As an international shipping center, Shanghai must establish a sound maritime arbitration system in order to establish an Asia-Pacific arbitration center, but the current ad hoc arbitration system has not been recognized by mainland law. The Arbitration Law (Draft Amendments) introduces ad hoc arbitration, but only allows parties to commercial disputes with foreign-related elements to resolve their disputes through a "special arbitral tribunal". There is a conflict between the existing exploratory norms for ad hoc arbitration and the Arbitration Law, judicial assistance is absent in the trial implementation of ad hoc arbitration norms, ad hoc arbitral awards cannot be directly enforced, and the mechanism for the selection and supervision of arbitrators is still imperfect. In view of this, it is necessary to affirm the status of ad hoc arbitration in legislation, confirm the validity of arbitration agreements with the judicial assistance of the courts and transform them into public documents for enforcement, adopt the "38 and 2 Supreme People's Courts" and adopt the recommendation list and negative list system to innovate the mechanism for the selection and appointment of arbitrators, and clarify the boundaries between arbitration institutions and courts, so as to break the deadlock in arbitration procedures and strengthen judicial assistance.
Ad hoc arbitration differs from institutional arbitration in that it is a form of arbitration as opposed to institutional arbitration. In ad hoc arbitration, the arbitral tribunal is constituted in accordance with the agreement of the parties, and the arbitration institution intervenes in accordance with the interim procedures agreed by the parties or with reference to a specific arbitration rule or authorizes the arbitral tribunal to choose its own procedures, and the arbitral institution does not manage the procedure in this process, and the ad hoc arbitration is also called ad hoc arbitration or arbitrary arbitration. The concept of ad hoc arbitration was introduced in 2016 when the Supreme People's Court issued the Opinions on Providing Judicial Safeguards for the Construction of Pilot Free Trade Zones, and recognized ad hoc arbitration under the "three specifics" principle. The promulgation of the Hengqin Rules and the Rules for the Docking of Ad Hoc Arbitration and Institutional Arbitration in 2017 have laid a good foundation for the introduction of ad hoc arbitration. The 2019 Implementation Opinions on the Protection of Shanghai Court Services for the Construction of the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone once again emphasized the principle of "three specifics". Due to the unique location and special positioning of the Lingang Special Area and the unique legislative authority of the Pudong New Area of Shanghai, the ad hoc maritime arbitration system has ushered in a new development opportunity in the construction of the Lingang New Area. In April 2022, the revision of the Arbitration Law appeared in the work plan of the Legislative Preparatory Review Project of the Standing Committee of the 13th National People's Congress, and the revision of relevant laws is underway, and whether to introduce ad hoc arbitration is the main trend of concern from all walks of life.
I. The Proper Attributes and Practical Exploration of Ad Hoc Arbitration
The ad hoc arbitration system is a dispute resolution mechanism with a long history in the maritime field, and its attributes are in line with the natural demands of maritime dispute resolution. Ad hoc arbitration was the main commercial dispute resolution method before the emergence of institutional arbitration, and institutional arbitration only appeared after ad hoc arbitration arose for a considerable period of time. In 1976, the 31st session of the United Nations General Assembly adopted the UNCITRAL Arbitration Rules, which provide guidelines on the basis of which ad hoc arbitration cases can be cited. In 1985, the validity of ad hoc arbitration was reaffirmed in the International Model Law on Commercial Arbitration. Since then, ad hoc arbitration has been widely recognized and used by the international community for its unique advantages.
(1) The natural nature of ad hoc arbitration
1. Flexibility and convenience: Guarantee the autonomy of the parties to the litigation and defense
The essence of ad hoc arbitration is to respect the autonomy and agreement of the parties, which actually embodies fairness and freedom and guarantees efficiency. It is also more flexible than institutional arbitration, and the parties can freely choose the place of arbitration, arbitration institution, arbitration rules, etc., and have complete autonomy. Ad hoc arbitration is not subject to any institutional rules, and in the course of the arbitration may formulate exclusive arbitration rules, and the arbitral tribunal may hear the cause of dispute and make an award in full accordance with the intention of the parties. In order to effectively resolve the dispute, the parties to the dispute may flexibly arrange and adjust the procedures and methods for resolving arbitration matters at any time. The flexibility of ad hoc arbitration also makes it easier to combine with mediation and reach a settlement during the arbitration process, which is conducive to the parties to consciously abide by the enforcement award and continue commercial exchanges.
Article 5 of the Implementation Opinions on the Protection of the Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone by Shanghai Courts (hereinafter referred to as the "Opinions on the Protection of the New Area") provides that ad hoc arbitration can meet the needs of "respecting the autonomy of the parties and innovating the operational mechanism for international commercial trials".
2. Cost-effective: Restrain the tendency of institutional arbitration and litigation
The institutional arbitration rules are similar to the court procedural rules, and the determination is a prominent feature, and the parties' free choice is limited, which makes it difficult to fully reflect the autonomy of arbitration. The important difference between the arbitration system and the litigation system is that the power of arbitrators is based on the authorization of the parties, and the power arises from the contract reached by the parties to the dispute, i.e., the arbitration agreement, which is why the arbitration system is more flexible. However, the arbitration system is currently showing a trend of litigation-like, with obvious arbitration and litigation, reduced flexibility, and it is difficult to ensure the independence of the arbitration system. Ad hoc arbitration, with the consent of the parties, can simplify the arbitration procedure, reduce the cumbersome procedures of the original institutional arbitration, and improve the efficiency of dispute resolution. Ad hoc arbitrations also do not require a permanent venue, and the selection of an appropriate form of ad hoc arbitration for a particular dispute can save administrative costs, especially in cases with smaller subject matter, and the prepayment of arbitration costs is generally not present in ad hoc arbitrations. After the award is made, the lien arbitration document is used to ensure the performance of the parties, and the enforcement cost is low.
