China’s Arbitration Law Undergoes Historic Transformation: Ad Hoc Arbitration, Enhanced Interim Measures, and the Path to Global Competitiveness

Introduction: A Legislative Milestone Three Decades in the Making

On September 12, 2025, the Standing Committee of the National People’s Congress
adopted the first substantive amendments to China’s Arbitration Law since its
enactment in 1995, marking a transformative moment in China’s dispute resolution
landscape. Set to take effect on March 1, 2026, the Amended Arbitration Law
represents far more than incremental reform—it constitutes a comprehensive modernization designed to position China as a premier destination for international commercial arbitration. For law firms advising clients on dispute resolution strategies in Asia and globally, these amendments create significant new opportunities while demanding careful recalibration of established practices.

The thirty-year gap between the original Arbitration Law and these substantive
amendments reflects both the challenges of achieving legislative consensus on
complex procedural matters and the dramatic evolution of China’s economy and legal
system during this period. When the original law took effect in 1995, China was still in
the early stages of market economic reform, international arbitration remained
relatively uncommon, and the institutional framework for alternative dispute
resolution was nascent. Today, China stands as the world’s second-largest economy, a
major hub for cross-border commerce, and home to increasingly sophisticated
arbitration institutions seeking to compete with established international centers.

The Amended Law addresses longstanding concerns that have limited China’s
attractiveness as an arbitration venue for complex international disputes. It introduces
ad hoc arbitration for specified categories of disputes, expands the scope of interim
measures available to support arbitration proceedings, streamlines procedures for
court assistance in arbitration, and reduces timeframes for challenging awards. These
changes align China’s arbitration framework more closely with international best
practices while preserving distinctive features that reflect China’s legal system and
policy priorities. For international law firms and their clients, the amendments create a
more flexible, efficient, and internationally competitive arbitration environment that
merits serious consideration for dispute resolution planning.

Ad Hoc Arbitration: A Measured Opening with Strategic Limitations

Perhaps the most significant innovation in the Amended Arbitration Law is the
introduction of ad hoc arbitration, albeit with carefully circumscribed limitations that
reflect ongoing policy concerns about maintaining regulatory oversight. Under the
previous framework, all arbitration in China required administration by a recognized
arbitration commission, effectively prohibiting the ad hoc arbitration common in
many international commercial disputes. This requirement created obstacles for
parties seeking the flexibility and autonomy that ad hoc proceedings can provide, particularly in complex cross-border matters where parties may prefer to craft bespoke procedural arrangements.

The Amended Law now permits ad hoc arbitration for two specific categories of
disputes. First, foreign-related maritime disputes may be resolved through ad hoc
arbitration, recognizing the international nature of shipping and the maritime
industry’s longstanding preference for flexible dispute resolution mechanisms.
Second, foreign-related disputes arising between enterprises established and
registered in free-trade pilot zones approved by the State Council, the Hainan Free
Trade Port, or other areas prescribed by the state may utilize ad hoc arbitration. This
geographic limitation reflects China’s broader strategy of using free-trade zones as
laboratories for regulatory innovation before potential nationwide expansion.
However, the permission for ad hoc arbitration comes with significant procedural
requirements designed to maintain regulatory oversight and ensure quality standards.
The arbitral tribunal must meet statutory requirements regarding composition and
qualifications, ensuring that arbitrators possess appropriate expertise and
independence. Within three days of the tribunal’s formation, it must file specified
documents with the China Arbitration Association, including the arbitration
agreement, the arbitration rules agreed by the parties, and information about the
arbitrators. This filing requirement creates a registration mechanism that enables
monitoring of ad hoc proceedings while stopping short of requiring full institutional
administration.

For international law firms and their clients, the introduction of ad hoc arbitration
creates new strategic options for dispute resolution planning. Maritime industry
participants can now structure arbitration agreements that provide for ad hoc
proceedings, potentially reducing costs and increasing procedural flexibility compared
to institutional arbitration. Enterprises operating in designated free-trade zones gain
similar flexibility for their foreign-related disputes, enabling them to craft arbitration
procedures tailored to their specific needs and industry practices.

However, the limitations on ad hoc arbitration mean that it remains unavailable for the
vast majority of disputes in China. Domestic commercial disputes must still be
resolved through institutional arbitration, as must foreign-related disputes outside the
specified categories. This creates a bifurcated system where dispute resolution options
vary based on the nature of the dispute and the parties’ locations. Law firms must
carefully analyze whether specific disputes qualify for ad hoc arbitration and, when they do, evaluate whether ad hoc proceedings offer advantages over institutional
alternatives.

