China’s Revised Arbitration Law
By Jillian Farrell
I. Background on China’s Arbitration Law
Historically, China has been an undesirable venue for arbitration amongst foreign parties.[1] Chinese arbitration institutions had been quasi-governmental, creating concerns about institutional bias and the perception that Chinese arbitrators exercised “ambiguous flexibility” in their decision-making.[2] Chinese courts also had a reputation for not enforcing arbitration awards.[3] Although there has not been empirical data to suggest that Chinese Arbitration proceedings are always biased, the provisions of China’s Arbitration Law itself alongside individual’s experiences painted Chinese Arbitration as unfair and unenforceable.[4]
II. The Revised Arbitration Law
On September 12, 2025, China adopted the Revised Arbitration Law of the People’s Republic of China, which goes into effect on March 1, 2026.[5] First drafted in 2021 and amended again in 2024, the revisions mark the most significant overhaul of China’s arbitration framework since the law was first enacted in 1995.[6]
The revisions are part of China’s efforts to make itself a more attractive and credible venue for resolving cross-border disputes by aligning more closely with international arbitration practice while addressing longstanding concerns about legitimacy and efficiency.[7]
A. Greater Compatibility with International Rules
The revisions introduce a choice of seat provision.[8] In international arbitration, the “seat” determines the procedural law governing the proceedings and establishes the nationality of the arbitral award.[9] This clarification is particularly significant in China, where reciprocity is a prerequisite for enforcing foreign awards, and uncertainty in this area has historically undermined foreign party’s confidence in Chinese arbitration.[10] By expressly recognizing party autonomy to designate the seat, the revised law reduces legal uncertainty and brings Chinese practice into line with prevailing international norms.
The law also authorizes ad hoc arbitration in foreign-related disputes, such maritime disputes and disputes involving enterprises located in designated free trade zones.[11] This represents a dramatic shift from China’s longstanding requirement that arbitration be administered exclusively by domestic institutions—a restriction widely criticized as a source of bias. [12] Further, the revised law allows for foreign arbitral institutions to establish business offices in China.[13] By allowing parties to select their own arbitrators, adopt independent procedural rules, and establish their own timelines, the revised framework introduces a flexibility long absent from China’s system.[14]
B. Building a More Attractive Forum
The revised law also targets issues of legitimacy and efficiency that have historically deterred foreign parties.[15] Arbitrators are now subject to heightened requirements of expertise and transparency, and the act expressly permits the appointment of subject-matter experts to arbitral panels.[16] New impartiality safeguards further address concerns about bias and conflicts of interest.[17]
The law expressly authorizes online arbitration, reflecting the global norm post-Covid, and allowing for lower costs and improved accessibility.[18] It also contemplates increased investment in arbitral institutions and professional training.[19] Both of which signal China’s commitment to development and dedication to efficiency.[20]
III. Final Thoughts
China’s revised Arbitration Law represents both a long overdue alignment with international practice and a calculated effort to elevate the country’s role as a seat of arbitration. By codifying internationally recognized concepts—such as the choice of seat and ad hoc arbitration—while strengthening the legitimacy and efficiency of domestic proceedings, the statute seeks to position China as a credible forum for international dispute resolution. Whether these reforms achieve their intended effect, however, will depend on their implementation and the willingness of courts and institutions to apply them consistently.
The revision is not an isolated development, but rather, the culmination of a decade-long trajectory toward liberalization. In Longlide,[21] China’s judiciary signaled openness to foreign arbitration by recognizing the validity of an ICC-administered arbitration seated in Shanghai.[22] This shift continued in Daesung,[23] where a Chinese court once again recognized the legitimacy of a foreign institution-administered arbitration.[24]
Further, Shanghai experienced a 61 percent rise in foreign-related arbitration cases in 2024,[25] suggesting that foreign institutions are increasingly willing to arbitrate in China.
Although these revisions are a radical change of the former Arbitration Act, they appear to reflect a pattern from both the government and foreign entities opening to the idea of Chinese arbitration. By embedding these practices into statute, China signals to the international community that arbitration in China is not merely tolerated but actively supported at the legislative level. This statutory endorsement is likely to strengthen confidence among foreign parties, increase case volume, and gradually reshape China’s reputation as a credible arbitral seat.
