Beijing Arbitration Commission Arbitration Rules (revision draft for comments) Chapter I: General Provisions Article 1: The Beijing Arbitration Commission (1) The Beijing Arbitration Commission (the BAC) is an arbitration institution registered in Beijing, China for resolving contractual disputes and other disputes over rights and interests in property between natural persons, legal persons and other organizations. (2) The Chairman of the BAC (the Chairman) or, with the authorization of the Chairman, one of the Vice-Chairmen or Secretary-General of the BAC, shall perform the functions and duties vested in him/her by the Arbitration Rules of the BAC (the Rules). (3) The Secretariat of the BAC (the Secretariat) shall handle the day-to-day affairs of the BAC. A member of its staff shall be designated as the case manager, responsible for the administration of case procedures and related services. Article 2: Application of the Rules (1) Where the parties to a dispute have agreed to submit to arbitration by the BAC, the Rules shall apply, save to the extent that the parties have agreed to the application of a different procedure or a different set of arbitration rules, in which case their agreement must comply with the mandatory law of seat of arbitration and be enforceable. Where the parties have agreed to the application of a different set of arbitration rules, the BAC shall perform the administrative functions and duties stipulated by such rules. (2) Where the parties agree to apply the BAC rules, but do not choose a specific arbitration institution, they shall be deemed to have agreed to submit their disputes to the 1 BAC. (3) In all matters not expressly provided for in the Rules, the BAC or the Arbitral Tribunal shall have the power to proceed the arbitral proceedings in a manner as it considers appropriate, in order to contribute to the efficient and fair resolution of the disputes between the parties concerned. (4) The BAC, the Arbitral Tribunal, the parties and their representatives shall apply the Rules in accordance with the principle of bona fide, collaboration and amiable dispute settlement. Article 3: Waiver of Right to Object A party who knows or should have known a failure to comply with any provision of the Rules or any term of the arbitration agreement, but nevertheless takes part in or proceeds with the arbitral proceedings without promptly raising its objection to such non-compliance in writing, shall be deemed to have waived its right to object. Chapter II: Arbitration Agreement Article 4: Definition and Form of Arbitration Agreement (1) An arbitration agreement is an agreement by parties to submit to arbitration all or certain disputes which have arisen or which may arise between the parties. An arbitration agreement includes an arbitration clause in a contract or any other written arbitration agreement. (2) An arbitration agreement shall be in written form, including but not limited to contractual instruments, letters and electronic data messages (including telegrams, telexes, facsimiles, EDIs and e-mails) and any other forms of communication where the contents are visible. 2 (3) Where, in the exchange of the Application for Arbitration and the Statement of Defence, one party claims the existence of the Arbitration Agreement whereas the other party does not deny such existence, it shall be deemed that there exists a written Arbitration Agreement. Article 5: Separability of Arbitration Agreement An arbitration agreement shall be independent of and separate from the contract in which it is contained. The validity of an arbitration agreement shall be judged separately, and it shall not be affected by the establishment, non-establishment, modification, rescission, termination, invalidity, expiry, non-effectiveness, or revocation of the contract. Article 6: Objection to Jurisdiction (1) If a party objects to the existence or the validity of an arbitration agreement or the jurisdiction over an arbitration case, it may raise a jurisdictional objection to the BAC. A jurisdictional objection shall be raised in writing before the first oral hearing. As for a documents-only hearing, the written objection shall be raised prior to the expiry of the time limit for the submission of the first round of defence. (2) If a party has not raised any jurisdictional objections pursuant to the provisions of the preceding paragraph, it shall be deemed to have accepted that the BAC has jurisdiction over the arbitration case. (3) The arbitration shall proceed notwithstanding any jurisdictional objection raised by any party to the BAC. (4) The BAC or, if so authorized by the BAC, the Arbitral Tribunal, shall have the power to determine on its jurisdiction over an arbitration case. The Arbitral Tribunal may make its decision on jurisdiction either during the arbitral proceedings or in an award. 3 (5) Where the BAC or the Arbitral Tribunal authorized by the BAC decides that the BAC has no jurisdiction over an arbitration case, the case shall be dismissed. Where a case is to be dismissed before the formation of the Arbitral Tribunal, the decision shall be made by the BAC. Where the case is to be dismissed after the formation of the Arbitral Tribunal, the decision shall be made by the Arbitral Tribunal. Chapter III: Application for Arbitration, Defence and Counterclaim Article 7: Application for Arbitration (1) A party applying for arbitration shall submit : (a) the arbitration agreement; (b) its Statement of Claim, containing the following information: (i) the names, addresses, zip codes, telephone numbers, facsimile numbers and any other convenient means of contact of the Claimant and the Respondent; (where a party concerned is a legal person or organization, the name, position, address, zip code, telephone number, facsimile number and any other convenient means of contact of the legal representative or the person in charge); (ii) the claims and the facts and grounds on which the claims are based; (c) the evidence or other documents on which the Application for Arbitration is based; (d) proof of the Claimant’s identity. (2) A party applying for arbitration shall deposit an advance on costs in accordance with the provisions of the BAC’s Arbitration Fee Schedule. Where the amount in dispute is not clear in the claims of the party concerned, the BAC shall determine the amount in dispute or the arbitration fee that shall be deposited in advance. (3) An application for deferment of the deposit can be made to the BAC in the event of hardship. The BAC shall decide on such applications. If a party applying for arbitration has neither deposited the advance in costs nor applied for deferment or has failed to deposit the full amount of the advance in costs within the time limit for deferment of such 4 deposit approved by the BAC, it shall be deemed to have not submitted or have withdrawn its Application for Arbitration. Article 8: Case Acceptance (1) Upon receipt of the Application for Arbitration, the BAC shall accept the Application for Arbitration within 5 days from the date when the applicant has deposited the advance in costs if the BAC finds that the requisite requirements for acceptance are met. (2) Where the Application for Arbitration does not fulfill the requirements stipulated by Article 7, the applicant shall rectify it within the time limit stipulated by the BAC, where the applicant fails to rectify it, the applicant shall be deemed not to have submitted an Application for Arbitration. (3) The arbitral proceedings shall be deemed to commence on the date of acceptance of the Application for