From: Judiciary answers to 14 Difficult Questionsabout Foreign-related Commercial Trials By Ningbo Intermediate People's Court, Zhejiang Province, PRC

Question: The parties submit the dispute to China'sforeign-related arbitration institution for arbitration according to the arbitration clause agreed in the contract. During this period, both parties reached anout-of-court settlement agreement, but no arbitration clause was agreed in the settlement agreement. Can the arbitration clause agreed in the original contract be applied to the dispute arising from the performance of the settlement agreement?

Answer: Although the out-of-courtsettlement agreement reached during the arbitration is a new legal relationship btween the two parties, the settlement agreement was generated by the two parties to resolve the dispute of the original contract and has a close relationship with the original contract. Now, the dispute between the two parties on the performance of the settlement agreement is essentially due to the non-performance of the original contract. The dispute can be subject to the arbitration clause in the original contract and arbitrated by the arbitration institution. However, if the arbitration institution expressly refuses to accept the case, and the parties may lose the right to relief, the court may file a case for acceptance as the case may be.