Landmark reform of the Arbitration Law of the People's Republic of China

On 12 September 2025, the Standing Committee of the National People's Congress adopted an amended version of the Arbitration Law of the People's Republic of China (“New Law”).  The New Law will take effect from 1 March 2026.  These amendments represent a significant modernisation of China’s arbitration regime, bringing it into closer alignment with international best practices and strengthening China’s position as a competitive venue for international arbitration. 

The amendments are quite substantial and go into details such as the composition of the arbitration institution and additional disclosure requirements on arbitrators. This update addresses the more significant ones:

1. Recognising online arbitration proceedings: The newly introduced Article 11 establishes a legal framework for conducting arbitration proceedings online unless the parties explicitly object. This provision enhances procedural efficiency by reducing costs and promoting greater participation in cross-border arbitration.  The default opt-out mechanism reflects a pragmatic approach to modern dispute resolution while preserving party autonomy.
2. Introducing pre-arbitration preservation measures: The New Law introduces a new mechanism that allows the parties to apply for pre-arbitration preservation measures.  Under the current regime, the parties may only apply for such relief under Article 104 of the Civil Procedure Law. After amendment, the parties may apply to the People’s Court for the preservation of property, evidence, or conduct in urgent situations before arbitration (Articles 39 and 58). Notably, the New Law does not define 'urgent situations,' creating potential uncertainty that will likely require clarification through judicial interpretation in due course.
3. Expansion of the international arbitration framework: The New Law significantly broadens the international dimension of arbitration in China through two key mechanisms:
   1. Establishment of foreign arbitration institutions: Article 86 allows foreign arbitration institutions to establish offices and administer foreign-related arbitration cases in the pilot free trade zone (FTZ), Hainan free trade port (FTP) and other areas approved by the State Council.
   2. Ad hoc arbitration for specified matters: Article 82 introduces ad hoc arbitration for foreign-related maritime disputes, and foreign-related disputes between enterprises registered in China's FTZ, the Hainan FTP, and other designated areas. The parties may constitute their own arbitral tribunal provided the arbitrators meet statutory requirements and may conduct arbitration in accordance with the arbitration rules as agreed between themselves. This offers flexibility and greater procedural autonomy to multinational parties to form an arbitral tribunal rather than being confined to choosing from established arbitration institutions in China.
4. Recognition of the “seat of arbitration”:  The New Law formally recognises the concept of the “seat of arbitration”.  Parties to foreign-related arbitrations may agree in writing on the arbitral seat. The designated seat serves as the basis for determining the governing law of the arbitration proceedings, the nationality of the arbitral award and the court with jurisdiction. This amendment clarifies the distinction between the seat of arbitration and the location of the arbitration institution, bringing China's foreign-related arbitration legislation in line with international mainstream arbitration legislation.
5. Affirming the validity of the arbitration agreement: The New Law addresses a significant gap in both the current law and the Civil Code regarding the effect of the arbitration clause when the underlying contract is not established.  The New Law expressly provides that the validity of an existing arbitration agreement will not be affected by whether the contract has been established, varied, taken effect, terminated, revoked, or rendered invalid (Article 30).
6. Enhanced framework for the recognition and enforcement of the arbitral award: The New Law introduces important reforms on recognition and enforcement of arbitral awards.
   1. China-seated arbitral awards: Previously limited to arbitral awards granted by the arbitration institutions in China, parties may now seek recognition and enforcement of any China-seated arbitral award directly in a competent foreign court if the award debtor resides outside China or his/her assets are located overseas (Article 85).
   2. Foreign arbitral awards: Under the New Law, parties may apply directly to a Chinese Intermediate People’s Court for recognition and enforcement of foreign arbitral awards. Chinese courts are required to handle such applications in accordance with international treaties or on the basis of reciprocity (Article 88).

These provisions reinforce China’s commitment to international arbitration norms and provide greater predictability for foreign parties.

Conclusion 

The amendments to the existing Arbitration Law represent a landmark reform that modernises China's arbitration framework and demonstrates a clear commitment to aligning with international standards.  By embracing online proceedings, expanding pre-arbitration remedies, opening the market to foreign institutions, recognising ad hoc arbitration in designated areas, and enhancing enforcement mechanisms, the New Law positions China as an increasingly attractive and competitive venue for international dispute resolution.

With thanks to Jerrie Leung for help in drafting this update.