Arbitration by the BAC. Article 9: Notice of Arbitration Within 10 days of the acceptance of the Application for Arbitration, the BAC shall send to the Claimant a Notice of Case Acceptance, a set of the Rules and the BAC’s Panel of Arbitrators. The BAC shall send to the Respondent a Request for Submission of Defence, as well as a copy of the Application for Arbitration, its attachments, if any, a set of the Rules, and the BAC’s Panel of Arbitrators. Article 10: Defence (1) Within 15 days of the receipt of the Request for Submission of Defence, the Respondent shall submit to the BAC such documents listed below: (a) Statement of Defence clarifying information listed below: (i) the names, addresses, zip codes, telephone numbers, facsimile numbers and any other convenient means of contact of the Respondent; (where a party concerned is a 5 legal person or organization, the name, position, address, zip code, telephone number, facsimile number and any other convenient means of contact of the legal representative or the person in charge); (ii) the defence opinion and the facts and grounds on which the defence is based; (b) the evidence or other documents on which the defence is based; and (c) proof of the Respondent’s identity. (2) Within 10 days of the receipt of the Statement of Defence, the BAC shall send a copy of the Statement of Defence to the Claimant. (3) The progress of the arbitral proceedings shall not be affected by the Respondent’s failure to submit its Statement of Defence. Article 11: Counterclaim (1) The Respondent shall file a counterclaim, if any, in writing within 15 days from the date of receipt of the Request for Submission of Defence.If the Counterclaim is not submitted within the stipulated period of time, the Arbitral Tribunal, or if the Arbitral Tribunal has not been constituted, the BAC, shall decide whether to accept the Counterclaim. (2) When deciding whether or not to accept the Counterclaim filed after the expiration of the above time limit, the BAC or the Arbitral Tribunal shall take into account the necessity for consolidating the Counterclaim and the Claim into one case, the time period exceeded, whether unnecessary delay will be caused and other related factors. (3) The provisions of Article 7 and Article 8 shall apply to the submission and acceptance of the Counterclaim. (4) Within 10 days of the acceptance of the Counterclaim, the BAC shall send to the Claimant a Request for Submission of Defence to Counterclaim, as well as the Counterclaim and its attachments, if any. 6 (5) The provisions of Article 10 shall apply to the Claimant’s submission of its Statement of Defence to Counterclaim. (6) Any other items concerning the counterclaim not stipulated by the Rules shall refer to the provisions concerning application for arbitration. Article 12: Amendment to Claim or Counterclaim (1) The parties may amend its Claim or Counterclaim in writing. The amendment shall be accepted by the Arbitral Tribunal, or if the Arbitral Tribunal has not been constituted, by the BAC. (2) Where the amendment to the Claim or Counterclaim is too late and may affect the arbitral proceedings, the BAC or the Arbitral Tribunal shall have the power to refuse acceptance of its amendment. (3) The provisions of Articles 7 to 10 of the Rules shall apply to such matters as acceptance of and defence to an application to amend the Claim or Counterclaim. Article 13 Claims between Multiple Claimants and Respondents (1) Where there are two or more Claimants and Respondents in an arbitration case, any party may raise claims against any other party under the same arbitration agreement. (2) The provisions of Articles 7 to 12 shall apply to such matters as submission of, amendment to, acceptance of, and defence to the above claims. (3) The Arbitral Tribunal shall decide whether or not to accept any new claim raised after the Arbitral Tribunal has been constituted. (4) After the above claims have been accepted by the BAC or the Arbitral Tribunal, the 7 status of each party in the arbitral proceedings shall remain unchanged. Article 14: Number of Copies of Submissions The Statement of Claim, the Statement of Defence, the Statement of Counterclaim, evidence and other written documents should be submitted in quintuplicate. If there are more than two parties, additional copies should be provided accordingly. If the Arbitral Tribunal is composed of a sole arbitrator, the number of copies can be reduced by two. Article 15: Preservation Measures (1) A party may raise an application for an order for the preservation of the other party’s property, or to require the other party to conduct a certain behavior or to be prohibited from conducting a certain behavior, if the enforcement of any award that it may obtain subsequently is likely to be difficult or if other damages are likely to be caused to the party, as a result of the conduct of the other party or other factors. (2) A party may apply for an order for the preservation of evidence if the evidence may be destroyed or lost, or may subsequently be inaccessible. (3) Where a party submits to the BAC the above application, the BAC shall forward the application to the competent court. (4) In an emergency circumstance where a party’s lawful right and interests would be irreparably damaged or the evidence may be destroyed or lost, or may subsequently be inaccessible if it does not apply for an preservation immediately, the party may raise an application for such preservation before submitting its Application for Arbitration. Article 16: Representation 8 Where a party is represented by its authorized representatives, the power of attorney setting out the matters specifically entrusted and the scope of the authorized representative’s authority should be submitted to the BAC. Chapter IV: Composition of Arbitral Tribunal Article 17: Panel of Arbitrators Arbitrators shall be chosen by the parties from the Panel of Arbitrators maintained by the BAC. Article 18: Appointment of Arbitrator (1) Within 15 days of the receipt of the Notice of Arbitration, the parties shall nominate or entrust the Chairman to appoint their arbitrators from the BAC’s Panel of Arbitrators. If the parties fail to nominate the arbitrator or entrust the Chairman to appoint the arbitrator in accordance with the aforementioned provisions, the arbitrator shall be appointed by the Chairman. (2) Within 15 days of the receipt of the Notice of Arbitration, the parties shall jointly nominate or jointly entrust the Chairman to appoint the presiding arbitrator. The parties may each nominate 1 to 3 arbitrators as the candidates for the presiding arbitrator within the time limit in accordance with the aforementioned provisions. According to the application or agreement of the parties, the BAC may also provide a list of 5 to 7 candidates for the presiding arbitrator from which the parties shall select 1 to 4 as candidates within the time limit fixed by paragraph 1 above. Where there is only one common candidate on either both parties’ list of nomination or both parties’ list of selection (the Candidate), such candidate shall be the presiding arbitrator jointly nominated by both parties. If there are two or more such candidates, the Chairman shall, taking into consideration the specific circumstances of the case, confirm one of them as the presiding arbitrator, who shall be regarded as being jointly nominated by the parties. 