Article 9 of the Opinions on the Protection of the New Area stipulates the issue of a diversified resolution mechanism and a "one-stop" arbitration dispute resolution system, and the ad hoc arbitration system can echo the latest policies and implement the legal guarantee of the pilot experience of the free trade zone. In 2017 and 2018, the Shanghai Banking Dispute Resolution Center promoted the first attempt at ad hoc arbitration in the FTZ and the first ad hoc arbitration case across the FTZ. The cost-effectiveness of ad hoc arbitration has been fully exploited.
3. Eliminate administrativeness: Promote the construction of a business-friendly environment based on the rule of law
The China Maritime Arbitration Commission (CMAC), as the only maritime arbitration institution, has always had a low number of cases, and only exceeded 100 for the first time since its independent operation in 2020. While the LMAA and SIAC designated 1,775 cases and accepted 1,080 cases in 3,010 times during the same period, the CMAC is still in a difficult period of development. During the same period, CMAC received only 111 cases, while HKIAC had 483 cases. In 2022, after the end of the pandemic, the number of cases accepted by HKIAC increased again to 515, while the number of cases accepted by CMAC was only 190. The reason for such a large gap between the international recognition of CMAC and HKIAC is that most of the HKIAC adopts ad hoc arbitration when maritime disputes arise, while CMAC retains institutional arbitration and does not introduce an internationally recognized ad hoc arbitration system, which is less competitive.
Article 6 of the Opinions on the Protection of the New Area clearly states that Shanghai should be supported to develop into an Asia-Pacific arbitration center, and at the same time support the reform and innovation of the arbitration system in the New Area. In international commercial trade activities, most of the commercial contracts concluded between commercial entities contain dispute resolution clauses, and ad hoc arbitration is the most important solution method that the parties will choose. The absence of an ad hoc arbitration system is not in line with the gist of the development of international commercial arbitration, does not conform to international commercial arbitration practices, and is not conducive to the improvement of diversified dispute resolution mechanisms, let alone the competitiveness of Chinese enterprises and Shanghai as arbitration venues. It is easier for parties to choose other arbitration venues in terms of dispute resolution, and it is difficult to achieve the goal of building an Asia-Pacific arbitration center. The introduction of the ad hoc maritime arbitration system can be guided by the needs of enterprises, keep pace with the times, improve the level of public service supply, and at the same time make innovation and entrepreneurship more dynamic, promote economic development, improve the equality of opportunities among market players, and promote the long-term sustainability of the growth economy, and promote the construction of a business-friendly environment from the perspective of the rule of law.
(2) the substantive nature of ad hoc arbitration
The New York Convention to which the mainland acceded in 1986 included ad hoc arbitration, but the Continental Arbitration Law did not recognize the validity of ad hoc arbitration in writing. As mentioned above, due to the many advantages of ad hoc arbitration over institutional arbitration and the ability to attract investors to enter the free trade zone, the mainland has started a series of trial measures for ad hoc arbitration.
1. The Supreme People's Court issued the Opinions on Judicial Safeguards in Free Trade Zones
In 2016, the Opinions on Providing Judicial Safeguards for the Construction of Pilot Free Trade Zones (hereinafter referred to as the "Opinions on Judicial Safeguards for Free Trade Zones") was issued, which clearly stipulates ad hoc arbitration under the "three specifics" principle. With judicial exploration and the reform and innovation of trial procedures as the entry point, support the establishment of diversified dispute resolution mechanisms in free trade zones, and encourage courts at all levels to summarize the existing practical experience in practice, and form a trial mechanism that conforms to the characteristics of the pilot free trade zone and has the characteristics of each region on the basis of richer and more substantial trial experience.
2. Zhuhai Hengqin Free Trade Zone issued the "Hengqin Rules"
The Ad Hoc Arbitration Rules of the Hengqin Pilot Free Trade Zone (hereinafter referred to as the "Hengqin Rules") promulgated in 2017 are the first ad hoc arbitration rules in mainland China and have had an important impact on the ad hoc arbitration system in mainland China. This rule is not only an important innovation in the Hengqin Free Trade Zone to create an international business environment based on the rule of law, but also marks the real implementation of ad hoc arbitration in China, which is a milestone for the ad hoc arbitration system. The Hengqin Rules clearly form an institutional model with ad hoc arbitration as the mainstay and institutional arbitration as the supplement, fully taking into account the lack of recognition of ad hoc arbitration in the mainland.
3. China Internet Arbitration Alliance Launches Rules for Docking Ad Hoc Arbitration and Institutional Arbitration
In September 2017, the Rules for the Docking of Ad Hoc Arbitration and Institutional Arbitration were promulgated, which explored the establishment of ad hoc arbitration rules from a local area or from a specific field "point", and then expanded the "line" or even "surface". The biggest highlight of the Docking Rules is the creation of a docking mechanism between ad hoc arbitration and institutional arbitration procedures, as well as a docking and conversion mechanism for awards. It expands the scope of ad hoc arbitration to include non-FTZ registered enterprises, and the ad hoc arbitration procedure and the award resulting from the ad hoc arbitration can be converted. Awards made overseas can also be docked in accordance with this rule.
