The 2025 Amendments to China's Arbitration Law – Progress with Conservatism

This article was published in the ICC Dispute Resolution Bulletin (issue 2025-2), also available in the ICC Dispute Resolution Library. Reproduced with permission of the International Chamber of Commerce (ICC).

On 12 September 2025, amendments to the PRC arbitration law (“2025 Amendments”) were promulgated, following earlier drafts released for public consultation in 2021, 2024 and early 2025. The 2025 Amendments will take effect on 1 March 2026 and bring major reforms to align China’s arbitration law with international norms, including formal recognition of online arbitration, promoting international cooperation, reinforcing of the legal significance of the seat of arbitration, and limited acceptance of ad hoc arbitration. However, the 2025 Amendments remain conservative in three respects: they retain the mandatory requirement to designate an arbitration institution, they do not adopt the competence-competence doctrine, and they do not include provisions to empower arbitral tribunals to grant interim measures.

Introduction

In recent years, there have been a number of proposals mooted for the modernisation of the arbitration law of the PRC (“Arbitration Law”), which was first promulgated in 1994 and implemented in 1995, and has not undergone any major amendments since that time. In July 2021, the Ministry of Justice released a consultation draft setting out a set of extensive proposed reforms (“2021 Draft”)¹ which had been eagerly anticipated by the international arbitration community. After a few years away from the public eye, the Standing Committee of the 14th National People’s Congress (“Standing Committee”) released updated drafts for public comment after its first review during its 12th session in November 2024 (“2024 Draft”),² and second review during its 15th session in April 2025 (“2025 Draft”).³ Following the two public consultations, the 2025 Amendments⁴ were approved at the 17th session of the Standing Committee, promulgated on 12 September 2025, and will take effect on 1 March 2026.

When it was first released, the 2021 Draft had been described by the international arbitration community as engendering the potential beginning of a new era for arbitration in China.⁵ Compared to the 2021 Draft, the 2024 Draft adopted a more conservative approach, and both the 2025 Draft and the 2025 Amendments largely align with the 2024 Draft.

This article highlights: (1.) some of the key revisions in the 2025 Amendments, and (2.) the features that remain unchanged.

1. What are the key amendments in the 2025 Amendments?

Replacement of “arbitration commission” with “arbitration institution” (Art. 89)

In the 2025 Amendments, the term “ arbitration commission” (仲裁委员会) has been globally replaced with “arbitration institution” (仲裁机构),⁶ and a new Article 89 has been introduced to define the term.

Article 89 of the 2025 Amendments provides:

“The term ‘arbitration institution’ in this Law includes arbitration commissions, arbitration courts, and other institutions legally established.”

These amendments are of significant legal and practical importance. Previously, the term “arbitration commission” was undefined and generally understood to refer only to domestic arbitral institutions established within China. This created uncertainty as to whether foreign arbitral institutions could administer arbitrations seated in China, raising concerns that agreements designating such institutions might be considered invalid or unenforceable under Chinese law.⁷

By adopting the broader term “arbitration institution” and providing a clear definition, the 2025 Amendments confirm that both domestic and foreign arbitral institutions legally established may administer arbitrations in China. This reform aligns the Arbitration Law with international practice, strengthens party autonomy in selecting arbitral institutions, and supports China’s policy of fostering a more open, market-oriented, and internationally integrated arbitration environment.

Supervisory powers of the State (Arts. 2 and 26)

Articles 2 and 26 of the 2025 Amendments originated in provisions introduced in the 2024 Draft, which empowered Chinese governmental bodies to guide and supervise “arbitration work” (仲裁工作), as well as impose substantial penalties on arbitration institutions that violated the Arbitration Law. There was a concern that these provisions could operate to subject parties and tribunals arbitrating in China to oversight by governmental bodies in the conduct of arbitration proceedings, igniting concerns about the independence and integrity of proceedings.

The updated provisions in the 2025 Amendments appear to be an attempt to address these concerns. The revised language – which includes the replacement of the term “arbitration work” with “arbitration undertakings” (仲裁事业) in Article 2 – suggests that (i) Article 2 pertains to policy-making and promotional activities related to arbitration; and (ii) Article 26 is directed towards the operations of arbitration institutions based in China rather than individual arbitration proceedings.

Article 2 of the 2025 Amendments provide:

“The development of arbitration undertakings shall implement the guidelines, principles, policies, and decisions of the Communist Party of China and the State, serve the State’s high-quality development and high-level opening-up, fosters a market-oriented, law-based, and international business environment, and contribute to the resolution of economic disputes.”

Article 26 of the 2025 Amendments provide:

“The judicial administrative department of the State Council shall, in accordance with the law, guide and supervise arbitration work nationwide, improve the relevant working systems, and coordinate the development of the arbitration undertakings. 

The judicial administrative departments of the people’s governments of provinces, autonomous regions, and municipalities directly under the Central Government shall, in accordance with the law, guide and supervise arbitration work within their respective administrative areas.”

Validity of online arbitration proceedings (Art. 11)

The 2025 Amendments introduces a new provision which expressly confirms the validity of arbitration proceedings conducted online. Online (or at least hybrid) proceedings have become the “norm” in international arbitration post COVID-19,⁸ and this provision aligns the Arbitration Law with international practices. Conducting arbitration online can significantly reduce costs associated with travel, accommodation, and venue hire. It also allows for more flexible scheduling, potentially speeding up the resolution process.⁹ Notably, under the 2024 and 2025 Drafts, online arbitration required prior consent from the parties, whereas the 2025 Amendments allow arbitration proceedings to be conducted online unless a party expressly objects. This change shifts online arbitration from an opt-in to an opt-out default, which should further enhance the efficiency of proceedings.

