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49 court cases on arbitration agreement invalidness - unclear agreement (2)

June 21, 2023

Full title: 49 existing court cases on invalidness of arbitration agreement - If the arbitration agreement is unclear and the parties are unable to reach a consensus, the arbitration clause shall be invalid (2)

Case 8. The arbitration clause in the case stipulates that if a dispute arises due to the interpretation or performance of the contract, it may be submitted for arbitration to a certain arbitration committee in the place where one of the parties is located. After verification, if there is no such arbitration committee in the place, and there is no evidence to prove that the parties to the contract have reached a supplementary agreement on the dispute resolution method, the arbitration clause is unclear about the arbitration committee and should be deemed invalid.

Case Name: Wuhan Lingyang Technology Co., Ltd. and Northern Oil Union Wanjia Supply Chain Management (Tianjin) Co., Ltd. Applying for Confirmation of the Validity of the Arbitration Agreement

Case No.: (2019) E01 Minte No. 532

Reason for Judgment: The arbitration clause in the case stipulates that disputes arising from the interpretation or performance of the contract may be submitted for arbitration to the Beijing Arbitration Commission where Party B is located. The second party of the "Technology Development Contract" is Lingyang Company, located in Wuhan, Hubei Province, where there is no Beijing Arbitration Commission. Without evidence to prove that both parties have reached a supplementary agreement on dispute resolution, this arbitration clause is unclear about the arbitration commission and should be deemed invalid.

Case 9. The contract involved in the case stipulates that if a dispute arises between the two parties, they can submit it to an arbitration institution located in either party's location for arbitration. If there is an arbitration institution located in both parties' locations and no supplementary agreement has been reached on the choice of the arbitration commission, the arbitration clause shall be invalid.

Case Name: Liu Mouyong and Xiamen Jiabi Communication Engineering Co., Ltd. Applying for Confirmation of the Validity of the Arbitration Agreement

Case No.: (2021) Min 01 Min Te No. 182

Reason for Adjudication: The case involves Article 8, Paragraph 1 of the Cooperation Agreement, which stipulates: "Any matters not covered in this agreement shall be resolved through friendly consultation between Party A and Party B. If consultation fails, either party may submit them to the local legal arbitration institution for arbitration." Among them, Liu Mouyong's address is in Fuzhou, and Xiamen Jiabei Communication Engineering Co., Ltd.'s address is in Xiamen. Both parties have arbitration committees in their respective locations. Therefore, according to the agreement of the local legal arbitration institution, Unable to determine the arbitration institution, and both parties have not reached a supplementary agreement on the selection of an arbitration committee. According to Article 18 of the Arbitration Law of the China: "If the arbitration agreement does not stipulate or clearly stipulates the arbitration matters or the arbitration commission, the parties may supplement the agreement; if the supplementary agreement cannot be reached, the arbitration agreement is invalid", the arbitration clause agreed in the first paragraph of Article 8 of the agreement involved in the case is invalid.

Case 10. If both parties agree that the local arbitration commission shall mediate, but it is not clear whether it is the place of residence of the parties, the place of contract signing or the place of contract performance, or the request for arbitration, and if no supplementary agreement is reached between the parties regarding arbitration, the arbitration clause shall be invalid.

Case Name: Zhao Moukuan and Wang Mouzhu's Application for Confirmation of the Validity of the Arbitration Agreement

Case No.: (2020) Inner 01 Min Te 135

Reason for adjudication: According to Article 16 of the Arbitration Law of the China, the arbitration agreement shall contain the following contents: (1) expression of intention to request arbitration; (2) Arbitration matters; (3) Selected arbitration committee. In this case, both parties agreed to "request the local arbitration commission to mediate", but the term "local" in this clause did not specify whether it was the place of residence of the parties, the place of contract signing, or the place of contract performance; The agreement was not explicitly requested for arbitration in the "Arbitration Commission Mediation". Therefore, the arbitration commission mediation stipulated in the arbitration clause is unclear and the parties have not reached a supplementary agreement. The arbitration clause is invalid.

Case 11. If a dispute arises as stipulated in the contract and negotiation fails, an application for arbitration shall be submitted to the arbitration committee in the place where the contract is signed. However, if the place where the contract is signed is blank and both parties have not reached a new arbitration agreement to resolve the dispute, the arbitration clause shall be invalid.