4. The Supreme People's Court's ad hoc arbitration rules are attempted
In 2019, the Opinions on Judicial Safeguards for the Belt and Road Initiative and the Opinions on Judicial Safeguards for the Shanghai Free Trade Zone were issued, and in 2021, the Opinions on the People's Courts Providing Judicial Services and Safeguards for the Construction of the Beijing National Service Industry Expansion and Opening-up Comprehensive Demonstration Zone and the China (Beijing) Pilot Free Trade Zone were issued, reiterating that ad hoc arbitration can be applied in the FTZ and making corresponding provisions on the application of ad hoc arbitration.
2. The development dilemma of maritime arbitration in the Yangtze River Delta region
(1) The legislative dilemma of ad hoc arbitration
1. The rejection of ad hoc arbitration in mainland arbitration legislation
As mentioned above, the New York Convention to which the mainland is a party does not itself restrict the form of arbitration, but the Mainland Arbitration Law stipulates that a valid arbitration agreement must reach an agreement on the selection of the arbitration commission, and at the same time, it does not recognize the legality of ad hoc arbitration. The conflict between the continental legislation and the New York Convention is fully reflected in the case of Woco Rubber Co. v. Züblin Engineering Co., Ltd., in which the recognition and enforcement of foreign ad hoc arbitral awards are based on the provisions of the New York Convention, but domestic ad hoc arbitral awards can only be invalidated under the Arbitration Law. The different treatment of Chinese and foreign awards, and the unfair and unstable legal effects, have led to the outflow of resources from the domestic arbitration market.
Considering the actual situation of arbitration legislation in mainland China, there may be concerns when foreign investment is made. The Draft Amendment to the Arbitration Law stipulates that in the case of ad hoc foreign-related commercial arbitration, a foreign-related commercial arbitration is defined as a foreign-related commercial arbitration if the legal relationship between civil and commercial matters is foreign-related or involves international commercial interests. However, such an amendment will lead to the resolution of the case without different elements except for the differences in foreign-related factors, and will also cause the parties to distrust the provisions of the Mainland Arbitration Law, which is contrary to the expectations of the parties.
As far as the Lingang Special Area is concerned, although the "three specifics" principle of the Opinions on the Protection of the Free Trade Zone can make ad hoc arbitration open within the free trade zone, ad hoc arbitration is fundamentally not legally recognized. According to Articles 16 and 18 of the Arbitration Law, as long as the parties do not "select an arbitration commission", the validity of the ad hoc arbitration agreement still cannot be supported by legislation. In terms of effectiveness, the Opinions on the Protection of the Free Trade Zone are only working documents of the Supreme People's Court and the Supreme People's Court, and cannot oppose the Arbitration Law, so the Opinions on the Protection of the Free Trade Zone cannot be used as the legal basis for the ad hoc arbitration law in the Lingang Special Area, and the legal basis for ad hoc arbitration in the Lingang New Area still needs to be consolidated. The method of applying for authorization for the Lingang Special Area to legislate on its own is currently questionable, and the arbitration system is stipulated in Article 8 as a reserved matter of the Legislation Law, which can only be established by the National People's Congress and its Standing Committee. It is not feasible to apply for authorization for the State Council to conduct administrative legislation to recognize ad hoc arbitration, and the State Council can only issue administrative regulations on the premise that there is no law on the reserved matters stipulated in Article 8. The Arbitration Law is a higher-level law, and the legislative effect of the State Council belongs to the administrative regulations and is a lower-level law, and even if it has the power to legislate, the higher-level law cannot be changed through the lower-level law. In this context, the respective trade zones can only adopt different reform methods to gradually move closer to ad hoc arbitration.
2. There is a conflict of laws in the existing ad hoc arbitration system
The Hengqin Rules enrich the ad hoc arbitration rules and fill the gap in the ad hoc arbitration system as the first ad hoc arbitration document, but they are only normative legal documents with a low level of effectiveness. And it has a strong local color, and some regulations are not perfect. For example, paragraph 3 of Article 21 does not stipulate the criteria for the selection of arbitrators, but provides that the Zhuhai Arbitration Commission shall select and appoint arbitrators from the panel of arbitrators. At the same time, it is necessary to take into account the criteria for the selection of arbitrators stipulated in the Arbitration Law, and according to the principle of the hierarchy of effectiveness of the superior law over the lower law, the arbitrators must first meet the "382 high" standard. The Zhuhai Arbitration Commission can only be selected from the panel of arbitrators on the premise that the superior law is satisfied, which limits the scope of arbitrators.
According to the Overall Plan for the Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the "New Area Plan"), the development of the Lingang Special Area is positioned as a special economic functional zone, and its particularity is reflected in the fact that investment and trade activities in the zone enjoy greater conditions for liberalization and facilitation of development, and the implementation of free and convenient personnel management policies. The Opinions on the Protection of Free Trade Zones only set out the requirements of "specific personnel" for ad hoc arbitrators, and did not specify them. If the Lingang Special Area follows the qualification standards of "38 and 2 highs", it may lead to a conflict between the talent policy and the Arbitration Law, and hinder the entry of foreign arbitrators.
