allows parties to submit post-arbitration feedback. Parties may use the inquiry system to search arbitration rules and other laws or pull up information regarding a specific arbitrator's background, case data, or feedback.

Expertise

The Arbitration Law requires that domestic arbitration cases be conducted by arbitrators appointed from the BAC's Panel of Arbitrators. The BAC's Panel of Arbitrators consists of over 270 arbitrators from China and around the world, all highly regarded in their respective legal or trade fields of expertise. Arbitrators selected by the Commission for inclusion on the Panel must meet the qualifications set out in Article 13 of the Arbitration Law. Those hoping to join the BAC as an arbitrator must have some knowledge or practical experience in the legal field as a lawyer or engaged in legal education or research.

Training

Before an arbitrator joins the BAC, the organization requires its arbitrators to pass a professional training course. All arbitral candidates for the BAC Panel of Arbitrators must successfully complete a training course administered by the BAC and the Law School of Tsinghua University
Tsinghua University
Tsinghua University , colloquially known in Chinese as Qinghua, is a university in Beijing, China. The school is one of the nine universities of the C9 League. It was established in 1911 under the name "Tsinghua Xuetang" or "Tsinghua College" and was renamed the "Tsinghua School" one year later...

, as well as an examination. The training process for arbitrators differs depending on the type of cases the arbitrator will be handling (i.e. purchase, construction, finance, engineering, leases). The Panel of Arbitrators includes arbitrators of Chinese and non-Chinese nationality
Nationality
Nationality is membership of a nation or sovereign state, usually determined by their citizenship, but sometimes by ethnicity or place of residence, or based on their sense of national identity....

, including American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...

n, Belgian
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...

, British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

, Canadian
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...

, Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...

n, French
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...

, German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...

, Italian
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...

, Korea
Korea
Korea ) is an East Asian geographic region that is currently divided into two separate sovereign states — North Korea and South Korea. Located on the Korean Peninsula, Korea is bordered by the People's Republic of China to the northwest, Russia to the northeast, and is separated from Japan to the...

n, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...

an, Swedish
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....

, and Swiss
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....

 arbitrators. The BAC also permits parties in international arbitrations— including parties from Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

, Macau
Macau
Macau , also spelled Macao , is, along with Hong Kong, one of the two special administrative regions of the People's Republic of China...

, and Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...

— to select arbitrators from outside the Panel. These selections must include the arbitrator's résumé and contact information.

Case-specific performance

The number of arbitrators used in an arbitration hearing depends on the character of the proceeding.

A Common Procedure case is heard before a presiding arbitrator and two co-arbitrators, creating a three-person Arbitral Tribunal. Each party selects their own arbitrator from the Panel of Arbitrators and submits a list of one to three choices for presiding arbitrator. If only one of the choices from each party's list overlaps, that arbitrator becomes the presiding arbitrator. If more than one candidate between the two lists overlaps, the Chairman of the BAC decides among the overlapping candidates. If the lists contain no overlapping candidates, the Chairman selects a presiding arbitrator outside of both lists. The Arbitral Tribunal's decision is based on majority opinion. Every member of the Arbitral Tribunal has an equal vote. If no majority opinion is reached, the final decision will be made by the presiding arbitrator.

A Summary Procedure case (a case involving a disputed amount of one million Yuan
Chinese yuan
The yuan is the base unit of a number of modern Chinese currencies. The yuan is the primary unit of account of the Renminbi.A yuán is also known colloquially as a kuài . One yuán is divided into 10 jiǎo or colloquially máo...

 or less) occurs before an Arbitral Tribunal composed of a sole arbitrator. The arbitrator is jointly appointed by the parties. If the parties cannot agree on an arbitrator, the Chairman makes the selection. In cases where the amount in dispute is one million Yuan
Chinese yuan
The yuan is the base unit of a number of modern Chinese currencies. The yuan is the primary unit of account of the Renminbi.A yuán is also known colloquially as a kuài . One yuán is divided into 10 jiǎo or colloquially máo...

 or less, the parties may jointly select to follow the Common Procedure and the added financial cost it entails.

