April 20, 2026
On September 12, 2025, China revised its 1994 Arbitration Law to better support the country’s pursuit of a market‑oriented business environment aligned with international practices. Effective March 1, 2026, the revised Arbitration Law (2025 Arbitration Law) expanded from seventy‑eight to ninety‑six articles across eight chapters and introduced several major changes to China’s arbitration scheme.
First, the 2025 Arbitration Law adopts a seat‑based arbitration principle, making the seat a central determinant of the applicable procedural law, evidentiary rules, nationality of the award, and judicial jurisdiction. Under Article 81, parties may agree in writing on the arbitration seat. Unless otherwise agreed, the seat determines the procedural law and the competent court, and any award is deemed rendered at the seat.
Second, the Law formally recognizes ad hoc arbitration in China for certain categories of cases. Before 2025, China did not recognize ad hoc arbitration domestically, though it allowed foreign ad hoc awards under treaty obligations. A key step occurred in 2016, when the Supreme People’s Court issued the Opinions on Providing Judicial Protection for the Development of Free Trade Zones (FTZs). Article 9 authorized courts to recognize arbitration agreements between enterprises in FTZs under certain circumstances, marking China’s first limited recognition of ad hoc arbitration within the country. The 2025 Law codifies and expands this practice. Under Article 82, parties engaged in foreign‑related maritime disputes or disputes between enterprises registered in pilot FTZs, the Hainan Free Trade Port, or other designated areas may choose ad hoc arbitration in China under agreed rules and with tribunal members meeting statutory qualifications.
Third, the Law introduces internet‑based arbitration to reflect advances in information technology. Article 11 provides that arbitration proceedings may be conducted online unless the parties explicitly disagree, meaning online arbitration is presumed valid in the absence of objection. Online proceedings carry the same legal effect as conventional ones.
Fourth, the Law broadens the framework for determining the existence of an arbitration agreement and limits findings based on assumption. Article 27 states that if one party asserts the existence of an arbitration agreement when applying for arbitration and the other party does not deny it before the first hearing, an agreement is deemed to exist upon the tribunal’s notice for the record.
Fifth, the Law replaces the term arbitration commission with arbitration institution and defines such institutions as public‑welfare, non‑profit legal persons. For purposes of the Law, an arbitration institution may be an arbitration commission, arbitration court, or any other body established according to law.
Sixth, the Law incorporates Chinese Civil Procedure Law provisions on grounds for refusing recognition and enforcement of foreign arbitral awards into the grounds for setting aside foreign‑related awards. It also encourages parties to choose arbitration institutions located within China (including its special administrative regions) and to designate China as the seat of arbitration. The Law expressly allows arbitration institutions or tribunals to administer international investment arbitration cases pursuant to relevant treaties, agreements, and the rules chosen by the disputing parties.
Finally, the Law supports Chinese arbitration institutions in establishing branches and conducting proceedings overseas, while also opening the door for foreign arbitration bodies to operate in China. Article 86 permits overseas arbitration institutions to establish a presence in free‑trade pilot zones, the Hainan Free Trade Port, and other State‑Council‑approved areas to carry out foreign‑related arbitration activities.
Despite these changes, concerns remain. One issue is the “party leadership” clause, which requires arbitration work to adhere to the leadership of the Communist Party, raising questions about neutrality. Additional concerns stem from provisions allowing government supervision, which may invite administrative interference. Critics warn that imposing a public‑sector overlay on what is intended to be a private, party‑autonomous dispute mechanism risks undermining the neutrality and impartiality that define commercial arbitration.
Mo Zhang is a Professor of Law at Temple University Beasley School of Law. He specializes in Conflict of Laws, Contract Law, International Civil Litigation and Arbitration, International Commercial Transactions, and Chinese Law.