Settling matters

When it comes to disputes, many Chinese enterprises first think of litigation. But legal experts suggest arbitration is also an effective and efficient method to resolve differences.

At a recent seminar on international arbitration, local enterprises were encouraged to make good use of arbitration.

The seminar was jointly organized by the Beijing Arbitration Commission, China International Economic and Trade Arbitration Commission and Jones Day International Law Firm.

Over 100 participants including senior experts from Chinese and foreign arbitration institutions, scholars, legal counsel and representatives from renowned Chinese and foreign enterprises, attended the seminar.



As China's economy continues to grow, there is greater interaction between Chinese and foreign enterprises and the number and scale of disputes, such as intellectual property rights, trade and human resources, is likely to grow.

Tao Jingzhou, a partner at Jones Day Beijing office, says arbitration is being used more widely by the international community as an important tool to resolve disputes arising from international economic and trade activities. This is because of the many advantages arbitration brings.

These include simple procedure, high degree of autonomy, easy enforcement, confidentiality, and the increasing number of professional arbitrators.

Tao says arbitration amounts to nothing more than a private forum, chosen by the parties, with a decision and award granted by an arbitrator, applying the procedural rules chosen by the parties.

The main advantage of arbitration is the time factor, Tao says. If properly planned, an arbitration procedure can take place within a few months, particularly if the parties choose to designate a fast-track procedure to deal with certain type of disputes.

The parties also have an opportunity to choose their own arbitrator, and accordingly, may decide to utilize the services of an expert with knowledge of their particular dispute, rather than a legal expert with little knowledge of the practical issues in dispute. The parties may even decide to be represented by experts rather than by legal representatives.

Tao adds confidentiality is also a big advantage.

Gao Fei, secretary-general of Arbitration Law Research Institute of China International Economic and Trade Arbitration Commission, says the best aspect of choosing arbitration is because the parties are not constrained by national laws, but rather, can invoke a system of laws that is internationally recognized.

Gao says China has joined the New York Convention, which means foreign arbitration rulings can be applied in China and vice-versa. But she says China still does not allow foreign legal representatives to comment on which laws to use during the arbitration.

Tao points out that Chinese courts have extended their power too much to the arbitration sector, which leads many firms planning to use arbitration instead of going to court.

Sigvard Jarvin, senior counsel of Jones Day in Paris and formerly general counsel of the International Court of Arbitration, talks about the history of arbitration at the Stockholm Chamber of Commerce. He says the Chamber has a long tradition in dealing with China-related cases, although their number represents less than 10 percent of the cases it handles.

According to Jones Day's predictions, there are 10 million dispute cases each year, and only 500,000 are settled through arbitration.

"As a foreign law firm, Jones Day has a wide network and knowledge on arbitrations in every city across the globe. We are very happy to work with local enterprises when they need help," Tao says.

Jones Day has over 30 locations across the globe, with over 2,300 lawyers.

In Beijing, the firm has about 60 locally or foreign trained partners, lawyers and consultants who are familiar with global arbitration matters, Tao says.

Jones Day can provide information for enterprises on where and how to go through arbitration anywhere in the world.