The Speech at the First Meeting of the First Board of Directors of Hainan International Arbitration Court (HIAC)

Huang Jin

Vice President of the China Law 

Society President of the Chinese Society of International Law

President of the Chinese Society of International Private Law 

Professor of China University of Political Science and Law

Chairman and Board members:

Good afternoon!

It gives me great pleasure to be appointed by the People's Government of Hainan Province as a member of the First Board of HIAC and to attend the first board meeting.

（Deputy Governor Shen Danyang issues the Appointment Letter to Board Member Huang Jin）

The restructuring of HIAC is an important step taken by Hainan Province to implement the spirit of the important speech delivered by XI Jinping, General Secretary of the CPC Central Committee, at the 30th anniversary meeting of the establishment of Hainan as a Special Economic Zone, and the Guiding Opinions of the CPC Central Committee and the State Council on Supporting Hainan in Comprehensively Deepening Reform and Opening-up. The establishment of the First Board of Directors and the holding of the first board meeting of HIAC marked the completion of the restructuring of the HIAC.

The restructured HIAC is the first arbitration institution in the country that no longer preserves the nature of a governmental institution, establishes a governance structure led by the Board of Directors and a governance mechanism under which decision-making, execution and supervision are checked and balanced and operates independently as a non-profit legal entity and a statutory body for public interest. This reform, which is the most thorough and leading in the country, will certainly play an important role in building a law-governing, internationalized and facilitative business environment at Hainan Free Trade Port (“FTP”). Here, I would like to express my warm congratulations on the success of today's meeting. My sincere greetings and my highest respect to all the Board members present at the meeting!

I would like to take this opportunity to make a few remarks.

1. Adhere to the dialectical unity of Arbitration Reform and "Three Directional Returns"

In the 26 years since the promulgation and implementation of the Arbitration Law of the People's Republic of China, the arbitration in China has been developing vigorously. According to the statistics of the Ministry of Justice, by 2019, there had been 253 arbitration institutions nationwide, accepting more than 480,000 civil and commercial cases of various types, with a total volume of amount in dispute valued at CNY 759.8 billion.

With the rapid economic and social development as well as the continuous deepening of reform and opening up, it is obvious that the current arbitration system cannot fully accommodate the needs of economic and social development and urgently calls for reform. Hainan, Shanghai, Shenzhen and other places have made genuine explorations in arbitration reform. XIONG Xuanguo, Deputy Minister of Justice recently mentioned the need to advance the market-oriented and law-governing reconstruction of arbitration. The Ministry of Justice has started the revision of the Arbitration Law and the preparation for the China Arbitration Association. The national arbitration reform has commenced and the institutional mechanism for arbitration will be continuously refined.

While actively promoting various reforms in arbitration, we shall pay attention to the "three directional returns": the first is to return to the original intention, thinking about the issue of arbitration origin, understand and think thoroughly about the starting point and the landing point of arbitration and its reform. What is arbitration? What function should arbitration play in modern society? Only when we think about these issues clearly can we not forget the original intention of arbitration and arbitration reform. Second, we must return to common sense. Reform and innovation should not deviate from the fundamental principles of arbitration. For example, while the principle of finality is one of the fundamental features of arbitration, some places adopt arbitration system with two level of trials thus moving towards litigation. How could this embody convenience and efficiency as advantages of arbitration? Such arbitration reform deviates from the common sense of arbitration. Third, we must return to the principles. Everything has its objective principles. Arbitration also has its own objective principles. The purpose of arbitration reform is to explore and understand the objective principles of arbitration, and to make the arbitration work more in line with the objective principles.

Actively promoting arbitration reform is to strive to resolve the conflicts arising from the existing arbitration system and mechanisms not accommodating the needs of the objective environment development. The fundamental aim of insisting on "Three Directional Returns" is to ensure that the work of arbitration reform will be proceeded in a healthy, smooth and orderly way. Through the reform, arbitration will better serve the contractual nature, professionalism, independence, efficiency, confidentiality, impartiality and marketability, so that arbitration business in China will develop better, our voices become more weighty and we become more influential in the world, and provide various civil and commercial parties with better quality and efficient arbitration legal services. We should not only encourage arbitration reform and innovation, but also adhere to the "Three Directional Returns". Arbitration reform and the “Three Directional Returns” are dialectical unity.

2. Summarize the Preliminary Experience of Hainan Arbitration Reconstruction in Time

Based on the national and provincial conditions and the needs of Hainan FTP construction, HIAC actively introduced advanced international arbitration systems, courageously carried out reform and innovation, and made active and genuine exploration for the arbitration reform of our country, and obtained elementary experience and achievements.

