THE AUTHOR:
Christian Liu, Legal Director at Clyde & Co
Clyde & Co’s Young Arbitration Group provides a unique insight into international arbitration issues through the lens of young international arbitration practitioners working across different jurisdictions. In this series with Daily Jus, Clyde & Co examines notable arbitral developments from around the world, offering a jurisdiction-by-jurisdiction analysis of key cases, legislative reforms, and emerging trends that shaped international arbitration over the past year.
On 12 September 2025, the National People’s Congress of China voted to adopt the newly revised Arbitration Law of the People’s Republic of China (the “PRC”) (hereinafter referred to as the “New Arbitration Law”). The New Arbitration Law will come into effect on 1 March 2026 and marks a significant update to China’s arbitration system, being the first substantial revision since the Arbitration Law was enacted in 1994. It is envisaged that the New Arbitration Law will enhance China’s attractiveness as a leading choice for international arbitration by aligning its arbitral landscape more closely with international standards.
This article provides an overview of the key highlights of the New Arbitration Law.
The Legal Effect of Online Arbitration Formally Recognised
Article 11 of the New Arbitration Law states: “Arbitration activities may be conducted online through the information network, except where the parties expressly disagree.”
Although online arbitrations in China are not a new practice, this revision formally affirms that online arbitrations have the same legal effect as offline arbitrations. Since the COVID-19 epidemic, online arbitration has become an increasingly popular feature of China’s arbitration system. Online arbitrations are convenient but have also proven to save time and costs for the parties, thus improving the efficiency of arbitral services.
Article 11 also makes online arbitrations the default proceedings, with parties able to opt out if they expressly disagree. If there are limited case information and documents, online arbitration may be a more cost effective way to proceed; however, if the case is complex with a large volume of documents, offline arbitration may be preferable.
Protecting Arbitration Agreements
Article 27 of the New Arbitration Law states that “if one party claims that there is an arbitration agreement when applying for arbitration, and the other party does not deny it before the first hearing, it shall be deemed that there is an arbitration agreement between the parties after being prompted and recorded by the arbitration tribunal.” Prior to this amendment, if the underlying contract did not contain an arbitration clause, arbitration was only possible after the parties made a separate written arbitration agreement, which could be impractical in certain scenarios. This amendment strengthens arbitration agreements by limiting opportunities for tactical challenges to their validity and, consequently, to arbitral awards.
Flexible Service in Arbitration
Article 41 of the New Arbitration Law stipulates that “arbitration documents shall be served in a reasonable manner agreed upon by the parties, and if the parties have not agreed or the agreement is not clear, they shall be served in the manner prescribed by the arbitration rules.”
In previous arbitration cases, if the parties agreed to designate an email address as the way of service of legal documents, the Arbitration Commission could still regard the registered address of a legal person as the address for service of legal documents in accordance with its arbitration rules. In addition, because the registered address of the legal person is often not the actual place of business, the parties would fail to receive the relevant documents sent by the Arbitration Commission, resulting in the parties not receiving the documents in time. Such a scenario could lead to the deprivation of procedural rights, such as the right to defend, the right of cross-examination, the right to apply for setting off the arbitration award etc.
Following the implementation of the New Arbitration Law, the service of arbitral documents will be more flexible.
Ad hoc Arbitration Confirmed for the First Time
Article 82 of the new Arbitration Law states: “For foreign-related maritime disputes or disputes arising between enterprises registered in the pilot free trade zones established with the approval of the State Council, Hainan Free Trade Port and other areas prescribed by the State, if the parties agree in writing to arbitrate, they may choose to arbitrate by an arbitration institution. Parties may also choose to arbitrate by persons who meet the requirements of this Law within the People’s Republic of China as the place of arbitration and shall conduct the arbitration in accordance with the agreed arbitration rules.”
As an international practice, ad hoc arbitration is prevalent in the international community and is recognized by laws and international conventions across jurisdictions. The new Arbitration Law introduces the ad hoc arbitration mechanism, allowing the use of ad hoc arbitration in foreign-related disputes between enterprises involved in “foreign-related maritime disputes” or within “free trade pilot zones”, “Hainan free trade port and other areas stipulated by the state”.
The addition of “ad hoc arbitration” is a breakthrough in China’s arbitration system, which may further integrate China’s foreign-related arbitration system with international practices and enhance the international attractiveness of China’s arbitration.
Legal Framework for Foreign Arbitral Institutions Administering Arbitration in the PRC
Article 86 of the New Arbitration Law expressly allows, upon approval, foreign arbitral institutions to set up offices and administer foreign-related arbitrations in pilot free trade zones, the Hainan Free Trade Port, and other areas. This amendment provides clarity on the status of foreign arbitral institutions in the PRC by creating a legal basis for their presence.
Conclusion
Overall, the New Arbitration Law’ s amendments should strengthen the efficiency and adaptability of arbitration procedures in the PRC, thereby enabling the arbitration framework to more effectively accommodate the requirements of diverse market participants domestically and internationally.
ABOUT THE AUTHOR
Christian Liu is a Legal Director in Clyde & Co’s Shanghai Office. He represents both local and international clients and advises on a wide range of insurance and shipping-related disputes. He also has experience in handling disputes relating to road and air carriage, affreightment and international trade. Christian is a Member of the Chartered Insurance Institute and holds the Diploma in Insurance issued by the Chartered Insurance Institute.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
