The 20th Central Committee of the Communist Party of China (CPC) adopted a resolution on further deepening reform comprehensively to advance Chinese modernization at its third plenary session, which explicitly mentions the need to ‘improve the system of international commercial arbitration and mediation’. On October 31, Shanghai Financial Court held a press conference to release a White Paper on Judicial Review of Financial Arbitration by Shanghai Financial Court (hereinafter referred to as the “White Paper”) and Typical Cases of Judicial Review of Financial Arbitration by Shanghai Financial Court (hereinafter referred to as the “Typical Cases”) for the purpose of effectively implementing the deployment of the Central and Municipal Party Committees on the strategic objectives of building an international commercial arbitration center and an international first-class arbitration institution, and to serve and support the construction of Shanghai’s international financial center. This press conference is the third in a series of conferences on the Innovation and Practice: Modernization of Financial Trials by Shanghai Financial Court, and the thirtieth in a series of conferences on the Further Promotion on the Modernization for Shanghai Courts on Justice and Efficiency by Shanghai courts. Gu Quan, Vice President of Shanghai Financial Court, and Wang Xin, Chief Judge of the Third Comprehensive Division, gave a briefing on the relevant information and answered journalists’ questions.
In recent years, guided by Xi Jinping’s thought of socialism with Chinese characteristics in the new era, Shanghai Financial Court has thoroughly applied Xi Jinping’s thought on the rule of law, based on the function of financial justice to support and supervise arbitration, continued to improve the judicial review mechanism of financial arbitration, strengthened the orderly alignment of financial arbitration and litigation, ensured the effective implementation of the ‘Regulations of Shanghai Municipality on Promoting the Construction of an International Commercial Arbitration Center’, assisted in the further promotion of the construction of an international commercial arbitration center of Shanghai, accelerated the building of a Asia-Pacific arbitration center with global focus, and provided strong financial judicial guarantee for promoting Shanghai a preferred place for international financial dispute resolution, enhancing the right of speech on foreign-related rule of law and participating in the global economic governance.
The White Paper is divided into five parts:
The first part summarizes the general characteristics of judicial review of financial arbitration cases in terms of the number of cases, the results of arbitration, the causes for application, and the types of dispute. Compared to the total number of 8,466 financial arbitration cases received by Shanghai arbitration institutions during the same period, Shanghai Financial Court heard 405 arbitration-related judicial review cases and made a negative evaluation of only 8 cases, reflecting the superior quality of financial arbitration in Shanghai, and the higher degree of recognition of financial arbitration in Shanghai by both Chinese and foreign parties. The number of arbitration-related judicial review cases was led by capital management disputes, followed by securities disputes, equity investment disputes, financial leasing disputes and insurance disputes. In foreign-related, Hong Kong, Macao and Taiwan-related cases, the respondents were mostly domestic enterprises in energy, electronics and financial industries, and the disputes mostly occurred in the fields of cross-border financing and guarantee.
The second part takes typical cases as an entry point to sort out the common arguments and arbitration rules under different types of cases, so as to provide market participants with clear rule expectations. Firstly, in cases concerning the validity of arbitration-related agreements, the White Paper analyzes certain issues on whether the signing method of standard contract text issued by domestic and foreign financial infrastructure affects the validity of the arbitration clauses; how to decide the validity of an arbitration clause when the dispute resolution clauses in the insurance application and the insurance policy are different, and the validity of arbitration clauses in form contracts and related contracts. Secondly, in cases involving applications for setting aside arbitral awards, the White Paper has sorted out procedural disputes in arbitration and analyzed the legitimacy requirements of arbitration procedures in the light of case. Finally, in foreign-related and Hong Kong, Macao and Taiwan-related judicial review of arbitration cases, ‘failure to provide proper notice’ has become the most common cause of action in judicial review. The White Paper has clarified the procedural requirements for such arbitration cases.
The third part introduces the three working mechanisms of Shanghai Financial Court: the mechanisms for judicial review of financial arbitration, link-up of financial judicial arbitration, and co-ordination between arbitration and litigation in financial risk prevention. Through mechanism innovation, it optimizes the function of judicial review of arbitration, improves the quality and efficiency of judicial review of financial arbitration cases, enhances the effectiveness of diversified dispute resolution, strengthens the data linkage of dispute resolution, the prevention of risks in key areas, and the research of theories in legal practice, so as to create a business environment based on rule of law.
The fourth part analyzes in depth the problems reflected in the practice of judicial review of financial arbitration and gives full play to the directive role of judicial big data. The White Paper has comprehensively sorted out and summarized the problems reflected in the cases of application for validity confirmation of arbitration agreements, application for setting aside arbitral awards, judicial review of arbitration concerning foreign countries, Hong Kong, Macao and Taiwan, as well as enforcement of arbitral awards.
The fifth part makes specific advice on the aforementioned issues. For parties in a contract, it is suggested to clarify the content of arbitration clauses; to enhance the consistency of the dispute resolution clause in related contracts, to incorporate concerning disputes into a single remedy channel as far as possible from a cost-saving and solvable perspective; to clarify the service mode of arbitration, and to give full play to the edges of strong autonomy of arbitration procedures; and to correctly understand the nature of judicial review of arbitration procedure. For arbitration institutions, it is suggested to safeguard the procedural rights of parties in an arbitration, further regulate the procedures for extending the time limit of arbitration cases, and optimize the service and notification procedures of arbitration; continue to enhance the international credibility of arbitration, strengthen the management of financial arbitrators, improve the internal management system of arbitration cases, and innovate the disclosure mechanism of typical cases in financial arbitration; deepen the positive interaction between arbitration and justice, and promote the international competitiveness of arbitral legal services by strengthening the construction of a flexible dispute resolution mechanism via litigation, arbitration and mediation and improving the mechanism of preservation and execution.
In order to further exert the exemplary significance of the rules of judicial review of financial arbitration cases and give full play to the guiding role of typical cases on the market, the press conference also released 10 typical cases, including recognition and enforcement of foreign arbitral awards, and applications for validity confirmation of arbitration agreements, applications for setting aside arbitral awards; It involves not only the identification of foreign laws, the recognition and enforcement of foreign arbitral awards, but also the validity confirmation of arbitration clauses in special contracts such as financial infrastructure-related open principal agreements and insurance contracts, as well as principal and accessory contracts, related contracts, and contract alterations, reflecting the common focus of disputes and new types of legal issues in such cases. It fully reveals the judicial stance of the people’s court to give equal importance to the support and supervision of arbitration to further unify the scale of judicial review of financial arbitration, and to promote the continuous enhancement of credibility and influence of financial arbitration.
“For our further work, Shanghai Financial Court will, in accordance with the relevant requirements of the Central and Municipal Party Committees and the higher courts, give full play to the function of financial justice to support and supervise arbitration, further improve the working mechanisms, support the arbitration system to innovate in accordance with the law, strengthen and form a synergy of work, and build a ‘arbitration-friendly’ financial judicial environment to boost the high-quality development of arbitration in Shanghai, improve the business environment under the rule of law, and continue to serve and safeguard the construction of Shanghai’s international financial center and financial power.” Gu Quan said.
Journalists from nearly 20 news media, including Legal Daily, China News Service, Shanghai Securities News, International Financial News, Democracy and Legal System, and Jiefang Daily, attended the conference.
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