9 If there are no such candidates, the Chairman shall appoint the presiding arbitrator from outside of the lists of nomination and lists of selection. (3) If the parties fail to jointly nominate the presiding arbitrator in accordance with the aforementioned provisions, the presiding arbitrator shall be appointed by the Chairman. (4) Where there are two or more Claimants and/or Respondents, the Claimant side and/or the Respondent side shall, through consultations, each jointly nominate or jointly entrust the Chairman to appoint the arbitrator. If, within 15 days of the receipt by the last party of the notice of arbitration, they have not agreed on the joint nomination of the arbitrator or the joint authorization of the Chairman, the Chairman shall appoint this arbitrator. (5) The party shall bear the burden of the arbitrator’s travel expense incurred necessarily by hearing the cases, if the party nominates the arbitrator living outside Beijing. If a party has not deposited the advance on expenses within the period stipulated by the BAC, it shall be deemed not to have selected the arbitrator. The Chairman could appoint the arbitrator for the party in accordance with the Rules. (6) The party shall re-nominate another arbitrator within 5 days of its receipt of the notice of re-nomination, if the arbitrator refuses to accept the party’s nomination or is unable to hear the case, due to the illness or other factors that may prevent him/her from performing an arbitrator’s duty. If the party fails to re-nominate the arbitrator within the aforementioned time limit, the arbitrator shall be appointed by the Chairman. Article 19: Notice of Constitution of Arbitral Tribunal Within 5 days of the constitution of the Arbitral Tribunal, the BAC shall notify the parties accordingly. The case manager shall transmit the case file to the Arbitral Tribunal promptly thereafter. 10 Article 20: Disclosure by Arbitrator (1) Upon accepting the appointment, the arbitrator shall sign a statement of independence and impartiality, a copy of which shall be transmitted to each party by the case manager (2) If an arbitrator is aware of circumstances relating to the parties or their authorized representatives, which might lead any party to reasonably doubt his/her independence or impartiality, the arbitrator shall disclose those circumstances in writing. (3) Within 5 days of the receipt of such a written disclosure, the parties shall state in writing if they intend to challenge the arbitrator. (4) The provisions of paragraphs 1, 2, 4, 5, and 6 of Article 21 shall apply to the challenge of an arbitrator on the basis of circumstances disclosed by the arbitrator. (5) A party who fails to challenge an arbitrator within the period of time specified in paragraph 3 shall not be permitted to challenge the arbitrator in the following arbitral proceedings based on the circumstances already disclosed by the arbitrator. Article 21: Challenge of Arbitrator (1) the parties shall have a right to challenge the arbitrator upon any reasonable doubt on the independence or impartiality of the arbitrator. (2) A challenge shall be made in writing and accompanied by grounds of the challenge and supporting evidence. (3) A challenge shall be raised before the first oral hearing. A challenge based on circumstances known after the first oral hearing can be raised prior to the close of the final oral hearing; where no further oral hearing will be conducted, or in a documents-only hearing, a challenge shall be raised within 10 days after the challenging 11 party is aware of the circumstances for challenge, except for the situation referred to in paragraph 3, Article 20. (4) The case manager shall promptly transmit the notice of challenge to the other party and each member of the Arbitral Tribunal. (5) When a party challenges an arbitrator and the other party consents to the challenge, or the challenged arbitrator withdraws voluntarily upon being informed of the challenge, such arbitrator shall no longer participate in the arbitration. In neither case does it imply the acceptance of the validity of the grounds for the challenge. (6) The Chairman shall decide on the challenge, except in the situation referred to in paragraph 5. The decision of the Chairman shall be final; the Chairman has the right to decide whether to explain reasons on the decision according to the specific circumstances. (7) A party who, after being aware of the composition of the Arbitral Tribunal, appoints authorized representatives who may give rise to grounds for challenge of any arbitrator as set forth in this Chapter shall be deemed to have waived its right to challenge the arbitrator on those grounds. However, the other party’s right to challenge the arbitrator shall not be affected. The additional costs resulting from any delay to the arbitral proceedings shall be borne by the party responsible for causing the grounds of challenge. (8) The arbitration proceedings shall proceed before the Chairman makes a decision on the challenge. Article 22: Replacement of Arbitrator (1) An arbitrator shall be replaced if he/she becomes unable to conduct the arbitration as a result of death or illness, or withdraws from the arbitration due to personal reasons, or is requested by both parties or the Chairman to withdraw from the arbitration. 12 (2) An arbitrator may also be replaced on the Chairman’s initiative if he/she decides that the arbitrator is prevented de jure or de facto from fulfilling functions as an arbitrator, or is not fulfilling necessary functions in accordance with the Rules. (3) Before making any decision pursuant to the provisions of paragraph 2, the Chairman shall give both parties and all members of the Arbitral Tribunal an opportunity to comment in writing. (4) If the arbitrator to be replaced was nominated by a party, that party shall re-nominate another arbitrator within 5 days of its receipt of the notice of replacement. If the arbitrator to be replaced was appointed by the Chairman, the Chairman shall appoint another arbitrator. Within 5 days of such re-nomination or re-appointment, the BAC shall send to the parties the notice of reconstitution of the Arbitral Tribunal. After the reconstitution of the Arbitral Tribunal, the parties may request that prior arbitral proceedings be repeated, in which case the Arbitral Tribunal shall determine if such repetition is necessary. The Arbitral Tribunal may also on its own accord decide whether and to what extent prior arbitral proceedings shall be repeated. The time limit stipulated in Article 46, 57 and 66 shall be re-calculated from the date of the reconstitution of the Arbitral Tribunal, if the Arbitral Tribunal decides to repeat all the arbitral proceedings. Chapter V: Arbitral Proceedings Article 23: Mode of Hearing (1) The Arbitral Tribunal shall hold an oral hearing to examine the case. (2) If the parties agree on a documents-only hearing, or if the Arbitral Tribunal considers an oral hearing to be unnecessary and has the consent of the parties, the Arbitral Tribunal may decide the case on the basis of documents submitted by the parties. 