We are pleased to include this guest contribution article by Junming He, Partner at Shanghai United Law Firm, Member of the Arbitration Committee of the Shanghai Bar Association, and participant in the First Advanced Training Program for Foreign-Related Lawyers of the Ministry of Justice.

 

Stability, Progress, and a Farsighted Vision in Arbitration Law (2025 Revision) [1]

After much anticipation within the legal community, the revised Arbitration Law of the People’s Republic of China (Arbitration Law 2025) was finally promulgated and came into effect on March 1, 2026. This article will examine the highlights of the revisions and discuss potential issues under the Arbitration Law 2025.

The highlights of updated Arbitration Law 2025 can be summed up in four areas.

Article 81 marks a significant advancement by establishing, for the first time in statute, the concept of the ‘seat of arbitration.’ It stipulates that the seat governs the award’s nationality, determines the jurisidiction for judicial review, and indicates the default applicable procedural law.

The previous Arbitration Law lacked the concept of a ‘seat of arbitration’. This conceptual gap lead to debates im cases such as Anhui Long Li De Packaging and Printing Co., Ltd. v. BP Agnati S.R.L. [2] and Brentwood. [3] Futhermore, this revision enables international parties to better understand and accept Chinese arbitration legal system, based on their existing familarity in the New York Convention and the UNCITRAL Model Law.

The Arbitration Law 2025 explicitly replaces the term “Arbitration Commission” with “Arbitration Institution”, while Article 82 under Chapter VII (“Special Provisions for Foreign-Related Arbitration”) effectively establishes a framework for ad hoc arbitration.

Nevertheless, ad hoc arbitration is restricted to specific types of disputes. This helps domestic enterprises gradually adapt to the ad hoc mechanism while filling a long-standing gap in Chinese legislation. Concurrently, it addresses the prior hesitancy of Chinese courts to recognise and enforce foreign ad hoc awards, which stemmed from the lack of explicit domestic legal grounding.

 

3. Broadening the scope of arbitrable foreign-related matters

Article 78 represents a significant expansion of the scope of foreign related arbitration. While retaining the traditional categories of foreign-related disputes in economic trade, transportation, and maritime affairs, it introduces a new provision for “other disputes involving foreign elements”. This expansion is further reinforced by related provisions: Article 93 incorporates the new Sports Arbitration chapter from the China revised Sports Law [4], and Article 94 acknowledges the expanded jurisidiction of institutions like Shenzhen Court of International Arbitration (SCIA) to include investment arbitration.

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Article 88 unifies the jurisidictional nexus for the recognition and enforcement of foreign awards. Simultaneously, the revision clairifies the role of application for the principle of reciprocity: treaty obligations take precedence, followed by reciprocity. It also marks the first introduction of a “reciprocal restrictions” clause at the legislative level in China. This provides a potential legal basis for judicial countermeasures against the backdrop of escalating trade wars. Consequently, Chinese courts are better equipped to operate effectively within an increasingly complex international environment, forming synergistic legal effects with domestic laws such as the Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures. [5]

Article 13 of the Arbitration Law 2025 clarifies, for the first time in statutory form, the legal nature of arbitration institutions as “public-benefit non-profit legal persons”, thereby putting an end to long-standing debates over their legal status. Consequently, the operation and other aspects of arbitration institutions will now be subject to supervision consistent with that applied to other public-benefit non-profit legal persons, and mechanisms for their exit. This position is further corroborated by Articles 16 and 17, which specify the requirements for the establishment and registration of arbitration institutions.

Article 21 introduces requirements for arbitrators’ professional competence, diligence, integrity, and ethical conduct. Furthermore, Article 23 explicitly clarifies the circumstances under which arbitrators may be removed, and Article 18 specifically addresses the tenure of Staffs of arbitration institutions. It is reasonable to expect that arbitration institutions will increasingly develop tailored arbitrator management rules by drawing on advances domestic practices (e.g., CIETAC’s Code of Conduct for Arbitrators and Rules on Arbitrator Conduct Review [6]) and international standards (e.g., the IBA Guidelines on Conflicts of Interest in International Arbitration [7])

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Article 27 codifies the doctrine of deemed acceptance of jurisdiction, effectively elevating existing instutional practices—such as Article 10 of the CIETAC Arbitration Rules—to a statutory level. It provides tribunals with granular guidance on both the substantive requirements and the practical implementation of this principle. Furthermore, Article 41 modernises the service of documents by prioritising party autonomy over service methods. This reform significantly alleviates the perennial challenge of ‘service difficulties’ that has long hampered arbitration proceedings. 

