China Legal Update – April 22nd 2026, China News

In the People’s Republic of China, the annulment of arbitral awards is a narrowly circumscribed remedy, reflecting a generally pro-enforcement judicial stance. Under the PRC Arbitration Law and the PRC Civil Procedure Law, courts may set aside awards only on limited procedural or public policy grounds, rather than reviewing the merits. This framework aims to balance judicial supervision with respect for the finality and efficiency of arbitration.

The adoption of the Provisions responds in large part to the digitalisation of business relationships and working methods. It highlights the practical shift the Provisions introduce for companies operating in China: trade secret protection is now expected to rely not only on contractual undertakings, but also on effective internal controls, digital traceability and sound management of sensitive information.

When an arbitration award bears statutory flaws, the law offers parties a necessary remedy—the application to set aside the arbitration award. This system strikes a balance between preserving the finality of arbitration and ensuring procedural fairness, reflecting both respect for the autonomy of the parties and the court’s judicial supervision over arbitration activities.

II.   Procedure

1. Application procedure

1) Applicant

The subjects for the applicants to apply for annulment of arbitral awards are limited to parties of the case, which excludes persons other than involved in the case to apply for annulment of arbitral awards.

2) Application Period

A party shall apply for the annulment of an award within three months from the date of receipt of the award. This is one of the highlights the revised Arbitration Law 2025 Edition has introduced. Previously such application duration was 6 months; the shortened timeframe will allow parties to exercise right of setting aside the arbitration award promptly, which can also speed up the whole award annulment procedure.

3) Jurisdiction Court

The intermediate people’s court where the arbitration institution is located has exclusive jurisdiction.

2. Courts’ review procedure

1) Statutory grounds for setting aside an arbitral award

After an arbitral is rendered in a commercial arbitration proceeding, parties may apply for setting aside arbitral awards with supportive evidence to the intermediate People’s court at the place where the arbitration institution is located under the following circumstances:

(1) There is no arbitration agreement.

This refers to the consensus which parties have not reached a valid arbitration agreement, and the arbitral tribunal has no basis for jurisdiction.

No arbitration agreement has been reached including failure to sign an arbitration agreement, invalid agreement, and/or an agreement has been revoked or terminated without supplementary agreement.

(2) The matters awarded are not within the scope of the arbitration agreement or the arbitration institution has no authority to arbitrate.

In practice, arbitral tribunals may partially annul the excessively arbitrated part without affecting the validity of the legally arbitrated content.

(3) The composition of the arbitral tribunal or the arbitration procedure violates statutory procedures.

Procedural illegalities are the focus of judicial review, including:

– Irregular composition of the Tribunal: Failure to select arbitrators in accordance with the rules, failure to withdraw when required, and/or failure of arbitrators to disclose conflicts of interest.

– Procedural defects: Failure to serve documents in accordance with the law, deprivation of the right to present evidence, cross-examine and argue, failure to hear the case in accordance with the rules, failure to state reasons in the award, and/or irregular deliberation procedures.

(4) The evidence on which the award is based is forged.

This refers that key evidence is forged or altered, leading to errors in the basic facts of the award. In addition, the applicant shall provide conclusive evidence to prove the falsity of the evidence.

(5) The other party has concealed evidence sufficient to affect the fairness of the award.

This circumstance includes the evidence is held by the other party and not submitted, and the evidence plays a decisive role in determining the facts of the case.

(6) The arbitrator has committed bribery, accepted bribes, engaged in favoritism, or rendered an award in violation of the law when arbitrating the case.

Arbitrators accept property, seek personal interests, or intentionally distort facts and laws to render an unfair award.

2) Ruling within 2 months

Courts will render a ruling based on statutory grounds to set aside the award or dismiss the application within two months from the date of accepting the application to set aside the award.

III. Judicial Practice

When ruling such cases regarding annulment of arbitral awards, courts tend to try the case from certain perspectives such as the nationality of the arbitral award rendered, re-arbitration.

1) The arbitral award must be domestic award

The procedure for applying for revocation of an arbitration award applies to awards made by arbitration institutions in mainland China. For foreign arbitration awards, there is generally no procedure for revocation, and recognition and enforcement procedures should be applied. If the award is made in the territory of another State party to the New York Convention, it shall be reviewed in accordance with that Convention.

2) Re-arbitration system

After accepting the application to set aside the award, where the court considers that the arbitral tribunal may re-arbitrate, it shall notify the arbitral tribunal to re-arbitrate within a specified period and rule to suspend the setting aside procedure.

If the arbitral tribunal conducts re-arbitration, the court shall terminate the annulment procedure; if the arbitral tribunal refuses to conduct re-arbitration, the review shall be resumed and a ruling shall be made.

It is clarified in the newly revised Arbitration Law that if the arbitral tribunal refuses to conduct re-arbitration, the court shall resume the annulment procedure and make a ruling in a timely manner to avoid procedural delay.

IV. Practical Takeaways

1. Time limit management for applying for the revocation of arbitration awards.

If the parties are dissatisfied with the arbitration award, they shall strictly adhere to the application deadline. Under the current law, the deadline for applying for revocation is within three months from the date of receiving the award. It is recommended that the parties immediately assess the award upon receipt. If they deem there are statutory grounds for annulment, they should initiate the application process as soon as possible to avoid losing their right to relief due to time limitations.

2. Selection of statutory reasons.

The reasons for applying for the revocation of an arbitration award must fall within the statutory circumstances prescribed by law, and the people’s court will not review reasons outside of these statutory circumstances. The applicant shall confirm that the reasons for the application comply with the statutory circumstances and not submit evidence that does not match the reasons for the application.

3. Preparation of evidence.

The applicant is required to provide evidence corresponding to the reasons for the application to support their claims. For the claim of no arbitration agreement, evidence proving the non-existence or invalidity of the arbitration agreement shall be submitted. For the claim of violation of statutory procedures, the specific procedural provisions violated and their impact on the arbitration award must be specified.

V.  Conclusion

China’s annulment of arbitral awards system’s core value lies in ensuring the fairness of arbitration through limited judicial supervision and maintaining the finality of arbitration through strict restriction of grounds. In practice, parties involved need to accurately be aware of the statutory grounds for annulment and relevant evidence to be provided to effectively exercise the right for remedy to safeguard the statutory rights.