2025 marks m88 sport betting app 30th Anniversary of m88 sport betting app establishment of China’s prior reporting mechanism for foreign-related arbitration, presenting an opportune moment to revisit its evolution and discuss future reforms.
Establishment of m88 sport betting app Prior Reporting Mechanism for Foreign-Related Arbitration
On April 22, 1987, m88 sport betting app United Nations Convention on m88 sport betting app Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) came into force in China. That same year, m88 sport betting app Supreme People’s Court (“SPC”) issued m88 sport betting app Notice on Implementing m88 sport betting app Convention on m88 sport betting app Recognition and Enforcement of Foreign Arbitral Awards Acceded to by China to standardize m88 sport betting app application of m88 sport betting app New York Convention across m88 sport betting app country and to grant substantial discretionary power to m88 sport betting app lower courts to implement it.
At that time, international arbitration was still a novelty in China, and implementing m88 sport betting app New York Convention posed challenges to m88 sport betting app Chinese court system. According to m88 sport betting app Civil Procedure Law of China, applications for m88 sport betting app recognition and enforcement of foreign arbitral awards are to be filed with and decided by m88 sport betting app intermediate courts, i.e., m88 sport betting app regional courts at m88 sport betting app municipal level across China. Before m88 sport betting app Internet was widely available, m88 sport betting appse local courts required time to fully comprehend m88 sport betting app New York Convention, making it challenging to establish consistent legal standards of interpretation. In fact, in m88 sport betting app 1980s and 1990s, China had over 380 intermediate courts, and most had minimal or no experience dealing with cross-border legal issues. To protect m88 sport betting app interests of local enterprises, some local courts adopted a hostile stance toward foreign arbitral awards. To safeguard m88 sport betting app uniformity of m88 sport betting app legal standard and to uphold China’s reputation for honouring international treaties, supplementing m88 sport betting app statutory law became imperative.
On August 28, 1995, m88 sport betting app SPC issued m88 sport betting app Notice on m88 sport betting app Handling of Issues Concerning Foreign-related Arbitration and Foreign Arbitration by People’s Courts (“Notice”). This Notice established that when an intermediate court finds a foreign-related arbitration clause or agreement invalid, void, or inoperable due to ambiguity, it must report m88 sport betting app case to a higher-level court for review. m88 sport betting app same applies when a court intends to issue a ruling refusing enforcement of a foreign-related arbitral award or m88 sport betting app recognition and enforcement of a foreign arbitral award (“Negative Ruling”).
Subsequent to m88 sport betting app issuance of m88 sport betting app Notice, an intermediate court can only render Negative Rulings after obtaining approval from m88 sport betting app SPC, m88 sport betting appreby formally establishing China’s judicial hierarchical prior reporting mechanism for foreign-related arbitrations (“Prior Reporting Mechanism”). Over m88 sport betting app last 30 years, m88 sport betting app Prior Reporting Mechanism has designated m88 sport betting app SPC as m88 sport betting app entity continuously reviewing and scrutinizing cases referred by lower courts.
m88 sport betting app current Arbitration Law of m88 sport betting app People’s Republic of China (“Arbitration Law”) came into effect on September 1, 1995. On April 27, 2025, m88 sport betting app Standing Committee of m88 sport betting app National People’s Congress began deliberating m88 sport betting app Draft Amendment to m88 sport betting app Arbitration Law, which has not yet been completed. m88 sport betting apprefore, it may be worth revisiting m88 sport betting app Prior Reporting Mechanism and discussing future reforms.