Case Name: Sichuan Zefeng Real Estate Co., Ltd. and Deng Moubo's Application for Confirmation of the Validity of the Arbitration Agreement

Case No.: (2020) Chuan 09 Min Te No. 15

Reason for Adjudication: Arbitration is a dispute resolution method in which both parties to a dispute reach an agreement before or after the dispute arises and voluntarily choose to submit the dispute to an arbitration institution for arbitration. The dispute between the two parties in this case is whether the agreement on the arbitration institution in the arbitration agreement is clear, that is, whether the place of signing the contract in this case can be determined. From the contract confirmed by both parties involved in the case, although it was agreed that if a dispute arises and negotiation fails, the arbitration committee in the place where the contract was signed should apply for arbitration, the place where the contract was signed is blank in the contract. Now Sichuan Zefeng Real Estate Co., Ltd. said that after Deng Moubo signed the contract, it was sent to Chengdu, Sichuan Province, where Chen Moubo, the legal representative of Sichuan Zefeng Real Estate Co., Ltd., signed and sealed it. Deng Moubo said that the contract was signed after a field visit, and the contract was signed in Suining, Sichuan Province, but neither party submitted evidence to the Court to confirm the signing process and location of the contract. According to Article 16 of the Arbitration Law of the China, an arbitration agreement must be in writing and the arbitration clause must be clear. Therefore, the determination of the arbitration institution agreed upon by the parties cannot be inferred based on the contractual behavior of the parties. Deng Moubo believes that the evidence in the arbitration clause in the contract between the two parties regarding the selection of the arbitration institution is insufficient, and the two parties have not reached a new arbitration agreement to resolve the dispute. Therefore, this court supports Sichuan Zefeng Real Estate Co., Ltd.'s claim that the arbitration clause involved in the contract signed by both parties is invalid.

Case 12. If the arbitration clause stipulates two arbitration institutions and both parties fail to reach an agreement on the choice of arbitration institution, the arbitration clause shall be invalid.

Case name: Shenzhen Compaq Industrial Co., Ltd. and Xixia County Shunfa Motor Vehicle Testing Co., Ltd. applied for confirmation of the validity of the arbitration agreement

Case No.: (2020) Yue 03 Min Te No. 1310

Reason for Judgment: This case is a dispute regarding the application for confirmation of the effectiveness of the domestic arbitration agreement. After accepting the case, the people's court shall review it in accordance with the relevant provisions of the Arbitration Law of the China. According to Article 5 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Arbitration Law of the China, if the arbitration agreement stipulates two or more arbitration institutions, the parties may agree to choose one of them to apply for arbitration; If the parties cannot reach an agreement on the choice of arbitration institution, the arbitration agreement shall be invalid. According to Article 15 of the Product Purchase and Sales Contract involved in the case, if a dispute arises between the two parties and negotiation fails, it shall be submitted to the Xinxiang Arbitration Commission or Shenzhen Arbitration Commission for arbitration. Due to the agreement on two arbitration institutions in the arbitration clause, both parties were unable to reach an agreement on the choice of arbitration institution. In accordance with the provisions of Article 18 of the Arbitration Law of the China and Article 5 of the Interpretation of the Supreme People's Court on the Application of Certain Issues, the claim of the applicant Shenzhen Compaq Industrial Co., Ltd. to confirm the invalidity of the arbitration clause should be supported.

Case 13. The arbitration clause stipulates that the arbitration institution shall be the arbitration commission at the location of the defaulting party. However, in the absence of a physical trial of the case, the defaulting party cannot be determined, and the arbitration clause in question shall belong to a situation where both parties have an unclear agreement on the arbitration commission as stipulated by law.

Case Name: Shandong Xunda Chemical Group Co., Ltd. and Dandong Keli Chemical Technology Co., Ltd. Applying for Confirmation of the Validity of the Arbitration Agreement

Case No.: (2020) Lu 03 Min Te No. 207

Reason for Adjudication: Article 12 of the "Purchase and Sales Contract for Industrial and Mineral Products" signed between the applicant Shandong Xunda Chemical Group Co., Ltd. and the respondent Dandong Keli Chemical Technology Co., Ltd. stipulates that "the method of resolving contract disputes shall be through friendly consultation between both parties. If no resolution is reached, the defaulting party shall be arbitrated by the local arbitration committee. The applicant claims that the defaulting party is the respondent, so the Zibo Arbitration Commission in the other party's location has jurisdiction over this case. However, in this case, without a physical trial, it cannot be determined whether the defaulting party is the applicant or the respondent. The arbitration clause stipulated in the contract in this case belongs to a situation where both parties have an unclear agreement on the arbitration commission as stipulated by law, so the arbitration clause involved in the case should be invalid.

Case 14. If the arbitration institution stipulated in the contract does not exist, and the parties cannot reach a supplementary agreement on the selection of the arbitration institution, it is a situation where the arbitration commission is not clearly agreed upon, and the arbitration clause is invalid.

Case Name: Han, Cao, and others applied for confirmation of the validity of the arbitration agreement

Case No.: (2022) E01 Minte No. 206

Reason for decision: Article 18 of the Arbitration Law of the China stipulates: "If the arbitration agreement does not stipulate or clearly stipulates the arbitration matters or the arbitration commission, the parties may supplement the agreement; if the supplementary agreement cannot be reached, the arbitration agreement is invalid." The arbitration institution Hubei Arbitration Commission agreed in the Housing Decoration Project Construction Contract involved in the case does not exist, The parties have failed to reach a supplementary agreement on the selection of the arbitration institution, which is a situation where the agreement on the arbitration commission is unclear. According to Article 18 of the Arbitration Law of the China, the arbitration agreement involved in the case is invalid.