Viewpoint. Whether the applicant can request the setting aside of the arbitral award on the grounds that the arbitral tribunal has not made the arbitral award within the statutory time limit.
Published:
2021-12-20
The revocation of the arbitral award needs to meet the statutory requirements, and this paper focuses on the analysis of whether the arbitral tribunal's failure to make an arbitral award within the statutory time limit constitutes a violation of the statutory procedure in the arbitral procedure and leads to the revocation of the arbitral award. 1. [link to the law]] the People's Republic of China Arbitration Act Article 58 If the parties provide evidence to prove that the award has one of the following circumstances, they may apply to the intermediate people's court where the arbitration commission is located to cancel the award. (I) there is no arbitration agreement; The matters awarded by the (II) do not fall within the scope of the arbitration agreement or the arbitration commission does not have the power to arbitrate; (III) the composition of the arbitration tribunal or the arbitration procedure violates the legal procedure; (IV) the evidence on which the award is based is falsified; (V) the opposing party conceals evidence sufficient to affect a just decision; (VI) arbitrators have solicited or accepted bribes, practiced favoritism, or perverted the law in adjudicating the case. If the people's court, after forming a collegial panel to examine and verify the award, has one of the circumstances specified in the preceding paragraph, it shall rule to cancel the award. If the people's court determines that the award is contrary to the public interest, it shall rule to cancel it. Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Arbitration Law Article 20 The term "violation of legal procedures" as stipulated in Article 58 of the Arbitration Law refers to the circumstances in which the violation of the arbitration procedures stipulated in the Arbitration Law and the arbitration rules chosen by the parties may affect the correct award of the case. 2. Typical Case] Case 1: The case of Company A and Company B applying for setting aside the arbitral award. On November 11, 2019, Chen and Company B filed an application for arbitration in this case to the Beijing Arbitration Commission. The respondent was Company A. After the Beijing Arbitration Commission formally accepted the case on November 18, 2019, it was held on December 31, 2019. Form an arbitration tribunal. In accordance with the arbitral award made on 8 March 2021, the arbitral tribunal of summary proceedings shall, in accordance with the provisions of the Arbitration Rules, make an award within 75 days from the date of the formation of the tribunal. If there are special circumstances that require an extension, the sole arbitrator shall submit it to the Secretary-General for approval, and the extension may be appropriately extended. Company A believes that the arbitration award made by the Arbitration Commission on March 8, 2021 exceeds the above-mentioned time limit, and requests the court to revoke the (2021) Beijing Arbitration Zi No. XXX award made by the Arbitration Commission in accordance with the law. The court held that this case was a case in which the parties applied for the revocation of the domestic arbitration award and should be reviewed in accordance with Article 58 of the the People's Republic of China Arbitration Law. Article 58 of the the People's Republic of China Arbitration Law stipulates that if the parties provide evidence to prove that the award has one of the following circumstances, they may apply to the intermediate people's court where the arbitration commission is located for cancellation of the award: (1) there is no arbitration agreement; the matters on which the award is (II) do not fall within the scope of the arbitration agreement or the arbitration commission has no power to arbitrate; the composition of the arbitration tribunal or the arbitration procedure violates legal procedure; the evidence on which the (IV) award is based is forged; the other party to the (V) has concealed evidence sufficient to affect the fairness of the award; the (VI) arbitrator has solicited and accepted bribes, practiced favoritism, or perverted the law in the arbitration of the case. If the people's court, after forming a collegial panel to examine and verify the award, has one of the circumstances specified in the preceding paragraph, it shall rule to cancel the award. If the people's court determines that the award is contrary to the public interest, it shall rule to cancel it. The above-mentioned provisions are the statutory reasons for the people's court to revoke the domestic arbitral award. With regard to Company A's claim that the arbitration procedure violates the legal