The latest regulations on international commercial arbitration in south China’s Hainan Free Trade Port (FTP) officially took effect on July 1. With these measures, Hainan takes the lead nationally in the field of ad hoc arbitration, and makes strides in the refinement of the province’s law-based, international, convenient business environment.

Aerial view of Haikou, the capital city of China's southern island province of Hainan that is developing the world's largest free trade port. (Photo: Hainan Daily)

Composed of 27 provisions, the regulations make innovations in the area of ad hoc arbitration and the appointment of arbitrators outside of the Panel of Arbitrators, based on the arbitral practice of the Hainan FTP and in accordance with basic principles of China’s arbitration mechanism.

According to a representative of the Department of Justice of Hainan Province, ad hoc arbitration, as a time-honored form of arbitration, is prevalent in the international community and is recognized by national laws and international conventions. Ad hoc arbitration has the potential to be more flexible, faster, and cheaper than institutional proceedings, making it a popular choice for dispute resolution, especially in international maritime disputes and other areas where traditional legal practices are not practical or fast enough.

According to the latest regulations, ad hoc arbitration is applicable for commercial disputes between enterprises which are both registered in the Hainan FTP, between Hainan enterprises and international counterparts, and between foreign companies and companies registered in China’s Hong Kong, Macao, and Taiwan regions.

In addition to regulating the rules, fees, the composition of the arbitral tribunal, and the appointment of arbitrators, the latest ad hoc arbitration regulations also clarify that the People's Court shall support and supervise ad hoc arbitration proceedings by reviewing the rulings and enforcing the interim measures in accordance with the law, as well as giving assistance in investigation and evidence collection for arbitration cases.

Judicial review cases involving ad hoc arbitration, such as the determination of validity for arbitration agreements, interim measures, and arbitral awards annulment & enforcement shall be subject to the jurisdiction of courts in the Hainan FTP.

Looking forward, Hainan will enhance cooperation with domestic and international arbitration institutions, as well as work to bring more high-quality arbitration institutions and high-level legal talent to the FTP.