Commercial Arbitration and Jurisdictional Regulations

January 13, 2026

1. Concept

Commercial arbitration is a dispute resolution mechanism established based on the agreement and request of the disputing parties. The parties mutually select a third party—an arbitrator—to act as an independent intermediary for the purpose of protecting and resolving their respective rights and interests.

The jurisdiction of commercial arbitration is stipulated in Article 2 of the Law on Commercial Arbitration 2010:

“Article 2. Jurisdiction over Disputes of Arbitration

Disputes arising between parties from commercial activities.
Disputes arising between parties in which at least one party is engaged in commercial activities.
Other disputes between parties that are prescribed by law to be resolved by arbitration.”

Pursuant to Clause 5, Article 3 of the Law on Commercial Arbitration 2010, “An arbitrator is a person selected by the parties or appointed by an arbitration center or the court to resolve disputes in accordance with this Law.”
An arbitrator is deemed qualified when meeting the standards prescribed in Article 20 of the Law on Commercial Arbitration 2010.

“Article 20. Standards of Arbitrators

Persons who satisfy the following criteria may serve as arbitrators:
(a) Having full civil act capacity in accordance with the Civil Code;
(b) Holding a university degree and having at least five years of professional experience in the field of study;
(c) In special cases, experts with high professional qualifications and extensive practical experience may be selected as arbitrators even if they do not satisfy the requirement set out in Point (b) of this Clause.
Persons who satisfy the criteria specified in Clause 1 of this Article but fall under any of the following circumstances shall not serve as arbitrators:
(a) Judges, Procurators, Investigators, Judgment Enforcement Officers, or civil servants working for the People’s Courts, People’s Procuracies, Investigation Agencies, or Judgment Enforcement Agencies;
(b) Persons who are under criminal investigation, defendants, individuals serving criminal sentences, or individuals who have completed criminal sentences but have not yet had their criminal records expunged.
Arbitration centers may prescribe standards higher than those set out in Clause 1 of this Article for arbitrators within their respective organizations.”

2. Jurisdiction of Arbitrators

The powers of arbitrators in arbitral proceedings are not consolidated within a single provision but are scattered across various articles of the Law on Commercial Arbitration 2010.

First, arbitrators have the authority to decide whether to accept or decline the resolution of a dispute pursuant to Clause 1, Article 21.

Second, with regard to the language of arbitral proceedings, the parties may reach an agreement. In the absence of such agreement, the Arbitral Tribunal shall decide the language to be used pursuant to Clause 2, Article 10.

Third, in disputes involving foreign elements, the parties are entitled to agree on the applicable law. Failing such agreement, the Arbitral Tribunal shall apply the law it considers most appropriate pursuant to Clause 2, Article 14.

Fourth, the parties may agree on the venue for dispute resolution. In the absence of agreement, the Arbitral Tribunal shall determine the venue, without territorial limitation, provided that it complies with legal requirements, pursuant to Clause 1, Article 11.

Fifth, arbitrators are empowered to examine whether an arbitration agreement is invalid or incapable of being performed, and whether the dispute falls within the jurisdiction of the Arbitral Tribunal pursuant to Clause 1, Article 43.

Sixth, arbitrators may correct, interpret, or issue an additional arbitral award within thirty (30) days from the date of receipt of the award, unless otherwise agreed by the parties, pursuant to Article 63.

Seventh, the Arbitral Tribunal has the authority to verify facts. During the dispute resolution process, the Tribunal may meet and exchange views with the parties in the presence of the opposing party, using appropriate methods to clarify relevant issues. Arbitrators may independently or upon the request of one or more parties collect information from third parties, with the presence of one party or after notifying all parties, pursuant to Article 45.

Eighth, the Arbitral Tribunal may apply interim urgent measures at the request of a party and may require the requesting party to provide financial security pursuant to Article 49.

Finally, the Arbitral Tribunal has the authority to modify, supplement, or revoke interim urgent measures pursuant to Article 51 of the Law on Commercial Arbitration 2010.

