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[(2019) Q-96-M-T-No.43]The First Intermediate People's Court of Hainan Province Civil Ruling

The First Intermediate People's Court of Hainan Province
Civil Ruling
(2019) Q-96-M-T-No.43
Applicant: Hainan Ding'an Tianjiu Food Culture Plaza Co., Ltd. Domicile: No. 138, Huancheng South Road, Taling New District, Ding'an County, Hainan Province.
Legal Representative: Zheng Ticai, president of the Company.
Attorney: Pan Xiaoli, a lawyer of Hainan Gangfeng Law Firm
Attorney: Zhao Yue, a lawyer of Hainan Gangfeng Law Firm
Respondent: Zhou Yin, male, Han nationality, born on July 31, 1967, having his domicile at No.299-99 Jinsheng Road, Dongshan Street, Jiangning County, Nanjing City, Jiangsu Province.
Attorney: Zhao Yue, a lawyer of Beijing Zhongming (Chengmai) Law Firm.
The Court put on record on December 25, 2019 with respect to the case that the Applicant Hainan Ding'an Tianjiu Food Culture Plaza Co., Ltd. (hereinafter referred to as "Tianjiu Company”) and the Respondent Zhou Yin applied to confirm the validity of the arbitration agreement, after which a collegiate bench was established to inquire the Parties hereto and review the case. The Case has been closed.
Tianjiu Company claim through application that it requested the People's Court to judge that the arbitration clauses agreed in the Commercial Housing Sales Contract of Ding'an County entered into by both parties on January 8, 2015 to be null and void. Reason: the Ding'an Arbitration Commission as agreed in Commercial Housing Sales Contract of Ding'an County entered into by the Applicant Tianjiu Company and the Respondent Zhou Yin did not exist, which should be deemed to be no agreements have been reached in this respect. In accordance with Article 18 of Arbitration Law of the People’s Republic of China, i.e. "where an arbitration agreement does not specify or clearly specify the items for arbitration or an arbitration commission, the litigants may reach a supplementary agreement. Where they fail to reach a supplementary agreement, the arbitration agreement shall be deemed invalid, on account of which the arbitration clauses agreed in the Contract shall be invalid.
Zhou Yin defensed that there was only one arbitration committee in Hainan Province, and the arbitration committee specified by both parties is clear and the arbitration clauses are valid.
Upon investigation and review, it was found that on January 8, 2015, the Commercial Housing Sales Contract of Ding'an County was entered into by Tianjiu Company and Zhou Yin with respect to the fact that Zhou Yin intended to purchase the house located at S9 (Room) No.20 Building (#) First (Floor) developed by Ding'an Tianjiu Food Culture Plaza Co., Ltd., on the east side of Fumin Avenue in Taling New District. Article 27 of the Contract stipulates: "Any disputes arising during the performance of this Contract shall be resolved by both parties through negotiation; should such negotiation fail, it shall be resolved in the first way as follows: 1. Apply to Ding'an Arbitration Commission for arbitration. 2. Bring a suit before the People's Court that has jurisdiction in accordance with the law." In November 2019, Zhou Yin filed an arbitration application with the Hainan Arbitration Commission with respect to the dispute arising from the performance of the Contract. Hainan Arbitration Commission has accepted the application, but the arbitration tribunal has not yet held a hearing.
The Court verifies that this case is that the parties hereto applied to confirm the validity of the arbitration contract. The People's Court shall, upon acceptance of the Case, review the validity of arbitration agreements entered into between the parties in accordance with Articles 16, 17 and 18 of Arbitration Law of the People’s Republic of China, Articles 3 and 6 of Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the Arbitration Law of the People's Republic of China, and other regulations. The Applicant Tianjiu Company applied for verification that the arbitration clauses involved in the case were invalid on the grounds that the arbitration institution set out in the Commercial Housing Sales Contract of Ding'an County did not exist. Firstly, in accordance with the provisions and spirit of Article 3 of Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the Arbitration Law of the People's Republic of China “Where an arbitration agreement only includes the arbitration rules applicable for the dispute at issue, the parties concerned shall be deemed not to have agreed upon the arbitration institution, unless the parties have reached a supplementary agreement or the arbitration institution can be identified through their agreed-upon arbitration rules”, and Article 6 “If an arbitration agreement states that arbitration shall be conducted by an arbitration institution at a certain place, and there is only one arbitration institution in that place, such arbitration institution shall be deemed the agreed-upon arbitration institution. If two or more arbitration institutions exist in that place, the parties concerned may select, by