China International Economic and Trade Arbitration Commission (CIETAC), as China’s online dispute resolution (ODR) provider under the APEC Collaborative Framework for ODR of Cross-Border B2B Disputes (Collaborative Framework), provides ODR service with an entirely online process of negotiation, mediation and arbitration to resolve B2B cross-border commercial disputes, esp. between micro-, small-, and medium-sized enterprises (MSMEs), in accordance with the Collaborative Framework and its Model Procedural Rules.
Parties may agree, before or after a dispute has arisen, to submit the dispute to CIETAC for resolution via its APEC ODR service platform in accordance with the Model Procedural Rules. Please refer to our “Model Clause” when drafting such agreement or dispute resolution clause.
- Collaborative Framework
- Scope of Application
- ODR Proceedings
- Appointment of Neutral
- Why CIETAC?
Collaborative Framework In August 2019, the APEC Economic Committee endorsed the Collaborative Framework and its Model Procedural Rules, by partnering with ODR providers located in APEC economies, establishes an APEC-sponsored initiative to provide quick, inexpensive ODR service for resolving B2B cross-border disputes of low value through ODR proceedings of negotiation, mediation and arbitration, so as to promote B2B cross-border confidence and healthy development of the business environment in the Asia-Pacific Region.
For more background and detailed contents of the Collaborative Framework, please visit APEC’s official website: https://www.apec.org/SELI/Overview
Scope of Application According to Article 1 of the Model Procedural Rules, the Rules shall apply to disputes satisfying the following conditions: - 1. business-to-business (B2B) disputes;
- 2. disputes relating to a sales or service contract;
- 3. where the parties have agreed that disputes relating to the transaction shall be resolved under the Model Procedural Rules, so long as the dispute falls within the scope of the Rules;
- These rules shall govern the ODR proceedings subject to such modifications as the parties may agree, except that where any of these Rules is in conflict with a provision of the law applicable to the ODR proceedings from which the parties cannot derogate, that provision shall prevail.
In addition, in light of the purpose of the Collaborative Framework and the scheme design of its Model Procedural Rules, also considering the development status quo of online dispute resolution, the ODR proceedings currently SHALL NOT apply to any case where the amount in dispute (calculated by the aggregate of the claims and counterclaims) exceeds RMB 5,000,000 in the APEC ODR service provided by CIETAC. The parties may agree to submit such cases to CIETAC for arbitration in accordance with its arbitration rules currently in effect. For more information, please visit the official website of CIETAC: http://www.cietac.org/
ODR Proceedings According to the Model Procedural Rules , the APEC ODR proceedings, after commencement, will go through 3 stages, namely, negotiation, mediation and arbitration, which will be entirely conducted on the ODR platform of the ODR provider.
In the APEC ODR service provided by CIETAC, a complete set of the ODR proceedings is as follows:
ODR Commencement of the ODR Proceedings
- The Claimant shall first register/log in on the ODR platform, communicate the commencement notice to CIETAC. CIETAC, after accepting the case, shall notify the Respondent of the availability of the notice at the platform, by which point the ODR proceedings shall be deemed to commence.
- The Respondent shall communicate its response and counterclaim (if any) to CIETAC via the platform within 7 days.
Negotiation Stage
1. Commencement of the negotiation stage: - (1) If the response does not include a counterclaim, the negotiation stage shall commence upon communication of the response to CIETAC, and notification thereof to the Claimant.
- (2) If the response does include a counterclaim, the negotiation stage shall commence upon communication of the response by the Claimant to that counterclaim to CIETAC and notification thereof to the respondent, or after the expiration of 7-day response period, whichever is earlier
- 2. The period for negotiation is 10 days, which may be extended for one time upon parties’ agreement, but such extension shall be no more than 10 days.
Mediation Stage
- 1. The mediation stage shall commence:
- (1) if the Respondent does not communicate a response to the commencement notice within the specified time period;
- (2) where one or both parties request that the process move to the mediation stage;
- (3) where a party elects not to engage in the negotiation stage;
- (4) if the parties have not settled their dispute by negotiation within the negotiation period.
- 2. Upon commencement of the mediation stage, CIETAC shall promptly appoint a neutral to mediate the dispute.
- 3. The period for mediation is 10 days.
Arbitration Stage
- 1. If the parties have not settled their dispute by mediation within the mediation period, the ODR proceedings shall move to the final stage of arbitration, with the same neutral arbitrating the dispute.
- 2. The neutral shall notify the parties of the deadline for any final submissions, and evaluate the dispute based on the information submitted by the parties and shall render an award.
- 3. The award shall be rendered within 10 days from a specified point as determined by CIETAC.
Appointment of Neutral - If the parties fail to settle their dispute during the negotiation stage, CIETAC will appoint a neutral from its List of Neutrals to mediate the dispute. If no settlement is reached within the mediation period, the same neutral shall proceed to conduct the arbitral proceedings for final resolution of the dispute through arbitration.
