The Beijing Financial Court has recently upheld the validity of
an asymmetric (or "unilateral option") arbitration
clause, determining that it did not constitute an impermissible
"either arbitration or litigation" clause under
the law of the People's Republic of China
("PRC"). ((2022) Jing 74
Min Te No.4)
Background
The arbitration clause was contained in a pledge agreement
concluded in July 2015 between China Development Bank
("CDB") as pledgee and (Cambodia) Fiber
Optic Communication Network Co., Ltd. ("Cambodia
Network") as pledgor. It provided for disputes to be
submitted to the China International Economic and Trade Arbitration
Commission ("CIETAC") for arbitration,
unless CDB chose otherwise. It further provided that CDB could
choose to submit disputes to the non-exclusive jurisdiction of the
courts of Cambodia.
