CAAI Arbitration Rules 2017: The new arbitration rules for the new Chinese Arbitration Association, International

Winnie Jo-Mei MaDeputy Secretary-General, CAA*

To align with international trends and benchmarks while conforming to users’ demands and interests, CAA (Chinese Arbitration Association, Taipei) has been devising a new set of arbitration rules for CAAI (Chinese Arbitration Association, International), a new and separate entity to be established, with its first representative office expected to open in Hong Kong.

The drafting committee considered, through comparative references, Hong Kong Arbitration Ordinance (Chapter 609), the arbitration rules of HKIAC, ACICA, ICC, LCIA, SCC, BAC and CIETAC, together with UNCITRAL Model Law and Arbitration Rules. The first public draft of the CAAI Arbitration Rules 2017 (Arbitration Rules of the Chinese Arbitration Association, International) was presented at the Taipei International Conference on Arbitration and Mediation on 30 August 2016. The second public draft was presented at the Taipei Symposium on International Arbitration Rules on 31 March 2017. With approval by the CAA Board of Directors and Supervisors, the CAA Arbitration Rules 2017 took effect on 1 July 2017. They apply to arbitrations seated outside Taiwan Area, while the existing CAA Arbitration Rules 2001 continue to apply to arbitrations seated in Taiwan Area. Such dual-track approach will expand CAA’s services and enhance CAA’s international competitiveness.

The new CAAI Arbitration Rules adopt, in the interest of costs and time efficiency, a semi-bilingual approach to the language of arbitration – “either English or Mandarin Chinese” at a time rather than “English and/or Mandarin Chinese”. Absent the parties’ agreement on language, the claimant may use either English or Mandarin Chinese in its notice of arbitration. CAAI will then make and notify all parties of its preliminary decision on using either English or Mandarin Chinese. The parties will use either of these languages in accordance with such preliminary decision in subsequent submissions and proceedings, unless the Tribunal determines that another language is more appropriate after consulting with the parties.

Despite the increasing trend towards delocalisation of arbitration, the CAAI Arbitration Rules still specify Hong Kong as the default seat in the absence of parties’ agreement, unless the Tribunal determines that another seat is more appropriate after consulting with the parties. Apart from serving the interests of certainty, enforceability and party autonomy, this approach also signifies CAAI’s presence in Hong Kong, a New York Convention and Model Law jurisdiction, and will enable the enforcement of CAAI awards made in Hong Kong and other New York Convention jurisdictions.

The procedures for challenging arbitrators remain disputed due to persisting diversity and inconsistency of institutional and legislative approaches. Most institutional rules empower the arbitration institution to decide on arbitrator challenges, with variations in the specific institutional decision-making body, as well as in the status and finality of such institutional decision. Balancing the need for minimising dilatory challenges with the interest in ensuring impartiality of arbitration, the CAAI Arbitration Rules provide that, pending CAAI’s decision on the challenge within 15 days of CAAI’s receipt of notice of challenge, the Tribunal, including the challenged arbitrator(s), may continue the arbitration, unless CAAI orders suspension.

One of the unique features of Taiwan’s arbitration law is the time limit for award-making within six months after the Tribunal’s constitution, with a maximum extension of another three months. By contrast, the CAAI Arbitration Rules impose the unique double time limits of requiring the Tribunal to declare the closure of arbitral proceedings within six months after its constitution, and make its final award within six weeks after such declaration of closure. Both time limits are extendable by CAAI.

Other noteworthy features of the CAAI Arbitration Rules include the following:

  • extensive scope of application, such as including the interpretation, performance and breach of a contract in addition to the existence, validity or termination of that contract;
  • the Tribunal shall consist of three arbitrators, unless the parties agree otherwise;
  • the Tribunal’s extensive choice of “the law or rules of law” as applicable to the substance of the dispute in the absence of parties’ agreement on the applicable law;
  • unified criteria for commencing single arbitration under multiple contracts (at the initial stage) and for consolidating arbitrations (at a later stage), which are additional and may be related to joinder of parties;
  • comprehensive provisions for emergency measures (before the Tribunal’s constitution) and interim measures (after the Tribunal’s constitution); and
  • concise provisions for expedited procedure for disputes under US$250,000, such as shorter time limits, sole arbitrator, and documents-only arbitration.

These features seek to ensure party autonomy, impartiality, efficiency and enforceability of CAAI arbitration. They also seek to facilitate both CAA and CAAI in exploring the opportunity for One Belt One Road in international arbitration beyond inter-territorial disputes between Mainland China, Taiwan, Hong Kong and Macau. Taiwan is the 22nd largest economy in the world, with its hi-tech industry playing a key role in the global economy. With more than 60 years of history, CAA also has substantial experience and expertise in construction disputes.

Two official versions of the CAAI Arbitration Rules 2017 are currently available – English-only and bilingual (English-Chinese). CAA will offer a series of introductory seminars, including the first Chinese seminar in Kaohsiung on 29 September 2017 and the first English seminar in Hong Kong on 13 October 2017.


Winnie Jo-Mei MaDeputy Secretary-General, Chinese Arbitration Association, Taipei (CAA); FCIArb

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