China Model Case: Recognizing Validity Of Agreement For SIAC Arbitration In Shanghai

In its release of model arbitration-related cases earlier this year, the Supreme People's Court ("SPC") included a ruling from a Shanghai court affirming the validity of an agreement for a foreign arbitral institution to administer an arbitration with a seat in Shanghai. Traditionally, arbitrations in China have had to be administered by domestic institutions, although several PRC courts and even one official determination by the SPC have come to a different conclusion in the past.¹ The recently published model case, Daesung Industrial Gases Co., Ltd. v Praxair (China) Investment Co Ltd ("Model Case"), is significant in several respects, first and foremost as a possible signal of opening-up reform, maybe even setting the stage for the promulgation of the PRC Arbitration Law amendment whose draft was released almost three years ago. This article examines the Model Case and its implications.