New BAC Rules to enter into force on 1 September 2019

The Beijing Arbitration Commission (BAC) has updated its arbitration rules and fee schedule. The new versions will replace the current (2015) version, with effect from 1 September 2019.

Among a number of notable amendments, BAC’s revised fee structure marks a significant step towards aligning Chinese arbitral practice with international standards. The new fee schedule:

  • distinguishes between the institution’s administrative charges and the arbitrator’s fees, with a clear imposition of higher charges for the latter. Under the current fee schedule, arbitration fees are payable entirely to the institution, without transparency as to the proportion that is paid to the arbitrators;
  • applies equally to both domestic and international arbitrations, removing any differentiation between the fees applicable. In addition, parties to domestic arbitrations can now agree to have the arbitrator’s fees charged on an hourly basis whereas under the current rules, this option is only available for international arbitrations;
  • increases the minimum administrative charges as well as arbitrator’s fees. For arbitrations involving amounts in dispute below RMB 250,000, the administrative charges and arbitrator’s fees shall be RMB 5,000 and RMB 12,000 respectively, totalling RMB 17,000. Under the current rules, the minimum arbitration fees payable for a dispute up to and including RMB 1,000 is only RMB 5,100, a sum that barely covers one hour of a sole arbitrator’s hourly rate;
  • imposes a maximum on the administrative charges and arbitrator’s fees, thereby preventing disproportionately high costs for high-value cases. For arbitrations involving amounts in dispute of RMB 5 billion and above, the administration fees will be capped at RMB 8.761 million. If the disputed amount is RMB 8.682 billion and above, the arbitrators’ fees will further be capped at RMB 18 million. Where hourly rates apply, an arbitrator’s hourly fee shall be capped at a maximum of RMB 5,000.

Other highlights of the new BAC Rules include:

  • the threshold for ordinary procedures before a full panel of three arbitrators has been increased from RMB 1 million to RMB 5 million. Where the amount in dispute falls below RMB 5 million, summary procedures handled by a sole arbitrator shall apply (Article 54);
  • a claimant may file a single notice of arbitration where a dispute arises out of multiple contracts provided that (i) the contracts contain identical or compatible arbitration clauses and (ii) the contracts are collateral or the contracting parties are identical and the subject matter of the arbitration is of a similar or related nature (Article 8);
  • amendments to the emergency arbitration procedure. Drawing on its experience of administering the first emergency arbitration in China in 2017, which resulted in an award that was successfully enforced in Hong Kong, BAC has clarified the emergency arbitration regime in its new rules. This includes clearer stipulations of the procedures and fees involved in the appointment of emergency arbitrators (Article 63);
  • the period for BAC to accept a case after a claimant’s payment of the requisite fees is extended from five to 10 days (Article 9);
  • an option for certain administrative deadlines to be extended by approval of the Secretary-General of the BAC, depending on the circumstances of each case, is now expressly codified (Article 70).

The new BAC Rules and fee schedule will no doubt be warmly welcomed by users and practitioners, enhancing BAC’s reputation as one of China’s most progressive arbitral institutions.

 

Helen Tang
Helen Tang
Partner, Mainland China
+86 21 2322 2160
Michelle Li
Michelle Li
Partner, Mainland China
+86 21 2322 2162
Hew Kian Heong
Hew Kian Heong
Partner, Mainland China
+86 21 2322 2150
Stella Hu
Stella Hu
Senior Consultant, Hong Kong
+852 2101 4248

JCAA Announces New Sets of Rules

Overview

The Japan Commercial Arbitration Association (JCAA) has issued an announcement that it is (i) amending its two current sets of arbitration rules and (ii) introducing a revolutionary set of rules designed to provide efficient and cheap civil-law style arbitration.

In its introduction to an initial call for public comments on the drafts, the JCAA made the frank admission that it: “has yet to play a significant role in the resolution of international disputes.”  The clear motivation for these new rules is to change this by offering a unique arbitration model that is attractive to a wide range of businesses.  Accordingly, the new sets of rules (the key features of which are explored below) seem to create a three tiered-system:

The new sets of rules will come into force on 1 January 2019.

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New KLRCA Rules 2017 – a step towards more efficient arbitrations in South East Asia

On 1 June 2017, the Kuala Lumpur Regional Centre for Arbitration (the "KLRCA") published its updated arbitration rules (the "KLRCA Rules 2017"). The KLRCA has seen a steep increase in cases over recent years reflecting Malaysia's growing importance as a regional dispute resolution hub. From 1978 to 2010, the KLRCA recorded only 22 cases but by 2016 this had risen to 618. The amount in dispute for international cases alone totalled over USD 295 million, the majority of which related to disputes from the construction and related sectors.

The KLRCA Rules 2017 apply, unless otherwise agreed by the parties, to all KLRCA arbitrations commenced after 1 June 2017. The KLRCA Rules 2017 replace the previous version of the rules which were last revised in 2013.

The changes implemented in the KLRCA Rules 2017 are designed to optimize the costs and efficiency of KLRCA proceedings and to improve the quality of arbitral awards. The changes are also designed to reflect international best practice in the case of multi-party disputes and introduce or bolster provisions for joinder of third parties and consolidation of proceedings. A summary of the key changes is set out below.

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English High Court considers the requirement to “exhaust” any available arbitral process of appeal before challenging an arbitral award under the Arbitration Act 1996

In an anonymised judgment dated 11 June 2014, Mr Justice Andrew Smith considered whether the terms of section 70(2) and/or section 73(2) of the Arbitration Act 1996 (the Act) precluded the Claimants (referred to as A) from bringing a challenge to an arbitral award (the Award) under sections 67 and 68 of the Act.

The judgment provides a helpful clarification in respect of what a party seeking to challenge an award under the Act must have done to satisfy the requirement in section 70(2)(a) to have first exhausted any available arbitral process of appeal or review in a two-tier arbitration.

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