A leading arbitration official has said China's eight-year-old Arbitration Law is in urgent need of revision to better handle disputes.

"The Arbitration Law should be revised to give parties more control over the process, make the procedure more flexible and better meet the requirements of modern commercial development," said Wang Shengchang, vice-chairman of the China International Economic and Trade Arbitration Commission (CIETAC).

The current Arbitration Law was approved by the Standing Committee of the National People's Congress (NPC), the nation's top legislative body, in 1994 and took effect in 1995.

While the law has played an important role in promoting China's arbitration system, Wang said some of its provisions are now outdated.

For example, the law says disputes should be heard through "institutional" arbitration, organized by authorised bodies such as CIETAC.

It does not allow for "ad hoc" arbitration, in which the parties have more direct contact with arbitrators.

"We should introduce ad hoc arbitration, which is a very popular tool elsewhere in the world, to offer more choice to the parties involved," said Wang, who is also director of the Legal Affairs Department of the China Council for the Promotion of International Trade.

Wang said that limiting parties to a list of arbitrators makes it impossible for other experts to give advice.

The law should also be more flexible in assessing the validity of the arbitration agreements.

Currently, most Chinese courts tend to overrule arbitration agreements because of minor defects, Wang said.

They should instead follow trends in international arbitration and look favourably on agreements when determining their validity, he added.

Wang said CIETAC is now busy preparing for the revision of the Arbitration Law. They will hand their research results to the NPC Standing Committee for reference.

"We expect the revision to come out by 2005, the 10th anniversary of the current Arbitration Law," Wang said.

(China Daily February 11, 2003)