Shenzhen arbitration court impartial, efficient, respected around world

"It was an inevitable outcome of reform and opening up and the construction of the Special Economic Zone," Liu Xiaochun said, recalling the history of Shenzhen Court of International Arbitration.

As the head of the court, Liu has expertise in company, securities and financial law.

Shenzhen was established as a special economic zone in 1980. Over the course of the next two years, 1,066 foreign-related economic contracts were signed in Shenzhen. Among them, 25 percent resulted in disputes, and 10 percent in major ones, said Liu. In order to prevent and effectively resolve future disputes, the SCIA was founded in 1983.

It was an innovative move, as the Hong Kong International Arbitration Center wasn't established until 1985, and the Singapore counterpart was only set up in 1990.

The SCIA's goal was to become an authoritative center for international arbitration in the Asia-Pacific region.

"It makes the business environment in Shenzhen more transparent, which is conducive to attracting foreign investment," said Liu.

In 1986, China acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The National People's Congress ratified the convention, which took effect in China in 1987.

A year later, Hong Kong, then still under British colonial rule, was the first foreign place to acknowledge an SCIA arbitration decision. To date, all arbitration decisions by the SCIA regarding Hong Kong have been enforced by courts there.

SCIA cases have evolved with the pace of China's reform and opening-up. In the 1980s and 1990s, cases were mostly linked to international trade and Sino-foreign joint ventures, but since China joined the WTO at the end of 2001, domestic cases have increased every year.

Under the current structure, most of the SCIA's cases revolve around finance, capital, international trade and investment, real estate, high-tech and intellectual property.

Liu received his Bachelor of Law, Master of Economics and Doctor of Law from Peking University. In 2000, he became a member of Shenzhen's first cadre delegation to study for an MBA at Chicago's Roosevelt University. While he was there, he paid visits to the National Association of Securities Dealers and the Chicago International Dispute Resolution Association.

In his view, arbitration only gains credibility by providing businesses with good service. It must be impartial, but also exists to serve the market.

"Without the trust of the parties involved, arbitration is like water without a source," he said.

This is why the SCIA adheres to the "3I" concept: independence, impartiality and innovation.

The court's most important innovation lies in its statutory governance structure, which guarantees its independence and impartiality.

In 2012, Shenzhen passed a special legislation, the Regulations on Shenzhen Court of International Arbitration, the world's first legislation designed solely to regulate an arbitration institution.

Its main purpose was to establish an international, professional and socialized corporate governance mechanism to ensure the independence and fairness of SCIA operations.

Among the 13 members of the SCIA Council, seven come from outside the Chinese mainland, and include representatives of the WTO and the United Nations Commission on International Trade Law.

Moreover, panel arbitrators come from 77 countries and regions, and overseas arbitrators account for more than 41 percent of the total, greatly enhancing the SCIA's credibility.

Trust in the court's independence is such that three parties from China and the US handed over a complicated arbitration case worth 13.6 billion yuan ($2.1 billion)－the highest value case of its kind in China to date－to the SCIA in 2015.

Liu was unanimously nominated by the three parities as sole mediator and arbitrator. Because of the time difference between China and the US, he dealt with the case day and night for six days. On the seventh, an agreement was reached under his mediation.

In total it took just 13 days to settle the case. The court's efficiency impressed the parties and also satisfied the dozen attorneys from five different countries involved in the case.

"We are confident that our arbitration is fair, and enjoys international credibility," Liu said, adding that last year, the SCIA handled cases involving disputed amounts of more than 60 billion yuan.

On Oct 1, a revised version of the court's regulations came into effect under the authorization of the standing committee of the Shenzhen people's congress.

The new legislation mandates the SCIA strengthen exchange and cooperation with Hong Kong and Macao arbitration institutions and other overseas arbitration institutions, and promote the construction of an international arbitration center in the Guangdong-Hong Kong-Macao Greater Bay Area.

"We will work with Hong Kong and Macao to establish an international arbitration platform through consultation, joint construction and collaboration," Liu said.