Arbitration cases in China are on the rise as corporates choose a quicker and more efficient way of resolving trade and economic disputes.
Last year, such cases handled by the China International Economic and Trade Arbitration Commission (CIETAC) and its branches rose 18.5 percent to 1,256, compared with 1,060 cases in the previous year, the commission said Tuesday.
Of the 1,256 cases, 375 involved foreign parties, up from 311 cases a year ago. Foreign cases refer to cross-border and Hong Kong disputes as well as those in which Chinese parties are not involved.
For more than 50 years, CIETAC has been at the forefront of resolving disputes arising from interpretations and violations of business contracts and transactions. Its role as one of the world’s major permanent arbitration institutions has become even more crucial as China further opens up its economy and boosts its economic and trade relations with foreign countries.
“The cases that involve foreign parties are actually higher than what’s shown in the figures because we excluded the ones between domestic companies registered in China but with foreign shareholders,” secretary general Wang Wenying told the Hong Kong Economic Journal’s EJ Insight on the sidelines of a conference organized by the Hong Kong Chamber of Commerce.
“We expect the number of arbitration cases and those involving foreign parties to grow as the country gets more internationalized. Setting up a branch in Hong Kong is a first step for the country’s arbitration practice to become internationalized,” she said, adding that CIETAC has no plans to add branches outside China at the moment.
“Part of the reason for setting up a branch in Hong Kong is that local parties are the second majority clients for our commission and we want to provide them convenience,” Wang said, adding that the third place goes to the United States, where disputes mostly involve joint ventures or investments in intellectual property and information technology.
Domestic arbitration cases usually take four months to bring to resolution while cases involving foreign parties take about six months. Cases involving small claims of less than 2 million yuan (US$322,820) are usually settled within three months, Wang said.
SOEs to put more profit into central pot
The Ministry of Finance said it will raise the share of profits that state-owned enterprises (SOEs) must pay into government coffers by 5 percentage points this year, the China Securities Journal reported Wednesday. SOEs are forecast to contribute 141.49 billion yuan (US$22.81 billion) in after-tax profits to central finances this year, up 37.543 billion yuan, or 36.1 percent, from 2013. Public fiscal revenue is forecast to be 6.44 trillion yuan this year, up 7 percent year on year, the report said.
Cabinet calls for rule of law in capital market
The State Council has underscored the need for the rule of law and marketization in the development of the mainland’s capital market, the Shanghai Securities News reported Wednesday. The principles were among six identified by the cabinet at its regular Tuesday meeting, the report said. The other measures touched on equity market reforms, including better protection of investor interests, as well as the development of the bond market, private equity, futures, and intermediary agencies, the report said.
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