Judicial remedy mechanism provided under the Arbitration Law of the People’s Republic of China allows a court to invalidate an arbitration award due to improper private communication between an arbitrator and one of the parties. The ex parte misconduct set aside is designed to protect the neutrality and integrity of the arbitral process by ensuring that all parties have an equal opportunity to present their case. It applies when an arbitrator meets with one side without the presence or knowledge of the other, or when they accept gifts or favors that could influence their decision.
This remedy is available in the intermediate people’s court at the place where the arbitration commission is located. The successful application of this rule results in the complete nullification of the award, requiring the parties to either restart the arbitration or settle their dispute through litigation.
Integrity of the evidence presented in the set-aside application is the most challenging part of the legal process. To succeed in an ex parte misconduct set aside, the petitioner must provide clear and convincing proof that the improper communication actually took place. This often requires the use of phone records, hotel logs or eyewitness testimony that demonstrates a secret meeting occurred during the arbitration proceedings.
The court will not set aside an award based on mere suspicion or hearsay; it requires a high standard of factual substantiation. Because these communications are by their nature private, obtaining such evidence often involves difficult discovery efforts. The legal team must focus on showing that the misconduct was not just a procedural error but a fundamental violation of the arbitrator’s duty of impartiality.
If the evidence is found to be credible, it undermines the validity of the entire arbitration outcome.
Violation of the procedural rules established by the arbitration commission and the national law forms the legal basis for the court’s intervention. The ex parte misconduct set aside focuses on the breach of the principle of fair hearing, which is a cornerstone of the Chinese judicial system. When an arbitrator engages in ex parte communication, they deprive the other party of the chance to respond to information or arguments that may have influenced the final award.
The court examines whether the conduct violated the specific ethical guidelines for arbitrators or the internal rules of the arbitration institution. This review does not look at the merits of the case but only at the fairness of the process. If the court finds that the procedure was tainted by misconduct, it must set aside the award to preserve the public’s trust in the legal system.
Nullification of the arbitration award is the final and most severe consequence of a finding of misconduct. Once the court issues an order for an ex parte misconduct set aside, the award ceases to have any legal effect and cannot be enforced in China or elsewhere. The parties are then returned to their original positions as if the arbitration had never happened.
They may choose to enter into a new arbitration agreement with a different panel of arbitrators or take the matter to a court of law. This result can be devastating for the party that won the original award, as it leads to significant delays and additional legal costs. However, it is a necessary check on the power of arbitrators and ensures that the arbitration system remains a fair and reliable method for resolving commercial disputes.
The court’s decision in these cases is final and cannot be appealed, which emphasizes the gravity of the misconduct.
PRC arbitral set-aside motions require intermediate court filings within six months, leveraging strict statutory procedural grounds and prior reporting oversight.
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