Clauses in China Related Contracts
Centre (CEAC) in Hamburg, Germany,
specializes in China related disputes.
Founded in September 2008 with the joint
support of the Hamburg Bar, the Hamburg
Chamber of Commerce and the Hamburg
State, as well as law firms from around
the globe, CEAC has received ten cases
since June 2012. CEAC handles cases
from all parts of the world. Its arbitration
rules are based on the neutral arbitration
rules of the United Nations Commission
on International Trade Law, adapted to
the needs of China related arbitration.
Arbitration Clauses in China
Related Contracts
usually each party is most satisfied
when it can impose its own conditions,
rely on its own law and provide for
the competence of the courts at its
seat. Often this simply does not work,
because the business partner may have
conditions, another state law and a
distinct dispute resolution mechanism.
In the case of contract negotiations
with a Chinese party, e.g. about a
joint venture, a transaction or sale of
goods, the Chinese party is likely to
have Chinese law and the competence
of Chinese courts in mind, while its
international partner, e.g. a company
from New York, might prefer New York
law and the competence of New York
courts. How is such a conflict resolved?
Regarding substantive law, the
parties might settle on the choice of the
law of a neutral state or, less risky and
less costly
Contracts (UNIDROIT PICC), which
have been created over the past decades
by the neutral international organization
UNIDROIT, comprising 63 member
states including the U.S. and China
saxon U.S. law and Chinese law, which is
based on continental (German) law.
dispute resolution mechanism, counsel
of both parties will soon find out that
any choice of jurisdiction clause is only
of limited value. The reason is that
enforcement of Chinese state judgments in
the United States (or other jurisdictions of
the world) or of U.S. judgments (or other
foreign state judgments) in China are
difficult and sometimes even impossible
as there is no international treaty basis
for enforcement. As a result, both counsel
would look for an arbitration clause in
order to create a functioning tool for the
enforcement of rights, if necessary, by
using the international enforceability
of arbitration awards under the New
York Convention on the Recognition and
Enforcement of Arbitral Awards (New
York Convention)
With respect to the choice of
the adequate arbitration regime, the
perspective is likely to be different. Each
party will prefer the choice of the rules of
Professor Dr. Eckart Broedermann (Hamburg University), LL.M.
(Harvard), FCIArb. (London) has for 25 years concentrated both
on international transactions (including M&A, joint ventures
and international construction) and on international litigation
and arbitration. He serves as managing director of the Chinese
European Arbitration Centre and teaches international contracts
and arbitration at the University of Hamburg.
law. He is author and co-author of numerous publications,
mainly in the area of arbitration.
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