Why CIETAC?- International brand of Chinese arbitration
- China International Economic and Trade Arbitration Commission (CIETAC), established in 1956, is the first arbitration institution in China and one of the major permanent arbitration institutions in the world. CIETAC enjoys a high reputation internationally, and has been recognized as one of the 5 most preferred arbitration institutions in the world in the 2021 International Arbitration Survey.
- Rich experience in cross-border commercial dispute resolution and expert resources
- In the past nearly 70 years, CIETAC has concluded over 60,000 international and domestic arbitration cases involving parties from more than 160 countries and regions, and its awards have been recognized and enforced worldwide. CIETAC has been widely acknowledged at home and abroad for its independent, impartial and efficient arbitration service. The practice of combination of conciliation with arbitration is the “oriental experience” initiated by CIETAC.
- CIETAC currently has a highly international pool of 1881 arbitrators from 145 countries and regions. CIETAC also has 300 domestic and international mediators.
- Nationwide service network with overseas branches
- CIETAC is headquartered in Beijing, and has built a nationwide network composed of 13 domestic branches in different parts of China, as well as overseas branches at HK, Europe and North America.
- Confidentiality and data security
- The ODR proceedings are confidential, which is conducive to protect the business reputation and secrets of enterprises, facilitate the dispute resolution between the parties in a harmonious atmosphere, and maintain the foundation for future cooperation of the parties.
- The APEC ODR service platform of CIETAC employs technologies to ensure that the collection, use, processing and storage of all information data during the negotiation, mediation and arbitration stages are in strict compliance with the relevant legislation, regulations, systems and standards, in order to protect the security of the users’ personal data and guarantee the orderly conduct of the ODR proceedings .
- Reasonable and manageable dispute resolution cost
- Considering the APEC ODR service is primarily for MSMEs to settle low value disputes, CIETAC adopts a lump-sum fee schedule with substantially lowered fee standards, to keep the total dispute resolution cost relatively low and as reasonable and manageable as possible.
- CIETAC will endeavor to provide convenient, efficient, professional and inexpensive APEC ODR service, and promote the development of cross-border trade as well as dispute resolution for the digital economy.
Special NoteIn light of the purpose of the APEC ODR Collaborative Framework and the scheme design of its Model Procedural Rules, also considering the development status quo of online dispute resolution, the ODR proceedings currently SHALL NOT apply to any case where the amount in dispute (calculated by the aggregate of the claims and counterclaims) exceeds RMB 5,000,000 in the APEC ODR service provided by CIETAC. The parties may agree to submit such cases to CIETAC for arbitration in accordance with its arbitration rules currently in effect.
For more details, please visit the official website of CIETAC: http://www.cietac.org/
Provisions on FeesI. Registration FeeWhen submitting a commencement notice to initiate the ODR proceedings pursuant to Article 4 of the Model Procedural Rules, the Claimant shall pay a registration fee of RMB 1,000, and advance the ODR proceedings fee in accordance with the fee table below. The registration fee is not refundable.
II. ODR Proceedings Fee1. ODR Proceedings Fee TableUp to 100,000
5% of the amount，minimum 4,000
From 100,001 to 200,000
5,000 + 4% of the amount over 100,000
From 200,001 to 500,000
9,000 + 3% of the amount over 200,000
From 500,001 to 1,000,000
18,000 + 2% of the amount over 500,000
From 1,000,001 to 5,000,000
28,000 + 0.6% of the amount over 1,000,000
2. The ODR proceedings fee is a lump sum fee which includes the fees of the neutral in item (1) and the fees and expenses of CIETAC as the ODR provider in item (4) of Article 21 of the Model Procedural Rules, but does not exclude the costs in items (2) and (3).
3. All the fees shall be charged in RMB or in the equivalent amount of USD based on the exchange rate on the date of payment notification.
4. If the Respondent files a counterclaim in the ODR proceedings, it shall advance the corresponding fee in accordance with the above fee table.
5. Claims and counterclaims are aggregated for the determination of the amount in dispute. Where the amount in dispute is not ascertained, or where special circumstances exist, the fee shall be determined by CIETAC taking into account of the circumstances of the case.
6. In addition to Article 20 of the Model Procedural Rules on the allocation of costs at the arbitration stage, the ODR proceedings fee shall be disposed as follows:
- (1) where at the negotiation stage a settlement agreement is reached between the parties or the case is dismissed based on the parties’ withdrawal of claims and/or counterclaims, the ODR proceedings fee shall be refunded in its entirety;
- (2) where a settlement agreement is reached between the parties at the mediation stage, the ODR proceedings fee shall in principle be equally borne by both parties, unless the parties have agreed otherwise or the neutral has decided otherwise;
- (3) where the case is dismissed based on the parties’ withdrawal of claims and/or counterclaims at the mediation stage or the arbitration stage, CIETAC shall decide whether the ODR proceedings fee needs to be partially refunded, taking into account of the circumstances of the case and the progress of the ODR proceedings.
Cost EstimationThis calculation is only for reference. The deposit shall be paid according to the specific amount notified by CIETAC.
