In the high-efficiency realm of shipping and trade, “inviting experts to resolve issues on-site” efficiently settles disputes
A new model for ad hoc arbitration in North Bund: Completed in just 4 weeks
Previously, legal litigation would take at least a year and a half, and institutional arbitration would take 4 to 8 months
Recently, an ad hoc arbitration case concerning an international container transport contract dispute between a shipping company and a trading company was heard at the North Bund International Legal Services Hub. This is the first ad hoc arbitration case implemented following the revision and enforcement of the “Shanghai Measures for Promoting Ad Hoc Foreign-Related Commercial and Maritime Arbitration”.
The case was not complex: After the goods arrived at the port, the trading company discovered the goods were wet and damaged, affecting their use. Inspection revealed that the damage was caused by water ingress due to damage to the container top during storage at the terminal. The shipping and trading companies agreed to initiate ad hoc arbitration in Shanghai in accordance with the “Shanghai Measures for Promoting Ad Hoc Foreign-Related Commercial and Maritime Arbitration”, and received professional support from the Shanghai Shipowners’ Mutual Insurance Association. Ultimately, the shipping company compensated the trading company for the related losses.
From the dispute arising to the award being issued, the entire process took only 4 weeks. This case will provide a new model for resolving foreign-related commercial and maritime disputes for more companies, helping Hongkou’s North Bund become a preferred location for resolving such disputes and a top choice for ad hoc arbitration.
A relevant person in charge of the trading company involved in this arbitration case told the reporter: “We learned that Shanghai is vigorously promoting ad hoc arbitration. After experiencing it firsthand in Hongkou, we found it to be truly efficient and convenient. In the past, foreign-related commercial cases could take a year and a half to two years or even longer through litigation, and 4 to 8 months through institutional arbitration, with overall costs being much higher. So for companies, this significantly saves costs, which is the most direct reflection of optimizing the business environment.”
Compared to litigation or institutional arbitration, ad hoc arbitration is more like “inviting experts to solve problems on-site,” making it particularly suitable for high-efficiency fields like shipping and trade. Everything from how arbitrators are selected and where hearings are held, to what rules apply and what kind of hearing services are chosen, is decided by the companies through mutual consultation. For example, they can directly adopt established international arbitration rules or negotiate and formulate their own set of simplified, exclusive procedural rules.
This year, with the completion and opening of the physical hub of the North Bund International Legal Services Hub, the North Bund Arbitration Service Center, characterized by shared arbitration hearing rooms and ad hoc arbitration, was simultaneously inaugurated.
Recently, the “North Bund Ad Hoc Arbitration Service Guidelines (Trial)” and the “North Bund Ad Hoc Arbitration Service Handbook” were officially released, which include a recommended list of arbitrators and arbitration tribunal secretaries for ad hoc arbitration. These tribunal secretaries were specifically trained by the Hongkou District. Late last year, the ICC Tribunal Secretary Training Program came to Shanghai for the first time and was held in the North Bund.
Zhuang Wei, one of the first selected for the recommended list for ad hoc arbitration and who served as an arbitrator in this case, stated: “The professional supporting services and shared arbitration hearing facilities provided by the North Bund International Legal Services Hub not only fully meet the practical needs of international commercial arbitration, but the efficient procedural support and first-class hardware environment were particularly impressive.”
The reporter saw that the shared arbitration hearing room has seats for the arbitrator, recorder, claimant, respondent, witness, etc., equipped with a hearing system, audio and video synchronous collection system, supports connection and contact with arbitration tribunal secretaries, and provides supporting services such as language translation.
As a highland of China’s shipping industry, the North Bund currently gathers over 4,700 shipping companies and more than 40 functional institutions, covering the entire industrial chain of shipping transactions, insurance, brokerage, and freight forwarding. Leveraging this resource advantage, Hongkou District is promoting the deep integration of ad hoc arbitration with sectors like shipping insurance and freight forwarding logistics, expanding the application scenarios for ad hoc arbitration.
“We are deepening cooperation with multiple arbitration, shipping, insurance, and freight forwarding industry institutions in Shanghai to jointly promote the formation of more practical cases of ad hoc arbitration in细分行业 (sub-sectors),” introduced Zhou Hao, head of the Hongkou District Bureau of Justice. “We hope that by helping companies resolve disputes efficiently, we can further enhance the global competitiveness and discourse power of Chinese enterprises.”
It is reported that the North Bund International Legal Services Hub is currently expanding the experience of the “Three Offices Linkage” (police station,司法所 justice office, law firm), which originated in Hongkou, to the commercial field. It is exploring the creation of a new-era “Fengqiao Experience” brand integrating a mediation院 (/center), arbitration院 (/center), and court院 (/center) — the “Three Institutions Fusion” — making it possible to resolve cross-border commercial disputes without “leaving the building.”
(Source: Liberation Daily Reporter Zhou Nan)