The filing requirements for ad hoc arbitration also create practical considerations that
parties and their counsel must address. The three-day deadline for filing with the
China Arbitration Association requires prompt action following tribunal formation,
demanding efficient coordination among parties, arbitrators, and counsel. The
required documentation must be prepared carefully to satisfy regulatory expectations
while preserving the procedural flexibility that makes ad hoc arbitration attractive.
Failure to comply with filing requirements could potentially affect the validity or
enforceability of resulting awards, creating risks that must be managed through
diligent procedural compliance.

Expanded Interim Measures: Aligning with
International Standards

The Amended Arbitration Law significantly expands the scope of interim measures
available to support arbitration proceedings, addressing a longstanding gap in China’s
arbitration framework. Under the previous law, parties could seek property
preservation orders from courts to prevent dissipation of assets during arbitration, but
the range of available interim measures remained limited compared to international
standards. The amendments broaden this framework to include conduct preservation
orders and evidence preservation orders, creating a more comprehensive toolkit for
protecting parties’ interests during arbitration proceedings.

Conduct preservation orders enable courts to require or prohibit specific actions by
parties during arbitration, preventing conduct that could undermine the arbitration
process or prejudice the ultimate award’s effectiveness. This might include orders
preventing a party from transferring business operations, disposing of key assets, or
taking other actions that could render an eventual award meaningless. Evidence
preservation orders allow courts to secure evidence that might otherwise be
destroyed, concealed, or become unavailable, ensuring that tribunals can make
decisions based on complete factual records.

These expanded interim measures align China’s arbitration framework with
international arrangements, particularly the Hong Kong and Macau mechanisms for
mutual assistance in court-ordered interim measures supporting arbitration. Under these arrangements, parties in arbitrations seated in Hong Kong or Macau can seek interim measures from mainland Chinese courts, and vice versa. By expanding the scope of available measures in domestic law, China ensures that its arbitration framework can support the full range of interim relief contemplated by these cross-border cooperation mechanisms.

The Amended Law also streamlines procedures for obtaining interim measures,
addressing practical obstacles that previously limited their effectiveness. Parties may
now apply directly to courts for interim measures in emergency situations, eliminating
the previous requirement to route applications through arbitration commissions. This
direct access reduces delays and enables faster responses to urgent situations where
immediate court intervention is necessary to prevent irreparable harm.

Furthermore, the Amended Law imposes a specific timeline for court consideration of
interim measure applications, requiring courts to determine such applications “in a
timely manner in accordance with the law.” While the Amended Law itself does not
specify an exact timeframe, this provision effectively incorporates the 48-hour
deadline established in China’s Civil Procedure Law for ruling on preservation
applications. This creates certainty about the maximum timeframe for obtaining
interim relief and ensures that emergency situations receive appropriately expedited
treatment.

For international law firms and their clients, these enhanced interim measures
significantly improve China’s attractiveness as an arbitration venue for disputes where
asset preservation or other provisional relief may be necessary. Parties can now be
confident that Chinese courts can provide comprehensive interim protection
comparable to what might be available in other major arbitration centers. This is
particularly important for disputes involving allegations of fraud, asset dissipation, or
other circumstances where interim measures may be critical to ensuring effective final
relief.

The expanded interim measures also create new strategic considerations for dispute
resolution planning and case management. Parties and their counsel must evaluate
whether circumstances warrant seeking interim measures, considering both the
substantive grounds for relief and the procedural requirements for obtaining court
orders. They must coordinate between arbitration proceedings and court applications
for interim measures, ensuring that tribunal proceedings continue efficiently while
parallel court processes unfold. They must also consider the implications of seeking interim measures for the overall dispute resolution strategy, including potential effects on settlement negotiations and the parties’ relationship.

Reduced Set-Aside Period and Enhanced Finality

The Amended Arbitration Law reduces the time available to apply for setting aside an
arbitration award from six months to three months, significantly enhancing the finality
and efficiency of arbitration proceedings. This change addresses concerns that the
previous six-month period created excessive uncertainty about award finality,
potentially delaying enforcement and undermining arbitration’s advantages over
litigation. The three-month period aligns more closely with international practice and
provides a more balanced approach to ensuring both the availability of judicial review
and the prompt finality of arbitration awards.

