Shanghai Maritime Court Concludes First Case on the Validity of an Ad Hoc Arbitration Agreement

On March 17, 2025, the Shanghai Maritime Court concluded a highly watched case concerning an application to confirm the validity of an ad hoc arbitration agreement. This case marks the first judicial precedent on the validity of an ad hoc arbitration agreement since the implementation of the Regulations on Promoting the Establishment of an International Commercial Arbitration Center in Shanghai (hereinafter referred to as the "Arbitration Regulations").

The dispute arose between two companies registered in the China (Shanghai) Pilot Free Trade Zone and the Lingang New Area over transportation costs incurred during the importation of goods. In November 2024, the parties entered into an Ad Hoc Arbitration Agreement, stipulating that disputes would be resolved through arbitration under the Shanghai Arbitration Association Ad Hoc Arbitration Rules.

During the proceedings, the respondent challenged the validity of the arbitration agreement, arguing that the agreement merely specified the seat of arbitration, arbitration rules, and the number of arbitrators without explicitly naming specific arbitrators, thereby failing to meet the legal requirement for "designated arbitrators." However, after thorough review, the Shanghai Maritime Court held that the parties had explicitly chosen ad hoc arbitration to resolve their dispute, and their genuine intent was clearly reflected in the agreement. The court noted that although there was disagreement regarding the specific transportation segment involved in the dispute, the International Import Cargo Transportation Agreement contained foreign-related elements, and the arbitration agreement provided a clear mechanism for appointing arbitrators, thus ensuring specificity. Consequently, the court ruled that the arbitration agreement was valid.

In its deliberations, the court conducted a detailed analysis of key elements such as the method of arbitrator selection, the applicability of arbitration rules, and the identification of foreign-related factors. Drawing on the Arbitration Regulations and relevant judicial opinions of the Supreme People's Court, the court concluded that its decision not only upheld the parties' autonomy in choosing ad hoc arbitration but also provided valuable insights for refining judicial review mechanisms for ad hoc arbitration. This ruling is expected to contribute to creating a sound legal environment for Shanghai's ambition to establish itself as a global arbitration hub in the Asia-Pacific region and to promote innovation in ad hoc arbitration mechanisms.

Following the conclusion of the case, the Shanghai Maritime Court stated that it would take this opportunity to further summarize and disseminate typical cases, gradually building a comprehensive judicial review framework for ad hoc arbitration. This effort aims to contribute judicial expertise to the refinement of the Arbitration Law of the People's Republic of China and the development of an international commercial arbitration center. The ruling not only reaffirms the court’s strong support for arbitration in accordance with the law but also provides clear judicial guidance for enterprises in the free trade zone seeking to resolve disputes through ad hoc arbitration.

CIETAC Delegation Visits Austria to Promote Sino-Austrian Economic and Legal Cooperation

In mid-March 2025, in response to China's strategy of further opening up and to enhance Sino-Austrian economic and legal cooperation, the China International Economic and Trade Arbitration Commission (CIETAC) organized a delegation led by Vice President Xie Changqing. From March 13 to 15, the delegation conducted a series of trade and legal exchange activities in Austria. During the visit, the delegation participated in the China-Austria Economic and Trade Forum and the Third Global Supply Chain Promotion Conference and engaged in in-depth discussions with the Austrian Federal Economic Chamber, labor and economic authorities, as well as experts and scholars from the arbitration and legal sectors.

During these activities, both sides exchanged views on strengthening cross-border commercial dispute resolution mechanisms, advancing international arbitration cooperation, and leveraging multilateral platforms to facilitate investment. In meetings with the Austrian Arbitration Association and the Vienna International Arbitral Centre, the delegation reached a consensus on how to utilize their respective advantages, innovate arbitration procedure management, and effectively resolve disputes. Vice President Xie Changqing emphasized that as Sino-Austrian economic and trade cooperation continues to deepen, there is vast potential for collaboration in legal services, dispute resolution, and regulatory alignment, which will provide enterprises from both countries with more efficient and fair solutions for investment and trade disputes.

The delegation also visited renowned local enterprises and conducted in-depth research on Austria’s advanced experience in cross-border investment and arbitration rule-making. Ren Hongbin, President of the China Council for the Promotion of International Trade (CCPIT), along with Austrian government officials and business representatives, highly praised the visit, recognizing it as a significant step toward building a regional ecosystem for international arbitration cooperation. This visit to Austria not only expanded channels for Sino-foreign arbitration exchanges but also provided strong legal protection and intellectual support for Chinese enterprises in their global expansion.