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[1] Anton A. Ware et al., Reforming the PRC Arbitration Law: Implications to Foreign Parties, Kluwer Arb. Blog (Apr. 2, 2025), https://legalblogs.wolterskluwer.com/arbitration-blog/reforming-the-prc-arbitration-law-implications-to-foreign-parties/ [https://perma.cc/4GU3-2LUW].
[2] Lyndon Lin, Doing Arbitration in Mainland China: What You Need to Know—CWG, Int’l Bar Ass’n, https://www.ibanet.org/article/6F9D7812-7A71-4274-88B4-5E3EB628515F [https://perma.cc/5WPZ-H2J5] (last visited Sep. 25, 2025).
[3] Andre Hendrick, International Arbitration as a Means for Dispute Resolution with Chinese Exporters, Holland & Knight Newsl., https://www.hklaw.com/en/insights/publications/2008/01/international-arbitration-as-a-means-for-dispute-r [https://perma.cc/6AYD-Z6Z4] (last visited Sep. 25, 2025).
[4] Arbitration in China—The Common Misperceptions, Kluwer Arb. Blog (Nov. 7, 2013), https://legalblogs.wolterskluwer.com/arbitration-blog/arbitration-in-china-the-common-misperceptions/ [https://perma.cc/7GK7-AVXC].
[5] Guangjian Tu, 2025 New Chinese Arbitration Law: Improvements Made and To Be Further Made, Conflict of L., (Sep. 19, 2025), https://conflictoflaws.net/2025/2025-new-chinese-arbitration-law-improvements-made-and-to-be-further-made/ [https://perma.cc/HW7V-NTM4].
[6] Id.
[7] Ware et al., supra note 1.
[8] Sylvia Tee, Progress and Conservatism in the Development of International Arbitration in China—The 2024 Draft Amendment to the PRC Arbitration Law, Ashurst (Dec. 16, 2024), https://www.ashurst.com/en/insights/progress-and-conservatism-in-the-development-of-international-arbitration-in-china/ [https://perma.cc/UYS3-QAQW].
[9] Id.
[10] Arbitration in China—The Common Misperceptions, supra note 4.
[11] NPC Standing Committee Amends Arbitration Law, Thomson Reuters (Sep. 17, 2025), https://uk.practicallaw.thomsonreuters.com/w-048-1695 [https://perma.cc/PU2L-HDA7].
[12] Guangjian Tu, supra note 5.
[13] Yuanmei Lu & Zhenye Wang, Highlights of the Draft Amendment to the Arbitration Law of China, Sheppard Mullin China L. Update (Aug. 20, 2024), https://www.chinalawupdate.cn/2024/08/articles/arbitration/highlights-of-the-draft-amendment-to-the-arbitration-law-of-china/ [https://perma.cc/W8Q6-6YVD].
[14] NPC Standing Committee Amends Arbitration Law, supra note 11.
[15] Hendrick, supra note 3.
[16] Susanne Rademacher, China: Four Years in the Making — The Revised PRC Arbitration Law Has Been Published, Advant Beiten (Sep. 19, 2025), https://www.advant-beiten.com/en/news/china-four-years-in-the-making-the-revised-prc-arbitration-law-has-been-published [https://perma.cc/MM38-WXEC].
[17] Id.
[18] Tee, supra note 8.
[19] Henry Huang, Emily Tang, & Catherine Zhang, Legal Developments in Arbitration, Asia Bus. L. J. (Sep. 10, 2025), https://law.asia/legal-developments-arbitration-asia-2025/ [https://perma.cc/Y8P4-8GNZ].
[20] Tee, supra note 8.
[21] See generally Anhui Longlide Packaging & Printing Co. v. BP Agnati S.R.L., (2013) Min Si Ta Zi No. 13 (Sup. People’s Ct. Mar. 25, 2013) (China).
[22] Arbitration in China: Potential Issues, Aceris L. (July 27, 2024), https://www.acerislaw.com/arbitration-in-china-potential-issues/ [https://perma.cc/6Q37-NQ9X].
[23] See generally Daesung Indus. Gases Co. v. Praxair (China) Inv. Co., (2020) Hu 01 Min Te No. 83 (Shanghai No. 1 Interm. People’s Ct. Aug. 3, 2020) (China).
[24] Id.
[25] China advances as new destination for international commercial arbitration, Ministry of Just. of the People’s Repub. of China (Aug. 19, 2025), http://en.moj.gov.cn/2025-08/19/c_1117862.htm [https://perma.cc/G3CF-BTLW].
