The China International Economic and Trade Arbitration Commission (CIETAC)  has recently announced that CIETAC’s authorisation to the CIETAC Shanghai Sub-Commission and the CIETAC South China Sub-Commission for accepting and administering arbitration cases is hereby suspended.

In March this year, CIETAC had issued amended arbitration Rules that became effective on  May 1.As the new Rules became effective, the Shanghai sub-commission of CIETAC announced that it was an independent arbitration body and would follow its own rules. This prompted a response from CIETAC in Beijing reinforcing that all sub-commissions and branches were under their remit.

According to the statement of CIETAC, from August 1, all parties shall submit their applications for arbitration before CIETAC in Beijing, who will administer the cases. However, where parties have previously stated that Shanghai or the South China Sub-Commission in Shenzhen shall handle disputes they will continue to administer such cases.

Chinese courts have so far remained silent on the situation, but it is likely both sub-commissions will take their cases to court. Shanghai will probably be the first to initiate legal proceedings, drawing this dispute out even further.

The Commission is one of the world’s busiest arbitration institutions, but its role in international arbitration is being questioned as this dispute continues.