13 (3) Regardless of the mode of hearing adopted, the Arbitral Tribunal shall treat the parties fairly and impartially and give each party a reasonable opportunity to present its case. Article 24: Confidentiality (1) An arbitration hearing shall be conducted in private. If the parties agree on a public hearing, the arbitration hearing may proceed in public, except those involving state secrets, any third party’s commercial secrets or any circumstance for which the Arbitral Tribunal considers that a case is inappropriate to be heard in public. (2) Where an arbitration is conducted in private, the parties, their authorized representatives, witnesses, arbitrators, experts consulted by the Arbitral Tribunal, appraisers appointed by the Arbitral Tribunal and staffs of the BAC shall not disclose to third parties any matter concerning the arbitration, whether substantive or procedural. Article 25: Place of Oral Hearing (1) Oral hearings shall be held at the BAC’s premises, or at other locations if the parties so agree. (2) The resulting additional costs shall be borne by the parties, if the parties agree upon oral hearing at other locations. The parties shall deposit an advance in the additional costs upon the proportion stipulated in their agreement or decided by the Arbitral Tribunal within the period stipulated by the BAC, or otherwise the oral hearing shall be held at the BAC’s premises. Article 26: Consolidation of Hearing (1) The Arbitral Tribunal may, upon meeting the following conditions, order the consolidation of two or more related hearings. a. The cases involving the same type or related subject matter; 14 b. On the application of any party and with the consent of all other parties concerned; c. The compositions of the Arbitral Tribunals are all the same. (2) After the consolidation, the Arbitral Tribunal shall decide the specific hearing proceedings. Article 27: Consolidation of Arbitrations (1) At the application of a party and where all the parties concerned consent, or the BAC considers necessary and where all the parties concerned consent, the BAC may decide to consolidate two or more arbitrations pending under the Rules into a single arbitration. Unless otherwise agreed by the parties, the consolidated cases shall consolidate to the first commenced case. (2) After the consolidation of arbitrations, the status of each party concerned shall be determined according to the status of each party in the arbitration that was first commenced. Any party, not appear in the arbitration first commenced, shall act as either the claimant or the respondent, through consultation with other parties; and in the absence of such agreement, as an independent party in the arbitral proceedings after the consolidation. The rights and obligations of the independent party shall refer to the rights and obligations of the claimant or the respondent under the Rules. (3) If the Arbitral Tribunal has not yet been constituted for the arbitration that was first commenced, the independent parties and all the claimants or all the respondents jointly nominate or jointly entrust the Chairman to appoint an arbitrator, provided that consent is obtained from all the claimants or all the respondents. Where any independent party fails to reach consensus with corresponding party/ies concerning the aforementioned matters within 15 days from the date on which the last party receives the notice of arbitration, the Chairman shall appoint all the arbitrators of the Arbitral Tribunal. (4) In deciding whether to conduct the aforementioned consolidation, the BAC may take into account such relevant factors as: conditions of the arbitration agreements on which 15 the relevant arbitrations are based, relevance between/among different arbitrations, progress of proceedings of relevant arbitrations, and nomination or appointment of arbitrators for the cases for which the arbitral tribunals have been constituted, etc. Article 28: Notice of Oral Hearing (1) As for a oral-hearing-based arbitration, the Arbitral Tribunal shall notify the parties of the date of the first oral hearing at least 10 days before the hearing. The date of the first oral hearing may be brought forward by the Arbitral Tribunal with the agreement of both parties through consultation. A party may request a postponement of the date of the first oral hearing, at least 5 days before the hearing, if there are grounds justifying a postponement. The Arbitral Tribunal shall decide on the request. (2) A notification of the date of a subsequent oral hearing and a notification of the date of a postponed oral hearing is not subject to the 10-day requirement. Article 29: Default of Appearance (1) Having been duly notified in writing of the oral hearing, if the Claimant fails to appear at the oral hearing without any justifiable reason or withdraws from an ongoing oral hearing without the permission of the Arbitral Tribunal, the Claimant shall be deemed to have withdrawn its Application for Arbitration. Where the Respondent raises a counterclaim, it shall not affect the Arbitral Tribunal’s default hearing on the Respondent’s Counterclaim. (2) Having been duly notified in writing of the hearing, if the Respondent fails to appear at the hearing without any justifiable reason or withdraws from an ongoing hearing without the permission of the Arbitral Tribunal, the Arbitral Tribunal may proceed with the hearing. Upon such failure, the Respondent shall be deemed to have withdrawn its Counterclaim if any. 16 Article 30: Production of Evidence (1) Each party shall bear the burden of proof for its claim, defence, or counterclaim. (2) The Arbitral Tribunal shall have the power to require the parties to produce their evidence within a specified period of time and the parties shall comply accordingly. The Arbitral Tribunal shall have the power to reject any evidence not produced within the specified period of time, unless the parties agree otherwise or the Arbitral Tribunal considers necessary. (3) If a party having the burden of proof fails to produce evidence within the specified period of time, or if the evidence produced is insufficient to discharge its burden of proof, it shall bear the consequences of such failure. (4) Each party shall properly bound, numbered and page-numbered the evidence it produces, which shall be accompanied by an evidence list stating briefly the name(s), proof purpose(s) and production date(s) of the evidence. (5) A reproduction, photograph, duplicate copy, and abridged version of a document or a thing shall be deemed to be identical to the original document or thing unless the other party challenges its authenticity. (6) Unless otherwise agreed by the parties or otherwise provided in Chapter VIII of the Rules, evidence and documentation in a foreign language should be accompanied by a Chinese translation. The Arbitral Tribunal may, if necessary, require the parties to provide a translation of the evidence and documentation into Chinese or other languages. Article 31 Checking of Evidence (1) The Arbitral Tribunal may, according to the need for hearing the case, arrange the parties to check whether the originals of the evidence already produced are identical with the photocopies thereof. 17 (2) The Arbitral Tribunal may entrust the case manager to organize the parties to conduct the aforementioned checking. Article 32: Investigation of Facts and Collection of Evidence by Arbitral Tribunal (1) If the parties apply and the Arbitral Tribunal considers necessary, or the Arbitral Tribunal considers necessary according to the case circumstance without the application of the parties, the Arbitral Tribunal may undertake investigations or collect evidence on its own initiative. If the Arbitral Tribunal considers it necessary to require the parties’ presence when it is undertaking investigations or collecting evidence, it shall promptly notify the parties. The Arbitral Tribunal may proceed with the investigations or the collection of evidence even if one or both parties fail to appear after being notified. (2) Evidence collected by the Arbitral Tribunal on its own initiative shall be forwarded to both parties for their comments on its authenticity, admissibility and relevance. Article 33: Appraisal (1) If any party requests an appraisal and the Arbitral Tribunal consents, or if the Arbitral Tribunal of its own motion considers it necessary, the Arbitral Tribunal may notify the parties to jointly nominate an appraiser within a period of time specified by the Arbitral Tribunal. If the parties fail to do so, the appraiser shall be appointed by the Arbitral Tribunal. (2) The parties shall deposit an advance in appraisal costs according to the agreement by the parties or the proportion confirmed by the Tribunal. The Tribunal has the power to decide not to carry out the appraisal, if the parties do not deposit an advance in costs. (3)The Arbitral Tribunal shall have the power to require the parties to produce to the appraiser any document, material, property or any other article required for the appraisal and the parties shall comply accordingly. 