First, adhere to governance by law. The arbitration work of our country should deal with the relationship between the reform and governance by law. We should not only explore and try boldly, but also pay attention to that legislation should come first. There form of arbitration in Hainan is reform and innovation on the footing of adhering to the Arbitration Law and the spirits of the documents of the CPC Central Committee. For instance, there has been along-standing disagreement about the nature of arbitration institutions within our country. In Hainan Province, the nature of the HIAC is an on-profit legal entity, a legal institution for public interest. This is not only in line with the spirit of the Arbitration Law, but also echoes the requirements set out by the General Office of the CPC Central Committee and the State Council Information Office. Prior to the initiation of arbitration reform in Hainan Province, the former Provincial Legislative Affairs Office and the newly reconstituted Provincial Department of Justice, after sufficient study and research, in the first place submitted the Administrative Measures of Hainan International Arbitration Court (Hainan Arbitration Commission)and the restructuring plan and other regulatory instruments to Hainan Provincial Committee for Comprehensively Deepening Reform for deliberation and adoption. This provided a legal basis for major reforms such as the legal person governance structure of the arbitration institution, the constitution of the Board of Directors, and the management of human resources and finances and assets. This further provided fundamental compliance and law-governing foundation for guiding the direction for progressing the reform of arbitration system and mechanism in Hainan.

Second, draw on international experience. Arbitration is a method for resolving commercial disputes that is generally trusted and adopted by commercial parties. The reform of our arbitration system must be in line with internationally accepted rules and practice, and take an internationalized route. HIAC adopts the internationally accepted governance structure of a legal entity headed by the Board of Directors and established a governance mechanism with check and balance in decision-making, execution and supervision. Foreign Board members and arbitrators make up one third of the total number, The arbitration rules have fully received the international and advanced systems and experience. These reform measures are in line with the direction of international arbitration reform, and I believe they will be widely recognized by the industry domestic and abroad.

Third, aligns with market practice. In terms of the whole country, arbitration institutions mainly adopt either one of the two management modes, namely management by public institutions with reference to Civil Servant Law and management by public institutions. Arbitration is founded on party autonomy. Arbitration institutions and arbitrators are subject to the choice of the market. Therefore, market-oriented management is an inevitable requirement for the development of arbitration in the new era of economic and social development and this is the direction of arbitration reform and development. HIAC fully respects the practice of the arbitration market by taking the initiative to withdraw from public financial support, becoming financially responsible for its own income and expenditure, and paying taxes according to the law, whereby driving and furthering its development by its own competitiveness in the market. With respect to staff management, with the exception of statutory representatives, HIAC has fully implemented contract-based employment, resulting in a staffing system with flexibility concerning promotion and demotion as well as entry and exit. As regards staff remuneration and social security, with reference to international customs and market practice in the industry, HIAC has formulated a reasonable remuneration system for arbitrators and a performance appraisal system for staff. Staff’s remuneration varies with work performed. More pay is received for more work performed. Staff is obliged to participate in statutory social insurance schemes such as pension and medical insurance. Accordingly, a management system displaying the characteristics of arbitration work and practice and in line with market practice has been established.

3. Open a New Chapter for Arbitration in Hainan from a New Starting Point

The reform of arbitration in Hainan has kicked started their journey with elementary achievements. It is hoped that HIAC will, from a new starting point, continue to deepen reform and innovation and relentlessly enhance the credibility and international influence of arbitration.

First, adhere to the direction of internationalization. Based on the local practical considerations, HIAC continuously attends to, studies and introduces all advanced international arbitration concepts and rules to provide international and domestic commercial parties with first-class arbitration services. We strive to create a destination for international commercial arbitration. We shall strengthen international exchanges and cooperation with domestic and foreign high-end forums (organizations) such as the Boao Forum for Asia, academic and research institutions, international arbitration organizations and overseas arbitration institutions and so as to enhance the international awareness and influence of arbitration in Hainan. We focus on establishing commercial dispute resolution platforms in countries and regions along the "Maritime Silk Road", actively explore international case sources, and endeavour to become the main platform for international commercial dispute resolutions in the Hainan FTP as well as the regional brand for international arbitration.

Second, strengthen professional management. Particularly, there are included the professionalization of arbitration institutions, arbitration staff and arbitrators. Arbitration institutions specializing in handling civil and commercial disputes require a high degree of professionalism and independence. Arbitration institutions shall enhance education and training for different personnel such as management executives, arbitration secretaries, general staff so that they would become professionals in arbitration administration, arbitration case management and services and provide professional and accurate arbitration services for the parties concerned. The extent of professionalization of arbitrators directly determines the quality and efficiency of arbitration cases and the credibility of arbitration. Thus, we should further refine the division of specialties among arbitrators, provide systematic and all-round training for the relevant arbitrators based on the characteristics and requirement s of different professional areas, and continuously enhance their professional qualities and case handling ability in different specialist fields.