(2) Judicial dilemmas in ad hoc arbitration
1. There are deficiencies in judicial assistance
The Hengqin Rules stipulate that the court can play a role in the following areas: the parties may apply to the court for a ruling on the grounds that there is an objection to the validity of the arbitration agreement, and in the context of the Hengqin Rules, the parties may directly apply to the court for preservation. The provisions of Article 48 of the Hengqin Rules are consistent with the legislative concept in the Mainland Arbitration Law, reflecting the flexibility of ad hoc arbitration itself, and also reflecting the fact that the provisions of the Hengqin Rules themselves may be relatively vague and incompatible. The relevant content of property preservation and evidence preservation mentioned in the Hengqin Rules only stays at the level of declaratory provisions, and does not explain the specific methods. In terms of the enforcement of arbitral awards, the Hengqin Rules provide an indirect solution for the conversion of ad hoc arbitral awards into institutional arbitral awards, i.e., into institutional arbitral awards. However, in the Opinions on the Protection of Free Trade Zones, the frequency of court appearances is also not very high, and it is stipulated that cases in which a local court intends to determine that an ad hoc arbitration agreement is invalid shall be reported to the Supreme People's Court, which will conduct a final review.
2. The boundaries of judicial supervision are not clear
As far as the ad hoc arbitration agreement is concerned, the essence of ad hoc arbitration is to respect the autonomy and agreement of the parties, and the ad hoc arbitration agreement is the embodiment of the autonomy of the parties. The parties have a broad space for autonomy in the ad hoc arbitration system, and it is necessary for the court to intervene in a timely manner, but excessive intervention is not in line with the original intention of ad hoc arbitration. Although the Opinions on Judicial Protection of Free Trade Zones stipulate that the "three specified" arbitration agreements can be found to be valid, and stipulate that when the people's court determines that they are invalid, the higher court shall review them and finally rule by the Supreme People's Court, in fact, the appearance of "may" means that the arbitration agreement may still be found to be invalid, and the final decision on whether it is valid is in the hands of the Supreme People's Court. There are still gaps in the Hengqin Rules in terms of the selection of arbitrators and the appointment of the seat of arbitration, and the issue of the limits of judicial supervision intervention has not been completely resolved.
3. The judicial effect is unclear
The award of ad hoc arbitration in mainland China has not been made by an arbitration institution and stamped with the seal of the arbitration commission, which is an element that needs to be met for the award to be legally effective under the Arbitration Law, so it is difficult to recognize the validity. The Hengqin Rules and the Docking Rules create a mechanism for the conversion of arbitral awards, whereby ad hoc arbitral awards can be converted into institutional arbitral awards after being transformed by arbitration institutions, and ad hoc arbitral awards can be enforced. The creation of this mechanism enables the current mainland ad hoc arbitral award to be enforced, but this conversion mechanism lacks a legal basis and violates the legal reservation of the Legislative Law, and even if the ad hoc arbitral award is successfully converted, it only means that it is the institutional arbitral award that has been judicially confirmed, and the legality of the validity of the ad hoc arbitral award has not been fundamentally resolved.
(3) The legal dilemma confirmed by the arbitrator
1. The arbitrator certification system needs to be improved
The full value of arbitration lies in the arbitrators, and there is no panel of arbitrators in ad hoc arbitrations compared to institutional arbitrations, and the selection of arbitrators is very broad in this sense, but therefore the first difficulty in the implementation of ad hoc arbitration lies in the selection of arbitrators. The Hengqin Rules stipulate that arbitrators in ad hoc arbitration shall meet the requirements of the "38 and 2 supreme", which is consistent with the provisions of the Mainland Arbitration Law. However, some scholars believe that ad hoc arbitration itself should not require arbitrators to have excessive legal literacy and professional legal knowledge. As far as the qualifications of arbitrators are concerned, the provisions of the Arbitration Law on the qualifications of arbitrators are mainly based on the specific legal environment in the past, but at this stage, the mainland has an increasingly large contingent of arbitrators, and the degree of specialization and internationalization is getting higher and higher, and the provisions of the Arbitration Law are no longer appropriate. In addition, the requirements for the qualifications of arbitrators have also been questioned in the arbitration community, mainly focusing on the fact that arbitrators have legal knowledge but do not have the professional knowledge unique to resolving arbitration cases, are not familiar with arbitration rules, and cannot effectively resolve disputes. From the perspective of international legislation, the arbitration law or arbitration rules do not set excessively high requirements for the qualifications of arbitrators, and some even have no legal threshold. Therefore, the requirements for the selection of arbitrators should be relaxed. Some scholars, however, believe that the level of arbitrators in mainland China has not yet reached the international level, and that the trial of arbitration cases is actually highly dependent on the arbitration commission and the case handling secretary due to the national conditions of mainland arbitration institutions affecting the allocation of functions and powers of arbitration cases, and the arbitrators accept fewer cases, lack arbitration experience, and lack the ability to handle cases independently. Therefore, it should be gradually liberalized with the improvement of the capacity and quality of mainland arbitrators. In the "Opinions on the Protection of Free Trade Zones", the specific personnel of the "three specifics" refer to and what kind of personnel are not refined.