18 The Arbitral Tribunal shall decide on any disagreement between any party and the appraiser as to whether the document, material, property or article required for the appraisal is relevant to the case. (4) The appraiser shall provide the appraisal opinion in writing. A copy of such appraisal opinion shall be sent to each party. The parties shall have the right to express their comments on the appraisal opinion. (5) If the Arbitral Tribunal considers it necessary or if the parties so request, the Arbitral Tribunal may notify the appraiser to attend the hearing. The parties may, with the permission of the Arbitral Tribunal, question the appraiser on issues of the appraisal opinion. (6) The time limit stipulated in Article 46, 57 and 66 shall exclude any period of time taken to conduct an appraisal. Article 34: Hearing-related Measures The Arbitral Tribunal shall have the power to, depending on circumstances of the case, determine the agenda of cases and take such various hearing measures as issuing question lists, holding pre-hearing conferences or producing terms of reference, etc. The presiding arbitrator may accept an entrustment from the Arbitral Tribunal to take the aforementioned hearing measures. Article 35: Examination of Evidence (1) In the event of an oral hearing, evidence exchanged between the parties prior to the oral hearing shall be presented for examination during the oral hearing. Evidence may be used as proof of the facts relied upon without being produced at the oral hearing if, the other party affirms its authenticity and legality, and, during the oral hearing the other party so agree after the Arbitral Tribunal’s explanation. 19 (2) Where evidence is produced by any party during or after the oral hearing and the Arbitral Tribunal decides to admit the evidence without holding further oral hearings, the Arbitral Tribunal may require the parties to examine in writing the authenticity, admissibility and relevance of the evidence within a specified period of time. Article 36: Assessment of Evidence (1) The evidence shall be assessed by the Arbitral Tribunal. The Arbitral Tribunal shall decide whether to adopt the appraisal opinion. (2) Upon assessing evidence, the Arbitral Tribunal may conduct assessment by combining such factors as industry practices and trade conventions as well as take a comprehensive consideration of the overall situation of the case concerned, in addition to in accordance with relevant laws, regulations and by referring to judicial interpretations. Article 37: Argument The parties have a right to present oral arguments during the hearing. The Arbitral Tribunal may also require the parties to submit written arguments. Article 38: Closing Statement At the close of the hearing, the Arbitral Tribunal shall solicit final comments from the parties, which may be presented orally during the oral hearing or in writing within a period of time specified by the Arbitral Tribunal. Article 39: Record of Hearing (1) The Arbitral Tribunal shall keep minutes of the oral hearing, except in relation to conciliation proceedings. 20 (2) The Arbitral Tribunal may make an audio or video record of the oral hearing. (3) The parties and other participants in the arbitration shall have a right to request a rectification of any omission or error in the minutes of their testimony. The request shall be recorded if the Arbitral Tribunal does not allow the rectification. (4) The Arbitral Tribunal, the reporter, the parties, and other participants in the arbitration shall sign or affix their seals on the minutes. (5) Upon a joint request of both parties, or request of one party with the acceptance of the BAC, the BAC may appoint stenographer(s) to record the oral hearing, and the resulting additional costs shall be borne by both parties or the requesting party. Article 40: Withdrawing the Application for Arbitration and Dismissing Arbitration (1) The Claimant may withdraw the Application for Arbitration. Where the Respondent raises a counterclaim, it shall not affect the Arbitral Tribunal’s hearing and award on such counterclaim. The Respondent may withdraw its counterclaim. Where the Respondent withdraws its counterclaim, it shall not affect the Arbitral Tribunal’s hearing and award on the Claimant’s claim. (2) Where all the claim and the counterclaim (if any) have been withdrawn, the case can be deregistered. The Arbitral Tribunal, or if the Arbitral Tribunal has not been constituted at the time of withdrawal, the BAC, shall decide on the deregistration of the case. (3) If the case has been deregistered, the BAC shall have the power to decide whether to refund the arbitration fees or other fees paid in advance as well as the specific amount of such refunds according to the actual circumstances of the case. (4) Besides the aforementioned circumstances, where it is unnecessary or impossible to continue the arbitral proceedings due to any other reasons, the BAC or the Arbitral Tribunal may make a decision on the deregistration of the case. 21 Article 41: Conciliation by the Tribunal (1) The Arbitral Tribunal may, at the request of both parties or with the consent of both parties, conciliate the case in a manner it considers appropriate. (2) If the conciliation leads to a settlement, the parties may withdraw their claims and counterclaims if any, or request the Arbitral Tribunal to issue a Statement of Conciliation or make an award in accordance with the terms of the settlement. (3) The statement of conciliation shall state the claims and affirm the settlement agreement reached by the parties. It shall be signed by the Arbitral Tribunal and affixed with the seal of the BAC before being sent to both parties, and shall be binding once both parties have acknowledged receipt of it. (4) The Arbitral Tribunal shall rectify the clerical and calculating errors or similar errors in the statement of conciliation. The parties shall also have a right to request such rectification within 30 days from the date on which the parties sign the receipt of the statement of conciliation. The rectification of the statement of conciliation is a part of such statement, and shall become effective immediately after being served on the parties concerned. (5) If the conciliation fails to lead to a settlement, neither party shall invoke any of the statements, opinions, views or proposals expressed by the other party or the Arbitral Tribunal during the conciliation as grounds for any claim, defence or counterclaim in the subsequent arbitral proceedings, other judicial proceedings or any other proceedings. Article 42: Independent Conciliation 22 During the arbitral proceedings, the parties may enter into an independent conciliation or apply to the Mediation Center of the BAC for