During an interview with reporters from China News Service on October 21 in Haikou, several legal experts highlighted the groundbreaking progress of temporary arbitration in Hainan as an agile and efficient tool for resolving international commercial disputes.
Taking place between October 17 and 20 during the Hainan Free Trade Port Legal Week, these experts emphasized that Hainan is not only serving as a testbed for temporary arbitration but its successes may also set a new benchmark for innovative mechanisms in the resolution of international commercial disputes.
Temporary arbitration allows parties to select arbitrators at the time of contract formation or after a dispute arises. They can establish arbitration rules and procedures through prior agreements or post-dispute negotiations, which highlights a strong respect for the autonomy of the parties involved while offering a flexible and convenient solution.
While China recognizes and enforces foreign temporary arbitration awards, its current arbitration law only acknowledges institutional arbitration. However, the introduction of the “Several Provisions on the Development of International Commercial Arbitration in Hainan Free Trade Port” in July opened the door for temporary arbitration systems. Under this framework, the Hainan Arbitration Association has crafted the “Hainan Free Trade Port Temporary Arbitration Rules,” referencing international agreements like the UNCITRAL Model Law on International Commercial Arbitration.
According to independent international arbitrator Tao Jingzhou, “75% of temporary arbitration cases globally utilize UNCITRAL rules, and our temporary arbitration rules have over a 50% similarity rate with those.” He noted that Hainan’s rules also incorporate mediation processes, provisions for third-party financing, and early dismissal protocols, thus surpassing related UNCITRAL standards.
In addition to flexibly integrating both domestic and international arbitration rules, Huang Wenchao, Vice President of the Hainan Arbitration Association, pointed out the unique advantages of Hainan’s temporary arbitration. This includes not only the availability of qualified and international registered arbitrators but also the provision for non-registered temporary arbitrators to participate in the decision-making process. Furthermore, Hainan’s temporary arbitration is recognized for its efficiency and low cost, particularly with expedited procedures that can reach resolutions within two months.
The first temporary arbitration case was heard in Haikou on July 15, and a decision was delivered in less than a month. Following this, numerous international commercial agreements have included clauses prioritizing Hainan as their arbitration venue.
As the promotion of temporary arbitration continues in Hainan, experts are particularly interested in how it can be harmonized with institutional arbitration. Shen Sibao, Chairman of the Shenzhen International Arbitration Court Council, suggested that temporary arbitration could foster collaboration with institutional arbitration in sharing rules and rosters, facilitating the resolution of procedural stalemates, expanding markets, promoting business, and nurturing talent. He recommended incorporating elements of temporary arbitration into institutional rules to enhance their interaction and mutual growth.
Lü Yan, Deputy Secretary-General of the Hainan Arbitration Center at the China International Economic and Trade Arbitration Commission, noted that reaching consensus on key issues such as arbitration location, language, and applicable procedures can sometimes pose challenges, leading to deadlocks due to cost concerns. He stated that the involvement of arbitration institutions can effectively break such stalemates, and the “Hainan Free Trade Port Temporary Arbitration Rules” clarify the role and functions of designated arbitration bodies to ensure seamless integration of institutional and temporary arbitration.
Under the “Several Provisions on the Development of International Commercial Arbitration in Hainan Free Trade Port,” temporary arbitration is available for commercial disputes between enterprises registered in the Hainan Free Trade Port, as well as disputes involving foreign entities or companies from Hong Kong, Macau, and Taiwan. Although there are currently some restrictions on eligible parties, Tao Jingzhou believes this model could provide valuable insights into innovative dispute resolution mechanisms nationwide.
Arbitration efficiency remains a significant challenge globally, and Hainan is committed to establishing itself as an international arbitration center. Shen Sibao suggested that Hainan should cultivate an effective arbitration mechanism to establish a reputation whereby it becomes synonymous with swift dispute resolution, encouraging enterprises worldwide to choose Hainan as their go-to for resolving conflicts.
By leveraging its institutional advantages, Hainan is aiming to position itself as the preferred arbitration location for more commercial dispute cases. Officials from the Hainan Provincial Justice Department indicated plans to actively expand the application of temporary arbitration in areas such as foreign-related intellectual property, cross-border medical disputes, maritime and shipping issues, ecological economy, seed industry, and commercial aerospace—enhancing the visibility of temporary arbitration in Hainan.