HKIAC and SCCA Sign Cooperation Agreement to Jointly Promote International Arbitration Development

In March 2025, the Hong Kong International Arbitration Centre (HKIAC) and the Saudi Center for Commercial Arbitration (SCCA) officially signed a Cooperation Agreement in Hong Kong, marking the beginning of extensive collaboration in international arbitration and alternative dispute resolution mechanisms. The signing ceremony, held at HKIAC’s headquarters, was a significant event attended by representatives from arbitration institutions, the legal community, and businesses from both regions, witnessing this milestone in cross-border dispute resolution cooperation.

During the ceremony, HKIAC representatives highlighted Hong Kong’s unique advantages and extensive experience in international arbitration as a global financial and trade hub, while acknowledging Saudi Arabia’s remarkable progress in commercial dispute resolution and investment protection as a key Middle Eastern economy. Under the agreement, both institutions will collaborate on mutual arbitrator recommendations, resource sharing, joint training seminars, and the promotion of advanced arbitration rules, aiming to establish a new cross-border arbitration cooperation platform covering Eurasia and the Middle East.

SCCA representatives emphasized that this deepened collaboration with HKIAC would not only allow Saudi Arabia to leverage Hong Kong’s expertise in arbitration rule-making and procedural innovation but also enhance its influence in international dispute resolution. Both parties agreed on the need for further cooperation in case review mechanisms, mutual recognition of arbitration rules, and the development of multilateral dispute resolution frameworks to establish a more open, transparent, and internationalized arbitration system.

The signing of this cooperation agreement reflects the shared vision of HKIAC and SCCA in advancing international arbitration cooperation and facilitating cross-border investment. Both institutions reaffirmed their commitment to strengthening exchanges, jointly addressing increasingly complex international commercial disputes, and fostering a new global arbitration ecosystem, ultimately contributing to global economic stability and development.

Chongqing First Intermediate People's Court:Failure to Fulfill the Duty of Explanation and Notification Renders the Standard Clause Invalid—Arbitration Clause in Dispute Declared Null and Void

Legal Basis:

"Arbitration Law of the People’s Republic of China"

Article 16

An arbitration agreement shall include arbitral clauses stipulated in the contract and other written agreements which request arbitration to be made prior to or following the occurrence of a dispute.

An arbitration agreement shall include the following:

(1) the expression of an application for arbitration;

(2) items for arbitration;

(3) the chosen arbitration commission.

Article 20

Where the parties concerned have a differing opinion upon the validity of an arbitration agreement, a request may be made for an award to be made by the arbitration commission or a judgment made by the People's Court. Where one party requests an award to be made by the arbitration commission and the other party requests a judgment from the People's Court, it shall be judged by the People's Court.

Where the parties concerned have a differing opinion upon the validity of an arbitration agreement, this shall be raised before the arbitration tribunal commences the first hearing.

Case Description：

On November 14, 2022, the applicant, Xiao, and the respondent, Xinyan Company, signed a Japanese Language Training Agreement online. The contract was sent in PDF format, and Xiao signed it using a digital handwriting pad before returning it. The contract included a dispute resolution clause stating that if disputes arose, the parties should first negotiate, and if unsuccessful, submit the dispute to arbitration at either the Chongqing Arbitration Commission or the arbitration commission at the student’s location. The contract was a standard form agreement drafted in advance by Xinyan Company and sent to Xiao via the internet without separate negotiation or special notification.

Between November 14 and November 15, 2022, Xiao transferred the tuition fees to Xinyan Company in two transactions: ¥9,000 (in two payments) on November 14 and ¥1,000 on November 15, both labeled as “Xiao, Southwest University Japanese Experimental Class.”

On March 4, 2023, Xiao made another transfer of ¥7,800 via WeChat to an account labeled “Luo Honghong,” with the note “SWU Japanese Xiao,” indicating the continuation of the contract and commencement of classes. Xiao also submitted printed WeChat chat records with “Luo Honghong,” detailing the training fees and course arrangements but without any explanation or clarification of the arbitration clause.

According to the contract, the Japanese Experimental and Advanced Training Classes Xiao enrolled in included 480 lessons (240 hours), to be completed by December 1, 2023. Class attendance records confirmed that both parties fulfilled their contractual obligations, and Xiao acknowledged having “been informed of course completion,” marking the end of the service relationship. Xiao submitted only a printed copy of the Japanese Language Training Agreement, which showed that the contract was sent by Xinyan Company’s staff member “Luo Honghong,” but the original contract document was not provided. Regarding the arbitration clause, Xiao argued that before signing, Xinyan Company failed to notify or explain the clause, preventing him from noticing or understanding its implications.

