Jus Mundi Releases 2025 Year in Review: Arbitration — China Chapter

On 7 April 2026, Jus Mundi, a global legal intelligence platform, released 2025 Year in Review: Arbitration — China Chapter, summarising two major developments in China’s arbitration landscape in 2025.

First, the revised Arbitration Law, adopted in 2025, has came into force on 1 March 2026. The revised law introduces a series of important reforms, including broadening the scope of foreign-related arbitration, clarifying the concept of the seat of arbitration, strengthening the validity of arbitration agreements, giving preliminary recognition to ad hoc arbitration, and reforming the qualification requirements for arbitrators. These reforms are intended to bring China’s arbitration framework further in line with international practice and enhance its appeal as a leading venue for international arbitration.

Second, the Supreme People’s Court released the 2024 Annual Report on Judicial Review of Commercial Arbitration together with 16 guiding cases, aiming to promote greater consistency in judicial review standards across the country. The materials focus on key issues such as the validity of arbitration agreements, the setting aside of arbitral awards, and the recognition and enforcement of awards, providing important guidance for arbitration-related legal practice. The release reflects the continued development of China’s arbitration system towards greater internationalisation and transparency, and offers domestic and international businesses and parties a more stable and reliable arbitration environment.

The 27th ICCA Congress Successfully Concludes in Madrid

From 12 to 15 April 2026, the 27th Biennial Congress of the International Council for Commercial Arbitration (ICCA) was successfully held at the Teatro Real in Madrid, Spain. The Congress brought together approximately 1,300 arbitration practitioners from around the world. Under the theme “International Arbitration: Local, Global or Both?”, participants engaged in in-depth discussions on how the local and global dimensions of international arbitration can coexist, addressing a number of core issues over the course of the event.

Geopolitics and the Neutrality of Arbitration

Discussions on the first day focused on the role of arbitration amid geopolitical pressures, tracing the issue back to the 1794 Jay Treaty. Experts considered whether arbitration can continue to serve as a peaceful means of resolving inter-State disputes, particularly in today’s complex geopolitical environment. The discussions noted that, historically, arbitration has offered political leaders a lawful mechanism to manage diplomatic friction. The Brčko Arbitration was cited as a successful example, while certain high-profile maritime and boundary arbitrations illustrated the limitations of arbitration in politically sensitive disputes. A key question raised was whether the increasing “judicialisation” of arbitration may reduce its appeal in resolving State disputes involving significant political sensitivities.

The Multi-Dimensional Impact of Sanctions on Arbitral Proceedings

On the second day, the Congress examined in detail the multi-dimensional impact of sanctions on arbitral proceedings, with particular attention to how sanctions may affect different procedural stages. Experts observed that sanctions have increasingly been invoked as a basis for force majeure defences and may produce asymmetric effects across jurisdictions, particularly where EU sanctions are applied as a matter of public policy at the enforcement stage. Other issues discussed included the impact of sanctions on payment restrictions, the appointment of counsel, and the designation of arbitrators. Sanctions may also affect access to justice for sanctioned parties. Participants called for greater international coordination on sanctions to safeguard the integrity of arbitral proceedings and the enforceability of arbitral awards.

ESG and the Right to Regulate: A Generational Shift in Investment Treaties

Discussions on ESG — environmental, social and governance — issues and the right to regulate highlighted certain underlying tendencies within the investor-State dispute settlement system. These include the frequent use of a strict “foreseeability” standard to reject certain claims, as well as concerns over the asymmetric application of most-favoured-nation clauses. More importantly, investment treaty practice is undergoing a generational shift: from first-generation bilateral investment treaties, which primarily locked in investor protection obligations, to instruments such as the Investment Protocol to the African Continental Free Trade Area, which make investor obligations a precondition for treaty protection. The 2025 advisory opinion of the International Court of Justice on climate change was also cited as having a direct bearing on foreseeability and legitimate expectations in arbitration.

AI and the Future of Arbitration: The Limits of “Inert Intelligence”

A dedicated panel on the second day explored the use of artificial intelligence in arbitration. Experts suggested that AI is better understood as a form of “inert intelligence”: it can process and reproduce information, but it cannot reason or exercise judgment in the way human beings do. While AI can assist practitioners with data processing and strategic analysis in document-intensive stages, its biases reflect inequalities in data access. In particular, the under-representation of data from developing jurisdictions may further reinforce dominant legal narratives. The panel also raised the “uncanny valley” problem of AI, namely that AI may appear to imitate human reasoning without genuinely understanding it. The ultimate conclusion was that AI should remain a tool rather than a decision-maker, with human judgment and accountability continuing to lie at the heart of international arbitration.

