18 Nov 2025 China Legal Update – November 19th 2025, China News
I. Newly revised Arbitration law to align with international arbitration practices
On September 12, the 14th National People’s Congress Standing Committee passed the newly revised Arbitration Law, which will be effective on March 1, 2026.
The Arbitration law was firstly implemented in 1995. The recent revision process of the Arbitration Law started in 2024, which is a comprehensive and systematic amendment since its implementation, aiming to solve prominent issues occurring in arbitration practice nowadays such as incomplete internal governance structure of arbitration institutions, not sound supervision mechanism, and incomplete support and guarantee for arbitration etc.
Key content
The new Arbitration law consists of 8 chapters, 96 articles, mainly focuses on:
1) Enhanced efficiency of arbitration system
* Shortened the deadline for application for setting aside an arbitral award
The deadline for parties to apply for setting aside an arbitral award has been shortened from 6 months to 3 months, which will facilitate the process efficiency and encourage the parties to exercise their rights.
* Added Online arbitration
The new Arbitration law establishes online arbitration system, it is explicitly prescribed that arbitration activities can be conducted online through information networks, except where the parties explicitly express their disagreement. Additionally, the Arbitration law addressed that activities conducted online through information networks have the same legal effect as offline arbitration activities.
* Broadened Arbitrators’ qualifications
Arbitrators’ qualifications are broadened in the new Arbitration law, in addition to experts in traditional legal, economic and trade fields, it is explicitly prescribed that “prosecutors” and “those who possess legal knowledge, engage in professional work in law, economic and trade, maritime commerce, science and technology, and have senior professional titles or equivalent professional levels” are included in the scope of qualification of arbitrators.
Additionally, it is the first time that the Arbitration law has explicitly allowed “foreign individuals with specialized knowledge in law, economic trade, maritime commerce, science and technology” to serve as arbitrators.
2) New developments for arbitration agreements
· Expanded the Separability principle in arbitration agreements
Separability principle is one of the basic principles in international arbitration, which refers to arbitration agreement exists independently, and the revision, termination, or invalidity of the contract does not affect the validity of the arbitration agreement. The new Arbitration law further expanded the range of Separability principle:
The arbitration agreement shall exist independently. The establishment and revision, ineffectiveness, termination, rescission or invalidity of the contract shall not affect the validity of the arbitration agreement already reached. The arbitral tribunal shall have the authority to affirm the validity of a contract.
The highlight is that whether the agreement is established will not affect the validity of the arbitration agreement already reached by the parties, which expanded the scope of Separability principle.
· Extended the form of arbitration agreement
In the prior practice in China, arbitration agreements shall be concluded in written. The new Arbitration law added that where one party claims the existence of an arbitration agreement when applying for arbitration, and the other party does not deny it before the first hearing, upon the reminder and the record of the arbitral tribunal, it shall be deemed that an arbitration agreement exists between the parties. This means the acceptance of arbitration agreements concluded in the implied form.
3) Foreign related arbitration system
(1) Seat of Arbitration
The parties may agree in writing on the seat of arbitration. Unless otherwise agreed by the parties regarding the applicable law of the arbitration procedure, the seat of arbitration shall be the basis for determining the applicable law of the arbitration procedure and the court with jurisdiction. The arbitral award shall be deemed to be rendered at the seat of arbitration.
The rules for determining the seat of arbitration are as well established:
– Where the parties have not agreed or have agreed unclearly on the seat of arbitration, the seat of arbitration shall be determined in accordance with the arbitration rules agreed by the parties;
– Where the arbitration rules have no provisions, 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.
The current Arbitration law lacks provisions on the Ad Hoc arbitration system. The new amendment adopts the Ad Hoc arbitration system to be implemented partially for specific types of arbitration such as foreign maritime disputes, disputes between free trade zone enterprises and Hainan Free Trade Port enterprises, and disputes between enterprises established and registered in other regions prescribed by the state.
For abovementioned disputes, if the parties agree in writing to arbitrate, they may choose to have the arbitration institution conduct it; Alternatively, the parties can choose China as the place of arbitration, and the arbitration tribunal shall be composed of personnel who meet the conditions stipulated at the agreed place within the territory of China and shall conduct the arbitration in accordance with the agreed arbitration rules.
It is the first time that China has adopted Ad Hoc Arbitration system, which will facilitate parties in solving the dispute more flexibly in certain specific types of disputes.
The Draft Regulations clarify that commercial mediators shall meet one of the following conditions:
1. Obtained legal professional qualification through the national unified legal professional qualification examination and engaged in commercial mediation work for at least 3 years;
2. Engaged in legal, arbitration, notarization work or served as a judge or prosecutor for at least 3 years;
3. Having relevant professional knowledge in law, economics, science and technology, engaged in legal or economic trade work, and possessing intermediate or higher professional titles or equivalent professional levels;
4. Engaged in commercial mediation work for at least 3 years and holding a bachelor’s degree or above before the implementation of this regulation.
Public officials who also serve as commercial mediators shall comply with relevant regulations.
It is worth noting that commercial mediators shall participate in training in accordance with relevant regulations.
Conclusion
II. Implementation Measures for the Compulsory Deregistration System to improve mechanism of entity exit
On September 5, 2025, the State Administration for Market Regulation released the Implementation Measures for the Compulsory Deregistration of Companies (the “Measures”), which will be effective from October 10, 2025.
The newly revised Company Law in 2023 establishes a compulsory deregistration system for companies, which stipulates that if a company’s business license is revoked, ordered to close down or cancelled, and it has not applied for deregistration of company for three years, the registration authority may cancel the company registration.
To ensure the implementation of this system, the Measures provide regulations on the procedures and relief measures for mandatory cancellation of company registration, aiming to safeguard the rights and interests of all parties and maintain the stability of company registration order.
Highlights
1) Scope of application
The Measures clarify the scope of companies that can be compulsorily deregistered according to the newly revised Company Law, and stipulate that companies that require approval according to law before deregistration are not subject to compulsory deregistration procedures.
2) Compulsory deregistration procedure
The Measures have refined the provisions in relation to the announcement of compulsory deregistration of company, objection application and review, the making and delivery of compulsory deregistration decisions, and the termination of compulsory deregistration procedures:
(1) It has been clarified that a batch announcement method will be adopted for compulsory deregistration of company, with a notice period of 90 days
(2) It is specified that formal examination shall be conducted on objection applications, and if relevant departments, creditors, and interested parties raise objections, the compulsory cancellation procedure shall be terminated.
(3) It is clarified that the company registration authority should refer to the relevant provisions of the Civil Procedure Law to serve the decision on compulsory deregistration.
(4) It is stipulated that if a company has not applied for deregistration after three years from the date of termination of the compulsory deregistration procedure or restoration of registration, the company registration authority may initiate the compulsory deregistration procedure again.
3) Relief measures
The Measures stipulate that within three years from the date of compulsory deregistration of company, if relevant departments, creditors, and interested parties believe that there are circumstances such as litigation involved that should not be compulsorily deregistered, they may apply for the restoration of registration; In order to safeguard national interests and social public interests, the registration authority may also restore company registration in accordance with its authority to fully protect the rights and interests of all parties.
4) Strengthened information sharing
The Measures specify that the company registration authority shall strengthen the interconnection between the National Enterprise Credit Information Publicity System (“NECIPS”) and the registration, administrative licensing, law enforcement and case handling systems; Strengthen information sharing and business collaboration with other departments regarding the compulsory deregistration of company registration, and enhance the convenience of the compulsory deregistration of company.
Conclusion