mediation in accordance with the Mediation Rules of the Mediation Center of the BAC. Article 43: Suspension and Resumption of Arbitral Proceedings (1) The arbitral proceedings may be suspended if any special circumstance occurs during the proceedings that makes suspension of proceedings necessary. The arbitral proceedings shall be resumed once the special circumstances disappear. (2) The arbitral proceedings may be suspended upon the joint request of both parties, or the request by one party without objection from the other party. Where either party requests to resume the arbitral proceedings or the Arbitral Tribunal considers that such resumption is necessary, the arbitral proceedings shall be resumed. (3) The suspension and resumption of the arbitral proceedings shall be decided by the Arbitral Tribunal, or if the Arbitral Tribunal has not been constituted, by the BAC. The time limit stipulated in Article 46, Article 57 and Article 66 shall exclude any period of time taken for suspension of the proceedings. Article 44: Truncated Tribunal In the event that, after the conclusion of the last oral hearing, an arbitrator on a three-member arbitral tribunal is unable to participate in the deliberation and render the award due to his/her demise or removal from the BAC’s Panel of Arbitrators or other reasons, the Chairman may replace the arbitrator pursuant to Article 22 of the Rules. After soliciting consents from both parties and the Chairman, the other two arbitrators may continue the arbitral proceedings and make decisions or the award. Chapter VI: Decision and Award 23 Article 45: Decision on Procedural Matters (1) The Arbitral Tribunal shall have the power to decide on the procedural issues or procedural matters involved during the arbitral proceedings. (2) Any decision of an Arbitral Tribunal composed of three arbitrators shall be made by a majority of the arbitrators. If the Arbitral Tribunal fails to reach a majority decision, the decision of the presiding arbitrator shall prevail. (3) With the consent of the parties or the authorization of the other arbitrators of the Arbitral Tribunal, the presiding arbitrator may also decide on procedural issues or procedural matters. Article 46: Time Limit for the Award The Arbitral Tribunal shall render its award within 4 months of its constitution. If there are special circumstances justifying an extension, the Secretary-General may, at the request of the presiding arbitrator, approve a suitable extension of the time limit. Article 47: Rendering and Form of Award (1) The award of an Arbitral Tribunal composed of three arbitrators shall be made by a majority decision. The dissenting opinion of the minority may be put on record. If the Arbitral Tribunal fails to reach a majority decision, the award shall be made in accordance with the decision of the presiding arbitrator. (2) The award shall state the claims, the facts of the dispute, the reasons upon which the award is based, the result of the award, the allocation of the costs of the arbitration, the date of the award and the seat of arbitration. The award need not state the facts of the dispute or the reasons upon which the award is based if the parties so agree, or if the award is made in accordance with the terms of a settlement between the parties. 24 (3) The award shall be signed by each member of the Arbitral Tribunal. The dissenting arbitrator may choose to or not to sign the award. An arbitrator who chooses not to sign the award shall issue a dissenting opinion, which shall be sent by the BAC to the parties together with the award, but does not form part of the award. (4) After the award has been signed by the arbitrator or arbitrators, the BAC’s seal shall be affixed to it. Article 48: Partial Award and Interim Award (1) Where the Arbitral Tribunal considers it necessary, or where a party so requests and the Arbitral Tribunal agrees, the Arbitral Tribunal may render a partial award on certain issues of any part of the claim before rendering the final award. (2) Where the Arbitral Tribunal considers it necessary, or where a party so requests and the Arbitral Tribunal agrees, the Arbitral Tribunal may render an interim award on the procedural or substantive issues in dispute in the arbitration. (3) The parties concerned shall perform the partial award and interim award. Any party’s failure to perform a partial award or interim award shall neither affect the arbitral proceedings nor prevent the Arbitral Tribunal from making the final award. Article 49: Validity and Performance of Award (1) The award shall be legally effective as of the date it is made. (2) After an award has been made, the parties concerned shall perform the award according to the time limit for performance specified in the award. Where an award does not specify the time limit for performance thereof, it shall be performed immediately. Where any party fails to perform the award, the other party may apply to the competent court for enforcement of the award. 25 Article 50: Allocation of Costs (1) The Arbitral Tribunal shall have the power to fix in its award the costs of the arbitration and the expenses incurred to be borne by the parties, including but not limited to appraisal fees, evaluation fees, and audit fees, etc. (2) Unless otherwise agreed by the parties, the costs of the arbitration shall in principle be borne by the losing party. If the parties are only partially successful in the case, the Arbitral Tribunal shall decide on the proportion of each party’s share of the costs based on each party’s responsibilities. If the parties reach a settlement, whether or not as a result of the Arbitral Tribunal’s conciliation, they may determine the proportion of their respective share of the costs through consultation. (3) Where a party is under the circumstance stipulated in paragraph (7) of Article 21 of the Rules, or any of other circumstances of violating the Rules which results in delay in arbitral proceedings, its allocation of arbitration costs shall not be limited by the provisions of the preceding paragraph. Where other costs incur or increase due to such delay in proceedings, such party shall also bear other corresponding costs. (4) The Arbitral Tribunal shall also have the power to order in its award, according to the claim of the party, that the losing party bears the cost and expenses reasonably incurred by the winning party in the arbitration, including but not limited to legal expenses, preservation costs, travel expenses, and notarial fees, etc. Article 51: Rectification to Award and Supplementary Award (1) The Arbitral Tribunal shall correct in its award any error in computation, any clerical or typographical error, and any omission from its decision of claims on which it has made a judgment in its reasoning. In the event any claim is omitted entirely from the award, the Arbitral Tribunal shall make a supplementary award. 