· Document Number：No.1 [2006] of the Higher People’s Court of Shanghai Municipality

· Area of Law： State Organs

· Level of Authority： Local Judicial Documents

· Date issued：03-06-2006

· Effective Date：03-06-2006

· Status： Effective

· Issuing Authority： Higher People's Court of Shanghai Municipality

Notice of the Higher People's Court of Shanghai Municipality on Distributing the “Questions and Answers on the Trial of Commercial Cases involving Foreign Interests ”
(No. 1 [2006])
No. 5 Civil Tribunals of No. 1 and No. 2 Intermediate People's Courts of Shanghai Municipality, Shanghai Maritime Court, the Civil Tribunal of Shanghai Railway Transport Intermediate Court, No. 3 Civil Tribunal of the People's Court of Pudong New Area, No. 3 Civil Tribunal of the People's Court of Huangpu District:
We hereby distribute the “Questions and Answers on the Trial of Commercial Cases involving Foreign Interests ” to all courts for reference in the trial of cases. In case of any question or suggestion, please contact No. 4 Civil Tribunal of the Higher People's Court of Shanghai Municipality in time.
Annex: Questions and Answers on the Trial of Commercial Cases involving Foreign Interests
March 6, 2006
Questions and Answers on the Trial of Commercial Cases involving Foreign Interests
I.Standards on Notifying the Arbitration Institution to Re-arbitrate the Case on Applying for the Revocation of the Arbitral Award.
The “Arbitration Law of the People's Republic of China” (hereinafter referred to as the “Arbitration Law”) prescribes: “After the people's court has accepted an application for the cancellation of an arbitral award and deems it necessary for the arbitration tribunal to make a new award, it shall notify the arbitration tribunal for a new ruling within a certain time limit”. The “Arbitration Law” does not prescribe the specific standards of application on notifying the arbitration institution for re-arbitration. We hold that, re-arbitration is a kind of system attached to the award revocation procedure, whose scope of application is on the premise of the award revocation procedure. Therefore, the award which the court thinks necessary to be re-arbitrated must be in a circumstance of statutory revocation, and the error with the arbitral award may be corrected by the arbitration tribunal through re-arbitration; if some errors of the arbitral award cannot be corrected through re-arbitration (e.g., the arbitration agreement is ineffective or inexistent), or the arbitration tribunal has no power to arbitrate the matter concerned, its arbitration power was unlawful from the very beginning, and the case shall not be re-arbitrated.
II.Matters to which attention should be given in the judicial review of arbitration involving foreign interests.
The conditions and applicable laws, etc. for applying for the revocation of arbitral awards involving foreign interests are different from those for applying for the revocation of domestic arbitral awards. In accordance with the “Arbitration Law”, the courts' judicial review of arbitral awards shall be subject to a “dual-track system”. The applications for the revocation of domestic arbitral awards shall be examined in accordance with Article 58 of the “Arbitration Law”; the applications for the revocation of arbitral awards involving foreign interests or for non-enforcement of arbitral awards involving foreign interests shall be examined in accordance with Articles 70 and 71 of the “Arbitration Law” as well as Paragraph 1 of Article 260 of the “Civil Litigation Law of the People's Republic of China” (hereinafter referred to as the “Civil Litigation Law”). For the judicial review of arbitral awards involving foreign interests, autonomy of the parties' wills shall be stressed, the examination conditions shall be those prescribed in law, and the intervention of judicial functions with the arbitral awards involving foreign interests is small so as to ensure the stability of the arbitral awards.
Chapter VII of the “Arbitration Law” contains special provisions on the arbitration involving foreign interests. According to the principle of priority of special law, when an arbitral award involving foreign interests is examined, Chapter VII shall apply in priority. Under the circumstance of examining and affirming that the award “has violated public interests”, if it is a domestic arbitral award, it shall be ruled to be revoked in accordance with Paragraph 3 of Article 58 of the “Arbitration Law”; while if it is an arbitral award involving foreign interests, the ruling on revocation of the arbitral award involving foreign interests and on non-enforcement of the award shall not be made as required by Articles 70 and 71 of the “Arbitration Law” and Paragraph 1 of Article 260 of the “Civil Litigation Law”.
The principle of good faith established in the civil laws of all countries aims at making up the insufficiency of prohibitive provisions in legislation, has the function of safeguarding state interests, public interests and general morality, and embodies the state sovereignty in the process of trying cases involving foreign interests. We hold that, under the present legal framework of China, the judicial review of arbitral awards involving foreign interests shall be made in strict accordance with the principle of statutory grounds.
III.Examination of the application for the revocation of a domestic arbitral award, which is filed by the one party on the ground that “the other party conceals evidence which is enough to affect the impartiality”.
The applicant shall provide evidence regarding its application to prove that the other party really concealed relevant evidence, and shall sufficiently prove that the other party has affected the impartiality of domestic arbitration. Attention should be paid to the following particulars in the process of examination and affirmation: (1) Form of the concealed evidence. When neither the arbitration rules of Shanghai Municipal Arbitration Committee nor those of the Shanghai Office of China International Economic and Trade Arbitration Commission prescribe the forms of evidence, the forms of evidence shall be the seven forms prescribed in the “Civil Litigation Law”. Besides, the e-mails and other forms of evidence widely used nowadays shall also be allowed. (2) Possibility of providing evidence. Only when the evidence is held by the other party and the said party intentionally conceals the evidence, thus affecting the impartiality of the award made by the arbitration tribunal, may the ground for applying for the revocation of the award be constituted. (3) Judgment of the concealed evidence. If it is found from examination that the concealed evidence is the key evidence for arbitration of the case, but such evidence failed to enter into the arbitration procedures, so the award is affected and obviously impartial, the ground of “enough to affect the impartiality” is constituted. However, as the court does not hold a public hearing, such kind of rulings shall be made strictly and prudentially.
IV.Understanding of the meaning on “forged evidence for making the award” as prescribed in Item (4) of Paragraph 1 of Article 58 of the “Arbitration Law”.
As different from concealing evidence, if the party concerned applies for the revocation of an arbitral award on the ground that the evidence on which the arbitral award is based is forged, and the court confirms from the examination that the evidence is forged, then the forged evidence constitutes the ground for the party concerned to apply for the revocation of the arbitral award no matter whether it affects the award or not. The legal provisions on forged evidence do not require a definite answer as to whether the forged evidence has affected the impartiality, because forging evidence is a serious illegal act, and the legitimacy is not acknowledged by law.