Independence, Impartiality, and Efficiency

The Arbitration Law provides that arbitration and arbitration commissions should be independent and free from interference by administration organs, public organizations, or individuals. While the government played an instrumental role in the founding and initial organization of the BAC, and the BMG appoints BAC personnel, the organization is effectively independent. Today, the appointment of personnel by the BMG functions as a formality. First, the stringent qualifications required for personnel set out in the Arbitration Law limits the BMG's discretion in appointing personnel. Only specified departments and organizations may recommend candidates and the BMG never vetoes the recommendations. Second, the Chairman or the Vice-Chairman by designation may hold meetings of the Commission only if two-thirds of the Members are present. Any revisions of the BAC Constitution or dissolution of the BAC require the approval of more than two-thirds of the Commission Members. Other resolutions require the approval of more than two-thirds of the Commission Members present at the meeting. The decision-making process minimizes the ability of a government-appointed Commission Members from compromising the Commission's independence. Third, the BAC achieved financial independence from the government in 1998 and currently operates as a public institution "managed as an enterprise." Within the first three years after its creation, the BAC's caseload increased dramatically, providing the BAC with a stable source of funding from arbitration fees. The BAC has been self-funded since 2002. Fourth, the BMG has taken a "hands-off approach" in its strong support of the BAC. The BMG's involvement is limited to providing the BAC with necessary financial assistance, allowing the BAC to operate independently.

The BAC was the first in China to require its arbitrators to sign a statement declaring their ability to maintain fairness and independence. The BAC also enacted a Code of Ethical Standards for its arbitrators, which includes the disclosure of any connections an arbitrator may have to the arbitrating parties.

Each arbitration institution formulates its own set of procedural rules and the BAC's Arbitration Rules proved visionary for its time. They were the first in China to require individual dissenting opinions from arbitrators who do not sign the award and also the first to allow the parties to play a leading role in selecting a presiding arbitrator. The BAC amended its Rules to prevent BAC arbitrators from participating as advocates or representatives in any other cases before the BAC. According to Article 9 of the BAC's Ethical Standards, "[a]n arbitrator should not act as a representative in any case accepted by the BAC, including the case to which the arbitral award is applied for setting aside or for disallowing, nor should the arbitrator inquire about the case hearing or provide any entertainment, gift or other benefit to the member(s) of the arbitral tribunal for others." Arbitrators must disclose any information that may compromise their impartiality. In addition, upon concluding a hearing, arbitrators must sign a declaration affirming their impartiality and their diligence in conducting the proceedings.

Parties may challenge the impartiality of an arbitrator. Reasons for challenging an arbitrator include: (1) the arbitrator is a party to the arbitration or a close relative to a party to the arbitration; (2) the arbitrator has a personal interest in the dispute; (3) the arbitrator has any type of relationship which can affect his impartiality; or (4) the arbitrator privately met with a party or accepted offers of entertainment or a gift from the party or an authorized representative of the party. A challenge to an arbitrator should be made in writing and include supporting evidence. A challenge must be made before the first hearing; grounds for a challenge arising any time after the initial hearing must be brought before the final hearing. The secretary of the Arbitral Tribunal will distribute the party's challenge to the other party and to the Tribunal members. If the other party agrees to the challenge, the arbitrator must step down. If the other party does not agree to the challenge or the arbitrator does not voluntarily step down, the Chairman decides on the challenge. The Chairman's decision is binding on the arbitrator and the parties.

The average duration for the arbitral process from beginning to end is less than 70 days.

Publications

The Beijing Arbitration Journal, started in 1995 by the BAC, is co-edited by the BAC, the China Association of Private International Law, and the Wuhan University
Wuhan University
Wuhan University is a university located in Wuchang, Hubei, China. It is directly under the administration of the Ministry of Education of the People's Republic of China. It is regarded as one of the top ten universities in China, and its history dates back to 1893, making it one of China's...

 Research Institute of International Law. The BAC has also started arbitration forums in publications such as the People's Court Daily
People's Court Daily
People's Court Daily is a daily newspaper in China owned by the PRC Supreme People's Court. It was established on October 1, 1992 and is headquartered in Beijing....

 and the Legal Daily
Legal Daily
The Legal Daily is a People's Republic of China state-owned newspaper under the supervision of the PRC Ministry of Justice that is published in the PRC and primarily covers legal developments....

to raise awareness about arbitration.

External links

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