CIRCULAR OF THE GENERAL OFFECE OF THE STATE COUNCIL ON MAKING GOOD ARRANGEMENTS FOR THE REORGANIZATION OF ARBITRATION INSTITUTIONS AND THE ESTABLISHMENT OF THE CHINA ARBITRATION ASSOCIATION

(November 13, 1994)

    The Arbitration Law of the People’s Republic of China (hereafter referred
to as the Arbitration Law) has been passed at the Ninth Meeting of the
Standing Committee of the Eighth National People’s Congress on August 31,
1994, and shall be effective as of September 1, 1995. This Law is another
important law for settling economic disputes which meets the needs of a
socialist market economy and is in line with international practice.
Arbitration institutions are independent from administrative organs and are
not subject to administrative organs in accordance with the Arbitration Law.
The existing arbitration institutions shall be reorganized in accordance with
the provisions of the Arbitration Law; the institutions which have not been
reorganized before September 1, 1995 when the Arbitration Law goes into effect
may continue until September 1, 1996; the new arbitration institutions shall
be established by the people’s governments of the municipalities directly
under the Central Government, the cities where the people’s governments of
the provinces and autonomous regions are located and other cities divided into
districts which need to set up arbitration institutions through organizing the
relevant departments and commercial councils; and a China Arbitration
Association shall be established. Implementing the preceding provisions has a
tight schedule, involves many complicated issues, requires some research
through conducting experiments, and needs to be unified and standardized on
the basis of experience from the experiment. In order to insure the smooth
implementation of this work, the leaders of the State Council have agreed on
the following notices:

    1. Reorganization of arbitration institutions shall be carried out in the
cities of Beijing, Shanghai, Tianjin, Guangzhou, Xi’an, Huhehot and Shenzhen
on a trial basis. These seven cities shall make a study of such issues as the
establishment of arbitration institutions, the appointment of an arbitrator
and the make-up, articles of association, registration, property and funds of
the arbitration committee, and make proposals in these areas. The leadership
of this work shall be strengthened and a responsible comrade in the municipal
government shall be in charge; the specific work shall be organized by the
Bureau or Office of Legislative Affairs, and the Justice Administration, the
Industry and Commerce Administration and other administrations, the Council
for the Promotion of International Trade and the Association of Industry and
Commerce shall also participate.

    2. In order to ensure that the reorganization of arbitration institutions
is carried out in accordance with the provisions of the Arbitration Law and to
strengthen the leadership of such reorganization, it has been resolved that
the Bureau of Legislative Affairs of the State Council (BLA) which is in
charge of the reorganization, the State Economic and Trade Commission, the
State Commission for Restructuring the Economy, the Ministry of Justice, the
State Administration for Industry and Commerce, the Council for the Promotion
of International Trade and the All-China Federation of Industry and Commerce
which are involved in this work, make a study of relevant problems and work
out specific opinions on the standards which shall be arranged after they are
submitted to and agreed to by the leaders of the State Council. Thus, BLA
shall hold an meeting at a proper time with the experimental cities attending,
whose time and place will be notified in a separate method.

    3. The reorganization of arbitration institutions and the establishment of
the China Arbitration Association will proceed in two steps. First, the
arbitration institutions will be reorganized; then, on this base, the China
Arbitration Association will be established. Preparations for the
establishment of the China Arbitration Association may be made earlier. The
BLA, which is in charge of the work, and the State Economic and Trade
Commission, the State Commision for Restructuring the Economy, the Ministry of
Justice, the State Administration for Industry and Commerce, the Council for
the Promotion of International Trade, the All-China Federation of Industry and
Commerce, which will participate in the work, will mainly make a study
concerned with the establishment of the China Arbitration Association, the
drafting of its articles of association and of its arbitration rules.

    4. In addition to the seven experimental cities mentioned above, the
people’s governments and their relevant departments in the cities where the
people’s governments of other provinces and autonomous regions are located and
other cities divided into districts which need to establish arbitration
institutions and shall also study the provisions of the Arbitration Law, and
in the light of this Circular make proposals concerning the reorganization of
arbitration institutions, which should be submitted to BLA. On the basis of
the experiences and research results of the localities, after being arranged
by the State Council, the cities which need to establish arbitration
institutions in accordance with the law shall begin to reorganize the
arbitration institutions according to the unified standards.

    This Circular shall be transmitted by the people’s governments of the
provinces and autonomous regions to the people’s governments of the cities
where the governments of provinces or autonomous regions are located, and
other cities divided into districts.