Key amendments

1. Improvement of the foreign-related arbitration system

Ad hoc arbitration: Under the existing Arbitration Law, the validity of an ad hoc arbitration is not recognised in China. While China has been piloting ad hoc arbitration regionally in limited categories of cases, the Arbitration Law 2025 formally introduces ad hoc arbitration nationwide. Parties may now agree to ad hoc arbitration for two specific types of cases, namely (1) foreign-related maritime disputes and (2) foreign-related disputes between enterprises registered in the Pilot Free Trade Zone, the Hainan Free Trade Port, and other approved areas. The arbitral tribunal shall file (备案) details of the arbitration with the arbitration associations (仲裁协会) (Article 82). This marks a significant shift from solely relying on institutional arbitration traditionally to gradually aligning with international practice and embracing ad hoc arbitration.

Seat of arbitration: The Arbitration Law 2025 codifies the concept of “seat of arbitration” in foreign-related arbitration cases. It allows the parties to choose the seat of arbitration and, unless otherwise agreed by the parties, such seat of arbitration determines the applicable procedural law in the arbitration and the court with jurisdiction (Article 81). This fills a critical legal gap by adopting the internationally accepted concept of the “seat of arbitration”, which the existing Arbitration Law does not acknowledge.

International arbitration institutions: Another highly welcomed amendment opens the Chinese arbitration market by permitting international arbitration institutions to operate in certain areas in China and handle foreign-related disputes (Article 86).

Scope of arbitration cases: The Arbitration Law 2025 also broadens the definition of “foreign-related arbitration” to include “other foreign-related disputes” (Article 78). The expanded scope of “other foreign-related disputes” would allow both Chinese and foreign firms more options for resolving their disputes in practice.

2. Recognition and enforcement of arbitral awards made outside China

The Arbitration Law 2025 clearly specifies which court parties should apply to for the recognition and enforcement of a foreign arbitration award in China, and requires PRC courts, in handling such applications, to act in compliance with international treaties to which China is a party or based on the principle of reciprocity (Article 88). In light of the principle of reciprocity, the same article further stipulates that if any foreign arbitral institution imposes restrictions or discriminatory measures against PRC parties, the relevant PRC authorities may implement reciprocal countermeasures against the relevant parties in a foreign country.

3. Modernisation of arbitration procedures

Principle of independence and jurisdiction: The Arbitration Law 2025 confirms that the validity of an arbitration agreement is not affected by the validity of the underlying contract (Article 30). Further, the Arbitration Law 2025 endorses the widely known principle “Kompetenz-Kompetenz”, which provides that, apart from the PRC courts, the arbitral tribunal also has the power to rule on the validity of an arbitration agreement (Article 31).

Disclosure obligations of arbitrator: The Arbitration Law 2025 now requires an arbitrator to, upon becoming aware of circumstances that may give rise to reasonable doubts as to their independence or impartiality, disclose them in writing to the arbitration institution, which should in turn notify the parties to arbitration of such disclosure and the composition of the arbitration tribunal (Article 45). Although the main arbitration institutions in China have stipulated the disclosure requirements in their rules, the statutory law offers clearer and more uniform standards.

Interim measures: The Arbitration Law 2025 introduces interim measures for preservation of assets and evidence and injunctive relief, which are available even before the parties commence arbitration in urgent cases. The relevant sections also reiterate that such power rests with the PRC courts (Articles 39, 58).

4. Promotion of innovations in arbitration practice

Service: The Arbitration Law 2025 provides that the arbitration document shall be served in a reasonable manner as agreed upon by the parties. In the absence of a clear agreement, such a document shall be served in the manner prescribed by the rules of arbitration (Article 41).

While online arbitration has taken place in China for some time, the Arbitration Law 2025 provides a clear and explicit legal basis that, with the agreement of the parties, online arbitration has the same legal effect as traditional arbitration (Article 11).

Summary

The Arbitration Law 2025, building on nearly 30 years of practical experience, incorporates international best practices to modernise China’s arbitration framework. It refines provisions governing domestic arbitration while updating the foreign-related regime through the introduction of key concepts, such as “seat of arbitration” and ad hoc arbitration, bringing China’s system into closer alignment with international practice.

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