An arbitration agreement should express a clear intention to arbitrate and define the disputes covered and the agreed arbitration institution or other legally sufficient mechanism. The revised PRC Arbitration Law took effect on 1 March 2026 and expressly develops the role of the arbitration seat, electronic written form, separability and court support.
Validity is only the first test. A workable clause aligns the institution, seat, rules, language, tribunal, governing law, interim-relief route and enforcement plan. Parties should avoid hybrid wording that permits either arbitration or court litigation, mismatched institutions and rules, or vague references that generate a jurisdiction fight before the merits begin.
Direct answer
Use an institution’s current model clause as the base, then state the parties’ unambiguous agreement to submit a defined scope of disputes to arbitration. Identify the institution by its correct name, choose the seat deliberately, and align the rules, language and tribunal. Separately specify the contract’s governing law and preserve access to court-supported interim measures.
Review the clause across every related contract and signature block. Do not assume that an arbitration clause automatically binds affiliates, shareholders, guarantors, assignees or non-signatories.
The revised law
The Arbitration Law revised in 2025 took effect on 1 March 2026. It modernizes the framework, recognizes arbitration agreements in written forms including data messages, defines the legal significance of the seat, reinforces separability and updates domestic and foreign-related arbitration procedures.
Older contracts and judicial interpretations require compatibility analysis. Do not copy a clause or legal summary written only for the superseded 2017 text without checking the current law and the relevant institution’s rules.
Arbitrability
Arbitration is generally available for contractual disputes and other disputes over property rights and interests between equal civil subjects. Certain matters are excluded or governed by special regimes, including marriage, adoption, guardianship, support and succession disputes and administrative disputes that law requires administrative organs to handle. Labour and rural land-contracting arbitration follow their special statutes.
If a transaction combines arbitrable and non-arbitrable issues, identify potential fragmentation. Sector regulation, insolvency, corporate status, intellectual-property validity and public-law remedies may affect what a tribunal or court can decide.
Clear intention and scope
State that disputes “shall be submitted to arbitration” rather than saying the parties “may” arbitrate or may choose either arbitration or litigation. A 2025 SPC reply confirms that an agreement allowing either arbitration or court litigation makes the arbitration agreement invalid, while the litigation-jurisdiction agreement can remain effective.
Define scope broadly enough for the transaction: disputes arising out of or in connection with the contract, including formation, validity, interpretation, performance, breach, termination and related non-contractual claims. Deliberately address prior agreements and surviving obligations.
Institution and rules
Use the institution’s official current name and model language. Confirm that it administers the relevant dispute and that the named rules belong to it. Avoid obsolete names, nonexistent bodies and combinations such as one institution administering another institution’s rules unless that arrangement is expressly supported.
The revised law can provide mechanisms where an agreed institution is unclear, but relying on statutory rescue creates cost and uncertainty. Test the clause by asking where a claimant would file today and whether the case-registration team would recognize the choice.
Seat, hearing place and institution
The seat is the arbitration’s legal home. It influences procedural law, court supervision, award nationality and the courts competent for support or challenge. It is distinct from the institution’s headquarters and from the physical or virtual hearing venue.
State a city and jurisdiction as the seat. If hearings may occur elsewhere or online, say that this does not change the seat. Do not use “venue,” “place,” “seat” and institution interchangeably.
Under the revised law, where the parties have not agreed the seat or their agreement is unclear, the seat may be determined under the agreed arbitration rules or by the tribunal according to the case. Express choice remains safer.
Governing law
The law governing the substantive contract and the law governing the arbitration agreement are separate questions. State the contract law expressly and, in a cross-border contract, consider an express law for the arbitration agreement after analyzing validity and enforcement.
For foreign-related arbitration agreements, conflict rules can point to the parties’ chosen law, the seat or another prescribed connecting law. An apparently familiar substantive-law clause does not necessarily resolve arbitration-agreement validity.
Written form and electronic contracting
Put the agreement in the signed contract or a clearly incorporated document. The revised law recognizes written forms that can include data messages capable of expressing content tangibly. Preserve the complete electronic contracting record, incorporated terms, version, acceptance event and authority evidence.
