China to set up three new courts to underpin its 'belt and road' initiative

An opinion advocating dispute settlement mechanisms for disputes arising from belt and road projects was adopted by the Central Committee for Comprehensively Deepening the Reform of the Communist Party last week.

Helena Chen, a Beijing-based infrastructure expert at Pinsent Masons, the law firm behind Out-Law.com, said that the move, backed by Chinese president Xi Jinping, demonstrated the Chinese government's determination to build dispute resolution mechanisms and institutions that "provide diversified dispute resolution services for disputes arising from 'belt and road' projects".

The 'belt and road' Initiative, which is more properly known as the Silk Road Economic Belt and 21st Century Maritime Silk Road Initiative, is a development strategy that focuses on land and sea based connectivity from China to major markets in Europe, Asia and the Middle East.

The 'belt' refers to land-based routes, with several 'transport corridors' identified to reach key markets in 64 countries, while the 'road' refers to a maritime route through the South China Sea, South Pacific Ocean and Indian Ocean.

China plans to work with countries along each of these transport routes to finance and deliver projects, with a focus on energy and transport infrastructure. The policy was first outlined in 2013 by Chinese president Xi Jinping during a state visit to Kazakhstan, and work began on the first related projects in 2015. 

Three international commercial courts will be established to underpin the initiative. A new court will be established in Xi’an to deal with disputes along the 'belt', while a new court in Shenzhen will handle disputes along the 'road'. A central court will also be set up in Beijing with functions similar to a "headquarter".

According to the opinion, the new dispute resolution framework will also contain options to settle disputes via mediation and arbitration.

The new mechanism will "protect the legitimate rights and interests of Chinese and foreign parties on an equal footing, and create a stable, fair and transparent business environment for the rule of law", it said.

The announcement of three new international commercial courts builds on moves already made by arbitration institutions in China to prepare for resolving 'belt and road' disputes.

This included the announcement of new Investment Arbitration Rules by the China International Economic and Trade Arbitration Commission (CIETAC). Those rules took effect on 1 October 2017. CIETAC also opened a Silk Road Arbitration Centre in Xi'an on 8 September last year.

In its 2016 Arbitration Rules, the Shenzhen Court of International Arbitration (SCIA) indicated that it would accept arbitration cases related to investment disputes between countries and people from other nations.

In October 2016, the Wuhan Arbitration Commission also announced the establishment of a One Belt One Road Arbitration Court.

The Supreme People's Court (SPC) of China also recently published new judicial interpretations concerning arbitration to improve the legal framework of judicial review of arbitration and enforcement of arbitral awards.