On 12 September 2025, the Standing Committee of the PRC National People’s Congress finally passed the long-awaited amendment to the PRC Arbitration Law. The revision will enter into effect on 1 March 2026. The initial law entered into force in 1995 and since then only two minor revisions occurred in 2009 and 2017. This major overhaul that we are seeing now started to take shape in 2021 and since then three readings of a comprehensive revision were conducted. Here is an overview over some of the changes that will apply as of March next year:
Each arbitration institution shall be governed by one chairperson, two vice chairpersons and seven to eleven additional members. Among them, at least 2/3 shall have expertise in law, trade and economics, and scientific technology and every five years at least 1/3 of them shall be replaced for transparency reasons.
Online arbitration has become a common practice and is now confirmed as a legal and effective means of arbitration unless the parties opt out of this mode.
Prosecutors, judges and civil servants are barred from serving as arbitrators while non-PRC experts in the areas law, trade and economics, maritime, and scientific technology are invited to serve as arbitrators with Chinese arbitration institutions.
Arbitrators are now by law required to disclose any potential situations to their arbitration institutions in which a reasonable doubt could be cast on their independence or impartiality.
In the case of three-member tribunals, the parties can opt for one of the following appointment modes for the third arbitrator: the chairperson of the arbitration institution shall make the appointment; the parties themselves decide on the appointments or the other two arbitrators appoint the third arbitrator.
The amended law confirms the right of the parties to apply for interim measures or injunctions before the initiation of the arbitration proceedings but still provides that the competent People’s Court shall handle such applications.Thus, arbitration tribunals still have no power to rule on the parties’ applications for interim measures.
Arbitral tribunals may collect evidence themselves and also request authorities to assist them in such measures. This gives the tribunals more power to independently collect evidence rather than mainly relying on their requests to the claimants and respondents to provide evidence.
If one party claims the existence of an arbitration agreement while the other party fails to deny such existence prior to the first arbitration hearing, and provided the tribunal made a record of such situation, an arbitration agreement is deemed to exist.
Also, if a party challenges the validity of an arbitration agreement, it may either request a ruling from the competent People's Court or a decision from the chosen arbitration institution/tribunal. If in such case one party requests a ruling from the competent People’s Court while another party asks for a decision by the arbitration institution/tribunal, the ruling of the competent People's Court shall prevail.
The time limit for applying for setting aside an arbitral award has been shortened from six to three months from the date of receipt of the award. During enforcement, respondents can invoke the same legal grounds of setting-aside the arbitral awards to resist the enforcement of the arbitral awards, thus unifying the legal grounds for setting-aside and non-enforcement applications of arbitral awards.
Thus far the location of an arbitration commission determined whether the arbitration was considered domestic or foreign-related. From a PRC legal perspective this differentiation is important because therefrom e.g. the law governing the arbitration proceedings, evidence rules, nationality of the award, courts of jurisdiction etc. are derived. Parties to foreign-related arbitrations get to choose a seat of arbitration. Unless the parties chose otherwise concerning the law governing the arbitration proceedings, the seat of arbitration shall determine the law governing the arbitration process and the court jurisdiction. Arbitral awards are deemed to be made at the seat of arbitration. If the parties failed to (clearly) agree on the seat of arbitration, the seat of arbitration is determined according to the agreed arbitration rules. If such rules are unclear on this matter, the tribunal may select the seat of arbitration based on the merits of the case and the principle of best facilitating the resolution of the dispute of the parties.
The amended law allows parties in foreign-related maritime disputes as well as other parties residing in Chinese Free Trade Pilot Zones, in the Hainan Free Trade Port and in other regions approved by the PRC government to choose ad hoc arbitration. In case of such choice, the parties should still notify the Association of Chinese Arbitration about the parties’ names, seat of arbitration, composition of the tribunal and applicable arbitration rules. Such notification shall be made within three days after the formation of the tribunal. Thus, the scope for ad hoc arbitration still remains rather limited in China.
Foreign arbitration institutions from outside China are allowed to establish entities in Chinese Free Trade Pilot Zones, Hainan Free Trade Port and in other regions approved by the PRC government. The amended law however lacks clear provisions concerning what scope of action such foreign arbitration institutions could engage in in China.
Susanne Rademacher