procedure, the Court holds that the "violation of legal procedure" stipulated in Article 58 of the the People's Republic of China Arbitration Law refers to the situation that the violation of the arbitration procedure stipulated in the Arbitration Law and the arbitration rules chosen by the parties may affect the correct award of the case, and the violation of legal procedure shall seriously affect the procedural rights of the parties and substantially affect the correct award of the case. With regard to the fact that the award involved in the case was heard by a sole arbitrator, the Beijing Arbitration Commission made a clear statement on the matter. In addition, in accordance with Article 54, paragraph (I), and Article 55, paragraph (I), of the Arbitration Rules, the arbitration involved in the case was filed on the basis of the parties' arbitration request, which met the conditions for the application of the summary procedure in the Arbitration Rules, and it was not improper for the sole arbitrator to hear the case. Article 58 of the Arbitration Rules stipulates that if the amount of the dispute in the case exceeds 5 million yuan due to the change of the arbitration request, the summary procedure shall not be affected. Regarding the extension of the trial limit of the arbitration involved in the case, the case was applied by the sole arbitrator and approved by the Secretary-General of the Beijing Arbitration Commission to extend the trial limit, which does not violate the provisions of the Arbitration Rules. In addition, the arbitration tribunal heard all the arbitration requests of Chen Mou and Company B and the defense of Company A, investigated the relevant facts of the case, and organized both parties to provide evidence and cross-examine the evidence. The two parties debated around the focus of the dispute. Before the end of the trial, the two parties issued their final statements. No company A's rights were infringed. Therefore, the court did not support company A's claim. Case 2: The case of Xu and Chen's application to set aside the special procedure of the arbitral award. On September 23, 2009, Xu filed an arbitration application with the Yangzhou Arbitration Commission in accordance with the arbitration clause agreed in the contract, requesting the cancellation of the equity transfer agreement signed on October 16, 2008. The Yangzhou Arbitration Commission accepted Xu's arbitration request on September 24, 2009, and served relevant materials to the respondent Chen. On 26 November 2009, the Tribunal held its first hearing. On 19 and 20 December 2009, the Tribunal held its second session. On January 30, 2010, Xu filed an application for withdrawal from the chief arbitrator Xing. On February 8, 2010, Yangzhou Arbitration Commission made (2009) decision No. 668-1, deciding to reject Xu's application for chief arbitrator Xing to withdraw. On August 23, 2010, Yangzhou Arbitration Commission delivered the decision to Xu and Chen. … On July 5, 2016, Yangzhou Arbitration Commission made Award (2009) Yang Arbitration Zi No. XX, which was served on Xu and Chen on July 27, 2016. Xu later considered that the arbitral award had exceeded the statutory time limit and requested that it be set aside. Court view: on the question of whether the arbitration proceedings are illegal. Article 46 of the Yangzhou Arbitration Rules stipulates: "The arbitral tribunal shall make an arbitral award within four months after the formation of the arbitral tribunal. If there are special circumstances that require an extension, the chief arbitrator or the sole arbitrator may report to the chairman of the arbitration commission for approval, and the extension may be appropriately extended." According to this provision, four months is the time limit that the arbitral tribunal should abide by. Even if it needs to be extended, it should be appropriately extended, and the extended time limit should be specified when handling the application and approval procedures. The arbitral award involved in the case took 6 years and 8 months from the formation of the arbitral tribunal on November 2, 2009 to the service of the arbitral award to the parties on July 27, 2016, far exceeding the four-month period stipulated in the Yangzhou Arbitration Rules. Although the arbitral tribunal applied for an extension of the trial period on the grounds of the complexity of the case, no specific time limit was determined at the time of application and approval, resulting in an extension of the arbitration period for more than six years, a serious departure from the provisions of the Yangzhou Arbitration Rules on the period of award. The arbitration case file also reflects that the arbitration tribunal's trial activities were mainly concentrated before the end of 2010, and the trial activities were basically stagnant