By Dr Tietie “Frank” Zhang, The City Law School
In an article recently published in the Hong Kong Law Journal, Dr Tietie “Frank” Zhang discusses the appropriate approach that the Supreme People’s Court of China (SPC) should adopt when interpreting the scope of an arbitration agreement.
Arbitration is the preferred method to resolve international commercial disputes in today’s world. The scope of an arbitration agreement is a key issue in the theories and practice of international arbitration, because it directly decides an arbitrator’s jurisdiction. If a dispute falls outside the scope of an arbitration agreement concluded between the two parties, the arbitrator will not have authority to decide the case. This therefore makes scope a crucial factor in the arbitration process.
Courts in many jurisdictions and particularly those that are pro-arbitration, or friendly towards arbitration, have adopted a presumptive rule when determining scope issues. Under this rule, courts interpret the scope of an arbitration agreement broadly to cover all disputes related to the contract between the parties, except for those they have explicitly excluded. As a result, disputes broadly related to a contract, including those arising out of a supplemental agreement or a settlement agreement, are usually deemed as falling within the scope of the arbitration clause in the original contract.