26 (2) Any party may, on discovering the existence of any of the circumstances stipulated in the preceding paragraph, request in writing within 30 days of the date of receipt of the award that the Arbitral Tribunal rectify the award or make a supplementary award. (3) Any rectification by or supplementary award of the Arbitral Tribunal shall be an integral part of the original arbitral award, and may be handled by reference to the relevant provisions of Article 47 of the Rules. Chapter VII: Summary Procedure Article 52: Application of Summary Procedure (1) Unless otherwise agreed by the parties, the summary procedure set out in this chapter (the Summary Procedure) shall apply if the amount in dispute does not exceed RMB 1,000,000. (2) The parties may agree to apply the Summary Procedure even if the amount in dispute exceeds RMB 1,000,000, in which case the costs of the arbitration shall be reduced accordingly. (3) If the parties choose to apply the Ordinary Procedure (non-summary procedure) even if the amount in dispute does not exceed RMB 1,000,000, they shall bear any ensuing additional costs of the arbitration. (4) Where Chapter VIII “Special Provisions for International Commercial Arbitration” of the Rules provides for special provisions on Summary Procedure, such provisions shall apply. Article 53: Composition of Arbitral Tribunal 27 (1) Cases applying the Summary Procedure shall be heard by a sole arbitrator. (2) Within 10 days of the receipt of the notice of arbitration, the parties shall jointly nominate or jointly entrust the Chairman to appoint a sole arbitrator from the BAC’s Panel of Arbitrators. The sole arbitrator may be selected in the manner prescribed by paragraph 2 of Article 18. Article 54: Time Limit for Defence and Counterclaim Within 10 days of the receipt of the Request for Submission of Defence, the Respondent shall submit to the BAC its Statement of Defence and any relevant supporting document. A Counterclaim, if any, shall also be submitted within the same period of time, together with any relevant supporting document. Article 55: Notice of Oral Hearing (1) In the event of an oral hearing, the Arbitral Tribunal shall notify the parties of the date of the oral hearing at least 3 days before the hearing. (2) If the Arbitral Tribunal decides on the case by way of taking oral hearing, it shall hold one oral hearing only. The Arbitral Tribunal may on its own initiative decide to hold subsequent oral hearings if necessary. (3) Notification of the date of any subsequent oral hearing is not subject to the 3-day requirement. Article 56: Summary Procedure Turned into Ordinary Procedure (1) During the proceeding of a Summary Procedure, the Summary Procedure may be turned into an Ordinary Procedure upon unanimous request by both parties or upon request by one party with agreement of the other party. 28 (2) The proceeding of the Summary Procedure is not affected by mere reason that, as a result of any amendments to the claims or the submission of or the amendment to a Counterclaim, the amount in dispute exceeds RMB 1,000,000. If any party finds that the proceeding of the Summary Procedure may be affected, it may make a request to the Chairman for turning the Summary Procedure into an Ordinary Procedure, which shall be decided upon by the Chairman. (3) The parties shall determine, through consultation, their respective proportions of deposit of an advance in the additional arbitration costs arising from a change from the Summary Procedure to the Ordinary Procedure. Where such consultation fails, such proportions shall be determined by the BAC. Where the parties fail to deposit an advance in additional arbitration costs according to the requirements of the BAC, the procedure shall not be changed. (4) In the event of a change from the Summary Procedure to the Ordinary Procedure after the constitution of the Arbitral Tribunal, the parties shall, within 5 days of the receipt of notice of change of procedure, nominate or entrust the Chairman to appoint their respective arbitrators in accordance with the provisions of the Rules. Unless otherwise agreed by the parties, the original sole arbitrator shall become the presiding arbitrator. The re-constituted Arbitral Tribunal shall decide whether and to what extent the arbitration hearing proceedings conducted prior to the re-constitution shall be repeated. Where the re-constituted Arbitral Tribunal decides to repeat all the arbitration hearing proceedings, the time limit stipulated in Article 46 and Article 66 of the Rules shall be re-calculated from the date of the reconstitution of the Arbitral Tribunal. (5) The Summary Procedure shall not apply to the arbitral proceedings from the date of change from the Summary Procedure to the Ordinary Procedure. Article 57: Time Limit for the Award 29 The Arbitral Tribunal shall render its award within 75 days of the date of its constitution. If there are special circumstances justifying an extension, the Secretary-General may, at the request of the sole arbitrator, approve a suitable extension of the time limit. Article 58: Application of Other Provisions of the Rules For matters not covered in this Chapter, other relevant provisions of the Rules may apply, or such matters may be handled by reference to the same. Chapter VIII: Special Provisions for International Commercial Arbitration Article 59: Application of this Chapter (1) Unless otherwise agreed by the parties, the provisions of this Chapter shall apply to international commercial cases. For matters not covered in this Chapter, the other relevant provisions of the Rules shall apply. (2) Cases relating to Hong Kong SAR, Macao SAR and the Taiwan region may be handled by reference to the provisions of this Chapter. (3) Any dispute between the parties as to the existence of international elements shall be referred to the Arbitral Tribunal for a decision. The decision of the Arbitral Tribunal shall not affect the arbitral proceedings already conducted. After the Arbitral Tribunal has decided that international elements exist with the case, the proceedings stipulated in this chapter shall apply to the case. Article 60: Seat of Arbitration (1) The seat of arbitration shall be the premises of the BAC, unless otherwise agreed upon by the parties. The BAC may also determine the seat of arbitration according to the specific circumstances of the case. 30 (2) The arbitral award shall be deemed rendered at the seat of the arbitration. Article 61: Interim Measures At the request of a party, the Arbitral Tribunal may order any interim measure it deems proper in accordance with the applicable law. The order of an interim measure may take the form of a decision of the Arbitral Tribunal, an interim award or other manner accepted by relevant laws. If necessary, the Arbitral Tribunal shall have the power to require the requesting party to provide proper security. Arbitration 62: Composition of Arbitral Tribunal (1) Arbitrators could be chosen by the parties from or outside the Panel of Arbitrators maintained by the BAC. (2) If the parties want to select arbitrators outside the Panel of Arbitrators maintained by the BAC, they shall submit the resume and means of contact of the candidate to the BAC. The candidate selected outside the Panel may act as an arbitrator with the confirmation of the BAC. (3) Within 20 days of the receipt of the notice of arbitration, the parties shall, pursuant to the provisions of Article 18, nominate or entrust the Chairman to appoint their arbitrators and jointly nominate or jointly entrust the Chairman to appoint a third arbitrator who shall be the presiding arbitrator. If the parties fail to nominate their arbitrators or jointly nominate the presiding arbitrator in accordance with the provisions of the preceding paragraph, the arbitrators or the presiding arbitrator shall be appointed by the Chairman. (4) As a party agrees to increase the compensation for international arbitrators, the party shall deposit an advance on the resulting additional costs within the period stipulated by the BAC. If a party has not deposited the advance on costs within the 31 period stipulated by the BAC, it shall be deemed not to select the arbitrator. The Chairman could appoint the arbitrator for the party in accordance with the