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OUT-LAW ANALYSIS 3 min. read
China transforms from regional player to ‘global powerhouse’ international arbitration hub
31 Mar 2026, 9:54 am
Significant changes to mainland China’s arbitration landscape are expected following last year’s introduction of the revised Arbitration Law, effective from March 2026, after a multi-year consultation period.
The law aims to modernise mainland China’s arbitration framework and is the most significant reform to the country’s Arbitration Law since originally introduced in 1995. Aligning China’s framework with international standards, the law endorses significant concepts such as ‘seat’ of arbitration, the separability of an arbitration agreement from the main contract and a tribunal’s ability to rule on its own competence, while also allowing ‘ad hoc’ arbitration in designated areas.
The new law also expands the eligibility for arbitrators to include professionals from law, economics and science, including qualified foreign nationals, while introducing provisions on arbitrators’ independence and impartiality and grounds for recusal within reinforced ethical standards.
Institutions will be required to disclose operational details including rules, arbitrator rosters, fee standards and annual reports in an effort to enhance transparency and public trust. The law also shortens the timeframe to set aside awards, ensuring time efficiency by shortening the period from six months to three, and empowers the tribunal to dismiss arbitration requests if they find that a party has unilaterally fabricated essential facts to initiate the proceedings, which will significantly raise the cost of malicious arbitration.
The changes reflect the growing importance of mainland China as a hub for international arbitration.
According to the Ministry of Justice of the People’s Republic of China, in a communication dated 9 August 2025, China has 285 arbitration institutions and over 60,000 arbitrators, including more than 3,400 overseas arbitrators. A total of 4,373 foreign-related arbitration cases were handled in China in 2024, with a total value of 197.8 billion yuan ($27.51bn), which the ministry said “contribut[ed] to promoting international economic and trade exchanges, and supporting high-quality economic development and high-level opening-up”.
In the latest Queen Mary Survey (2025), Beijing was ranked amongst the five most preferred seats for arbitration after London, Singapore and Hong Kong and before Paris, moving up from seventh place in the 2021 survey. Shenzhen for the first time reached the sixth place and Shanghai is now eighth.
The China International Economic and Trade Arbitration Commission (CIETAC), China’s main arbitral institution, has experienced steadily increasing caseloads year-on-year, with its most recent annual report on international commercial arbitration revealing a 14.82% increase in its dispute portfolio and a 25.12% in total number of disputes.
CIETAC’s statistics also show that international cases are becoming more common, with the top ten users of CIETAC including parties based in the Hong Kong Special Administrative Region (SAR), the US, the British Virgin Islands, Cayman Islands, Italy, Germany and Japan. The modernisation of China’s arbitration framework, alongside CIETAC awards being widely recognised and enforced in foreign courts, should continue to facilitate the growing international usage of CIETAC.
During 2025, CIETAC became the first arbitration institution in Asia-Pacific to publish guidelines on the use of artificial intelligence (AI) in arbitration matters, reflecting China’s aim to become a global AI leader. The guidelines promote the use of AI as a way to support human-decision making, but not to replace it.
Reflecting a growing trend in the use of mediation by most arbitral institutions, the Beijing International Arbitration Court (BAC) introduced a fast-track mediation arbitration procedure in early 2025.
The Hong Kong International Arbitration Centre (HKAIC) was the first institution from outside mainland China to open in the country in December 2024, showing China’s regulatory openness to foreign-related arbitration institutions. The 2025 Queen Mary Survey highlighted Hong Kong SAR’s privileged status as the gateway to mainland China, with its users appreciating the ability to enforce awards issued in Hong Kong SAR in mainland China.
Arbitration case law in 2025 reflects the Chinese courts’ pro-arbitration stance. In one notable example, a Chinese court enforced an evidence collection order issued by an arbitral tribunal seated in Shanghai in an international arbitration case, reflecting Chinese courts’ support to international arbitral proceedings. The decision enhances confidence in enforceability for foreign parties and reflects ambitions for Shanghai to enhance its reputation as arbitration hub.
On 17 March 2025, the Shanghai Maritime Court upheld the validity of an ad hoc arbitration agreement (link in Chinese), addressing key issues such as “foreign‑related” elements and the completeness of essential terms for ad hoc arbitration. Described as the first such case accepted by a Shanghai court after the city’s regulations promoting an international commercial arbitration centre took effect, it provides judicial support for Shanghai’s experimentation with ad hoc arbitration.
On 21 May 2025, the Beijing International Commercial Tribunal concluded its first open circuit trial at the International Commercial Arbitration Center (Beijing) (link in Chinese), dismissing an offshore company’s motion to invalidate an arbitration agreement and reaffirming the separability/independence of the arbitration clause. The case is a milestone for Beijing’s arbitrationfriendly judicial infrastructure, and shows efficiency in arbitration-related judicial review and preservation matters.
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