from 2011 to 2012, and no trial activities were carried out for more than three years from 2013 to 2015. The applicant Xu has written to the arbitration tribunal many times to request the award as soon as possible, but it was not until July 2016 that the arbitration tribunal made a final award. It is therefore clearly inappropriate for the arbitral tribunal to extend a period sufficient to give the parties reasonable doubt as to the fairness of the arbitral proceedings. The Court needs to emphasize that "to ensure fair and timely arbitration of economic disputes and to protect the legitimate rights and interests of the parties" is the basic legislative purpose of China's arbitration law. As we all know, the procedure design of arbitration system is to achieve the value goal of fair and timely settlement of disputes. This is an important reason why the parties choose arbitration to resolve disputes, and it is also an important basis for the survival and development of the arbitration system. However, the arbitration tribunal in this case did not adjudicate for a long time without legitimate reasons and justifiable reasons, and the arbitration period lasted as long as six years and eight months, resulting in a long-term unstable legal relationship between the parties and unable to obtain timely and effective relief, which seriously damaged the legitimate rights and interests of the parties, the arbitral award involved in the case seriously violates the provisions of Article 51, paragraph 1, of the the People's Republic of China Arbitration Law and Article 42, paragraph 1, and Article 46 of the Yangzhou Arbitration Rules, which may affect the correct award of the case and should be revoked in accordance with the law. Summary of 3. Lawyers From the above cases 1 and 2, it can be seen that failure to make an arbitration award within the prescribed time limit does not constitute a violation of the arbitration procedure stipulated in the third paragraph of Article 58 of the Arbitration Law and a violation of the legal procedure. The "circumstances that may affect the correct award of the case" stipulated in Article 20 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Arbitration Law shall also apply." After comprehensive consideration, if it is necessary to extend the arbitration trial period due to special circumstances such as complex circumstances or epidemic situation, it will not affect the correct award of the case, and the arbitration award cannot be revoked according to this clause. On the contrary, arbitration is an efficient and convenient way to resolve disputes. If the arbitration tribunal does not issue an award for a long time without justifiable and legal reasons, and it will affect the rights of the parties and the correct award of the case, the court may set aside the arbitral award accordingly.
The revocation of the arbitral award needs to meet the statutory requirements, and this paper focuses on the analysis of whether the arbitral tribunal's failure to make an arbitral award within the statutory time limit constitutes a violation of the statutory procedure in the arbitral procedure and leads to the revocation of the arbitral award.
1. [link to the law]]
the People's Republic of China Arbitration Act
Article 58 If the parties provide evidence to prove that the award has one of the following circumstances, they may apply to the intermediate people's court where the arbitration commission is located to cancel the award.
(I) there is no arbitration agreement;
The matters awarded by the (II) do not fall within the scope of the arbitration agreement or the arbitration commission does not have the power to arbitrate;
(III) the composition of the arbitration tribunal or the arbitration procedure violates the legal procedure;
(IV) the evidence on which the award is based is falsified;
(V) the opposing party conceals evidence sufficient to affect a just decision;
(VI) arbitrators have solicited or accepted bribes, practiced favoritism, or perverted the law in adjudicating the case.
If the people's court, after forming a collegial panel to examine and verify the award, has one of the circumstances specified in the preceding paragraph, it shall rule to cancel the award.
If the people's court determines that the award is contrary to the public interest, it shall rule to cancel it.
Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Arbitration Law
Article 20 The term "violation of legal procedures" as stipulated in Article 58 of the Arbitration Law refers to the circumstances in which the violation of the arbitration procedures stipulated in the Arbitration Law and the arbitration rules chosen by the parties may affect the correct award of the case.
2. Typical Case]
Case 1: The case of Company A and Company B applying for setting aside the arbitral award.