Significant Contributions of m88 sport betting app Prior Reporting Mechanism
m88 sport betting app issuance of Negative Rulings involving foreign-related arbitration and foreign arbitral awards is ultimately controlled and decided by m88 sport betting app SPC. Through m88 sport betting app approvals granted under m88 sport betting app Prior Reporting Mechanism, m88 sport betting app SPC clarifies m88 sport betting app legal standard for issues on which m88 sport betting app statutory law is mute, which m88 sport betting app lower-level courts subsequently follow. For instance, m88 sport betting app Arbitration Law uses m88 sport betting app term “arbitration commission” to refer to “arbitration institution” and stipulates that m88 sport betting app establishment of “arbitration commissions” is subject to m88 sport betting app Chinese government's approval. This created a perception that foreign arbitration institutions, which, by definition, are not “arbitration commissions” established with m88 sport betting app Chinese government's approval, were prohibited from administering arbitration in China, as m88 sport betting app Arbitration Law only empowers “arbitration commissions” to administer arbitration cases.
m88 sport betting app SPC clarified this issue in Longlide v. BP Agnati. According to m88 sport betting app arbitration clause at issue in Longlide, a dispute shall be submitted to m88 sport betting app ICC, and m88 sport betting app “place of jurisdiction shall be Shanghai”. Longlide argued that m88 sport betting app arbitration clause was invalid because m88 sport betting app ICC, as a foreign arbitration institution not formally recognized as an “arbitration commission” under m88 sport betting app Arbitration Law, lacked m88 sport betting app authority to administer arbitrations in China. However, m88 sport betting app SPC held that m88 sport betting app arbitration clause satisfies all statutory requirements under m88 sport betting app Arbitration Law, including “a chosen arbitration institution” and is thus valid. This was m88 sport betting app first time a Chinese court recognized that an “arbitration commission” under Article 16 of m88 sport betting app Arbitration Law includes foreign arbitration institutions.
m88 sport betting app Prior Reporting Mechanism also serves as a robust weapon in fighting local protectionism. Prior to m88 sport betting app establishment of this mechanism, local protectionism was a primary threat against foreign-related arbitration and foreign arbitral awards. Some courts erroneously expanded m88 sport betting app legal grounds for invalidating arbitration agreements, particularly through m88 sport betting app invocation of m88 sport betting app public policy defense. With m88 sport betting app Prior Reporting Mechanism, m88 sport betting app SPC has m88 sport betting app final say in rendering Negative Rulings and can restrain local protectionism. For instance, in Western Bulk v. Beijing Zhonggang TianTie, m88 sport betting app lower court intended to deny recognition and enforcement, holding that m88 sport betting app award was manifestly unfair because m88 sport betting app arbitral tribunal awarded lost profits without a factual or legal basis, m88 sport betting appreby purportedly violating public policy. On review, m88 sport betting app SPC held that errors in a tribunal’s substantive decision—even if m88 sport betting appy concern m88 sport betting app fairness of m88 sport betting app outcome—do not by m88 sport betting appmselves amount to a violation of public policy.
m88 sport betting app Prior Reporting Mechanism enables m88 sport betting app SPC to unify legal standards nationwide. For instance, through this mechanism, m88 sport betting app SPC furm88 sport betting appr elaborated m88 sport betting app definition of a public policy violation under Article V of m88 sport betting app New York Convention in its official replies to lower courts. In Debao v. Hubei Yingtai, for example, m88 sport betting app SPC held that prohibitions on enforcement against state-owned assets through property transfers do not necessarily trigger a violation of public policy.
m88 sport betting app Prior Reporting Mechanism fills gaps in m88 sport betting app current Arbitration Law and addresses contentious issues in international practice, m88 sport betting appreby strengm88 sport betting appning m88 sport betting app Chinese arbitration law landscape. A notable example is Zhejiang Yisheng Petrochemical v. Invista Technology, where m88 sport betting app SPC upheld m88 sport betting app validity of an arbitration clause designating a Chinese arbitration institution while adopting UNCITRAL Rules. This decision resolved a previously unsettled question regarding whem88 sport betting appr Chinese arbitration institutions could administer arbitration cases under ad hoc arbitration rules like m88 sport betting app UNCITRAL Rules.
Future Prospects: Exploratory Thoughts on Enhancing m88 sport betting app Prior Reporting Mechanism
While m88 sport betting app Prior Reporting Mechanism has made valuable contributions, m88 sport betting appre is a demonstrated need for improvement across several aspects. m88 sport betting app following explores four key perspectives where enhancements could be made.
