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High People’s Court, Jiangsu Province, Date not indicated (official summary published by the court on 29 July 2024), Docket No. (2021) Su Min Zhong No. 606
(Beijing Oriental Technology ... Read more
High People’s Court, Jiangsu Province, Date not indicated (official summary published by the court on 29 July 2024), Docket No. (2021) Su Min Zhong No. 606
(Beijing Oriental Technology Development Co., Ltd. v. IBG HydroTech GmbH)
CHINA PR 60
The High People’s Court affirmed the first instance decision by which an Intermediate People’s Court had held that it lacked jurisdiction over a dispute because of the arbitration clause in the parties’ contract. The lower court had found that a clause such as the one at issue, providing that disputes could be referred either to a court or to arbitration, was valid under German law, which governed the clause’s validity. The High People’s Court affirmed the finding that German law applied to the validity of the arbitration agreement pursuant to Chinese conflict of law rules, and that neither German civil procedure law nor the German courts deemed arbitration-or-litigation clauses invalid.
The court discusses the meaning and effect of the referral of the resolution of disputes to arbitration, including: who can ask for referral and when, whether a party has waived its right to request arbitration, the defense that there was no contract at all; whether there was a condition precedent to the commencement of arbitration (e.g. mediation), stay of proceedings v. compelling arbitration, and national procedural specificities such as remand and removal (US), effect of class action. etc.
The court discusses how to interpret the Convention’s requirement that the agreement is not null and void etc., as well as specific cases of invalidity: e.g., lack of consent (misrepresentation, duress, or fraud), vague wording of the arbitral clause; other terms of the contract contradict the intention to arbitrate, etc.
The court discusses which law – lex fori, lex contractus, law of the State where the award will be made – applies specifically to determining whether an agreement to arbitrate is “null and void etc.“, and, by extension, which law applies to determining the validity of arbitration agreements.