(Yicai Global) Aug 7 -- Well-known overseas arbitration organizations will be approved to set up units in the new area of China (Shanghai) Pilot Free-Trade Zone to arbitrate business civil and commercial disputes.
These mediators will issue rulings in such fields as international commercial affairs, maritime matters and investments, the master plan for the Shanghai FTZ's new area the Chinese government issued yesterday shows.
China's cabinet the State Council designated the Lingang Area, which lies about 75 kilometers from downtown Shanghai, as an addition to the Shanghai FTZ yesterday, and said it will introduce a series of policies to further open it up. Lingang is also home to Tesla's work-in-progress electric vehicle Gigafactory 3.
Compared to existing policy, which merely lets well-known overseas arbitral organizations set up representative offices in the eastern Chinese megacity, the new measures permit overseas arbitration and dispute settlement organizations to rule on disputes in Shanghai, Cao Lijun, a partner at Beijing-based Zhonglun Law Firm and himself an international arbitrator, said in an interview with Yicai Global.
China is set to hear more multinational cases, especially those involving domestic companies, once renowned overseas dispute settlement institutions set up units in the new area as local conditions become more favorable, Cao noted.
Domestic arbitration organizations may feel the heat as the new policy is set to usher in more competition from abroad, Cao said. However, the initiative will draw more international business to China, enabling local arbitrators to gain new experience and further internationalize and enhance their service levels in the long run, he added. Effective competition will also force domestic arbitral rules to conform to international standards and thus speed the sector's upgrade and improvement.
Chinese arbitrators will have to brace themselves for a phase of faster development that will attract and retain more talent as ever more such cases of extra-judicial dispute resolution take place in China, Cao predicted.
The new policy will significantly elevate Shanghai's status and influence over arbitration in China and even in the entire Asia-Pacific region, he noted.
Overseas arbitral organizations may set up local units after they register with Shanghai's judicial authorities and open a file with the national Ministry of Justice, a follow-up policy document the State Council released shows.
The government will support and guarantee the application and execution of temporary measures such as attachment of property, preservation of evidence and injunctions on motion by Chinese and foreign parties before and during arbitration in accordance with law.
Editors: Tang Shihua, Ben Armour