On 12 September 2025, the Standing Committee of the National People’s Congress of the PRC has passed the amendment draft of the Arbitration Law (the “2025 Amendment”), and the newly amended Arbitration Law shall take effect on 1 March 2026. The 2025 Amendment marks the first substantive amendment of the Arbitration Law since its promulgation in 1995 and concludes the years’ discussion and debate on the amendments.
On the one hand, we see some highlights in the 2025 Amendment, which align towards the international standards and reflect the developments in the past decades; On the other hand, to the dismay of many legal practitioners, the 2025 Amendment largely retains, or only made minor changes to the previous rules more concerning to the arbitration parties, such as validity of the arbitration clause, interim reliefs, arbitration fee, enforcement of the arbitration award, etc. This conservative move is especially disappointing when considering that the amendment draft promulgated in 2021 (the “2021 Draft Amendment”) proposed a more reasonable legislative structure and adopted sophisticated rules of the international standards, such as the UNCITRAL Model Law on International Commercial Arbitration (“UNCITRAL Model Law”). In other words, the 2025 Amendment has taken a step backward, after the 2021 Draft Amendment had taken two steps forward.
Rules and Systems Retained
Institution orientated
Despite that the 2025 Amendment reluctantly opens a small window to ad hoc arbitration, the 2025 Amendment is still arbitration institution orientated, instead of, as generally accepted in the international standards, arbitration agreement orientated. On that basis, large bulk of provisions are retained and supplemented to specify the nature, management and operation of the arbitration institutions (Article 13-25). Also, in line with this feature, it is still required under the 2025 Amendment that a valid arbitration clause should designate a specific arbitration institution (Article 27), and the arbitration fee schedule should be formulated based on relevant regulations (Article 92).
Two sets of rules of setting aside arbitral awards for domestic and foreign related arbitration cases
Deviating from the 2021 Draft Amendment which generally treats two kinds of arbitration cases equally (with a few special rules for the foreign related arbitration cases specified), the 2025 Amendment went back to the old legislative model to provide two set of rules for domestic and foreign related arbitration cases on the grounds of setting aside of the arbitral award (Article 71 and 83, respectively). For the domestic cases, the grounds for setting aside the award not only include those commonly applied in the international arbitration practice, but also include those in relation to the substantive hearing of the cases, such as one party’s deliberate cancelation of evidence, and the arbitral tribunal’s apparent abuse of the law.
Unenforceability of the arbitration award
It has long been proposed by the Chinese legal society that, apart from matters concerning the foreign arbitral award, the enforcement court shall not be grant the right to refuse enforcing an arbitral award; the only way to challenge the validity and enforceability of a domestic arbitral award should be through setting-aside proceedings. The 2021 Amendment Draft partially took this position, under which the enforcement court can only reject enforcement of a domestic arbitral award based on the ground that the award is in violation of the public interest. However, under the 2025 Amendment, the old rules are retained that the enforcement court can reject enforcement of a domestic arbitral award by applying the grounds for setting aside the arbitral award (Article 72 and 84, respectively for the domestic cases and foreign related cases).
Interim reliefs can only be granted by courts
The PRC law has long adopted the position that only the courts are provided with power to grant interim reliefs to the arbitration parties, while the arbitration institutions are only responsible for forwarding such application to the competent court. Such model has drawn plenty of criticism, because the efficiency will be inevitably lost in transit, and the arbitral tribunal, as comparing to the court judges, are in a better position to decide whether to grant interim reliefs and what kinds of measures are appropriate. The 2021 Draft Amendment proposed for the first time in the Chinese legal history that the arbitral tribunal should have the power to grant interim reliefs, and such reliefs shall be enforceable by the court without further substantive examination. This position is in line with the international common practice and the UNCITRAL Model Law. However, the 2025 Amendment retained the old rules and rejects the arbitral tribunal any power to grant interim reliefs (Article 39).
Major Changes and Our Comments
Implied consent of the validity of the arbitration agreement.
The requirements for a valid arbitration agreement under the 2025 Amendment remain the same with the old rules, namely, in written form, with arbitration matters specified, and with specific arbitration institution designated (Article 27). That said, a paragraph is added to this provision, featuring the only substantive change to the rules judging validity of the arbitration clause. This new paragraph provides that, an arbitration agreement can be deemed to exist if (1) one party claims its existence when applying for arbitration; (2) the other party makes no objection before the commencement of the first hearing; and (3) the tribunal reminds the issue to the parties and has the reminder recorded in the transcript. It should be made aware that, unlike the UNCITRAL Model Law under which an implied consent can also be identified in the written correspondences prior to arbitration, the implied consent to an arbitration agreement under the 2025 Amendment can only be identified during the arbitration proceedings, and must be put on a written record.
