CIETAC: Who May File a Claim and How to Determine the Proper Respondent

Why the issue of the proper party matters in arbitration

In CIETAC arbitration, the question of who is entitled to file a claim and against whom the claims should be brought usually arises in two situations.

The first situation concerns the arbitration agreement. If the claimant is not a party to the arbitration clause and cannot prove succession under it, the respondent is entitled to raise an objection to the hearing of the dispute. Depending on the circumstances, this may lead to the termination of the proceedings. Under the 2024 CIETAC Rules, such objections must be raised in a timely manner, before the first oral hearing. Otherwise, there is an increased risk of losing the right to raise such an objection, as follows from Article 6(6) of the CIETAC Rules.

The second situation concerns not the arbitration clause itself, but the question of who holds the right of claim. For example, where the dispute involves an assignment of claims or succession, the key issue is whether the arbitration clause was transferred together with the claim. The approach of the Supreme People’s Court of the People’s Republic of China in its interpretation of arbitration legislation is that, in the case of an assignment of rights and obligations, the arbitration agreement generally remains binding on the assignee, subject to the applicable exceptions.

Who may act as claimant in CIETAC

From a practical perspective, CIETAC will consider a claim filed by a direct party to the arbitration agreement or by its successor.

If a claim is filed by a person that is not formally a party to the contract and has not confirmed the proper substitution of a party, this creates significant procedural risks. In particular, there is a risk that the statement of claim may not be accepted, or that the claims may be dismissed, since the claimant will be unable to prove that it is the proper holder of the right to refer the dispute to arbitration.

Why it is important to involve the proper party in due time

If it is already clear at an early stage that the right of claim or the arbitration clause is connected with another person, it is advisable to consider procedural mechanisms for joining that person to the case.

The 2024 CIETAC Rules provide for the possibility of joining a proper party. In practice, this may be more effective than continuing the proceedings with the risk of subsequent dismissal and the need to file a new claim.

How to determine the proper respondent

The proper respondent should be determined based on the contractual structure. As a rule, the party to the case should be the counterparty under the obligation, since it is that party that holds the contractual rights and obligations, agreed to the arbitration clause and accepted the applicable law.

Can a third party be joined as a co-respondent

CIETAC provides a procedural possibility to join an additional party, including as a co-respondent, under Article 18 of the CIETAC Arbitration Rules.

However, for such procedural action it is necessary to confirm that the additional party has direct obligations to the claimant. If no such obligations exist, and the main contract was concluded with another person, joining a third party as a co-respondent may complicate the consideration of the case.

Practical conclusion

For CIETAC disputes, it is critical to verify two issues in advance: who is the proper claimant and who is the proper respondent.

The claim must be filed by a party to the arbitration agreement or by a person that can confirm the transfer to it of the relevant rights and the arbitration clause.

As a rule, the respondent should be the counterparty under the contract, while other participants in the legal relationship may be joined to the proceedings only where there is a sufficient contractual and procedural basis.