agreement, one of these arbitration institutions to which they will apply for arbitration. If the parties fail to reach an agreement on the arbitration institution, the arbitration agreement shall be deemed invalid.”, the following two aspects should be taken into account when judging the validity of such arbitration agreement. Firstly, is the intention of the parties to apply for arbitration at the time of entering into the contract clear? Secondly, is it possible for the party who objects to the validity of arbitration agreement to choose two or more arbitration institutions when the contract is concluded without specifying the specific arbitration institution? In this case, agreements on dispute resolution are as follows: "any disputes arising during the performance of this Contract shall be resolved by both parties through negotiation; should such negotiation fail, it shall be resolved in the first way as follows: 1. Apply to Ding'an Arbitration Commission for arbitration. 2. Bring a suit before the People's Court that has jurisdiction in accordance with the law." It is obvious that the parties hereto express their intention to explicitly exclude the jurisdiction of the People’s Court on the issue of whether to resolve disputes through arbitration or litigation. Given that Ding'an County is under the jurisdiction of Hainan Province, Hainan Province had only one arbitration institution, the Hainan Arbitration Commission, when the parties concluded the Contract. In this case, it is impossible for the parties to choose other arbitration institutions. Therefore, there would be no ambiguity in choosing arbitration institutions. Secondly, the Contract involved in the Case is a contract on commercial housing sales, which was concluded with standard terms, and Tianjiu Company is the party providing the standard terms. Now, Tianjiu Company claimed to verify that the standard terms provided by it are invalid, which goes against the principle of good faith. In accordance with Article 41 of Contract Law of the People's Republic of China, “If the standard term is subject to two or more interpretations, it shall be interpreted against the party supplying it, this Court shall make an explanation that is not in favor of Tianjiu Company when interpreting the arbitration clauses. On account of this, the claim of Tianjiu Company that the arbitration institution stipulated did not exist shall be deemed to be a claim without basis, which is hereby rejected by this Court. Thirdly, Guiding Opinions on Supporting Hainan's Comprehensive Deepening of Reform and Opening-up was introduced by the Central Committee of the Communist Party of China and the State Council in April 2018, supporting Hainan to set up international economic and trade arbitration institutions and diversified dispute resolution institutions such as international dispute mediation institutions. On December 31, 2018, Several Opinions on Improving the Arbitration System and Increasing the Credibility of Arbitration was introduced by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council, stating that “efforts must be made to give full play to the role of arbitration in respecting the autonomy of the parties’ will, as well as convenient and efficient dispute resolution.” All of these fully reflect the current trend of my country's paying more attention to the principle of party autonomy in dispute resolution, respecting the parties’ voluntary choice of arbitration methods to resolve disputes, and ensuring the development of arbitration. The People’s Court shall make judgments in favor of the recognition of the validity of arbitration clauses on the premise of respecting the autonomy of will of the parties in accordance with the law and supporting the sound development of the arbitration business. In this Case, the parties’ declaration of will to submit for arbitration to resolve the disputes thereof is clear, without any ambiguity in the choice of specific arbitration institutions; moreover, the arbitration clauses involved herein shall be affirmed as valid arbitration agreements.
To sum up, the claim of Tianjiu Company to verify the invalidity of arbitration agreements lacks factual and legal basis, to which this Court shall reject. In accordance with Articles 16 and 20 of Arbitration Law of the People’s Republic of China, and Articles 3 and 6 of Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the Arbitration Law of the People's Republic of China, this Court hereby sentences:
The application put forward by the Applicant Hainan Ding'an Tianjiu Food Culture Plaza Co., Ltd. on verifying the arbitration clauses set out in the Commercial Housing Sales Contract of Ding'an County entered into with Zhou Yin dated January 8, 2015 to be invalid is hereby rejected.
The application fee of 400 yuan shall be borne by the Applicant Hainan Ding'an Tianjiu Food Culture Plaza Co., Ltd.
After this Civil Ruling reaches, above ruling shall be executed immediately.
 
Chief judge: Su Zhihui
Judge: Liang Jingjing
Judge: Long Shujuan
 
December 31, 2019
Court Clerk: Wu Yali


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