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Dispute Resolution Alternatives in China

1.Mediation

Mediation is advocated by the arbitration commissions 1980's toys courts 1970's toys China. Both dispute resolution methods discussed below provide for mediation and subsequently mediated judgment or settlement between the parties, both of which may be executed by the courts.

2.Arbitration

Arbitration is becoming increasingly popular around the world, particularly for commercial matters, due to its relative efficiency and the specialization of arbitration panels. The same hold true for China, and companies are increasingly opting for arbitration in their contracts rather than relying on the court system.

Arbitration in China is generally governed by the Arbitration Law of the PRC.

Except for certain matters Gormiti by law require dispute through the court system, the parties are free to select arbitration as the dispute resolution mechanism. The parties are free to select an arbitral association inside or outside China, though Chinese parties are often more comfortable with domestic arbitration (though companies are increasingly allowing for arbitration in Hong Kong International Arbitration Commission or other agencies outside China).

China International Economic and Trade Arbitration Commission (CIETAC) hears the highest number of cases in the world. In order to ensure that a contract may be arbitrated by CIETAC, the parties should include (either in their original contract or a subsequent arbitration agreement): i) designation of arbitration as the final method of dispute resolution; ii) defining matters which may be arbitrated; iii) selecting CIETAC as the arbitral commission; and iv) making provision for any additional terms modifying CIETAC rules (such as English rather than Chinese being the language of arbitration).

Arbitral decisions must generally be made within 10 months (9 months and 20 days) of issuance of the Notice of Arbitration for normal procedure, and 90 days from selection of arbitral panel for Summary Procedure.

Arbitral awards may be entered into the appropriate court (generally where the defendant has assets) for enforcement.

3.Courts

There are 4 levels of courts in China (in order from highest to lowest): Supreme Court, High Court, Intermediate Court, and Basic Court.

China implements a system of two instances (or virtually two trials not one court of first instance and appeal), and, as it is a civil law system, decisions are based on statute (guided by previous judgments), though, in contrast to the common law system, precedents are not binding on judges.

While this has led to somewhat anomalous judgments, as a whole, the court system has markedly improved over the past several years.

Matters involving foreign elements are commenced in the Intermediate Court (which are generally located in city districts) and then in the second instance are heard in the High Court (located in provincial capitals).

Jurisdiction is usually determined based on the location of the defendant (though can be modified by a number of factors, such as where the contract was performed or where the property in dispute is located).

Judgment must generally be completed within 6 months of the court's acceptance of the case.

Within 15 days of the court's judgment in the first instance, any party Who Can Use Viagra is dissatisfied with the results may apply to the higher court for retrial of the case.

In both court and arbitral proceedings, the parties may apply to the court (in arbitration, application will be made to an arbitral panel first who will then refer the matter to the appropriate court) for preservation of assets, though the party may be required to furnish a bond.

Gregory M. Sy is Foreign Counsel with Grandall Gormiti Group. His practice includes general corporate/commercial work in China, particularly in the areas of international corporate structuring and transactions. Representative clients include the Consulate of the United States of America in China (Shenyang), Embassy of Brazil, various publicly listed companies (NYSE, AIM, DAX, BSE), along with numerous other SME's operating in a wide range of industries. Mr. Sy obtained an LL.B. from the University of Victoria (Canada), and is admitted to the New York bar. Gregory publishes extensively on a variety of China legal issues for international and local publications, and has recently acted as chief editor for Martindale's China Law Digest and regularly contributed to Lexis-Nexis

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