On November 11, 2019, Chen and Company B filed an application for arbitration in this case to the Beijing Arbitration Commission. The respondent was Company A. After the Beijing Arbitration Commission formally accepted the case on November 18, 2019, it was held on December 31, 2019. Form an arbitration tribunal. In accordance with the arbitral award made on 8 March 2021, the arbitral tribunal of summary proceedings shall, in accordance with the provisions of the Arbitration Rules, make an award within 75 days from the date of the formation of the tribunal. If there are special circumstances that require an extension, the sole arbitrator shall submit it to the Secretary-General for approval, and the extension may be appropriately extended. Company A believes that the arbitration award made by the Arbitration Commission on March 8, 2021 exceeds the above-mentioned time limit, and requests the court to revoke the (2021) Beijing Arbitration Zi No. XXX award made by the Arbitration Commission in accordance with the law.
The court held that this case was a case in which the parties applied for the revocation of the domestic arbitration award and should be reviewed in accordance with Article 58 of the the People's Republic of China Arbitration Law. Article 58 of the the People's Republic of China Arbitration Law stipulates that if the parties provide evidence to prove that the award has one of the following circumstances, they may apply to the intermediate people's court where the arbitration commission is located for cancellation of the award: (1) there is no arbitration agreement; the matters on which the award is (II) do not fall within the scope of the arbitration agreement or the arbitration commission has no power to arbitrate; the composition of the arbitration tribunal or the arbitration procedure violates legal procedure; the evidence on which the (IV) award is based is forged; the other party to the (V) has concealed evidence sufficient to affect the fairness of the award; the (VI) arbitrator has solicited and accepted bribes, practiced favoritism, or perverted the law in the arbitration of the case. If the people's court, after forming a collegial panel to examine and verify the award, has one of the circumstances specified in the preceding paragraph, it shall rule to cancel the award. If the people's court determines that the award is contrary to the public interest, it shall rule to cancel it. The above-mentioned provisions are the statutory reasons for the people's court to revoke the domestic arbitral award.
With regard to Company A's claim that the arbitration procedure violates the legal procedure, the Court holds that the "violation of legal procedure" stipulated in Article 58 of the the People's Republic of China Arbitration Law refers to the situation that the violation of the arbitration procedure stipulated in the Arbitration Law and the arbitration rules chosen by the parties may affect the correct award of the case, and the violation of legal procedure shall seriously affect the procedural rights of the parties and substantially affect the correct award of the case. With regard to the fact that the award involved in the case was heard by a sole arbitrator, the Beijing Arbitration Commission made a clear statement on the matter. In addition, in accordance with Article 54, paragraph (I), and Article 55, paragraph (I), of the Arbitration Rules, the arbitration involved in the case was filed on the basis of the parties' arbitration request, which met the conditions for the application of the summary procedure in the Arbitration Rules, and it was not improper for the sole arbitrator to hear the case. Article 58 of the Arbitration Rules stipulates that if the amount of the dispute in the case exceeds 5 million yuan due to the change of the arbitration request, the summary procedure shall not be affected. Regarding the extension of the trial limit of the arbitration involved in the case, the case was applied by the sole arbitrator and approved by the Secretary-General of the Beijing Arbitration Commission to extend the trial limit, which does not violate the provisions of the Arbitration Rules. In addition, the arbitration tribunal heard all the arbitration requests of Chen Mou and Company B and the defense of Company A, investigated the relevant facts of the case, and organized both parties to provide evidence and cross-examine the evidence. The two parties debated around the focus of the dispute. Before the end of the trial, the two parties issued their final statements. No company A's rights were infringed. Therefore, the court did not support company A's claim.
Case 2: The case of Xu and Chen's application to set aside the special procedure of the arbitral award.
On September 23, 2009, Xu filed an arbitration application with the Yangzhou Arbitration Commission in accordance with the arbitration clause agreed in the contract, requesting the cancellation of the equity transfer agreement signed on October 16, 2008. The Yangzhou Arbitration Commission accepted Xu's arbitration request on September 24, 2009, and served relevant materials to the respondent Chen. On 26 November 2009, the Tribunal held its first hearing. On 19 and 20 December 2009, the Tribunal held its second session. On January 30, 2010, Xu filed an application for withdrawal from the chief arbitrator Xing. On February 8, 2010, Yangzhou Arbitration Commission made (2009) decision No. 668-1, deciding to reject Xu's application for chief arbitrator Xing to withdraw. On August 23, 2010, Yangzhou Arbitration Commission delivered the decision to Xu and Chen.… On July 5, 2016, Yangzhou Arbitration Commission made Award (2009) Yang Arbitration Zi No. XX, which was served on Xu and Chen on July 27, 2016. Xu later considered that the arbitral award had exceeded the statutory time limit and requested that it be set aside.