2. The selection of arbitrators is subject to update
The selection of arbitrators in institutional arbitrations is mainly through the panel of arbitrators drawn up by the arbitration institution, but in ad hoc arbitrations, the parties are free to choose arbitrators, which is highly dependent on the parties' agreement on the selection of arbitrators. The parties must maintain close cooperation to advance the proceedings and reach an agreement on the selection of arbitrators in order for the ad hoc arbitration to be successfully constituted and the arbitration proceedings to be commenced, otherwise the tribunal cannot be constituted or even fall into a situation of deadlock. Article 20 of the Hengqin Rules sets the corresponding rules for the occurrence of tribunal deadlock, which stipulates that the Zhuhai Arbitration Commission (or the Zhuhai Court of International Arbitration authorized by the Zhuhai Arbitration Commission) shall act as the institution for appointing arbitrators and resolve the tribunal deadlock by appointing arbitrators. However, due to the nature of the local arbitration commission of the Zhuhai Arbitration Commission, the arbitrators appointed by the Zhuhai Arbitration Commission have certain limitations and are regional, and it is difficult to be recognized by the parties. However, when the parties do not recognize the arbitrator appointed by the arbitration commission and do not appoint him, whether it is a situation in which the appointment of the arbitrator has not been completed, and how the arbitration procedure is advanced in such a situation, the Hengqin Rules do not provide for it.
3. The supervision mechanism of ad hoc arbitrators still needs to be optimized
Arbitrators in ad hoc arbitration are not limited to arbitration institutions or rosters, and it is difficult to bring effective and timely legal remedies to the parties if an unfair arbitration result occurs. Although Article 38 of the Arbitration Law stipulates that an arbitrator shall bear legal liability if he violates professional ethics or fails to adjudicate in accordance with the law, it does not specify in detail the subject of liability, the degree of "intentionality", and the extent of liability. The Hengqin Rules stipulate that arbitrators shall bear the obligation of information disclosure and challenge under certain circumstances, but do not stipulate the consequences and punishment methods for violation, so that the obligations of arbitrators are not practical and feasible. Similarly, there is no provision on the responsibilities and supervision mechanism of ad hoc arbitrators in the Docking Rules.
3. The feasibility of introducing an ad hoc maritime arbitration system in the Yangtze River Delta
(1) A sound legal environment
The Safeguard Opinions for the New Area are specific measures to build a special institutional system for investment and trade liberalization and facilitation in the New Area, with the goal of supporting Shanghai to become an Asia-Pacific arbitration center, and emphasizing the need to strengthen communication with qualified international institutions and arbitration institutions to jointly build a "one-stop" dispute resolution platform for mediation, arbitration and litigation.
At the same time, Shanghai, as an international metropolis in eastern China, ranked third in the international shipping center city in 2022, after Singapore and London. Shanghai's important status as a city and its important impact on the development of the global economy, finance, and shipping industry have determined that it enjoys greater local legislative power. In June 2021, the Standing Committee of the 13th National People's Congress (NPC) authorized the Shanghai Municipal People's Congress and its Standing Committee to formulate regulations for the Pudong New Area, indicating that Shanghai is able to exercise the legislative power equivalent to a special economic zone in the Pudong New Area. The Shanghai Pilot Free Trade Zone can also break through the current provisions of the law to carry out pilot trials and give full play to the important role of the free trade zone in the first trial.
(2) Systematic policy supply
The Shanghai Free Trade Zone is a pilot zone suitable for the introduction of an ad hoc arbitration system, but the Plan for the New Area issued by the State Council in 2019 positions the Lingang Special Area as a "special special economic zone with more influence and competitiveness in the international market". The Lingang Special Area aims to build the world's most developed free trade zone, and carries out reforms in key areas, and the State Council has also given the Lingang Special Area maximum policy support and independent reform authority to serve the implementation of the national development strategy. The special functional zone is reflected in the more liberalization of investment and trade activities, the more convenient development environment, and the special systems and policies implemented in the Lingang Special Area are not replicable and promotable in China for the time being. In addition, Shanghai has formulated the Administrative Measures for the Establishment of Business Offices by Overseas Arbitration Institutions in the Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone, which is complementary to the Plan for the New Area, which stipulates the conditions that foreign arbitration institutions need to meet when they enter the Lingang New Area and the requirements that need to be met in the post-settlement management. The Safeguard Opinions for the New Area do not restrict arbitration institutions that meet the corresponding conditions on the specific ways to conduct arbitration business, and overseas arbitration institutions may carry out ad hoc arbitration activities. This is also conducive to the arbitration institutions in the region to learn from the advanced experience of overseas ad hoc arbitration, align with international standards, and improve the applicability experience and enforcement efficiency of ad hoc arbitration.
At the same time, the scale of the Shanghai Free Trade Zone is limited, which is convenient for the timely adjustment and innovation of legal norms in the region, and is conducive to the pilot work of legal norms. The original intention of the Shanghai Free Trade Zone is to encourage innovation, which includes judicial and arbitration and other safeguard innovations and institutional innovations. The establishment of an ad hoc maritime arbitration system in the Lingang Special Area and the Shanghai Free Trade Zone is an appropriate and necessary measure to build Shanghai into an Asia-Pacific arbitration center.
(3) Wide-caliber human resources
Ad hoc maritime arbitration has high requirements for the good faith of both parties, while the Shanghai Free Trade Zone and the Lingang New Area rely on the Shanghai International Shipping Center, and there are many shipping enterprises, which conduct long-term commercial exchanges based on the concept of good faith, and have a certain understanding and experience of international arbitration rules and ad hoc maritime arbitration, and have a relatively complete foundation for the concept of integrity and social understanding. The Yangtze River Delta region, with Shanghai as the center, has gathered a large number of high-quality comprehensive legal talents, and as the country's largest shipping city with the richest and most concentrated resources of arbitration institutions in mainland China, Shanghai also has many excellent bilingual arbitrators and judges, as well as arbitrators with rich experience in cross-border maritime arbitration. In addition, the Yangtze River Delta region has many double-first-class universities, more professional and specialized students have emerged under the call of the new liberal arts construction, the training of professional foreign-related legal talents is relatively perfect, the reserve army of legal talents is endless, and the diversified foreign-related legal service talent team will be further expanded with the development of the maritime ad hoc arbitration system.