The grounds for setting aside awards remain substantively similar to the previous
framework, though the Amended Law provides updated articulation of these
standards. Awards may be set aside by the Intermediate People’s Court if: (1) there is
no arbitration agreement; (2) the matter decided does not fall within the scope of the
arbitration agreement, or the arbitration institution is not competent to arbitrate; (3)
the constitution of the arbitral tribunal or the arbitration procedure violates the
statutory procedures in the Amended Law; (4) the evidence on which the award is
based is forged; (5) the other party conceals evidence that is sufficient to influence the
fairness of the award; (6) the arbitrator engaged in acts of bribery; or (7) the award is
contrary to the public interest.

These grounds reflect a balance between ensuring judicial oversight of arbitration
quality and preserving arbitration’s autonomy and finality. The grounds focus on
fundamental procedural fairness, jurisdictional propriety, and protection of public
interests, rather than permitting courts to review arbitral tribunals’ substantive
decisions on the merits. This approach aligns with the pro-arbitration principle
embodied in international instruments like the New York Convention and reflects
China’s commitment to supporting arbitration as an effective dispute resolution
mechanism.

The reduced set-aside period creates important implications for parties and their
counsel in managing post-award procedures. Parties considering challenges to awards
must act more quickly to prepare and file set-aside applications, requiring prompt
analysis of potential grounds and efficient coordination of legal strategy. Conversely, prevailing parties benefit from greater certainty about award finality, enabling them to proceed with enforcement planning more confidently once the three-month period
expires.

The enhanced finality also affects strategic considerations in arbitration proceedings
themselves. Parties and tribunals can proceed with greater confidence that awards will
achieve prompt finality, potentially influencing decisions about procedural efficiency,
the scope of evidence and argument, and settlement timing. The reduced risk of
prolonged post-award challenges may make arbitration more attractive compared to
litigation, where appellate processes can extend for years.

Additional Modernization Measures: Implied Consent, Online Arbitration, and Good Faith

Beyond the major innovations in ad hoc arbitration, interim measures, and award
finality, the Amended Arbitration Law introduces several additional modernization
measures that collectively enhance the efficiency and accessibility of arbitration in
China. These changes reflect evolving international practice and technological
capabilities while addressing specific issues that have emerged in China’s arbitration
experience.

The recognition of implied consent to arbitrate represents a significant procedural
innovation. Under the previous framework, parties’ consent to arbitration required
explicit agreement, and questions about the validity or scope of arbitration
agreements could derail proceedings. The Amended Law now provides that a party’s
participation in arbitration proceedings without objecting to the tribunal’s jurisdiction
before the first hearing constitutes implied consent to arbitrate. This principle
prevents parties from participating in arbitration proceedings while preserving
technical jurisdictional objections for later challenge, promoting efficiency and good
faith in dispute resolution.

The formal recognition of online arbitration with the same legal effect as offline
proceedings reflects the digital transformation of dispute resolution accelerated by the
COVID-19 pandemic. While Chinese arbitration institutions had already adopted online
hearing capabilities, the Amended Law’s explicit endorsement provides clear legal
foundation for digital proceedings. This ensures that awards rendered in online
arbitrations receive the same recognition and enforcement as traditional proceedings, eliminating any uncertainty about the validity of remote hearings, electronic evidence
submission, or digital award delivery.

The introduction of a good faith principle to guide arbitration proceedings establishes
an overarching standard for party and arbitrator conduct. The Amended Law requires
parties, arbitrators, and arbitration institutions to act honestly and reasonably
throughout the arbitration process. This principle provides a framework for addressing
conduct that, while not necessarily violating specific procedural rules, undermines the
fairness and efficiency of proceedings. It empowers tribunals to manage proceedings
effectively and sanction behavior inconsistent with good faith dispute resolution.
Enhanced arbitrator disclosure requirements strengthen the framework for ensuring
arbitrator independence and impartiality. Arbitrators must disclose circumstances that
could give rise to justifiable doubts about their independence or impartiality,
providing parties with information necessary to evaluate potential conflicts and
exercise challenge rights. These disclosure obligations align China’s standards with
international best practices and help ensure that arbitration proceedings meet the
highest standards of procedural fairness.

Strategic Implications for International Dispute
Resolution Planning

The Amended Arbitration Law’s comprehensive modernization creates significant
strategic implications for international law firms and their clients engaged in dispute
resolution planning for China-related matters. These implications span multiple
dimensions of arbitration practice, from initial contract drafting through award
enforcement.