Court view: on the question of whether the arbitration proceedings are illegal.
Article 46 of the Yangzhou Arbitration Rules stipulates: "The arbitral tribunal shall make an arbitral award within four months after the formation of the arbitral tribunal. If there are special circumstances that require an extension, the chief arbitrator or the sole arbitrator may report to the chairman of the arbitration commission for approval, and the extension may be appropriately extended." According to this provision, four months is the time limit that the arbitral tribunal should abide by. Even if it needs to be extended, it should be appropriately extended, and the extended time limit should be specified when handling the application and approval procedures. The arbitral award involved in the case took 6 years and 8 months from the formation of the arbitral tribunal on November 2, 2009 to the service of the arbitral award to the parties on July 27, 2016, far exceeding the four-month period stipulated in the Yangzhou Arbitration Rules. Although the arbitral tribunal applied for an extension of the trial period on the grounds of the complexity of the case, no specific time limit was determined at the time of application and approval, resulting in an extension of the arbitration period for more than six years, a serious departure from the provisions of the Yangzhou Arbitration Rules on the period of award. The arbitration case file also reflects that the arbitration tribunal's trial activities were mainly concentrated before the end of 2010, and the trial activities were basically stagnant from 2011 to 2012, and no trial activities were carried out for more than three years from 2013 to 2015. The applicant Xu has written to the arbitration tribunal many times to request the award as soon as possible, but it was not until July 2016 that the arbitration tribunal made a final award. It is therefore clearly inappropriate for the arbitral tribunal to extend a period sufficient to give the parties reasonable doubt as to the fairness of the arbitral proceedings.
The Court needs to emphasize that "to ensure fair and timely arbitration of economic disputes and to protect the legitimate rights and interests of the parties" is the basic legislative purpose of China's arbitration law. As we all know, the procedure design of arbitration system is to achieve the value goal of fair and timely settlement of disputes. This is an important reason why the parties choose arbitration to resolve disputes, and it is also an important basis for the survival and development of the arbitration system. However, the arbitration tribunal in this case did not adjudicate for a long time without legitimate reasons and justifiable reasons, and the arbitration period lasted as long as six years and eight months, resulting in a long-term unstable legal relationship between the parties and unable to obtain timely and effective relief, which seriously damaged the legitimate rights and interests of the parties, the arbitral award involved in the case seriously violates the provisions of Article 51, paragraph 1, of the the People's Republic of China Arbitration Law and Article 42, paragraph 1, and Article 46 of the Yangzhou Arbitration Rules, which may affect the correct award of the case and should be revoked in accordance with the law.
Summary of 3. Lawyers
From the above cases 1 and 2, it can be seen that failure to make an arbitration award within the prescribed time limit does not constitute a violation of the arbitration procedure stipulated in the third paragraph of Article 58 of the Arbitration Law and a violation of the legal procedure. The "circumstances that may affect the correct award of the case" stipulated in Article 20 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Arbitration Law shall also apply." After comprehensive consideration, if it is necessary to extend the arbitration trial period due to special circumstances such as complex circumstances or epidemic situation, it will not affect the correct award of the case, and the arbitration award cannot be revoked according to this clause. On the contrary, arbitration is an efficient and convenient way to resolve disputes. If the arbitration tribunal does not issue an award for a long time without justifiable and legal reasons, and it will affect the rights of the parties and the correct award of the case, the court may set aside the arbitral award accordingly.
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