IV. The Transition Path of Ad Hoc Maritime Arbitration in the Yangtze River Delta Region
The Yangtze River Delta region has a special geographical location and a well-developed economic system, and the development and prosperity of the maritime arbitration system is crucial to building an Asia-Pacific international arbitration center. The most important thing in the development of maritime economy is to promote the deep integration of systems and seek a point of convergence and balance in the differences. Based on the above-mentioned current situation in the Yangtze River Delta region, this paper proposes the following ideas:
(1) Legislation clarifies the effect of ad hoc arbitration
As mentioned above, the main problem faced by ad hoc arbitration is that it is not recognized by the Arbitration Law itself, and ad hoc arbitration is not legitimately legitimate. There are two main ways to solve this problem: one is to directly recognize the legal status of ad hoc arbitration and recognize its legality by amending the Arbitration Law and adding relevant content of ad hoc arbitration, and the other is to apply to the Standing Committee of the National People's Congress for authorization to suspend the implementation of Articles 16 and 18 of the Arbitration Law in accordance with Article 13 of the Legislation Law, so as to recognize the legal effect of ad hoc arbitration. According to the Arbitration Law (Draft Revisions) issued on 30 July 2021, Articles 91-93 specifically provide for the ad hoc arbitration system, and limit the scope of application of ad hoc arbitration to "foreign-related commercial litigation" in light of the mainland's national conditions. However, restricting ad hoc arbitration to "foreign-related commercial litigation" lacks legitimacy and universality, and is not in line with international practice. The revision of the Arbitration Law needs to go through a long cycle, and the scope of ad hoc arbitration in the revised draft is limited to "foreign-related commercial litigation" also needs to be argued urgently. Therefore, it is more appropriate for the Standing Committee of the National People's Congress to issue a judicial interpretation to suspend the implementation of Articles 16 and 18 of the Arbitration Law. This approach is in line with the provisions of Articles 45 and 50 of the Legislation Law, and according to the previous attempts in the pilot work of the reform of the supervision system, this approach also has great reference for the selective application of some provisions of the Arbitration Law in the free trade zone.
In addition, the scope of "restrictions in areas such as administration" in article 13 of the Legislation Act needs to be expanded. From a legal point of view, the scope of application of Article 13 is the field of "administrative management" and "equivalent to administrative management", while the arbitration system does not essentially belong to the field of "administrative management" or "equivalent to administrative management", and the adjustment of the arbitration system belongs to the adjustment of the judicial system. Between December 28, 2012 and December 25, 2016, the National People's Congress (NPC) made 17 authorization decisions, including judicial events and reforms of state systems and mechanisms, such as the third decision on authorizing the Supreme People's Court and the Supreme People's Court to carry out pilot work on expedited procedures for cases in some areas, and the 16th decision on carrying out pilot work on the reform of the national supervision system in Beijing, Shanxi Province, and Zhejiang Province, all of which are about the adjustment of the judicial system. From the perspective of practical experience, it is not the first time that the judicial system under the interim arbitration reform has been adjusted, but the reform of the judicial mechanism and the state institutional mechanism goes beyond the scope of "administrative management and other fields" stipulated in Article 13 of the Legislation Law, so it is necessary to expand the relevant provisions of Article 13.
After the Standing Committee of the National People's Congress authorized the Lingang Special Area to suspend the implementation of Articles 16 and 18 of the Arbitration Law, it is also necessary to clarify the specific content of the "three specific" principles in the Free Trade Zone Safeguard Opinions and the New Area Safeguard Opinions. After the ad hoc arbitration system is recognized by the Legislation Law, it is also necessary to legislate to determine the ad hoc arbitration rules in light of the actual situation of the Lingang Special Area.
(2) Innovate the arbitrator mechanism in the new area
It is necessary to adapt the criteria for the recognition of arbitrators in the Lingang Special Area, and the key lies in the establishment of an open panel of arbitrators. In regions where ad hoc arbitration is relatively mature, such as the United Kingdom, the United States, Switzerland and other countries, there is almost no threshold for arbitrators, and any person with full capacity for civil conduct can serve as an arbitrator. Comparing the mainland's "38 and 2 high" standards, some scholars believe that we should learn from international standards, lower the threshold for the selection of arbitrators, and set the selection period. Some scholars believe that ad hoc arbitration has high requirements for the quality and ability of arbitrators, but the construction of arbitrators in mainland China has not yet reached the corresponding level, and blindly imitating international legislation is not conducive to the development of mainland conditions and arbitration system. Some scholars also believe that according to the relevant provisions of the New Area Plan on overseas arbitration institutions and overseas qualified persons, an open roster system should be established to allow arbitrators who do not meet the "38 and 2 high" standards but have excellent qualifications to serve as arbitrators in the new area after filing. Many scholars agree that the "38 and 2 high" standards should be changed, especially in the Lingang New Area, new standards and new solutions need to be adopted.