Arbitration Efficiency: From Over-Litigation to Proactive Case Management

Participants acknowledged that arbitration has, in some respects, “gone off track”: increasing procedural complexity, rising costs, and lengthy written submissions have affected access to justice. The underlying causes were identified as passive tribunals, over-litigation, and overly flexible procedural frameworks. Proposed reform tools included mandatory case management conferences, disclosures of arbitrator availability, page limits, strict procedural timetables, and earlier procedures to narrow the issues in dispute. Martina Polasek, Secretary-General of the International Centre for Settlement of Investment Disputes (ICSID), also provided a detailed overview of the ICSID rule reform process.

Supreme Court of India: Delayed Arbitral Awards May Be Set Aside

On 13 April 2026, Kluwer Arbitration Blog reported on an important ruling by the Supreme Court of India in Lancor Holdings Limited v. Prem Kumar Menon & Ors., concerning delay in the rendering of arbitral awards. The Court confirmed that an arbitrator’s failure to issue an award within a reasonable period is not, in itself, an independent ground for setting aside an award. However, where the delay has a material adverse impact on the quality, fairness, or dispute-resolution function of the award, the award may be held invalid under the existing statutory grounds for setting aside.

According to the judgment, the Court identified four categories of circumstances in which delay may render an award vulnerable to challenge: (i) where the award is issued well beyond the time agreed by the parties or beyond a reasonable period, without sufficient explanation; (ii) where the arbitrator remains inactive for a prolonged period before signing the award, impairing the recollection of facts and the assessment of evidence; (iii) where the parties’ legitimate expectations are seriously undermined by the delay, depriving the award of substantive fairness; and (iv) where there is an abnormal time gap between the draft award and the final award, indicating that the tribunal failed to deal with the core issues in a timely and effective manner.

The Supreme Court emphasised that the core value of arbitration lies in the timely, fair, and effective resolution of disputes. Where delay prevents an arbitral award from fulfilling these objectives, or even turns it into an ineffective determination that forces the parties to seek judicial relief again, the award may be found to violate Indian public policy or involve patent illegality, thereby providing a basis for setting it aside. This ruling offers clearer guidance for arbitration practice in India and is expected to encourage arbitral tribunals to manage procedural timelines more actively and prevent unreasonable delays.

Ezhou Intermediate People’s Court:

Failure to Specify Whether “Local” Refers to the Place of Contract Signing, the Company’s Domicile, or Another Place Constitutes an Unclear Designation of the Arbitration Commission

Legal Basis:

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

Article 18

Where the arbitration agreement does not specify or clearly define the subject matter of arbitration or the arbitration commission, the parties may conclude a supplementary agreement; if no supplementary agreement can be reached, the arbitration agreement shall be invalid.

Case Description：

This case concerned an application to confirm the validity of an arbitration agreement between the applicant, a Hubei technology company (“Company A”), and the respondent, a Guizhou mining company (“Company B”).

On 7 January 2015, a coal mine company, as a general partnership, transferred its mining rights to a Guizhou mining company and entered into a Mining Rights Transfer Contract. The contract provided that debts incurred before 7 January 2015 would be borne by the coal mine company, while debts incurred thereafter would be borne by the Guizhou mining company.

On 18 April 2015, an employee of the coal mine company, Shen, used the coal mine’s company seal to enter into an Industrial and Mining Products Purchase and Sales Contract with the applicant. Article 8 of that contract provided that any contractual dispute should first be resolved through consultation; failing consultation, the dispute should be submitted to the “local arbitration commission” for arbitration.

In August 2016, the coal mine company was deregistered. In May 2019, the Guizhou mining company transferred the mining rights to Company B. The new Mining Rights Transfer Contract provided that debts owed by the Guizhou mining company would be assumed by Company B.

The applicant argued that the reference to the “local” arbitration commission in the original contract was ambiguous and failed to identify a specific place of arbitration or arbitration institution. It therefore applied to the court for confirmation that Article 8 of the Industrial and Mining Products Purchase and Sales Contract was invalid.

Company B did not appear before the court as notified and did not submit any written opinion.

