Arbitration in China with Foreign Arbitral Institutions (Part 1)

Arbitration in China Administered by Foreign Arbitral Institutions: A Seamless Integration of International Standards and Local Convenience (Part I)

With China’s continued opening-up, an increasing number of enterprises are opting in their cross-border commercial contracts for internationally renowned arbitral institutions—such as the International Chamber of Commerce (ICC), the Singapore International Arbitration Centre (SIAC), and the Hong Kong International Arbitration Centre (HKIAC)—to administer their cases while designating Chinese mainland as the seat of arbitration. This arrangement preserves the international credibility of foreign arbitral institutions in terms of procedural management and legal reasoning quality, while aligning closely with China’s legal environment. In particular, it provides notable advantages in relation to interim measures to preserve assets and evidence, and the enforcement of arbitral awards.
 

I. When the Seat of Arbitration Is in China: Application of the PRC Arbitration Law Framework

Under Chinese law, the seat of arbitration determines both the procedural law governing the arbitration and the supervisory jurisdiction. Although the current Arbitration Law of the People’s Republic of China (as amended in 2017, the “Current Arbitration Law”) does not expressly stipulate the decisive role of the seat of arbitration in determining the procedural law, such principle has been recognized in judicial practice.

For instance, in Civil Ruling No. (2021) Jing 04 Min Te 726, the Fourth Intermediate People’s Court of Beijing explicitly held that the arbitral award in question was rendered by the International Court of Arbitration of the ICC, with Beijing designated as the seat of arbitration. The court determined that such an award constitutes a foreign-related arbitral award rendered in Chinese mainland by a foreign arbitral institution and therefore should be governed by and reviewed in accordance with Chinese Law, such as the Arbitration Law and the Civil Procedure Law.

Recent legislative developments give us a clearer picture of this issue. Article 81 (under Chapter 7 “Special Provisions on Foreign-Related Arbitration”) of the Arbitration Law that was amended in 2025 and will take effect on March 1, 2026 (the “New Arbitration Law”), expressly clarifies the legal significance of the seat of arbitration:

The parties may agree in writing on the seat of arbitration. Unless otherwise agreed, the law of the seat of arbitration shall apply to the arbitral proceedings and serve as the basis for determining the court with supervisory jurisdiction over the arbitration. The arbitral award shall be deemed to have been made at the seat of arbitration.

In other words, once the parties designate a Chinese location—such as Beijing, Shanghai, or Shenzhen—as the seat of arbitration, the arbitration will be regarded as having been conducted within the territory of China, regardless of whether it is administered by a Chinese or a foreign arbitral institution. Accordingly, such arbitration will be governed by the Arbitration Law and the Civil Procedure Law of the People’s Republic of China, unless the parties have agreed otherwise.

Another provision that reflects China’s legislative stance is Article 86(2) of the New Arbitration Law, which explicitly provides that foreign arbitral institutions may, in accordance with relevant national regulations, establish business offices in China’s Pilot Free Trade Zones and the Hainan Free Trade Port to conduct foreign-related arbitration activities.

The framework elaborated on above means that while the arbitral proceedings in China may be administered by a foreign arbitral institution, they nonetheless fall within Chinese jurisdiction. Within this framework, two implications are particularly significant:

• The parties may, in accordance with Chinese law, apply to Chinese courts for interim measures; and
• The resulting award is regarded as an arbitral award rendered within the territory of Chinese mainland, which may be directly enforced under China’s Civil Procedure Law, without having to go through the recognition and enforcement proceedings that only apply to “foreign awards”.

This change in arbitration law effectively dispels the traditional concern that “foreign arbitration means enforcement difficulties”, striking a balance between international standards and China-based enforceability.

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