On 1 August 2012, CIETAC's authorisation to the CIETAC Shanghai sub-commission and the CIETAC South China sub-commission (branch offices of CIETAC), for accepting and administering arbitration cases was suspended (see China International Economic and Trade Arbitration Commission Announcement On the Administration of Cases Agreed to be Arbitrated by CIETAC Shanghai Sub-Commission and CIETAC South China Sub-Commission).

On 1 May 2012, at the time when the new CIETAC Arbitration Rules 2012 (2012 Rules) came into force, the CIETAC Shanghai sub-commission announced a split from CIETAC, with plans to become an independent institution. CIETAC responded at the time with a Statement declaring the Shanghai sub-commission's conduct to be a violation of the Arbitration Law of China, the relevant regulations of the State Council and CIETAC's Articles of Association (see Legal update, CIETAC and Shanghai sub-commission reported to have parted). Since that time, the Shanghai and South China sub-commissions have refused to apply the 2012 Rules and have refused to remain under the leadership of CIETAC in respect of case administration. Therefore, from 1 August 2012, parties who have agreed to arbitrate their disputes with the Shanghai or South China Sub-Commissions are requested to submit their applications for arbitration to CIETAC.

We will provide a fuller analysis of this development soon.