The Potential Tribulations of the China International Commercial Court (CICC)

In 2013, China’s President, Xi Jinping, announced the “New Silk Road,” which would be the largest infrastructure development from East Asia to Europe. It was later coined as the Belt and Road Initiative (BRI). The Belt and Road would consist of not only physical infrastructure but also fifty special economic zones. To date, roughly 60 countries have demonstrated interest in, or signed onto, this initiative. With a significant amount of the world’s population on board with BRI, there are plenty of disputes that can arise. Thus, on July 1, 2018 China announced its creation of the China International Commercial Court (CICC). The CICC is comprised of three tribunals in Shenzhen, Beijing, and Xi’an. The goal is to have a “one stop shop” for litigation, mediation, and arbitration.

Recently, Zachary Mollengarden, a legal scholar and former Law Clerk for the U.S. Court of Appeals for the Eleventh Circuit, published an article titled, One-Stop’ Dispute Resolution on The Belt and Road: Toward an International Commercial Court with Chinese Characteristics. The article discusses the CICC, and theories behind the reasoning to create the CICC, as well as its potential drawbacks. One of the biggest disadvantages that stood out was with the “med-arb” process. Med-arb refers to the use of mediation and arbitration as a dispute resolution in the same consolidated proceeding. This means that if mediation in the CICC is not successful, the mediator will then serve as the arbitrator in the subsequent arbitration proceeding. This raises concerns around the impartiality of arbitrators. If the mediator switches hats to the arbitrator, the mediator will already have had ex ante communications with the parties, which could potentially taint the arbitral proceeding.  

Furthermore, there is a notable lack of diversity in the panel of judges. All of the judges will be of Chinese Nationality. Given that over 60 countries could bring claims forward under the auspices of the CICC, this seems unfair. The lack of diversity in the panel of judges could cause an implicit bias or taint the perception of impartiality. The China International Commercial Court (CICC): A New Chapter for Resolving International Commercial Disputes in China discusses how the lack in diversity will be mitigated by the International Commercial Expert Committee (ICEC). The article claims that the ICEC will be comprised of different experts from in various legal backgrounds and geographical locations.  The ICEC will likely only assist with mediation proceedings by serving as mediators, helping explain rules and clarifying international law, and assisting with issues related to the CICC and interpreting policies. Nevertheless, the ICEC is not enough to mitigate the issues with diversity and inclusion across the board. While China is not likely to change its policy on who can serve as a judge, it is a point of contention that should be considered by the countries involved in the BRI. 

These are only two of the problems with the CICC, and there are likely many more issues that will arise and require additional attention. In theory, a “one stop shop” forum sounds ideal, but when issues of impartiality and diversity are not accounted for, it could be more problematic than helpful.

By Susan Farhang, Article Editor

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