A reference to another document can incorporate an arbitration clause where the language makes that clause part of the contract, but vague references invite disputes. Attach or identify the terms precisely and obtain clear assent.
Separability and competence
The arbitration clause is separable from the main contract. Allegations that the contract was not formed, is invalid, revoked or terminated do not automatically eliminate the arbitration agreement. Draft survival wording consistently, especially for termination and rescission.
An objection to the existence or validity of the arbitration agreement must be raised through the proper court, institution or tribunal route within the statutory and institutional timetable. Participation without timely objection can prejudice a later challenge. Obtain advice as soon as jurisdiction is disputed.
Language, tribunal and procedure
Choose the arbitration language with contracts, evidence, witnesses, counsel and enforcement in mind. State the number of arbitrators or use the rules’ default; consider one arbitrator for lower-value cases and three for complex or high-value disputes.
Address qualifications only when genuinely important and draft them flexibly enough to avoid appointment failure. Institutional rules normally cover appointment, replacement, emergency procedures, consolidation, joinder, confidentiality and costs; review those provisions rather than duplicating them inconsistently.
Multiple contracts and parties
Map the dispute clause across master agreements, orders, guarantees, licences, corporate approvals and side letters. Conflicting clauses can prevent consolidation and produce parallel proceedings. Use a hierarchy clause and compatible wording where one commercial relationship uses several documents.
Affiliates and representatives are not automatically bound merely because they performed part of the deal. Analyze agency, assignment, succession, guarantee, incorporation and applicable non-signatory doctrines. Obtain signatures from every party from whom an arbitral remedy may be needed.
Interim measures
State that a party may seek preservation or other interim relief from a competent court or under the applicable arbitral framework without waiving arbitration. For mainland asset, evidence or conduct preservation, understand how the application reaches the court and which court is competent.
In cross-border matters, check special court-assistance arrangements and the institution or seat qualifications they require. A general interim-relief sentence cannot create jurisdiction that the law does not provide.
Confidentiality and data
Arbitration can offer procedural privacy, but confidentiality should not be assumed to cover every participant, filing, related court proceeding or enforcement action. Review the law and rules, then add targeted obligations for parties, representatives, witnesses, experts and service providers where appropriate.
Plan evidence transfers, personal information, cybersecurity, state secrets and commercial secrecy. A foreign seat does not remove Chinese restrictions affecting evidence located in China.
Award and enforcement planning
Before selecting the seat and institution, identify where counterparties and assets are likely to be located. Consider the applicable domestic enforcement framework, the New York Convention, mainland–Hong Kong arrangements and local grounds for refusal or setting aside.
No clause guarantees collection. Verify party names, authority, service addresses, asset structure and sovereign or state-entity issues. Choose a seat and institution with an enforcement path suited to the actual transaction.
Clause review workflow
- Identify every party, contract and likely claim.
- Confirm arbitrability and mandatory special regimes.
- Select institution and obtain its current model clause.
- State clear intent and comprehensive scope.
- Choose seat and substantive governing law deliberately.
- Align rules, language and tribunal size.
- Coordinate joinder, consolidation and related contracts.
- Preserve court-supported interim relief.
- Address confidentiality, data and evidence movement.
- Stress-test challenge and enforcement locations.
Common mistakes
- Allowing a party to choose either arbitration or litigation.
- Naming an obsolete or ambiguous institution.
- Mixing one institution with incompatible rules.
- Confusing seat, hearing venue and institutional location.
- Assuming the contract’s governing law controls the arbitration agreement.
- Using conflicting clauses across related documents.
- Assuming affiliates or guarantors are automatically bound.
- Copying a clause based only on the former Arbitration Law.
- Promising confidentiality or enforcement without checking the rules and forum.
Sources
- Arbitration Law of the People’s Republic of China, 2025 revision effective 1 March 2026.
- SPC Interpretation on Application of the Arbitration Law, subject to compatibility with the revised law.
- SPC Reply on Jurisdiction Issues in Certain Civil Cases, effective 31 December 2025.
- The selected arbitration institution’s current rules and model clause.
General legal information only; not legal advice for a particular clause, dispute, seat or enforcement forum.
