CIETAC clarifies emergency arbitrator powers following Singapore ruling

CIETAC published its interpretation of article 23(2) of its 2024 rules, to do with emergency arbitration clauses, on 15 October. It follows a recent Singapore High Court decision refusing to enforce interim relief granted by an emergency arbitrator in a mainland China-seated CIETAC arbitration. The court found that neither Chinese law nor the parties' arbitration agreement gave the emergency arbitrator the necessary authority.

Article 87(2) of the CIETAC Rules gives CIETAC the authority to interpret its own rules. CIETAC said the new interpretation does not change the rules but explains how article 23(2) should be understood, including in cases that have already been handled as well as those currently underway or filed in future.

Article 23(2) allows parties to seek emergency relief either under the applicable law or under their agreement. CIETAC said these are two separate and equally valid routes for obtaining urgent relief.

CIETAC also said parties using its arbitration procedures do not need a separate written agreement specifically authorising emergency arbitration. Instead, consent can be inferred when parties choose arbitration rules that provide for emergency arbitrators. This includes agreements to arbitrate under the CIETAC Rules, under specialist CIETAC rules that incorporate them, or in arbitrations administered by CIETAC under other rules that allow emergency proceedings. Parties that do not want the emergency procedure to apply must expressly opt out in writing.

CIETAC takes a broad view of what qualifies as the "applicable law". It said the relevant law is not limited to the law of the country where the arbitration is based. Depending on the circumstances, it could also include other legal systems that may affect whether an emergency order can be recognised or enforced.

Rachel Turner, a Shanghai-based arbitration expert at Pinsent Masons, said: “CIETAC's interpretation confirms the more natural reading of its rules: by agreeing to CIETAC arbitration, parties accept the emergency arbitrator mechanism and the authority needed to make that mechanism effective, unless they expressly opt out. This responds to the additional layer of party authorisation identified by the Singapore High Court and provides welcome clarity on CIETAC's intended operation of article 23(2).”

Wee Jian Ang, a Singapore-based arbitration expert at Pinsent Masons, said: “CIETAC's interpretation directly addresses the two points that proved decisive before the Singapore High Court.”

“It says that parties agree to the emergency arbitrator process when they adopt the CIETAC Rules, and that the relevant law is not limited to the law of the country where the arbitration is based. That strengthens the basis on which an emergency arbitrator may act under the CIETAC Rules,” he said.

“It, of course, remains to be seen how much weight the Singapore courts, or other national courts, will accord to CIETAC's interpretation.”

The interpretation also addresses the relationship between emergency arbitrator orders and orders issued by courts in mainland China to preserve assets or evidence. CIETAC said that although Chinese law reserves the power to grant preservation measures to mainland courts, this does not stop parties from agreeing that an emergency arbitrator can make interim orders that are binding on them. It also doesn’t it mean such orders have no legal effect when issued in China. According to CIETAC, this approach is consistent with the principle that parties are generally free to decide how their disputes should be resolved.

Ang said: “The interpretation does not mean that every emergency relief granted by a CIETAC emergency arbitrator will be enforceable wherever assets are located.”

“A national court asked to recognise or enforce the measure will still apply the relevant domestic legal framework. Parties should plan for that risk when drafting the arbitration agreement, choosing the seat and identifying likely enforcement jurisdictions,” he said.

“Where enforcement risk is significant, an express emergency-relief clause may remain prudent, even though CIETAC says it is not required for its procedure to apply.”

Turner said: “The interpretation also seeks to accommodate interim relief ordered in emergency arbitration within China's existing legal framework by distinguishing a court-ordered preservation measure from arbitral relief.”
“This offers a clear and practical response to the Singapore High Court's interpretation of the CIETAC Rules and Chinese law,” she said.

“As CIETAC's interpretation of its own arbitration rules, it may be persuasive to an enforcing court. It also reflects efforts by CIETAC and other Chinese arbitration institutions to bring their procedures more closely into line with international practice while China's arbitration framework continues to develop.”