Court's View:

The Court held that, under Article 18 of the PRC Arbitration Law, where an arbitration agreement contains no provision, or an unclear provision, regarding the matters to be arbitrated or the arbitration commission, the parties may reach a supplementary agreement. If no supplementary agreement can be reached, the arbitration agreement shall be invalid.

In this case, the parties’ reference to the “local arbitration commission” in the Industrial and Mining Products Purchase and Sales Contract was not sufficiently specific. The contract did not clarify whether “local” referred to the place where the contract was signed, the domicile of the company, or any other location. This ambiguity fell within the category of an unclear designation of the arbitration commission. As the parties had not reached any supplementary agreement on the arbitration institution, the arbitration clause should be held invalid in accordance with law.

Accordingly, the Court ruled to confirm that the arbitration agreement contained in the Industrial and Mining Products Purchase and Sales Contract was invalid.

Paris Court of Appeal: Evidence Disclosure Request Dismissed and Tribunal’s Award Declining Jurisdiction Upheld

Case Description：

This case concerned a share transfer dispute relating to a lithium mining project in the Manono region of the Democratic Republic of the Congo, with the dispute primarily focusing on the ownership of shares. Between 2016 and 2017, Company E and certain foreign investors established Company D for the purpose of developing the Manono lithium project. Under the 2019 shareholders’ agreement, Company A was its majority shareholder, holding 75% of the shares, while Company E held 25%. The agreement stipulates that shareholders are entitled to pre-emptive rights.

In 2019, Company E decided to sell 15% of its shares. Although Company A expressed its intention to exercise a right of first refusal, Company E ultimately transferred the shares to Company J on 10 September 2021. Company J was a wholly-owned subsidiary of a Chinese-funded enterprise.

The shareholders’ meeting expressed differences of opinion on the transfer. Company A opposed the admission of Company J as a new shareholder, arguing that the transfer was unlawful. On 20 April 2022, Company J commenced ICC arbitration pursuant to the arbitration clause in Company D’s articles of association. It alleged that Company A had abused its shareholder rights and sought confirmation of its shareholder status, as well as amendments to the company’s articles of association. On 11 March 2024, the arbitral tribunal issued an award declining jurisdiction, finding that Company J had not yet been entered in the company’s share register and had therefore not formally acquired shareholder status.

Company J subsequently applied to the Paris Court of Appeal (Cour d’appel de Paris) to set aside the award. In the setting-aside proceedings, Company A requested extensive disclosure of evidence relating to the share transfer and allegations of corruption, and also sought witness examination.

Court's View：

On 20 January 2026, the Paris Court of Appeal dismissed Company A’s requests for evidence disclosure and witness examination, and ordered Company A to pay Company J EUR 20,000 in legal costs. The Court’s reasoning was mainly as follows:

1. Powers of the Pre-Trial Judge and the Rules on Evidence

The Court confirmed that the pre-trial judge has the power to adopt necessary measures for the taking of evidence, but such power is not unlimited. Under the French Code of Civil Procedure, the court may order disclosure only where the requested documents are “useful” for resolving the dispute. The Court found that the documents sought by Company A were not directly connected with the jurisdictional issue in the setting-aside proceedings and therefore lacked the required usefulness.

2. Lack of Relevance and Usefulness

Company A sought to rely on evidence disclosure to establish alleged corruption in the share transfer process, with a view to challenging the validity of the transfer agreement. However, the Court held that the tribunal’s award declining jurisdiction did not address the validity of the transfer agreement or the corruption allegations. Instead, the tribunal’s decision was based on the fact that Company J had not been registered as a shareholder. Accordingly, the evidence sought by Company A lacked a sufficient connection with the jurisdictional issue before the Court in the setting-aside proceedings.

3. Dismissal of the Request for Witness Examination

Company A also requested that a letter rogatory be issued to the judicial authorities of the Democratic Republic of the Congo and that the current chairman of Company E be summoned to testify. For the same reasons as those applicable to the disclosure request, the Court found that this request also lacked usefulness. The tribunal, in issuing its award declining jurisdiction, had expressly refrained from examining the validity of the transfer agreement and the corruption allegations. As a result, the proposed witness testimony would have no practical impact on the setting-aside proceedings.

Ultimately, the Court dismissed Company A’ s requests and upheld the arbitral award, emphasising that, in reviewing an application to set aside an award, the court need not enter into evidence disclosure or witness examination, particularly where the original award had expressly avoided determination of the substantive issues.