3. Determination of Jurisdiction

The determination of an arbitrator’s jurisdiction follows the same principles as those applicable to commercial arbitration. The first and fundamental consideration is the existence of a valid arbitration agreement. An arbitration agreement exists only when it is established in writing as prescribed in Article 16 of the Law on Commercial Arbitration 2010.

In practice, arbitration agreements may be established in various forms, including arbitration clauses incorporated into contracts, standalone arbitration agreements, or exchanges via letters, telegrams, faxes, emails, or other lawful electronic means. If the existence of an arbitration agreement cannot be proven, there is no legal basis for determining the arbitrator’s jurisdiction.

Once the existence of the arbitration agreement is established, its validity must be examined. Even where the parties have executed an arbitration agreement, if such agreement falls under any of the invalidity grounds specified in Article 18 of the Law on Commercial Arbitration 2010, it shall be deemed null and void, and the arbitrator shall have no jurisdiction to resolve the dispute. Any arbitral award rendered on the basis of such invalid agreement risks being set aside by the court.

An arbitrator has jurisdiction only over disputes expressly covered by the arbitration agreement and satisfying the conditions set forth in Article 2 of the Law on Commercial Arbitration 2010. Fundamentally, an arbitration agreement reflects the parties’ consensus on dispute resolution, and arbitral authority exists only where such agreement is valid. Should an arbitrator exceed the scope of authority granted under the arbitration agreement, the arbitral award may be set aside by the court pursuant to Article 68.

Arbitrators may examine the existence and validity of the underlying contract and determine whether a dispute falls within the jurisdiction of the Arbitral Tribunal pursuant to Article 43. However, arbitral jurisdiction remains subject to judicial supervision, particularly at the stage where a court reviews an application to set aside an arbitral award.

4. Jurisdictional Disputes

First, one of the most common jurisdictional disputes concerns the existence and validity of the arbitration agreement. Determining whether such agreement exists and is valid is a critical prerequisite for initiating arbitral proceedings. If the arbitration agreement does not exist or is invalid, subsequent procedural steps in arbitration cannot be lawfully carried out.

Second, disputes often arise regarding the scope of the arbitration agreement and the arbitrator’s jurisdiction. In such cases, one party may argue that the dispute falls outside the agreed scope or does not satisfy the conditions under Article 2 of the Law on Commercial Arbitration 2010. Examples include disputes arising from ancillary contracts, related contracts without arbitration clauses, disputes involving Master Service Agreements (MSAs), mergers and acquisitions (M&A), or disputes relating to ownership or use rights over special assets such as land, housing, or land-attached assets.

Finally, jurisdictional disputes may concern the parties involved in arbitral proceedings, particularly where third parties who did not sign the arbitration agreement seek to participate, or in cases of succession of rights and obligations, or disputes involving parent and subsidiary companies. Any extension of arbitral jurisdiction to non-signatory parties must be carefully examined; otherwise, the arbitral award may be set aside.

It is evident that determining an arbitrator’s jurisdiction is a legally rigorous process. In practice, many arbitral awards are set aside not because of substantive errors, but due to defects in the determination of arbitral jurisdiction. Therefore, jurisdictional determination is a key factor in safeguarding the finality and enforceability of arbitral awards, thereby strengthening the parties’ confidence in arbitration as an effective dispute resolution mechanism.

5. Resolving disputes through BIGBOSS International Commercial Arbitration Center (BBIAC)

To resolve disputes by commercial arbitration at BBIAC, parties may incorporate one of the following clauses into their contract:

5.1. Model arbitration clause

The parties may further agree on:

(a) the number of arbitrators: [one or three];
(b) the seat of arbitration: [city and/or country]
(c) the governing law of the contract
(d) the language of arbitration

Notes:

Applicable only to disputes involving foreign elements.
Applicable only to disputes involving foreign elements or disputes where at least one party is a foreign-invested enterprise.

5.2. Model arbitration clause under the expedited procedure

“Any dispute arising from or in connection with this contract shall be resolved by arbitration at the BIGBOSS International Commercial Arbitration Center (BBIAC) in accordance with its Arbitration Rules. The parties agree that the arbitration shall be conducted under the Expedited Procedure provided for in Article 37 of the BBIAC Arbitration Rules.”