The First International Commercial Court of the Supreme
People's Court of China ("CICC") has
recently published its first rulings 1 on the validity of
three arbitration agreements in relation to one same transaction.
CICC recognised the principle of severability of arbitration
agreement and held that although the underlying contracts had not
been formally signed, the parties had reached valid arbitration
agreements.
Background
The dispute concerns a proposed sale of shares in Newpower
Enterprise Inc. (the "Target") by Luck
Treat Limited (the "Seller") to
Zhongyuan Cheng Commercial Investment Holdings Co., Ltd. (the
"Purchaser") for a consideration of
RMB900 million. The parties negotiated the sale and purchase
agreement (the "SPA") but it was never
signed. The Seller is a subsidiary of China National Travel Service
Group Corporation and holds 100% shares in the Target. The Seller
and the Target are incorporated in the BVI, while the Purchaser is
a PRC company.