For contract drafting and dispute resolution clause design, the amendments expand
the range of viable options that parties should consider. Maritime contracts and
agreements between enterprises in designated free-trade zones should evaluate
whether ad hoc arbitration offers advantages over institutional alternatives. All
contracts should consider how the enhanced interim measures framework might
affect dispute resolution strategy and whether specific procedural arrangements could
optimize access to these measures. The reduced set-aside period should influence
calculations about the likely timeline from award to finality, potentially affecting
decisions about arbitration versus litigation.

The amendments also create new considerations for arbitration venue selection in
international disputes with China connections. China’s arbitration framework now
offers greater procedural flexibility, more comprehensive interim relief, and enhanced
finality compared to the previous regime. These improvements may make Chinese
arbitration institutions more competitive with established international centers for
certain categories of disputes. Law firms should conduct comparative analyses
evaluating Chinese arbitration against alternatives in Hong Kong, Singapore, London,
Paris, or other venues, considering factors including procedural rules, interim
measures availability, enforcement prospects, and cost.

For matters already in arbitration or approaching dispute resolution, the amendments
create transition considerations. The Amended Law will take effect on March 1, 2026,
and questions may arise about its application to arbitrations commenced before that
date. While the law provides that cases already accepted before implementation will
continue under the original framework, parties in pending matters should evaluate
whether any aspects of the amendments might be invoked to support procedural
innovations or enhanced efficiency.

The amendments also strengthen China’s position in the competitive landscape of
international arbitration centers. By addressing key limitations that previously
deterred parties from selecting Chinese venues, the reforms position China’s
arbitration institutions to compete more effectively for international caseloads. This
creates opportunities for law firms with strong China arbitration capabilities to expand
their practice in this area, while also requiring firms focused on other arbitration
centers to consider how China’s enhanced competitiveness might affect their strategic
positioning.

Conclusion: Embracing China’s Arbitration
Renaissance

The Amended Arbitration Law represents a watershed moment in China’s dispute
resolution evolution and a significant development in the global arbitration
landscape. By introducing ad hoc arbitration for specified disputes, expanding interim
measures, reducing set-aside periods, and implementing multiple procedural
modernizations, China has transformed its arbitration framework into a more flexible,
efficient, and internationally competitive system. For international law firms and their clients, these changes create both opportunities and imperatives for strategic adaptation.

The immediate priority involves understanding the amendments’ specific provisions
and their implications for dispute resolution planning. Law firms must educate
themselves and their clients about the new options available under the Amended Law,
the procedural requirements for accessing these options, and the strategic
considerations that should guide decision-making. This requires not only legal
analysis but also practical evaluation of how the amendments might affect dispute
resolution efficiency, cost, and outcomes in specific contexts.

Beyond immediate implementation, the amendments signal China’s long-term
commitment to developing world-class arbitration capabilities and positioning
Chinese institutions as preferred venues for international commercial disputes. This
commitment reflects both economic considerations—arbitration services represent a
valuable professional services sector—and strategic objectives related to China’s role
in global commercial governance. Law firms and their clients should anticipate
continued evolution of China’s arbitration framework as institutions and regulators
gain experience with the amendments and identify opportunities for further
refinement.

The Amended Arbitration Law also exemplifies broader trends in China’s legal
development, including increasing alignment with international standards, growing
sophistication in procedural design, and strategic use of free-trade zones as
laboratories for regulatory innovation. These trends extend beyond arbitration to
encompass multiple areas of commercial law and regulation. Law firms that develop
capabilities to track and respond to these developments will be well-positioned to
serve clients navigating China’s evolving legal landscape.

Ultimately, the message is clear: China’s arbitration framework has entered a new era
of modernization and international competitiveness. The amendments create genuine
opportunities for efficient, effective dispute resolution in China while demanding that
parties and their counsel carefully evaluate how to optimize use of the enhanced
framework. International law firms must rise to meet this challenge, developing the
expertise and strategic capabilities necessary to guide clients through China’s
transformed arbitration landscape and to leverage the opportunities it creates for
effective dispute resolution.

References

[1] Debevoise & Plimpton LLP. (2025, October 13). China Adopts First Substantive
Amendments to Arbitration Law. https://www.debevoise.com/insights/publications/2025/10/china-adopts-first-substantive-amendments-to

[2] China Law Blog. (2025, October 12). China’s Arbitration Law Undergoes Historic
Transformation. https://www.chinalawblog.com