Third, facilitate the construction of standardized practice. Rules and regulations shall be further improved and aligned with those of the world-class arbitration institutions. For instance, we shall formulate and improve the administration of the case assessment procedures, management of the time limit for arbitration, case process management, as well as the management of the employment system and remuneration system for staff and arbitrators in order to fully form an administrative and working mechanism whereby the management of personnel and affairs are governed by the system. High standards and strict requirements ensure that the rules and regulations are truly implemented. Strict implementation of the appraisal system and the reward and punishment system, scientific application of the appraisal results, and rewarding diligence and punishing laziness would bring the administration of arbitration teams onto the track of normalization. We shall firmly establish the awareness of arbitration service and the brand of arbitration, conscientiously implement various systems of case management, carry out the whole-process and standardized management of arbitration cases and ensure fairness, impartiality, integrity and efficiency.

Fourth, promote the development of modernization. The modernization of arbitration work refers to the modernization of both hardware and software. The key lies in keeping pace with the times. We should focus on the application of new technologies such as the internet, cloud computing, big data, block chain and artificial intelligence in the arbitration arena. "Internet + arbitration" has a prospect of broad application. Online applications for arbitration by the parties, online case-filing and online arbitration hearings, being convenient, efficient and costs-saving, are of great value of popularization. As regards software modernization, management team, staff, arbitrators and so on need to have modern arbitration philosophies and concepts so as to formulate the arbitration culture and arbitration brand unique to HIAC. It should be said that compared with the modernization of hardware, software modernization is less easy. It requires broader horizons, a more open and inclusive mind, and need our relentless efforts!

4. Give full play to the decision-making, guiding and supervisory role of the Board of Directors

The Board of Directors is the decision-making body of HIAC, which is equivalent to the cerebrum in the centric nervous system. Whether the vision and mission of HIAC can be achieved hinges on the Board. I am willing to work together with the Board members to actively perform our duties.

First, adhere to scientific decision-making. The Board of Directors, As the decision-making body of HIAC, deliberates every issue that is important to the HIAC. Arbitration is a highly professional task, and each Board member shall, on the basis of careful study and research, use his own professional advantages, and take a highly responsible attitude towards the Hainan arbitration business, watch the gate tightly and make decisions scientifically. The Board is not only the important decision-making organ of HIAC, but also the link and platform for HIAC to communicate and connect with the world. We sincerely hope that the directors from different legal background and jurisdictions will give full play to their professional advantages, tell the stories of Hainan arbitration and PRC arbitration from an objective and real point of view, and actively promote and disseminate Hainan arbitration and PRC arbitration.

Second, strengthen work guidance. The Board members come from all over the world and are authoritative in their respective fields of expertise with broad international horizons and excellent professional skills. It is hoped that all directors will strengthen the macro-guidance for Hainan arbitration, actively learn about and study the latest research outcomes and practical experience of relevant arbitration institutions in terms of innovation in arbitration systems and mechanisms such as corporate governance, arbitration rules and arbitration business management, and recommend and refer HIAC timely. The Board members may also, on a need basis, strengthen the guidance of micro-business and provide professional advice, or strengthen the guidance on business for arbitrators and arbitration personnel by ways of lectures on specific topics and business training to improve their professional knowledge and case handling quality.

Third, strengthen supervision. In accordance with the provisions of the Articles of Association, Board members have the duty to supervise the implementation of the resolutions of the Board and the routine work. HIAC should report its work and developments to all Board members in a timely manner. Each director may supervise the implementation by means of special investigation and research. Necessary supervision and inspection of the daily management work of the HIAC may also be carried out in order to timely discover deficiencies, plug loopholes and promote the healthy and rapid development of the HIAC.

Dear fellow Board members, the construction of Hainan FTP is a major national strategy planned, deployed and promoted by XI Jinping, General Secretary of the Central Committee of CPC, having regard to the overall international and domestic situation. HIAC takes up the important responsibility and mission of providing quality legal services and legal backup for the construction of a law-governing, internationalized and facilitative business environment in the Hainan FTP. Historical opportunities have brought us altogether. I believe that, with our joint efforts, HIAC will certainly achieve fruitful results together with the construction of Hainan FTP. Let us embrace a brighter and prosperous tomorrow!

Thank you all!