This paper argues that the "38 and 2 high" scheme can be adopted at the same time, and the recommendation roster system and the negative list system can be adopted at the same time. The recommended roster system is conducive to attracting outstanding arbitrators from outside the territory to settle in the Lingang Special Area, especially those with rich arbitration experience, and can improve the arbitration level of the arbitrator team in the new area. However, in order to ensure the fairness of the arbitral award, the arbitral institution or the court and other relevant units may appoint the arbitrator after review. At the same time, it is stipulated that the negative list mainly excludes persons who meet certain circumstances, which is also reflected in Article 18 of the Arbitration Law (Revised Draft). According to the plan of the Lingang Special Area, make a bold attempt, and then according to the implementation of the plan of the Lingang New Area, the criteria for the selection of arbitrators will be extended to the whole country, or the criteria for the selection of arbitrators will be lowered after the mainland arbitrator team is perfected and matured.
(3) Optimize intervention mechanisms
1. Diversified dispute resolution methods to solve the deadlock in the court
The arbitral tribunal is formed by the agreement of the parties, but if the parties fail to reach an agreement, it will reach an impasse in the formation of the tribunal. In this case, the international usually choice is to appoint the arbitration institution as the appointing entrusting institution or the management institution, and let the arbitration institution intervene in the ad hoc arbitration by appointing the arbitration institution to avoid the deadlock in the ad hoc arbitration tribunal. The Hengqin Rules stipulate that the arbitration commission shall act as the appointing authority for arbitrators, but the scope of selection of arbitrators should not be limited to the arbitration panel of a certain place. In view of the deadlock in the formation of the tribunal, it may be stipulated that the parties shall entrust an arbitration institution to assist in the formation of the tribunal by agreement. Although ad hoc arbitration should fully respect the opinions of the parties, in the case of an impasse in the formation of a tribunal, in order to prevent the parties from falling into endless disputes, it should restrict the parties' freedom of will. Therefore, it should be agreed that the parties shall not refuse or need to give sufficient reasons for the appointment of an arbitrator by the arbitral institution to avoid abuse of the rights of the parties. At the same time, a system of transformation and connection between arbitration procedures and litigation procedures can be established, and when the parties are unable to reach an agreement on the appointment of an arbitration institution, they will adhere to a diversified dispute resolution mechanism, and the parties shall waive or abandon the arbitration agreement through consultation, and bring the dispute to the people's court for jurisdiction. The nature of ad hoc arbitration will not change due to the intervention of arbitration institutions and judicial procedures, and the advancement of the procedure still mainly depends on the close cooperation and in-depth communication between the ad hoc arbitral tribunal and the parties, and the arbitration institution will only appear when the parties urgently need and reach an agreement, which can not only ensure that the ad hoc arbitration has a high degree of respect for the advantages of party autonomy, but also avoid the excessive involvement of the arbitration institution to affect the independence of the ad hoc arbitration, and give full play to the efficiency of ad hoc arbitration.
2. Prevent the "three regardless" situation
The malicious delay of the parties in the arbitration proceedings, the failure to select arbitrators, or even the abuse of rights by the parties may lead to the arbitration proceedings falling into the embarrassing situation of "three regardless". Although the external objective conditions and manifestations of the "three irregularities" are different at different stages of the arbitration procedure, in terms of each stage, the "three irrevenues" reflect the gap between dispute resolution mechanisms such as ad hoc arbitration, institutional arbitration, and judicial litigation, and will also hinder the timely and effective exercise of the parties' right to choose. In the face of such a situation, we can start from two aspects: prevention and resolution, and avoid the deadlock of "three regardless". Clarify the powers of arbitrators and inform the parties in advance, and may set up corresponding rules to warn the relevant parties when the parties fail to comply with the decision of the arbitral tribunal, and if the circumstances are serious, make an arbitration presumption unfavorable to the parties, and even take disciplinary measures against the malicious parties, etc., to prevent the occurrence of the "three regardless" situations in advance. If such a situation arises during the course of the proceedings, ad hoc arbitration may also be linked to judicial litigation to resolve disputes through litigation.
3. Give full play to the "one main, two auxiliary" mode
"One main and two auxiliary" mainly refers to a supervision mechanism that focuses on industry supervision, supplemented by judicial supervision and internal supervision, and gives full play to the joint role of internal supervision, external supervision and industry supervision, and conducts comprehensive supervision and review of arbitrators and arbitral awards. After the introduction of ad hoc arbitration, the relationship between arbitrators and arbitral institutions was relatively loose, and the supervision of arbitrators was weakened. If the supervision of arbitrators is placed under the supervision of arbitration institutions, it is easy to cause excessive intervention by arbitration institutions, which is not in line with the original intention of ad hoc arbitration. Considering that judicial supervision may also lead to judicial centrism, resulting in the administrativeization and judicialization of arbitration. Therefore, the industry supervision of the industry chamber of commerce and arbitration institutions can be regarded as the main mode of supervision, and when the arbitrator violates the professional ethics and the obligation of information disclosure and recusal, the industry will impose internal penalties, and when the arbitrator commits bribery, arbitrary judgment and other behaviors that seriously affect the arbitration activities, the people's court shall investigate his criminal or civil liability in accordance with the law.