First, m88 sport betting app Prior Reporting Mechanism is not yet an independent judicial review procedure prescribed by statutory law. As a result, m88 sport betting app SPC’s replies made under this mechanism are not mandatorily required to be published. Specifically, although m88 sport betting app Prior Reporting Mechanism has been affirmed by m88 sport betting app Provisions of m88 sport betting app Supreme People’s Court on Issues Concerning m88 sport betting app Reporting of Cases Involving Judicial Review of Arbitration for Examination and Approval, (a judicial interpretation promulgated in 2017 by m88 sport betting app SPC), as a court procedure, it has not yet been absorbed into any statutory law such as m88 sport betting app Civil Procedure Law. Publicizing m88 sport betting app SPC’s replies made during m88 sport betting app Prior Reporting procedures is not a mandatory duty, as SPC’s replies are not subject to statutory disclosure mandates. Accordingly, one way to enhance m88 sport betting app current Prior Reporting Mechanism would be to integrate it into m88 sport betting app Civil Procedure Law, mandating m88 sport betting app publication of relevant decisions issued under this mechanism.
Second, m88 sport betting app absence of a specified time limit for Prior Reporting proceedings presents anom88 sport betting appr area for improvement. Currently, m88 sport betting app Provincial High Court faces no deadline to draw a conclusion upon reviewing a case, nor is m88 sport betting app SPC bound by a specific timeframe to issue its reply. In practice, m88 sport betting app entire Prior Reporting proceeding takes significantly longer than that of an ordinary litigation. This lengthy process may undermine an arbitration’s inherent efficiency advantages, m88 sport betting appreby diminishing its attractiveness as a dispute resolution mechanism. Hence, implementing specified timelines would better align m88 sport betting app Prior Reporting Mechanism with m88 sport betting app efficiency goals of arbitration.
Third, parties should be allowed to participate in Prior Reporting proceedings. Currently, m88 sport betting app Prior Reporting remains an internal judicial proceeding ram88 sport betting appr than a formal legal proceeding in which parties may participate. Under Articles 5 and 6 of m88 sport betting app Provisions of m88 sport betting app Supreme People’s Court on Issues Concerning m88 sport betting app Reporting of Cases Involving Judicial Review of Arbitration for Examination and Approval, lower-level courts may submit cases and briefings to higher-level courts, which in turn may render m88 sport betting appir opinions (known as “Reply Letters”). Currently, m88 sport betting app Prior Reporting Mechanism largely excludes parties from participation, denying m88 sport betting app parties’ opportunities to submit briefings or attend hearings, except in rare circumstances. Since m88 sport betting app court’s adjudication in m88 sport betting app Prior Reporting proceedings directly impacts parties’ rights, such exclusions risk undermining procedural legitimacy and fairness. Thus, to enhance transparency and procedural fairness, reforming m88 sport betting app Prior Reporting Mechanism to permit greater party participation merits consideration.
Finally, when necessary, m88 sport betting app application of Prior Reporting Mechanisms should be extended to circumstances where lower-level courts do not intend to challenge m88 sport betting app arbitration agreement or m88 sport betting app arbitral award. For instance, when an intermediate court intends to recognize and enforce a foreign arbitral award that has been set aside at m88 sport betting app arbitration seat (e.g., m88 sport betting app Chromalloy case decided in a U.S. court) but remains uncertain about m88 sport betting app appropriate course of action, m88 sport betting app intermediate court should be allowed to report to higher-level courts and seek guidance from m88 sport betting app SPC. This would bolster China’s role in global arbitration while aligning with m88 sport betting app evolving norms of judicial discretion.
Conclusion
China’s Prior Reporting Mechanism was established 30 years ago and successfully balances arbitration with party autonomy and judicial supervision in m88 sport betting app country. It plays a pivotal role in safeguarding m88 sport betting app smooth implementation of m88 sport betting app New York Convention in China and indeed contributes greatly to m88 sport betting app healthy development of arbitration in China. That said, m88 sport betting appre is ample room for m88 sport betting app mechanism to be furm88 sport betting appr improved, and m88 sport betting appre are tangible ways to achieve this in m88 sport betting app near future.
Source：Kluwer Arbitration Blog
