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STATE COUNCIL'S OFFICIAL REPLY CONCERNING THE RENAMING OF THE FOREIGN ECONOMIC AND TRADE ARBITRATION COMMISSION AS THE CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION AND THE AMENDMENT OF ITS ARBITRATION RULES

Category  ARBITRATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1988-06-21 Effective Date  1989-01-01  

THE State Council's Official Reply Concerning the Renaming of the Foreign Economic and Trade Arbitration Commission As the China International Economic and Trade Arbitration Commission and the Amendment of Its Arbitration Rules



The Official Reply
CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION ARBITRATION
Chapter I  General Provisions
Chapter II  Arbitration Proceedings
Chapter III  Supplementary Provisions
CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION ARBITRATION
Chapter I  General Provisions
Chapter II  Arbitration Proceedings
Chapter III  Summary Proceedings
Chapter IV  Supplementary Provisions

(June 21, 1988)

The Official Reply

    China Council for the Promotion of International Trade:

    The State Council approves the renaming of the Foreign Economic and Trade
Arbitration Commission of your Council as the China International Economic and
Trade Arbitration Commission. The existing relationship of its subordination
remains unchanged and its scope of handling cases covers all disputes arising
from international economic and trade transactions.

    The Arbitration Rules of the China International Economic and Trade
Arbitration Commission shall be amended by your Council in accordance with
China's laws and the international treaties concluded or acceded to by China
and with reference to international practice, and then promulgated for
implementation after adoption by your Council. Hereafter, any amendments to
the Arbitration Rules shall be made by your Council's own decision.

CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION ARBITRATION
RULES (Adopted on September 12, 1988 at the Third Session of the First
National Congress of the China Council for the Promotion of International
Trade (China Chamber of International Commerce))
Chapter I  General Provisions

    Section 1  Jurisdiction

    Article 1  The China international Economic and Trade Arbitration
Commission (hereinafter referred to as the Arbitration Commission)
independently and impartially settles disputes arising from international
economic and trade transactions by means of arbitration so as to protect the
justified rights and interests of the parties and promote international
economic and trade development.

    Article 2  The Arbitration Commission takes cognizance of cases of
disputes arising from international economic and trade transactions in
accordance with arbitration agreements concluded between the parties, prior to
or after the occurrence of disputes, to refer their disputes to the
Arbitration Commission for arbitration and upon a written application by one
of the parties.

    An arbitration agreement means the arbitration clause stipulated by the
parties in their contract, or an agreement in writing concluded in other forms
to submit disputes for arbitration.

    The Arbitration Commission has power to decide on the validity of
arbitration agreements and the jurisdiction over arbitration cases.

    Section 2  Organization

    Article 3  The Arbitration Commission is composed of Chairman,
Vice-Chairmen and Commission Members.

    The Chairman performs functions and duties given by these Rules and any
Vice-Chairman, if authorized by the Chairman, may perform the functions and
duties of the Chairman.

    Under the Arbitration Commission, a Secretariat is established to handle
the day-to-day work of the Arbitration Commission.

    Article 4  The Arbitration Commission maintains a panel of arbitrators.
The arbitrators are selected and appointed by the China Council for the
Promotion of International Trade (China Chamber of International Commerce)
from among Chinese and foreign persons with expertise and practical experience
in international economics and trade, science and technology, law and other
fields.

    Article 5  The Arbitration Commission is located in Beijing. The
Arbitration Commission may, according to the requirement of development of
arbitration business, establish sub-commissions in other places within the
territory of China.
Chapter II  Arbitration Proceedings

    Section 1  Application for Arbitration, Defence and Counterclaim

    Article 6  The Claimant must submit his Application for Arbitration to the
Arbitration Commission in accordance with the following requirements:

    (1) an Application for Arbitration in writing must be submitted to the
Arbitration Commission. The following must be specified in the Application for
Arbitration:

    (a) the name and address of the Claimant and those of the Respondent;

    (b) the arbitration agreement relied upon by the Claimant;

    (c) the Claimant's claim and the facts and evidence on which his claim is
based.

    The Application for Arbitration shall be signed by the Claimant and/or the
attorney authorized by the Claimant.

    (2) when submitting an Application for Arbitration to the Arbitration
Cornmission, relevant documentary evidence on which the Claimant's claim is
based shall accompany the Application for Arbitration.

    (3) the Claimant shall appoint an arbitrator from among the Panel of
Arbitrators of the Arbitration Commission or authorize the Chairman of the
Arbitration Commission to make an appointment on his behalf.

    (4) the Claimant shall pay an arbitration fee in advance to the
Arbitration Commission according to the Arbitration Fee Schedule attached to
these Rules.

    Article 7  After receipt of the Application for Arbitration and its
attachments and when the Arbitration Commission, after examination, deems that
the Claimant has completed the formalities required for arbitration, the
Arbitration Commission shall immediately mail to the Respondent one copy each
of the Claimant's Application for Arbitration and its attachments as well as
the Arbitration Rules and the Panel of Arbitrators of the Arbitration
Commission.

    Article 8  The Respondent shall, within 20 days after receipt of the
Application for Arbitration, appoint an arbitrator from among the Panel of
Arbitrators of the Arbitration or authorize the Chairman of the Arbitration
Commission to make an appointment on his behalf, and shall, within 45 days
after receipt of the Application for Arbitration, submit his defence and
relevant documentary evidence to the Arbitration Commission.

    Article 9  The Respondent shall file with the Arbitration Commission his
counter-claim, if any, in connection with the case taken cognizance of by the
Arbitration Commission, within the time limit as specified in Article 8 for
the submission of his defence. The Respondent must state, in his
counter-claim, his claim and the facts and evidence on which his claim based
and attach relevant documentary evidence to his counter-claim.

    When filing a counter-claim, the Respondent must pay an arbitration fee in
advance according to the Arbitration Fee Schedule attached to these
Arbitration Rules.

    Article 10  The Arbitration Commission has discretion to ask the
Respondent to pay in advance a part of arbitration fees when it deems it
necessary.

    Article 11  When submitting an Application for Arbitration, defence,
counter-claim, relevant documentary evidence and other documents to the
Arbitration Commission, the parties shall provide duplicate copies as many as
the number of the other party/parties and the arbitrators, of whom the
arbitration tribunal is composed.

    Article 12  The parties may authorize attorneys to confer with the
Arbitration Commission on matters relating to arbitration. Such attorneys may
be citizens of China or foreign citizens. The authorized attorney must produce
a Power of Attorney to the Arbitration Commmission.

    Article 13  The Arbitration Commission may, pursuant to the request of the
parties and in accordance with the Chinese law, apply to the Chinese court in
the place where the property of the Respondent is or in the place where the
arbitration institution is located for a decision in respect of taking
preservative measures.

    Section 2  Composition of Arbitration Tribunal

    Article 14  After each of the two parties has chosen one arbitrator from
among the Panel of Arbitrators of the Arbitration Commission or the Chairman
of the Arbitration Commission has such an appointment under the authorization
by the party/parties, the Chairman of the Arbitration Commission shall appoint
a third arbitrator from among the Panel of Arbitrators of the Arbitration
Commission as the presiding arbitrator to form an arbitration tribunal to hear
the case.

    Article 15  Both parties may jointly appoint or authorize the Chairman of
the Arbitration Commission to appoint one arbitrator from among the Panel of
Arbitrators of the Arbitration Commission as a sole arbitrator to form an
arbitration tribunal to hear the case alone. If both parties have agreed on
the appointment of a sole arbitrator to hear their case alone but failed to
agree on the choice of such a sole arbitrator within 20 days as from the date
on which the Respondent receives the Application for Arbitration or as from
the date on which both parties reach an agreement to have their case heard by
a sole arbitrator, the Chairman of the Arbitration Commission shall appoint
the sole arbitrator.

    Article 16  If the Respondent fails to appoint and fails to authorize the
Chairman of the Arbitration Commission to appoint an arbitrator according to
Article 8 of these Rules, the Chairman of the Arbitration Commission has the
power to appoint an arbitrator for the Respondent.

    Article 17  When there are two or more Claimants and/or Respondents in an
arbitration case, the Claimant's side and/or the Respondents' side each shall,
through consultation, appoint one arbitrator from among the Panel of
Arbitrators of the Arbitration Commission. If the Claimants' side fails to
make such appointment at the time when the Claimants submit their Application
for Arbitration and/or Respondents' side is unable to appoint one arbitrator
within 20 days as from the date on which the last Respondent receives the
Application for Arbitration, the appointment shall be made by the Chairman of
the Arbitration Commission.

    Article 18  Any appointed arbitrator having personal interest in the case
shall himself request the Arbitration Commission for withdrawing from his
office and the parties have the right to make a request in writing to the
Arbitration Commission for a withdrawal of the arbitrator from his office.

    Article 19  A party who intends to challenge an arbitrator must put
forward his challenge before the first oral hearing of the case. If the
grounds for challenge come out or become aware of after the first oral
hearing, the challenge may be raised before the conclusion of the last hearing.

    Article 20  The Chairman of the Arbitration Commission shall decide on the
challenge.

    Article 21  If an arbitrator cannot perform his duty due to withdrawal or
other reasons, a substitute arbitrator shall be appointed in accordance with
the procedure pursuant to which the original arbitrator was appointed.

    Section 3  Hearing

    Article 22  The arbitration tribunal shall hold oral hearings to hear the
case. However, at the request of the parties or with their consent, oral
hearings may be omitted and the arbitration tribunal may examine the case and
make an award on the basis of documents only.

    Article 23  The date of oral hearing shall be decided by the arbitration
tribunal in consultation with the Secretariat of the Arbitration Commission
and the notice of hearing shall be communicated to the parties 30 days before
the date of hearing. A party having justified reasons may request for
postponement of the date of hearing. But his request must be communicated to
the Secretariat of the Arbitration Commission 12 days before the date of
hearing unless unforeseeable special circumstances occur. The Secretariat
shall inform the arbitration tribunal of his request and the arbitration
tribunal shall decide thereon, in consultation with the Secretariat.

    Article 24  The cases taken cognizance of by the Arbitration Commission
shall be heard in the place where the Arbitration Commission is located and
may, with the approval of the Chairman of the Commission, be heard in other
places.

    Article 25  The arbitration tribunal shall not hear cases in open
sessions. If both parties request hearings in open sessions, the arbitration
tribunal shall decide thereon.

    Article 26  The parties shall give evidence for the facts on which their
claim or defence is based. The arbitration tribunal may, if it deems it
necessary, make investigation and collect evidence on its own initiative.

    Article 27  The evidence shall be examined and approved by the arbitration
tribunal.

    Article 28  The arbitration tribunal may consult experts or appoint
appraisers for the clarification of special questions relating to the case.
Such experts and appraisers may be Chinese or foreign organizations or
citizens.

    Article 29  Should one of the parties or his attortey fail to appear at
the hearing, the arbitration tribunal may proceed with the hearing and make an
award by default.

    Article 30  During hearings, the Secretariat of the Arbitration Commission
shall take records in writing and/or tape-recordings and the arbitration
tribunal may, if it deems it necessary, order the parties and/or their
attorneys, witnesses and/or other persons involved to sign the records taken.

    Article 31  If both parties reach a settlement by themselves of a case
under the cognizance of the Arbitration Commission, the Claimant shall timely
request for withdrawal of the case. Dismissal of the case shall be decided by
the Chairman of the Arbitration Commission before an arbitration tribunal is
formed and by the arbitration tribunal after the arbitration tribunal is set
up.

    If the party or the parties refer the dismissed case again to the
Arbitration Commission for arbitration, the Chairman of the Arbitration
Commission shall decide whether to accept the reference or not.

    Section 4  Award

    Article 32  The arbitration tribunal shall render an arbitral award within
45 days after the closing of examination and hearing.

    Article 33  Where a case is heard by an arbitration tribunal composed of
three arbitrators, the arbitral award shall be decided by the majority of the
arbitrators and the minority opinion can be written down in the record and
docketed into the file.

    Article 34  The arbitration tribunal shall state the reasons upon which
the arbitral award is based unless the award is made in accordance with the
Article 37. The arbitral award shall be signed by all or majority of the
arbitrators sitting in the arbitration tribunal and shall contain the date and
place on and in which the arbitral award is made.

    Article 35  The arbitration tribunal may, if it deems it necessary or the
parties so request and it agrees, make an interlocutary or partial award on
any issue of the case at any time in the process of arbitration.

    Article 36  The arbitral award is final and neither party may bring a suit
before a law-court or make a request to any other organization for revising
the arbitral award.

    Article 37  The Arbitration Commission and the arbitration tribunal may
conciliate cases under their cognizance. In case a settlement agreement is
reached through conciliation, the arbitration tribunal shall make an award in
accordance with the contents of the settlement agreement reached by and
between both parties.

    Article 38  The parties must automatically execute the arbitral award
within the time limit specified in the award. lf no time limit is specified in
the award, the parties shall carry out the award immediately.

    In case either party fails to execute the award, the other party may,
pursuant to the Chinese law, apply to the Chinese court for enforcement of the
award or, according to the 1958 Convention on the Recognition and Enforcement
of Foreign Arbitral Awards or other international treaties that China has
concluded or acceded to, apply to the foreign court which has jurisdiction for
enforcement of the award.
Chapter III  Supplementary Provisions

    Article 39  The Chinese language is the official language of the
Arbitration Commission. At the hearing, if the parties or their attorneys or
witnesses are not familiar with the Chinese language, the Secretariat of the
Arbitration Commission may provide an interpreter for them or the parties may
bring with them their interpreters.

    The Secretariat of the Arbitration Commission may, if it deems it
necessary, ask the parties to hand in corresponding translation copies in
Chinese or other languages of the various documents and evidential materials
submitted by the parties.

    Article 40  Any written communication from the Arbitration Commission to
the parties is deemed to have been received if it is delivered to the
addressee personally or if it is delivered at his place of business, habitual
residence or mailing address; or if none of these can be found after making a
reasonable inquiry, a written communication is deemed to have been received if
it is sent to the addressee's last known place of business, habitual residence
or mailing address by registered letter or by any other means which provide a
record of the attempt to deliver it.

    Article 41  Apart from charging arbitration fees from the parties
acccording to the Arbitration Fee Schedule attached to these Rules, the
Arbitration Commission may collect from the parties other actual expenses
including arbitrators' remuneration and their travel and boarding expenses for
dealing with the case and the fees and expenses for experts, appraisers and
interpreters appointed by the arbitration tribunal, etc.

    Certain fees and actual expenses incurred may be collected by the
Arbitration Commission if a case is withdrawn after the parties have reached
by themselves a settlement agreement.

    Article 42  These Rules shall also apply to the cases of dispute taken
cognizance of by the Sub-Commissions of the Arbitration Commission. In the
arbitration proceedings conducted by the Sub-Commissions of the Arbitration
Commission, the functions and duties of the Chairman and the Secretariat of
the Arbitration Commission under these Rules shall be performed by the
Chairmen and the Secretariats of the Sub-Commissions.

    Article 43  These Rules shall come into force as of January 1, 1989.

    Arbitration Fee Schedule


      Amount of Claim (RMB)            Amount of Fee (RMB)

    100,000 Yuan or less              4% of the Claiming Amount, minimum 2,000

                                      Yuan

    100,000 Yuan to 500,000 Yuan      4,000 Yuan plus 3% of the excess over

                                      100,000 Yuan

    500,000 Yuan to 1,000,000 Yuan    16,000 Yuan plus 2% of the excess over

                                      500,000 Yuan

    1,000,000 Yuan to 5,000,000 Yuan  26,000 Yuan plus 1% of the excess over

                                      1,000,000 Yuan

    5,000,000 Yuan or more            66,000 Yuan plus O.5% of the excess over

                                      5,000,000 Yuan


    If no amount of claim is stated when applying for arbitration, the amount
of arbitration fees shall be determined by the Secretariat of the Arbitration
Commission.

    If the arbitration fee is charged in foreign currency, an amount of
foreign currency equivalent to the corresponding RMB value specified in this
Schedule shall be paid.

CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION ARBITRATION
RULES
(Revised and adopted by China Council for the Promotion of International Trade
on March 17, 1994)

Chapter I  General Provisions

    Section 1  Jurisdiction

    Article 1  These Rules are formulated in accordance with the relevant
provisions in the laws of the People's Republic of China, the Decision of the
former Government Administration Council of the Central People's Government,
and the Circular and Official Reply of the State Council.

    Article 2  The China international Economic and Trade Arbitration
Commission (originally named the Foreign Trade Arbitration Commission of the
China Council for the Promotion of International Trade, then renamed as the
Foreign Economic and Trade Arbitration Commission of the China Council for the
Promotion of International Trade, and now known as the China International
Economic and Trade Arbitration Commission, hereinafter referred to as the
Arbitration Commission), by means of arbitration, independently and
impartially settles disputes arising from international or foreign economic
and trade transactions, either contractual or non-contractual, including
disputes between foreign corporations and/or individuals and Chinese
corporation and/or individuals, between foreign corporations and/or
individuals themselves, and as well as between Chinese corporations and/or
individuals themselves, so as to protect the justified rights and interests of
the parties and promote economic and trade development at home and abroad.

    Article 3  The Arbitration Commission takes cognizance of cases in
accordance with arbitration agreements concluded between the parties, prior to
or after the occurrence of disputes, to refer their disputes to the
Arbitration Commission for arbitration and upon a written application by one
of the parties.

    An arbitration agreement means the arbitration clause stipulated by the
parties in their contract, or an agreement in writing concluded in other forms
to submit disputes for arbitration.

    Article 4  The Arbitration Commission has power to decide on the existence
and validity of arbitration agreements and the jurisdiction over arbitration
cases.

    Article 5  An arbitration clause in a contract should be deemed as a
clause separate and independent from other clauses of the contract, and an
arbitration agreement attached to a contract also be deemed as one part
separate and independent from other clauses of the contract. The
modification, rescission, termination, annulment or invalidity of such a
contract cannot prejudice the effect of the arbitration clause or arbitration
agreement.

    Article 6  Defence to the arbitration agreement and/or the jurisdiction
over an arbitration case may be put forward unless the Respondent makes his
first substantial defence; defence to the jurisdiction over a counter-claim
shall be put forward unless the Counterclaimant makes his first substantial
defence.

    Article 7  If any party agrees to refer his dispute to the Arbitration
Commission, he is deemed to accept the arbitration under these Rules.

    Section 2  Organization

    Article 8  The Arbitration Commission has one Honorary Chairman and
Consultants.

    Article 9  The Arbitration Commission is composed of Chairman,
Vice-Chairmen, General Secretary and Commission Members. The Chairman performs
functions and duties given by these Rules and any Vice-Chairman, if authorized
by the Chairman, may perform the functions and duties of the Chairman.

    Under the Arbitration Commission, a Secretariat is established to handle
the day-to-day work of the Arbitration Commission.

    Article 10  The Arbitration Commission maintains a panel of arbitrators.
The arbitrators are selected and appointed by the China Council for the
Promotion of International Trade (China Chamber of International Commerce)
from among Chinese and foreign persons with expertise and practical experience
in law, economics and trade, science and technology and other fields.

    Article 11  The Arbitration Commission is located in Beijing. The
Arbitration Commission establishes the Shenzhen Sub-Commission in the Shenzhen
Special Economic Zone and the Shanghai Sub-Commission in Shanghai. The
Arbitration Commission and the sub-commissions are considered as a whole.

    Under the sub-commissions of the Arbitration Commission, secretariats are
established to handle the day-to-day work of the sub-commissions.

    These Rules apply to the Arbitration Commission and the sub-commissions as
well. In the arbitration proceedings conducted by the sub-commissions, the
functions and duties of the Chairman and the Secretariat of the Arbitration
Commission under these Rules shall be performed by the chairmen and the
secretariats of the sub-commissions.

    Article 12  Both parties may agree to refer their dispute to the
Arbitration Commission for arbitration in Beijing, or refer to the Shenzhen
Sub-Commission for arbitration in Shenzhen, or refer to the Shanghai
Sub-Commission for arbitration in Shanghai. In case of absence of such an
agreement, the Claimant is entitled to choose the Arbitration Commission for
arbitration in Beijing, or choose the Shenzhen Sub-Commission for arbitration
in Shenzhen, or choose the Shanghai Sub-Commission for arbitration in
Shanghai. When making these choices, the one proposed first shall be taken as
the arbitration place. If a dispute arises therefrom, the Arbitration
Commission shall decide on the place.
Chapter II  Arbitration Proceedings

    Section 1  Application for Arbitration, Defence and Counterclaim

    Article 13  The arbitration proceedings commence from the date on which
the Respondent receives the Arbitration Notice from the Arbitration
Commission, or, if there are two or more respondents in a case, from the date
on which the last Respondent receives the Notice.

    Article 14  When applying for arbitration, the Claimant must:

    (1) submit a written Application for Arbitration, in which the following
must be specified:

    (a) the name and address (and also the post code, telephone number, telex,
fax and telegram code, if any) of the Claimant and those of the Respondent;

    (b) the arbitration agreement relied upon by the Claimant;

    (c) details of the case and points of the dispute;

    (d) the Claimant's claim and the facts and evidence on which his claim is
based.

    The Application for Arbitration shall be signed and/or sealed by the
Claimant and/or the attorney authorized by the Claimant.

    (2) when submitting an Application for Arbitration to the Arbitration
Commission, accompany the Application for Arbitration with relevant
documentary evidence on which the Claimant's claim is based.

    (3) appoint an arbitrator from among the Panel of Arbitrators of the
Arbitration Commission or authorize the Chairman of the Arbitration Commission
to make an appointment on his behalf.

    (4) pay an arbitration fee in advance according to the Arbitration Fee
Schedule stated by the Arbitration Commission.

    Article 15  After receipt of the Application for Arbitration and its
attachments and if the Secretariat of the Arbitration Commission, after
examination, deems that the Claimant didn't complete the formalities required
for arbitration, the Secretariat of the Arbitration Commission may require him
to complete them; if it deems that the Claimant has completed the formalities,
the Secretariat of the Arbitration Commission shall immediately issue an
Arbitration Notice to the Respondent and send to him one copy each of the
Claimant's Application for Arbitration and its attachments as well as the
Arbitration Rules, the Panel of Arbitrators and the Arbitration Fee Schedule
of the Arbitration Commission.

    Article 16  The Respondent shall, within 20 days after receipt of the
Arbitration Notice, appoint an arbitrator from among the Panel of Arbitrators
of the Arbitration Commission or authorize the Chairman of the Arbitration
Commission to make an appointment on his behalf.

    Article 17  The Respondent shall, within 45 days after receipt of the
Arbitration Notice, submit his defence and relevant documentary evidence to
the Secretariat of the Arbitration Commission.

    Article 18  The Respondent shall file with the Secretariat of the
Arbitration Commission his counter-claim in writing, if any, within the time
limit not exceeding 60 days after receipt of the Arbitration Notice.

    When filing a counter-claim, the Respondent must state, in his written
counter-claim, his claim and grounds as well as the facts and evidence on
which his claim and grounds are based and attach relevant documentary evidence
to his counter-claim.

    When filing a counter-claim, the Respondent must pay an arbitration fee in
advance according to the Arbitration Fee Schedule stated by the Arbitration
Commission.

    Article 19  The Claimant may request for modification to his claim, and
the Respondent may request for modification to his counter-claim. However, the
arbitration tribunal may reject such a request if it deems that the submission
of the request is late and so will affect the normal arbitration proceedings.

    Article 20  When submitting an Application for Arbitration, defence,
counter-claim, relevant documentary evidence and other documents, the parties
shall, in addition one copy each of them provided to the Secretariat of the
Arbitration Commission, provide duplicate copies as many as the number of the
other party/parties and the arbitrators, of whom the arbitration tribunal is
composed.

    Article 21  Failure by the Respondent to file his defence, or failure by
the Claimant to file his defence to the Respondent's counter-claim, shall not
prevent the arbitration proceedings from being carried out.

    Article 22  The parties may authorize attorneys to confer with the
Arbitration Commission on matters relating to arbitration. The authorized
attorney must produce a Power of Attorney to the Arbitration Commission.

    Either citizens of China or foreign citizens may accept authorizations to
act as such attorneys.

    Article 23  If any of the parties applies for property preservative
measures, the Arbitration Commission shall refer the application for a
decision to the intermediate people's court in the place where the defending
party of the application has his domicile or in the place where his property
is located.

    Section 2  Composition of Arbitration Tribunal

    Article 24  After each of the two parties has chosen one arbitrator from
among the Panel of Arbitrators of the Arbitration Commission or the Chairman
of the Arbitration Commission has such an appointment under the authorization
by the party/parties, the Chairman of the Arbitration Commission shall appoint
a third arbitrator from among the Panel of Arbitrators of the Arbitration
Commission as the presiding arbitrator to form an arbitration tribunal to hear
the case.

    Article 25  Both parties may jointly appoint or authorize the Chairman of
the Arbitration Commission to appoint one arbitrator from among the Panel of
Arbitrators of the Arbitration Commission as a sole arbitrator to form an
arbitration tribunal to hear the case alone.

    If both parties have agreed on the appointment of a sole arbitrator to
hear their case alone but failed to agree on the choice of such a sole
arbitrator within 20 days as from the date on which the Respondent receives
the Arbitration Notice, the Chairman of the Arbitration Commission shall
appoint the sole arbitrator.

    Article 26  If the Respondent fails to appoint and fails to authorize the
Chairman of the Arbitration Commission to appoint an arbitrator according to
Article 16 of these Rules, the Chairman of the Arbitration Commission shall
appoint an arbitrator for the Respondent.

    Article 27  When there are two or more Claimants and/or Respondents in an
arbitration case, the Claimant's side and/or the Respondents' side each shall,
through consultation, appoint one arbitrator from among the Panel of
Arbitrators of the Arbitration Commission. If the Claimants' side fails to
make such appointment at the time when the Claimants submit their Application
for Arbitration and/or Respondents' side is unable to appoint one arbitrator
within 20 days as from the date on which the last Respondent receives the
Arbitration Notice, the appointment shall be made by the Chairman of the
Arbitration Commission.

    Article 28  Any appointed arbitrator having personal interest in the case
shall himself disclose the case to the Arbitration Commission and request for
withdrawing from his office.

    Article 29  If there is a suspicion of the fairness and independence of
any appointed arbitrator for justified reasons, any of the parties may make a
request in writing to the Arbitration Commission for a withdrawal of the
arbitrator from his office. However, he shall specify the facts and grounds on
which his request is based.

    The request for challenging an arbitrator must be put forward in writing
15 days prior to the first oral hearing of the case. If the grounds for
challenge come out or become aware of after the first oral hearing, the
challenge may be raised after the first oral hearing but before the conclusion
of the last hearing.

    Article 30  The Chairman of the Arbitration Commission shall decide on the
challenge.

    Article 31  If an arbitrator cannot perform his duty due to withdrawal or
other reasons, a substitute arbitrator shall be appointed in accordance with
the procedure pursuant to which the original arbitrator was appointed.

    After the appointment of the substitute arbitrator, the arbitration
tribunal shall decide whether or not the arbitration proceedings having being
carried out partly or completely must begin anew.

    Section 3  Hearing

    Article 32  The arbitration tribunal shall hold oral hearings to hear the
case. However, at the request of the parties or with their consent, and when
the arbitration tribunal also deems that oral hearings may be omitted, the
arbitration tribunal may examine the case and make an award on the basis of
documents only.

    Article 33  The date of the first oral hearing shall be decided by the
arbitration tribunal in consultation with the Secretariat of the Arbitration
Commission and the Secretariat shall communicate the notice of hearing to the
parties 30 days before the date of hearing. A party having justified reasons
may request for postponement of the date of hearing. But his request must be
communicated to the Secretariat in writing 12 days before the date of
hearing. The arbitration tribunal shall decide on his request.

    Article 34  The dates of other oral hearings following the first may be
communicated to the parties without the deadline of 30 days before.

    Article 35  The cases taken cognizance of by the Arbitration Commission
shall be heard in Beijing and may, with the approval of the Chairman of the
Commission, be heard in other places. The cases taken cognizance of by the
Sub-Commissions of the Arbitration Commission shall be heard in the place
where the Sub-Commissions are located and may, with the approval of the
chairmen of the sub-commissions, be heard in other places.

    Article 36  The arbitration tribunal shall not hear cases in open
sessions. If both parties request hearings in open sessions, the arbitration
tribunal shall decide thereon.

    Article 37  Both parties and their attorneys, witnesses, arbitrators,
experts giving advice to the arbitration tribunal and its appointed
appraisers, personnel of the Arbitration Commission or its Secretariat shall
not disclose outside the information regarding the substantial contents and
the proceedings of cases not being heard in open sessions.

    Article 38  The parties shall give evidence for the facts on which their
claim, defence or counter-claim is based. The arbitration tribunal may, if it
deems it necessary, investigate facts and collect evidence on its own
initiative.

    Where the arbitration tribunal investigates facts and collects evidence on
its own initiative, if it deems it necessary to notify both parties to be
present on spot, it shall so notify the parties in time. The absence of one
party or both parties after such notification cannot prevent the arbitration
tribunal from investigating facts and collecting evidence on its own
initiative.

    Article 39  The arbitration tribunal may consult experts or appoint
appraisers for the clarification of special questions relating to the case.
Such experts and appraisers may be Chinese or foreign organizations or
citizens.

    The arbitration tribunal has power to require the parties to, and the
parties have the obligation to, submit or present all relevant materials or
documents, property or goods to experts/appraisers for examination, inspection
and/or appraisal.

    Article 40  Duplicate copies of expert reports and appraisal reports shall
be submitted to both parties and both parties shall be given an opportunity to
put forward their opinions on such reports. If any of the parties requests
experts/appraisers to participate in the hearing of the case, with the consent
of the arbitration tribunal, experts/appraisers may appear at the hearing and
explain their reports when the arbitration tribunal deems it necessary and
appropriate.

    Article 41  The evidence provided by the parties shall be examined and
approved by the arbitration tribunal. The admissibility of expert reports and
appraisal reports shall depend on the decision of the arbitration tribunal.

    Article 42  Should one of the parties fails to appear at the hearing, the
arbitration tribunal may proceed with the hearing and make an award by default.

    Article 43  During hearings, the Secretariat of the Arbitration Commission
may take records in writing and/or tape-recordings and the arbitration
tribunal may, if it deems it necessary, take main points of the hearing and
order the parties and/or their attorneys, witnesses and/or other persons
involved to sign the points taken.

    Records in writing and/or tape-recordings taken by the Secretariat shall
only be consulted by the arbitration tribunal.

    Article 44  If the parties reach a settlement by themselves of an
arbitration case without hearings of the arbitration tribunal, they may either
request the arbitration tribunal to make an award according to the agreement
on settlement, or request for withdrawal of the case. Dismissal of the case
shall be decided by the Chairman of the Arbitration Commission before an
arbitration tribunal is formed and by the arbitration tribunal after the
arbitration tribunal is set up.

    If the party or the parties refer the dismissed case again to the
Arbitration Commission for arbitration, the Chairman of the Arbitration
Commission shall decide whether to accept the reference or not.

    Article 45  If one of the parties has known or should know violations of
these Rules or any clause or condition stipulated in the arbitration
agreement, and if he continues to participate in or carry out the arbitration
proceedings and fails to challenge these violations in writing promptly and
expressly, he shall be deemed as abandoning the right to challenge.

    Article 46  If both parties wish to make a settlement through
conciliation, or if one of the parties so wishes, with the consent of the
other party, the arbitration tribunal may conciliate the case under its
cognizance during the arbitration proceedings.

    Article 47  The arbitration tribunal may conduct conciliation in any form
if it deems it appropriate.

    Article 48  If, in the process of the conciliation, any of the parties
requests for termination of the conciliation, or the arbitration tribunal
deems the conciliation not to be successful, the arbitration tribunal shall
give up the conciliation and resume the arbitration proceedings.

    Article 49  If, in the process of the conciliation, both parties reach a
settlement without hearings of the arbitration tribunal, such a settlement
shall be deemed as one reached through the conciliation of the arbitration
tribunal.

    Article 50  If a settlement is reached through conciliation of the
arbitration tribunal, both parties shall sign a written settlement agreement;
unless otherwise agreed on by the parties, the arbitration tribunal shall make
an award to conclude the case according to the contents of the written
settlement agreement agreed upon by and between the parties.

    Article 51  If no agreement is reached through conciliation, any party may
not, later in the arbitration proceedings, or in litigation proceedings, or in
any other proceedings, place his claim, defence and/or counter-claim on the
basis of any statement, opinion, view or proposal which the counter party or
the arbitration tribunal issued, put forward, raised, acknowledged and
accepted or repudiated in the process of the conciliation.

    Section 4  Award

    Article 52  The arbitration tribunal shall render an arbitral award within
nine months as from the date of its composition. The Arbitration Commission
may, at the request of the arbitration tribunal, approve the extension of the
time period when it deems it really necessary and justifiable.

    Article 53  The arbitration tribunal shall go by the facts, comply with
laws and contracts, take international practices into account and follow the
principle of equality and rationality, for the purpose of rendering the award
independently and impartially.

    Article 54  The arbitration tribunal shall state the reasons upon which
the arbitral award is based unless the award is made in accordance with the
settlement agreement agreed upon by and between both parties. The arbitral
award shall be signed by all or majority of the arbitrators sitting in the
arbitration tribunal, bear the seal of the Arbitration Commission and contain
the date and place on and in which the arbitral award is made.

    From the date on which the arbitral award is made, the arbitral award
comes into effect.

    Article 55  Where a case is heard by an arbitration tribunal composed of
three arbitrators, the arbitral award shall be decided by the majority of the
arbitrators and the minority opinion can be written down in the record and
docketed into the file. The arbitrators holding different opinions may or may
not sign the arbitral award.

    Article 56  Where the arbitration tribunal cannot form the majority
opinion, the arbitral award shall be decided by the presiding arbitrator.

    Article 57  The arbitration tribunal may, if it deems it necessary or the
parties so request and it agrees, make an interlocutary or partial award on
any issue of the case at any time in the process of arbitration. Failure to
execute the interlocutary award by any of the parties shall neither prevent
the arbitration proceedings from being carried out, nor the arbitration
tribunal from rendering the final award.

    Article 58  The arbitration tribunal has power to decide in the arbitral
award on the arbitration fee and other expenses finally paid by either party
to the Arbitration Commission.

    Article 59  The arbitration tribunal has power to decide in the arbitral
award that the loser should indemnify part of the expenses the victor incurred
reasonable for settling the case. However, a maximum of the indemnities shall
not exceed 10% of the amount the victor wins.

    Article 60  The arbitral award is final and binding on both parties.
Neither party may bring a suit before a law-court or make a request to any
other organization for revising the arbitral award.

    Article 61  Either party may, within 30 days as from the date of receiving
the arbitral award, request the arbitration tribunal in writing to correct
clerical, typing, calculation errors or other similar errors in the arbitral
award. If there are really such errors, the arbitration tribunal shall make a
written correction within 30 days as from the date of receiving the written
request. It may also make such a correction in writing on its own initiative
within 30 days as from the date of issuing the arbitral award. The written
correction shall be part of the arbitral award.

    Article 62  Either party may, within 30 days as from the date of receiving
the arbitral award, request the arbitration tribunal in writing to render a
supplementary award on matters omitted in the arbitral award.

    If there are really omissions, the arbitration tribunal shall render a
supplementary award within 30 days as from the date of receiving the written
request. It may also render such a supplementary award on its own initiative
within 30 days as from the date of issuing the arbitral award. The
supplementary award shall be part of the original arbitral award.

    Article 63  The parties must automatically execute the arbitral award
within the time limit specified in the award. If no time limit is specified in
the award, the parties shall carry out the award immediately.

    In case either party fails to execute the award, the other party may,
pursuant to the Chinese law, apply to the Chinese court for enforcement of the
award or, according to the 1958 Convention on the Recognition and Enforcement
of Foreign Arbitral Awards or other international treaties that China has
concluded or acceded to, apply to the foreign court which has jurisdiction for
enforcement of the award.
Chapter III  Summary Proceedings

    Article 64  Unless otherwise agreed upon by the parties, these summary
proceedings apply to all cases with the claiming amount not exceeding RMB
500,000 yuan or the cases with the claiming amount exceeding RMB 500,000 yuan
but when either party so requests in writing and the other party agrees in
writing.

    Article 65  When a party refers an Application for Arbitration to the
Arbitration Commission and the case falls within its cognizance upon
examination, the Chairman of the Arbitration Commission shall immediately
appoint one arbitrator from the Panel of Arbitrators of the Arbitration
Commission as a sole arbitrator to form an arbitration tribunal to hear the
case unless both parties have jointly made such a appointment. The Secretariat
of the Arbitration Commission shall immediately issue an Arbitration Notice to
the other party.

    Article 66  The other party shall, within 30 days as from the date of
receiving the Arbitration Notice, submit a defence and relevant documentary
evidence to the Secretariat of the Arbitration Commission; his written
counter-claim and relevant documentary evidence, if any, shall be submitted
within the time limit.

    Article 67  The arbitration tribunal may hear the case in any form if it
deems it appropriate. It may decide to hold a hearing on the basis of written
materials and evidence submitted by the parties, or an oral hearing to examine
the case.

    Article 68  Any of the parties shall submit written materials and evidence
necessary for arbitration according to the requirements and the deadline
specified by the arbitration tribunal.

    Article 69  After the arbitration tribunal decides the date of hearing for
the case to be examined at an oral hearing, the Secretariat of the Arbitration
Commission shall communicate the date of hearing to the parties 10 days before.

    Article 70  If a case is decided to be examined at oral hearing, the
arbitration tribunal shall hold one oral hearing, and the second hearing shall
not be held unless necessary.

    Article 71  In the process of these summary proceedings, failure by either
party to carry out these summary proceedings shall neither prevent the
proceedings from being carried out nor prejudice the power of the arbitration
tribunal to render an award.

    Article 72  Proceedings shall not be suspended when the arbitration claim
is modified or a counter-claim is filed unless there is a conflict with the
provisions in Article 64.

    Article 73  The arbitration tribunal shall, if the case is examined at an
oral hearing, render an arbitral award within 30 days as from the date of
hearing, or within 90 days as from the date of its composition if the case is
examined on the basis of written materials and evidence. The Arbitration
Commission may extend the time periods if necessary.

    Article 74  In cases there are no provisions in this Chapter, relevant
provisions of other chapters in these Rules shall apply.
Chapter IV  Supplementary Provisions

    Article 75  The Chinese language is the official language of the
Arbitration Commission. If otherwise agreed upon by the parties, such an
agreement shall prevail.

    At the hearing, if the parties or their attorneys or witnesses require
language interpreters, the Secretariat of the Arbitration Commission may
provide an interpreter for them or the parties may bring with them their
interpreters.

    The Secretariat of the Arbitration Commission may, if it deems it
necessary, ask the parties to hand in corresponding translation copies in
Chinese or other languages of the various documents and evidential materials
submitted by the parties.

    Article 76  Unless otherwise agreed upon by the parties or decided by the
arbitration tribunal, any arbitral document, notice and material may be sent
to the parties and/or their attorneys by messenger, registered letter, express
airmail, fax, telex, telegram or any other means if the Secretariat of the
Arbitration Commission deems it appropriate.

    Article 77  Any written communication from the Arbitration Commission to
the parties is deemed to have been received if it is delivered to the
addressee personally or if it is delivered at his place of business, habitual
residence or mailing address; or if none of these can be found after making a
reasonable inquiry, a written communication is deemed to have been received if
it is sent to the addressee's last known place of business, habitual residence
or mailing address by registered letter or by any other means which provide a
record of the attempt to deliver it.

    Article 78  Apart from charging arbitration fees from the parties
according to the Arbitration Fee Schedule stated by the Arbitration
Commission, the Arbitration Commission may collect from the parties other
actual expenses added reasonably, including arbitrators' special remuneration
and their travel and boarding expenses for dealing with the case and the fees
and expenses for experts, appraisers and interpreters appointed by the
arbitration tribunal, etc.

    Arbitration fees and expenses incurred may be collected by the Arbitration
Commission according to the amount of work and actual expenses if a case is
withdrawn after the parties have reached by themselves a settlement agreement.

    Article 79  Both parties shall be deemed to agree upon arbitration by the
Arbitration Commission or its Sub-Commissions if they stipulate in an
arbitration agreement or the arbitration clause of a contract for arbitration
by the Arbitration Commission or its Sub-Commissions, or by the Foreign Trade
Arbitration Commission or the Foreign Economic and Trade Arbitration
Commission of the China Council for the Promotion of International Trade, the
former names of the Arbitration Commission.

    Article 80  These Rules shall come into force as of June 1, 1994. The
Arbitration Rules on January 1, 1989 shall apply to the cases taken
cognizance of by the Arbitration Commission or its Sub-Commissions before the
implementation of these Rules; these Rules may also apply if both parties so
agree.

    Article 81  The Arbitration Commission shall be responsible for the
interpretation of these Rules.

    ARBITRATION FEE SCHEDULE OF THE CHINA INTERNATIONAL ECONOMIC AND TRADE
ARBITRATION COMMISSION
(effective as of June 1, 1994)


      Amount of Claim (RMB)            Amount of Fee (RMB)

    100,000 Yuan or less              4% of the Claiming Amount, minimum 2,000

                                      Yuan

    100,000 Yuan to 500,000 Yuan      4,000 Yuan plus 3% of the excess over

                                      100,000 Yuan

    500,000 Yuan to 1,000,000 Yuan    16,000 Yuan plus 2% of the excess over

                                      500,000 Yuan

    1,000,000 Yuan to 5,000,000 Yuan  26,000 Yuan plus 1% of the excess over

                                      1,000,000 Yuan

    5,000,000 Yuan or more            66,000 Yuan plus O.5% of the excess over

                                      5,000,000 Yuan


    If no amount of claim is stated when applying for arbitration, the amount
of arbitration fees shall be determined by the Secretariat of the Arbitration
Commission or its Sub-Commissions.

    If the arbitration fee is charged in foreign currency, an amount of
foreign currency equivalent to the corresponding RMB value specified in this
Schedule shall be paid.

    Apart from charging arbitration fees from the parties according to the
Arbitration Fee Schedule stated above, the Arbitration Commission or its
Sub-Commissions may collect from the parties other actual expenses added
reasonably according to relevant provisions of these Rules.



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