(4) Clarify the validity of ad hoc arbitral awards
The reason why the validity of an ad hoc arbitral award cannot be confirmed is that the status of the ad hoc arbitration law has not been recognized, and if the status of the ad hoc arbitration law is recognized, then the question of the validity of the ad hoc arbitral award will be easily resolved. Even if the status of ad hoc arbitration is not recognized at present, the validity of an ad hoc arbitral award is not automatically invalid. Article 93 of the Draft Amendment to the Arbitration Law stipulates the legal effect of an ad hoc arbitral award, and the arbitral tribunal shall submit the original arbitral award signed by the arbitrator to the people's court of the place of arbitration for filing. The Hengqin Rules stipulate some rules on the enforcement of arbitral awards, but since the Hengqin Rules are less effective and not popularized throughout the country, they cannot provide a legal basis for ad hoc arbitration nationwide, so it is not recommended to be included in the maritime ad hoc arbitration system in the Lingang New Area. The enforcement of an ad hoc arbitral award also depends on the country (region) of the arbitral award, and in the case of a foreign ad hoc arbitral award, it can be enforced under the New York Convention, and in the case of Hong Kong, Macao and Taiwan, it can be enforced under the inter-regional assistance arrangement, but the mainland arbitral award can only be realized after transformation. Because the subject of the interim arbitral award is not the arbitration institution, it does not meet the enforcement basis stipulated in the Civil Procedure Law, and cannot be covered by the enforcement of the current law, so it has no enforceable force. An ad hoc arbitral award is only a contract reached between the parties under the auspices of the arbitral tribunal, and in fact does not have the attributes of public power. However, the effective instrument is not a public document, and it needs to be transformed through certification at the level of public law in order to meet the formal requirements of the enforcement name. Therefore, Article 82 of the Arbitration Law (Draft Amendments) stipulates the specific matters for the enforcement of arbitral awards, and clearly stipulates that the enforcement of an interim arbitral award must be reviewed and confirmed by the court.
(5) Clarify the boundaries of third-party involvement
The third party mainly includes the intervention of the court and the intervention of arbitration institutions. The timely intervention of a third party can break the deadlock of ad hoc arbitration and promote the ad hoc arbitration procedure, but if the third party intervenes improperly, it will not comply with the principle of autonomy of will and threaten the autonomy of the parties. Courts and arbitral institutions should intervene in a prudent manner, and both should provide assistance where necessary, but the focus of intervention is different, with courts being more inclined to supervise and arbitral institutions to be more focused on providing services.
As far as the court is concerned, it should be prudent about the validity of the arbitration agreement, which is embodied in Article 92 of the Arbitration Law (Draft Amendment), which requires the Intermediate People's Court to record the ad hoc arbitration agreement. In addition, it is also manifested in the intervention when the selection of arbitrators is not possible, which is reflected in the provision in Article 92 of the Arbitration Law (Draft Revisions) that if the parties fail to reach an entrustment agreement, the arbitration institution shall be appointed by the place of arbitration, the location of the parties or the intermediate people's court that has a close connection with the dispute to assist in the determination, and the appointment ruling made by the people's court shall be final. In addition, when the "three regardless" situation arises, the parties should be allowed to break through the restrictions of the ad hoc arbitration agreement to file a lawsuit in the court, so as to break the stagnant deadlock in the arbitration procedure. The court supervises the arbitrators when they accept bribes in violation of professional ethics, affect the progress of the arbitration proceedings and incur civil or criminal liability.
For arbitration institutions, it is mainly to intervene and provide assistance when the parties really need it. It may be the provision of administrative services such as venues, facilities and services for ad hoc arbitration, or participation in appointed arbitration when the selection of arbitrators is not available. Sweden, Singapore and Hong Kong Administrative Region of China all have provisions on institutional arbitration to facilitate the appointment of arbitrators in ad hoc arbitrations, as reflected in the UNCITRAL Arbitration Rules. Paragraph 1 of Article 92 of the Arbitration Law (Draft Amendments) also stipulates that in cases arbitrated by a special arbitral tribunal, if an arbitral tribunal cannot be formed in a timely manner or it is necessary to decide on the matter to be challenged, the parties may agree to entrust an arbitration institution to assist in forming the tribunal and deciding on the matter to be challenged. In general, courts and arbitration institutions can intervene, but they should ensure the independence of ad hoc arbitration, grasp appropriate boundaries, avoid "paternalistic" management, and fully respect the autonomy of the parties.
V. Conclusions
For the mainland, the ad hoc arbitration system is more in line with the policy orientation of the 14th Five-Year Plan and the layout of the Belt and Road Initiative, and is also the proper meaning of establishing an Asia-Pacific arbitration center to enhance the legal status of international arbitration. With the continuous expansion of the degree of openness, the ad hoc arbitration committee has more room for application, and Shanghai and the Lingang New Area, as a city with a high degree of openness and reform and a large number of shipping enterprises, are more pragmatic measures to introduce the maritime ad hoc arbitration system. Based on this, the National People's Congress should authorize the appropriate suspension of the implementation of Articles 16 and 18 of the Arbitration Law in the Free Trade Zone, legislatively recognize the legal status of ad hoc arbitration, innovate the mechanism for the selection of arbitrators, adopt the "38 and 2 high" standards, and adopt both the recommended list and the negative list system, so as to better attract outstanding arbitrators from outside the territory and improve the level of the mainland arbitration team on the premise of respecting the autonomy of the parties. It is also necessary to confirm the validity of the arbitration agreement and complete the transformation and enforcement of public documents through judicial assistance and the court, and to complete the transformation of arbitration procedures and judicial procedures in a timely manner when there is a deadlock in the arbitration procedure, and at the same time conduct judicial supervision of arbitrators, so as to promote the smooth progress of the ad hoc arbitration procedure and further promote the reform to conform to the gist of the development of international commercial arbitration.