Article 11 of the 2025 Amendments provides:

“Arbitration activities may be conducted online through an information network, except where a party expressly objects.

Arbitration activities conducted online through an information network shall have the same legal effect as offline arbitration activities.”

Time limit for setting aside (Art. 72)

The 2025 Amendments shorten the time limit for applications to set aside arbitration awards from six months to three months from the date of receipt of the award, bringing it in line with the time limits under the Model Law.¹⁰ This requires parties to act promptly in respect of any challenge to the arbitral award and will likely accelerate the enforcement process.

Significance of seat (Art. 81)

The requirements applicable to the enforcement of arbitral awards in China differ depending on whether the award in question is regarded as a “foreign” or “domestic” award.¹¹ The previous version of the Arbitration Law does not expressly recognise the concept of a seat of arbitration, and there has been some ambiguity over how the “nationality” of an arbitral award ought to be determined under PRC law for the purposes of enforcement proceedings, with some Chinese courts determining the nationality of awards based on the location of the arbitral institution administering the case.¹² 

The 2025 Amendments addresses this ambiguity by confirming the significance of the parties’ choice of the “seat of arbitration” under PRC law, aligning the law with international arbitration practice. The wording also provides that the seat of the arbitration would determine the nationality of the arbitral award, and in turn determine whether the award will be deemed to satisfy the requirement of reciprocity, which is a precondition to enforcement of a foreign award in China.

Article 81 of the 2025 Amendments provides:

“The parties may agree in writing on the seat of arbitration. The seat of arbitration shall serve as the basis for determining the applicable governing law and the court of jurisdiction for the arbitration proceedings, unless the parties have otherwise agreed on the applicable governing law for the arbitration proceedings. The arbitral award shall be deemed to have been rendered at the seat of arbitration.

If the parties have not agreed on the seat of arbitration, or their agreement is unclear, the seat of arbitration shall be determined in accordance with the arbitration rules agreed upon by the parties; if the arbitration rules do not provide for a place, the arbitral tribunal shall determine the seat of arbitration based on the circumstances of the case and in accordance with the principle of facilitating the resolution of the dispute.”

Permitting specific types of ad hoc arbitration (Art. 82)

Under the previous version of the Arbitration Law, arbitration proceedings are required to be administered by institutions, except for limited exceptions in certain free trade zones. The 2025 Amendments relax this restriction, by permitting ad hoc arbitration in relation to two categories of foreign-related disputes:

1. disputes arising from foreign-related maritime affairs; and
2. disputes involving foreign elements between enterprises registered in pilot free trade zones established by approval of the State Council, the Hainan Free Trade Port or other regions¹³ designated by the State.

This provides parties with greater autonomy when arbitrating in China, granting them a greater range of options beyond institutional arbitration. As with the amendments to confirm that the administration of arbitrations by foreign arbitral institutions is permitted in China, these changes reflect a more market-oriented policy towards arbitration.

Article 82 of the 2025 Amendments:

"For foreign-related maritime disputes or foreign-related disputes between enterprises registered in a free trade pilot zone established upon approval of the State Council or the Hainan Free Trade Port or other regions designated by the State, if the parties have agreed in writing to arbitration, they may choose to have the arbitration conducted by an arbitration institution. Alternatively, they may choose the People’s Republic of China as the seat of arbitration, with an arbitral tribunal composed of individuals meeting the conditions stipulated by this Law, and conduct the arbitration in accordance with the agreed arbitration rules. The arbitral tribunal shall, within three working days after its formation, file with the arbitration association the names of the parties, the seat of arbitration, the formation of the arbitral tribunal, and the rules of arbitration.

If a party applies for property preservation, evidence preservation, or requests that the other party be ordered to perform or refrain from performing certain actions, the arbitral tribunal shall submit the application to the People’s Court, which must handle the matter in accordance with the law and in a timely manner.”

2. What key features remain unchanged in the 2025 Amendments?

Compared to the 2021 Draft, the 2025 Amendments appear to be more conservative. This is demonstrated by three key aspects, as set out below.

Mandatory selection of an arbitration institution

The selection of an arbitration institution remains a mandatory element for an arbitration agreement to be valid. The 2021 Draft proposed to remove this requirement.¹⁴ However, Article 27 of the 2025 Amendments fully retains the provisions of Article 16 of the previous version of the Arbitration Law, which stipulates that an arbitration agreement must meet the following four requirements:

• written form;
• mutual consent for arbitration;
• specification of matters for arbitration; and
• designation of an arbitration institution.

This means that, save in relation to the two limited categories of foreign-related disputes identified in Article 82, the 2025 Amendments continues to require arbitration proceedings seated in China to be administered by arbitral institutions.¹⁵

The competence-competence doctrine is not recognised in the 2025 Amendments. Under the 2025 Amendments, the power to rule on the jurisdiction of an arbitral tribunal is reserved for the arbitration institution or the court. If one party submits its jurisdictional challenge to the arbitration institution and another applies to the court, the court’s decision prevails. The 2021 Draft incorporated the competence-competence doctrine,¹⁶ granting arbitral tribunals the authority to determine their own jurisdiction. However, this amendment was removed from the 2025 Amendments. Arbitral tribunals therefore do not have the power to rule on their own jurisdiction (though they may determine whether the arbitration agreement is valid according to Arts. 27 to 30).

The 2025 Amendments do not authorise arbitral tribunals to grant interim measures. Under the 2025 Amendments, an application for interim measures must be submitted by the arbitration institution to the competent court for a decision.¹⁷ The 2021 Draft empowered arbitral tribunals to grant interim measures and introduced the mechanism of emergency arbitration.¹⁸ These changes were removed from the 2025 Amendments.