Commercial Dispute Resolution in China

In 2021, the COVID-19 pandemic continued to affect economic development. In addition, due to the changing global situation, international competition was increasingly fierce. Under the circumstances of major changes and a pandemic unseen in a century, commercial dispute resolution in China is confronting new challenges, facing new changes and ushering in new developments.

In the field of commercial arbitration, the promulgation of the Arbitration Law (Revision) (Draft for Comment) brought about many reforms to China’s current arbitration system, aroused widespread attention and discussion in the industry, and boosted arbitration research and the arbitration legal system to new levels. Arbitration institutions, including the Beijing Arbitration Commission/Beijing International Arbitration Center (hereinafter referred to as the “BAC/BIAC”), have duly issued new rules according to the needs of case handling and pandemic prevention and control in order to guide new arbitration practices, and the highlights of China’s judicial supervision and opening-up of arbitration are eye-catching.

In the field of commercial mediation, the Supreme People’s Court has continuously promoted the development of a “one-stop” diversified dispute resolution system to support international commercial mediation organizations in providing mediation services in free trade zones; the Shenzhen Intermediate People’s Court has innovatively introduced third-party mediation organizations to participate in bankruptcy reconciliation; and practices in coordination between arbitration and mediation have been constantly enriched. Commercial mediation is playing an increasingly important role in alternative dispute resolution in China.

In key professional fields, while actively responding to the impacts of the pandemic and focusing upon the resumption of work and production, legal construction and dispute resolution have also been developing.

In the field of construction engineering, with the implementation of the Civil Code, new judicial interpretations of construction contracts have been formally implemented. The formal implementation of the Engineering Procurement Construction Contract for a Construction Project (Model Text) has boosted the continued streamlining of administration, delegation of power, improved regulations and upgraded services for construction projects in China and stimulated the vitality of market entities more powerfully.

In the real estate field, enterprises continued to face market pressure, and defaults of large real estate enterprises occurred frequently. Properly solving disputes among the relevant market entities and promoting the transformation and upgrading of the industry have become hot issues of social concern.

In the energy field, the global energy crisis coexists with climate issues and the booming fossil energy transition, new energy consumption has increased steadily and a unified national carbon trading market has been officially formed.

In the financial field, the Beijing Financial Court has been established to enhance the professional level of financial adjudication, the property mortgage guarantee registration system has been continuously improved and the security investor protection mechanism has been steadily enhanced and upgraded. Disputes involving massive stakeholders were handled in a stable and orderly manner, and adjudication rules for asset management contracts have been constantly improved.

In the investment field, laws and regulations on foreign investment such as Company Law of the People’s Republic of China (Draft for Comment) has solicited public comments and the Measures for the Security Review of Foreign Investment have been amended; breakthroughs have been made in the personal bankruptcy system, which was first implemented in Shenzhen.

In the international trade field, the Regional Comprehensive Economic Partnership Agreement (RCEP) has come into force, and the Anti-foreign Sanctions Law and relevant laws and regulations on export control have been introduced to deal with international disputes.

In the intellectual property field, the revised Patent Law and Copyright Law have been formally implemented, and Chinese courts have actively participated in the resolution of international intellectual property disputes by adjudicating standard essential patent (SEP) disputes and issuing anti-suit injunctions, generating greater influence.

In the civil aviation field, the Civil Aviation Law has been revised and general aviation-related management specifications have been issued, improving China’s civil aviation legal system. In the meantime, disputes caused by the pandemic have also become a hot issue in the industry.

In the film, television and entertainment field, industry supervision remained strong, punishments for misbehaving actors and actresses have been continuously strengthened, and the digital transformation of the film, television and entertainment industry has been constantly deepened. As a result, the new type of entertainment disputes has also advanced the development of dispute resolution in the industry.

The year of 2022 marks the tenth consecutive year that the BAC/BIAC has organized senior industry experts to compile the Commercial Dispute Resolution in China: An Annual Review and Preview (hereinafter referred to as “Annual Review and Preview”), which is published globally in both Chinese and English. Both the Annual Review and Preview and the Annual Summit on Commercial Dispute Resolution in China have become important windows for people from all circles at home and abroad to understand the development status of commercial dispute resolution in China, building important exchange and interaction platforms for professionals in the dispute resolution industry at home and abroad.