Rules. (5) Where a case conforms to the provisions of Article 52 of the Rules, the Arbitral Tribunal shall be constituted in accordance with the provisions of Article 53 of the Rules. Article 63: Defence and Counterclaim Within 45 days, or 30 days where a case conforms to the provisions of Article 52 of the Rules, of the receipt of the Request for Submission of Defence, the Respondent shall submit to the BAC its written Statement of Defence and any relevant supporting document. The Respondent shall also submit its Application for Counterclaim in writing to the BAC, if any, within the aforementioned time limit. Article 64: Notice of Oral Hearing (1) Where a case is to be examined by way of oral hearing, the Arbitral Tribunal will notify the parties of the date of the oral hearing at least 30 days, or 10 days where a case conforms to the provisions of Article 52 of the Rules, before the hearing. The date may be brought forward by the Arbitral Tribunal with the agreement of both parties through consultation. A party may request in writing a postponement of the date of the oral hearing, at least 12 days, or 5 days where a case conforms to the provisions of Article 52 of the Rules, before the hearing, if there are grounds justifying a postponement. The Arbitral Tribunal shall decide on the request. (2) A notification of the date of any subsequent oral hearing and a notification of the date of a postponed oral hearing is not subject to the 30-day or 10-day requirement. Article 65: Conciliation by the Tribunal (1) The Arbitral Tribunal may, with the consent of both parties, conduct conciliation of the case. 32 (2) If, upon the termination of unsuccessful conciliation proceedings, both parties request a replacement of an arbitrator on the ground that the results of the award may be affected by the conciliation proceedings, the Chairman may approve the request. The resulting additional costs shall be borne by the parties. Article 66: Time Limit for the Award The Arbitral Tribunal shall render its award within 6 months of the date of its constitution. Where a case conforms to the provisions of Article 52 of the Rules, the Arbitral Tribunal shall render its award within 90 days of the date of its constitution. If there are special circumstances justifying an extension, the Secretary-General may, at the request of the presiding arbitrator or the sole arbitrator, approve a suitable extension of the time limit. Article 67: Applicable Law (1) The Arbitral Tribunal shall apply the law agreed upon by the parties to the merits of the dispute. Unless otherwise agreed by the parties, the agreed applicable law refers to the substantive rules of law but not the rules of conflict of laws. (2) In the absence of an agreed choice of law, the Arbitral Tribunal shall have the power to determine the applicable law according to the circumstances of the case. (3) In all cases, the Arbitral Tribunal shall decide the case in accordance with the terms of the valid agreement and take into account the relevant international trade usages. Chapter IX: Supplementary Provisions Article 68: Calculating Time Limits 33 (1) A period of time specified in or fixed in accordance with the Rules shall start to run on the day following the date on which such period commences. The day on which such period commences does not form part of the period of time. (2) If the day following the date on which the period of time commences is an official holiday or a non-business day at the place of the addressee, the period of time shall begin to run on the first following business day. Official holidays or non-business days occurring within such period are included in calculating the period of time. If the last day of the relevant period of time falls on an official holiday or a non-business day, the period of time shall expire on the first following business day. (3) Time for delivery shall not be included in the period of time. Any arbitral document, notice or material that has been mailed or dispatched prior to expiry of the period of time shall not be regarded as overdue. (4) If a party breaches a time limit because of force majeure events or other justifiable reasons, it may apply for an extension of time within 10 days of the removal of the obstacle. The BAC or the Arbitral Tribunal shall decide on the request. Article 69: Service (1) All relevant arbitral documents, notices and other materials may be served on the parties or their authorized representatives in person or by mail, courier, telex, facsimile or any other means that the BAC/the Arbitral Tribunal considers appropriate. (2) An arbitral document, notice and material shall be deemed to have been served if it has been delivered to the addressee in person or by mail to the addressee’s place of business, place of registration, place of residence, address indicated on ID card, household address, service address agreed by the party concerned or other mailing address provided by the addressee or the counterparty. 34 (3) If despite reasonable inquiries, the addressee’s place of business, place of registration, place of residence, address indicated on ID card, household address or other mailing address cannot be found, service shall be deemed to have been effected if the document, notice or material is delivered to the addressee’s last known place of business, place of registration, place of residence, address indicated on ID card, household address or other mailing address by mail, courier or by any other means of delivery with proof of attempt to deliver. Article 70: Language (1) Chinese language is the official language of the BAC. (2) The parties may agree upon the language(s) used in international commercial arbitration proceedings. Where the parties have no such agreement, the BAC or the Arbitral Tribunal may determine to use Chinese or other language(s) as the language(s) to be used in the international commercial arbitration proceedings according to the specific circumstances of the case. (3) Where the parties have agreed upon use of two or more than two languages in arbitration, the Arbitral Tribunal may, upon soliciting consent from the parties, determine use one of such languages. If the parties fail to reach an unanimous agreement, the arbitral proceedings can be conducted in multiple languages, and the resulting additional costs shall be borne by the parties. (4) The BAC or the Arbitral Tribunal may determine whether or not the written documents or materials in international commercial arbitration proceedings need to be accompanied with a version of translation into Chinese or other language(s). (5) If translation services are required by the parties or their authorized representatives or witnesses during hearings, translators may be provided by the BAC or by the parties themselves. The parties shall bear the cost of translation. 35 Article 71: Interpretation of the Rules The power to interpret the Rules is vested in the BAC. Other documents issued by the BAC do not constitute part of the rules, unless the BAC has otherwise statement. Article 72: Official Versions of the Rules Each of the Chinese, English and other language versions of the Rules published by the BAC is official. In the event of any conflict between the different versions, the Chinese version shall prevail. Article 73: Implementation of the Rules The Rules are effective as of [ ● ]. For cases accepted by the BAC before the Rules came into effect, the Arbitration Rules effective at the time of such acceptance shall apply. In such a case, the Rules may apply if the parties so agree and the BAC consents. 36