This requirement may encourage dishonest behaviors of the parties because, even if the party which is against the arbitration agreement has raised on objection in this regard all over the proceedings, it may still challenge the arbitral award on the ground that there is no arbitration agreement, if the arbitral tribunal has not duly reminded this issue and has the reminder recorded.
The 2025 Amendment has not defined the “written form” of the arbitration agreement. Under the UNCITAL Model Law, correspondence or records in writing containing the content of an arbitration clause or the reference of the contract to any documentation containing the arbitration clause shall be regarded as qualified for written form. However, in the Chinese practice, it has been generally held that arbitration agreements should be duly signed in writing. In the absence of further clarification in the 2025 Amendment, it is assumed that the previous practice will continue to apply, meaning the arbitration agreement needs to be signed.
Competence-competence
As an update of the old rules which only allow the court and the arbitration institution decide the validity of the arbitration agreement, the 2025 Amendment grants power to the arbitral tribunal to decide the disputes on the validity of the arbitration agreement as well (Article 31). However, unlike the generally accepted international arbitration practice that the tribunal shall have full power in this regard, and the court may normally only review such dispute if the parties challenge the tribunal’s decision (either in the interlocutory or final award), under the 2025 Amendment, the parties retain the option to directly seek the court’s decision, and the court’s power remains to be prioritized. If one party seeks the arbitration institution or the tribunal to decide whether a valid arbitration clause exists and the other party resorts to the court, it is the court which should hear and decide on such dispute. Besides, it is not clarified whether the arbitration shall be proceeded if the dispute of the arbitration clause is ongoing – In the practice, the arbitration proceedings will usually be pending on the decision of the court). Therefore, we anticipate that the application of the competence-competence rule in China will in fact be limited.
Arbitration place
In alignment with the international arbitration standard, the 2025 Amendment has added rules in relation to arbitration place for the foreign related arbitration cases (Article 81). The parties can agree on the arbitration place in writing, and the arbitration place is the basis to decide the governing law of the arbitration clause and the competent court for challenging the award.
Online arbitration
The 2025 Amendment allows online arbitration through internet, unless the parties expressly dissent (Article 11). This is to feature digitalization, flexibility and efficiency. However, this provision does not clarify which measures (electronic submission, virtual hearing, or others) can be utilized for online arbitration and to what extent, nor does it contain processes that should be taken to protect the parties’ procedural rights.
Reduction of the time limit for setting aside arbitral awards
The time limit for setting aside arbitral awards has been reduced from 6 months to 3 months after receiving the award. The amendment is in line with Article 34(3) of the UNCITRAL Model Law.
Ad hoc arbitration
Ad hoc arbitration has for the first time appeared in the legislative document, but can only be applied to disputes in a very limited scope: the foreign related maritime disputes and disputes with foreign elements concerning enterprises established and registered in the free trade zones approved by the State’s Council (Article 82). This provision fails to provide supporting mechanisms to help with implementation of ad hoc arbitration proceedings, such as authorizing the arbitration institutions as appointing authority and/or managing authority. Some of the arbitration institutions in China have already revised their arbitration rules setting out the services they can provide to ad hoc arbitration, but the provision of any service to ad hoc arbitration shall not contradict the applicable laws governing the arbitration proceedings. In the absence of the authorization rules under the 2025 Amendment, there is still question as to whether such arbitration institutions could assist with the ad hoc arbitration.
Interim Measures
Compared to the old Arbitration Law that only asset preservation is provided as an interim measure for arbitration cases, the 2025 Amendment expands the interim measures to also include preservation on parties’ behaviors/activities and on evidence, which is in line with the Civil Procedure Law. However, as mentioned above, under the 2025 Amendment, the power to grant interim reliefs to the arbitration parties rests with the court.
Foreign arbitration institutions’ activities in China
The 2025 Amendment opened a small window to the arbitration activities of the foreign arbitration institutions in China, allowing them to establish branches in the free trade zones approved by the State’s Council (Article 86). This is a step backward, as compared to the approach suggested in the 2021 Draft Amendment, which generally provides equal treatment to the foreign arbitration institutions as the domestic ones. Whether the foreign arbitration institutions could open offices and own premises in other areas of the Mainland China will need to be clarified in regulations promulgated in the future.
Unanswered Questions
Some issues have been in discussion and debate for years, but were not settled in the 2025 Amendment: one arbitration for multiple contracts; the extension effect of the arbitration agreement to a third party (for instance to the assignee and to the shareholders in derivative lawsuit in the interest of the company); partial cancelation of the award; third-party challenge of the award; etc.
Conclusion
The 2025 Amendment has made some scattered attempts to align towards the international standards (such as the UNCITRAL Model Law) and responded to certain issues arising from the indigenized practice. However, the updates are generally conservative, and some question have been left unanswered.
