Background to the amendments

China is emerging as a preferred forum for resolving cross‑border commercial disputes, as more Chinese enterprises explore business overseas. In 2024, leading Chinese arbitration institutions, including the China International Economic and Trade Arbitration Commission (CIETAC), the Beijing Arbitration Commission (BAC), the Shanghai International Economic and Trade Arbitration Commission (SHIAC) and the Shenzhen Court of International Arbitration (SCIA), reported year-on-year increases of roughly 20% to 40% in foreign-related cases, and an average case value above CNY100 million (administered by CIETAC), underscoring China’s growing prominence in global arbitration.

Against this backdrop, the amended Arbitration Law of the People's Republic of China (“the New Arbitration Law”) was promulgated on 12 September 2025 and will take effect on 1 March 2026. It preserves the dual‑track regime for domestic and foreign‑related arbitrations while introducing targeted reforms for the latter, including codifying the seat of arbitration and recognising ad hoc arbitration under specified conditions. These changes align China more closely with international practice and are designed to make China a more attractive jurisdiction in which to seat arbitrations.

Aligning arbitration principles with international practice

The New Arbitration Law codifies key international principles, providing a statutory foundation for long-standing practices and harmonising standards among Chinese arbitration institutions.

Defining the seat of arbitration

The seat of arbitration is pivotal: it typically determines both the law governing the arbitration agreement and the procedural law applicable to the proceedings.

The previous law lacked a clear definition of the arbitration seat, causing confusion between the seat and the institution’s location and even leading to instances where awards issued in the Chinese Mainland by foreign institutions were mistakenly categorised as “foreign awards”. Subsequent judicial interpretations and institutional rules clarified the distinction, gradually resolving this confusion.

Article 81 of the New Arbitration Law expressly anchors the seat of arbitration as the touchstone for identifying the applicable procedural law and the competent supervisory court for matters concerning the arbitration agreement. Where the seat is not specified, it may be determined under the applicable rules or by the arbitral tribunal. This clarification brings Chinese law into step with the established practice of China’s leading arbitral institutions.

Recognising the tribunal’s competence-competence

The New Arbitration Law formally adopts the competence-competence principle, confirming that arbitral tribunals may rule on their own jurisdiction. Previously, this authority technically resided with arbitral institutions, though many had, in practice, delegated it to tribunals. In some instances, however, administrative officers of arbitral institutions made jurisdictional decisions – an approach misaligned with international practice. The amendment removes this procedural inconsistency, reinforces tribunal independence and brings China’s arbitration framework closer to international norms.

Reinforcing the separability of arbitration agreements

The New Arbitration Law further strengthens the separability doctrine, confirming that an arbitration clause remains effective even if the underlying contract is not concluded or is invalid – or is rescinded, terminated or otherwise ineffective. It also clarifies that both non-existence and invalidity fall within validity review.

Procedurally, where a claimant invokes an arbitration agreement and commences arbitration, and the respondent – having been duly notified before the first hearing – does not contest the agreement’s existence, the agreement is deemed valid. This pragmatic approach, effectively recognising a constructive agreement, curbs belated challenges to the clause and deters tactics aimed at obstructing enforcement.

Strengthening arbitrator disclosure obligations

For the first time in statute, arbitrators must promptly disclose in writing to the institution any circumstances that may raise justifiable doubts about their independence or impartiality – a duty that previously appeared mainly in institutional rules. This provision aligns with the core principles of the International Bar Association (IBA) Guidelines on Conflicts of Interest in International Arbitration.

Enabling new mechanisms for foreign-related arbitration

Historically, the statute defined foreign-related arbitration narrowly – limited to trade, transportation and maritime disputes – even though, in practice, other matters with foreign elements were also treated as foreign-related. The New Arbitration Law broadens the scope by adding a catch-all category for “other foreign-related disputes”. It also calibrates international best practices to China's framework by introducing mechanisms such as ad hoc arbitration and strengthened judicial support, offering greater flexibility and efficiency for cross-border dispute resolution.

Introducing ad hoc arbitration

Article 82 marks a significant shift in China’s stance on ad hoc arbitration, extending it beyond prior pilots in free trade zones. Parties to maritime disputes, as well as companies registered in free trade zones or the Hainan Free Trade Port, may opt for ad hoc arbitration. They are free to agree on the seat, arbitral rules and arbitrators, and may adopt internationally recognised procedural rules – without being confined to institutional rosters.

A distinctive requirement remains: within three days of constitution, the ad hoc tribunal must file for the record with a recognised arbitration association. To date, more than ten such arbitration associations have been formally established in China at the municipal, provincial and national levels.

While this filing mechanism reflects China’s administrative oversight model, the reform nonetheless represents a meaningful breakthrough, enhancing procedural flexibility and modernising the arbitration framework.

Enhancing judicial support for arbitration proceedings

The New Arbitration Law substantially strengthens court support for arbitration by expanding interim measures to include preservation of conduct in addition to property and evidence. Courts may now grant such measures even before an arbitration is commenced, aligning arbitral practice with interim injunctions available in courts under the Civil Procedure Law. Parties can apply either through the arbitration institution or directly to the courts, and these measures are also available in ad hoc arbitrations.

The law also authorises arbitral tribunals to seek assistance from competent authorities in collecting evidence as they think fit. Courts have increasingly issued investigation orders to support tribunals in domestic and foreign-related arbitration cases. For example, in 2025, a cross-border contract dispute administered by SHIAC saw a Chinese court issue an investigation order at the tribunal's request to collect evidence, illustrating China's growing commitment to facilitating arbitral proceedings.

Revamping the judicial review mechanism

China retains distinct review regimes for domestic and foreign-related arbitral awards. Domestic awards may undergo substantive review, including verification of evidentiary authenticity, whereas foreign-related awards are primarily subject to procedural scrutiny.

The New Arbitration Law has updated the grounds for challenging foreign-related awards by replacing the phrase “arbitration clause in the contract or subsequently concluded in writing” with the broader “arbitration agreement”. This offers room to recognise implied arbitration agreements and aligns the grounds with those applicable to setting aside domestic awards.

To enhance efficiency, courts must now issue rulings on applications to set aside arbitral awards within three months – reduced from six months – for both domestic and foreign-related awards.

Policy support for international arbitration

China’s 2024 policy package signals strong backing for the expansion of international arbitration. Articles 86 and 87 of the New Arbitration Law promote a dual-track development strategy: encouraging domestic arbitration institutions to build an international presence while welcoming foreign institutions to establish operations in China’s free trade zones and the Hainan Free Trade Port. These measures aim to consolidate China’s position as a leading arbitration hub and enhance its global competitiveness.

This policy is already taking shape: leading institutions – including the Hong Kong International Arbitration Centre (HKIAC), SIAC and the ICC – have established representative offices in the Chinese Mainland.

Conclusion

The New Arbitration Law harmonises international and Chinese arbitration practice into a coherent framework, codifying such key principles as the arbitration seat, separability of arbitration agreements and arbitrator disclosure requirements. These changes help standardise procedures across local institutions and reduce regional disparities. The law recognises ad hoc arbitration and enhances judicial assistance, reflecting international best practices while preserving Chinese characteristics.