Based on the above evidence, Xiao submitted the following requests:

1. Confirmation that the arbitration clause in the Japanese Language Training Agreement signed on November 14, 2022, is invalid.

2. That the respondent bears the costs of the application.

Court's View:

1. Determination of the Standard Clause

According to Article 496, Paragraph 1 of the Civil Code of the People's Republic of China, arbitration clauses pre-drafted for repeated use and directed at unspecified persons qualify as standard clauses. Xinyan Company, as the party providing the standard terms, sent the contract via the internet without separately negotiating or explaining the terms to Xiao, thereby meeting the criteria for a standard clause.

2. Validity of the Arbitration Clause

Under Article 496, Paragraph 2 of the Civil Code of the People's Republic of China, the party incorporating standard terms into a contract must reasonably notify the other party of any clauses that significantly affect their rights and interests. In this case, the dispute resolution clause was a key provision impacting both parties’ rights and obligations. However, Xinyan Company failed to highlight or explain this clause through special formatting or other means. Because it did not fulfill its duty to notify, Xiao was unable to fully recognize the clause’s content, entitling him to challenge its incorporation into the contract, leading to the conclusion that the arbitration clause is invalid.

After reviewing the dispute, the court submitted its opinion regarding the invalidity of the arbitration clause to the Chongqing High People’s Court, which subsequently approved the ruling.

In accordance with Articles 16 and 20 of the Arbitration Law of the People's Republic of China and Article 157, Paragraph 1, Item 11 of the Civil Procedure Law of the People's Republic of China, the court ruled to confirm that the arbitration clause in the Japanese Language Training Agreement signed between Xiao and Xinyan Company on November 14, 2022, is null and void.

Singapore High Court:Dismissal of Application to Set Aside Arbitration Award on Grounds of Denial of Fair Hearing

In 2012 and 2014, T and U signed the 2012 Fixed-Term Contract and 2014 Fixed-Term Contract, respectively, under which T was to provide maintenance services for U’s building and surrounding areas. These services included building inspections and the repair of cracks on walls or ceilings, with each contract containing a fee schedule and specified crack repair methods.

In 2018, U initiated arbitration against T, seeking the return of payments made for repair work. The arbitral tribunal was tasked with determining: (1) whether T had performed the crack repair work as required under the contracts; (2) whether U had lost the right to claim repair work due to acquiescence, waiver, acceptance of contract modifications, or estoppel; and (3) whether U was entitled to recover payments made for the repair work in the event of T’s contractual breach.

During the hearing, the tribunal summoned a concrete repair expert, Mr. K, for an investigation. Mr. K’s report concluded that:

None of the inspected repair areas had undergone surface treatment, resulting in insufficient adhesion of repair materials;

Cracks were absent in approximately 80% of the buildings at the supposed repair locations, suggesting unnecessary repair work;

No signs of the prescribed repair process were detected, and core sample testing found no evidence of the specified repair materials, proving that T had failed to carry out the repairs as required by the contract.

The tribunal ruled that T had breached the contract, rejecting T’s defenses of acquiescence, waiver, estoppel, and contract modification. It further held that U was entitled to damages, determining that only 6 out of 252 buildings had undergone actual repairs. Consequently, T was ordered to refund U for payments made for the remaining 246 buildings.

Based on this ruling, U sought enforcement from the Singapore High Court, requesting that T return the payments related to the buildings that had not been repaired.

Court's View：

TThe court addressed T’s claims as follows:

A. Alleged Failure to Consider T's Defense

The court found that the tribunal had reasonable grounds to conclude that T had not fully articulated its legal defenses by the time the case was closed. Thus, the tribunal was not required to provide a substantive discussion of T’s defense in its award. The tribunal’s wording merely reflected its assessment that T’s evidence was insufficient after due examination.

B. Alleged Errors in Factual Findings

T contended that the tribunal erred in determining that the contracts were not of a “non-profit nature” and that U faced difficulties obtaining separate repair quotations for the 252 buildings. However, the court noted that U had clearly stated its position in supplementary materials, and T had the opportunity to rebut but chose not to do so. Additionally, the tribunal’s inference that individual repair quotations were impractical was reasonable given the circumstances of the case.

C. Alleged Overreliance on Expert K’s Evidence

T argued that the tribunal gave undue weight to Mr. K’s testimony. The court held that the tribunal had duly considered T’s objections and found Mr. K’s investigation methodology to be reasonable. While there was some dispute regarding the locations of core sample collection, this did not undermine the overall findings of the investigation.

In view of the above, T's claims of violation of natural justice, procedural unfairness and errors in factual findings were not sufficient to overturn the arbitral award, and it was ultimately ruled that the original arbitral award should be upheld and not set aside.