Additionally, Article 45 introduces a ‘proactive disclosure’ system, providing a clearer legal basis for the independence and impartiality declarations already widely adopted by leading arbitration institutions.

Article 19 requires arbitration institutions to establish an information disclosure system, mandating the proactive publication of their articles of association, fee schedules, annual financial reports, and other operational details to accept public supervision. This transparency requirement aligns with global trends toward greater openness in arbitration practice.

The Arbitration Law 2025 marks a pivotal shift in promoting the equal status of arbitration and litigation in China by bridging the gap in interim relief and investigative powers. Through the implementation of Articles 39, 59, 79 and 82, the law officially extends the three core types of preservation measures—property, evidence, and conduct preservation—to the arbitration process. 

Furthermore, the revised law substaintially empowers arbitral tribunals by granting them greater autonomy and authority in decision-making and evidence gathering. By explicity adopting the “comptence-competence” principle in Article 31, the law grants tribunals the inherent power to rule on their own jurisdiction and the validity of arbitration agreements. Coupled with Article 55, which authorises tribunals to seek direct assistance from relevant entities in obtaining evidence, these reforms transform the tribunal into a more robust and independent judicial body.

The Arbitration Law 2025 actively drives the technological advancement of commercial arbitration in China by formalising digital procedures and integrating technical expertise. Article 11 provides a definitive legal foundation by granting online arbitration equal legal validity and cost parity with offline proceedings. Furthermore, Aricles 18 and 22 institutionalise the role of scientific and technical talent within the arbitration framework, encouraging the inclusion of technology experts in both institutional governance and arbitrator selection.

While the Arbitration Law 2025 introduces numerous highlights, it still leaves certain regulatory gaps or potential risks in the following four areas.

Article 11 adopts an “opt-out” model for online hearings. This approach offers potential benefits such as reduced dispute resolution costs and improved efficiency. However, it also raises significant concerns regarding autonomy since parties with limited technological access could face barriers in exercising procedural rights.

Furthermore, if online hearings are extensively promoted without regulation, the widespread adoption of “asynchronous proceedings” in arbitration may follow. If the parties choose “asynchronous proceedings”, they may even conduct the hearing without being face-to-face or present at the same time. Should this occur, coupled with the increasing number of consumer arbitration cases in China, the solemnity and credibility of arbitration procedures could be significantly diminished.

B. Vague “Unless Otherwise Provided by Law” Clauses May Increase Systemic Uncertainty 

Articles 5 and 37 contain phrases such as “unless otherwise provided by law” without specifying relevant laws or provisions. Since the current PRC Securities Law, Foreign Investment Law, and Anti-Monopoly Law contain mandatory jurisidction or exclusive procedural clauses, the absence of systematic integration is likely to lead to ambiguity over arbitrability.

Furthermore, as commercial arbitration is widely used in cross-border transactions and investments and require parties’ specific agreement, such vague wording could reduce contractual predictability for foreign parties designing dispute resolution clauses. This may discourage parties from choosing China as the seat of arbitration.

As previously discussed, the Arbitration Law 2025 introduces several changes, including granting investigative power to arbitral tribunals, improving the interim measures system, and further liberalising ad hoc arbitration. However, the law itself does not specify detailed supporting measures for implementation. 

Additionally, online arbitration also lacks specific standards. Although several reference documents have already published, mandatory national standards are still absent. There are also no specified consequences for violating related mandatory requirements. 

 

III. Conclusion

The enactment of the Arbitration Law 2025 marks a watershed moment in the development of Chinese arbitration industry. To realise the full potential of Arbitration Law and strengthen the international competiveness of Chinese arbitration, it is essential to deepen our understanding of legal principles and respect practical realities. 

 

Prepared By: