Vol 21 (2024) - Issue 3

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Arbitration Clause Validity in Chinese Insolvency Proceedings: (2023) Jing No. 4 Min Te No. 221

Synopsis
On 23 April 2023, the No. 4 Beijing Intermediate Court upheld the validity of an arbitration agreement signed by an administrator following the initiation of an insolvency proceeding. The core issue pertained to the applicability of the centralised jurisdiction principle within insolvency law to arbitration agreements. Although current legislation validates arbitration agreements signed prior to the commencement of insolvency proceedings, the Court magnifies the pro-arbitration stance. This case underscores that the mere commencement of insolvency proceedings does not inherently render arbitration agreements null and void, regardless of when they are signed. This precedent could potentially serve as a model for forthcoming cases. Despite the absence of explicit legislation, administrators are recognised as having the right to conclude arbitration agreements. The judgement in this case vividly illustrates the pro-arbitration approach in the interplay of insolvency and arbitration, aligning harmoniously with the pro-arbitration policy in China.