On Feb. 27, the first foreign company related ad hoc arbitration case of the Hainan Free Trade Port (FTP) began in Yangpu. This is the first cross-border commercial ad hoc arbitration case to be brought from an overseas court to the FTP, marking the first success of the Hainan ad hoc arbitration system in attracting local resolution of cross-border disputes.

Hainan’s first foreign company related ad hoc arbitration case began in Yangpu on Feb. 27. (Photo: Hainan Daily)

The case involves a contract dispute between a Singapore company and a Hainan company. The Singapore company submitted a property preservation request to the Yangpu Court of the Haikou Maritime Court, and prepared to apply for arbitration to the Singapore International Arbitration Center in accordance with the original contract. Thanks to the Hainan FTP’s ad hoc arbitration system, the two parties agreed to change the original arbitration clause specifying the Singapore International Arbitration Center, instead choosing to apply for ad hoc dispute arbitration in Hainan.

After receiving assistance and confirmation from the Hainan Arbitration Association, the two parties jointly selected a Chinese ad hoc arbitrator from Shenzhen who was not on the arbitrator list but who had extensive experience in the field of maritime arbitration. This was also the first Hainan ad hoc arbitration case involving an arbitrator who was not on the arbitrator list.

The trial was successfully concluded under the arbitrator. As the designated institution for the case, the Hainan Arbitration Association provided necessary services such as the venue for the hearing and the arbitration secretary. Liu Daojun, president of the Hainan Arbitration Association, said that this hearing marks the first time for Hainan’s innovative ad hoc arbitration system to be applied in the maritime and shipping industry, which has a long history of ad hoc arbitration. This shows the expanding international influence of this innovative practice in the key industries of the Hainan FTP.

In July, 2024, Hainan took the lead in exploring the implementation of ad hoc arbitration in China. According to Hainan's commercial arbitration regulations, ad hoc arbitration is applicable for commercial disputes between enterprises which are both registered in the Hainan FTP, between Hainan enterprises and international counterparts, and between foreign companies and companies registered in China's Hong Kong, Macao, and Taiwan regions, resolving disputes in a more efficient, cost-effective manner.