山东洪达化工有限公司 v. 威立雅能源管理菏泽有限公司

At a glance

Parties

山东洪达化工有限公司 (Shandong Hongda Chemical Co., Ltd., applicant) v. 威立雅能源管理（菏泽）有限公司 (Veolia Energy Management (Heze) Co., Ltd., respondent to the application)

Case no.

(2021)京04民特636号

Court

北京市第四中级人民法院 (Beijing No. 4 Intermediate People's Court)

Forum and rules

Application to confirm the validity of an arbitration agreement under the PRC Arbitration Law

Treaty

None. The instrument is the arbitration clause in Article 21 of the Hongda Boiler Renovation and Steam Sale Agreement of 15 July 2016 (CIETAC arbitration in Beijing)

Underlying award(s)

None. A CIETAC arbitration started by Veolia (Heze) on 31 March 2020 was pending

Tribunal

冀东 (presiding judge), 于颖颖 and 朱秋菱 (judges)

Sector

Industrial energy; boiler renovation and steam supply

Outcome

Application dismissed (28 September 2021). The court held the arbitration clause valid.

Amount

Application fee RMB 400, borne by Hongda

The dispute

On 15 July 2016 Shandong Hongda Chemical Co., Ltd. (Hongda) signed a boiler renovation and steam sale agreement with Veolia (China) Energy Management Co., Ltd. That company later transferred all its rights and obligations under the agreement to Veolia Energy Management (Heze) Co., Ltd. (Veolia Heze) through a tripartite agreement. Article 21 of the agreement provided for CIETAC arbitration in Beijing before three arbitrators and stated that the third (presiding) arbitrator must not be a Chinese or French national or permanent resident. After Veolia Heze started a CIETAC arbitration, Hongda asked the court to declare the clause invalid. Hongda argued that the dispute was purely domestic, with no foreign element, and that requiring a non-Chinese presiding arbitrator broke the arbitrator qualifications in Article 13 of the Arbitration Law and China's public policy on judicial sovereignty. Veolia Heze replied that none of the grounds of invalidity in Article 17 of the Arbitration Law applied. It added that CIETAC is a domestic institution and that the law does not bar foreign arbitrators from domestic cases.

Key holdings

1. The arbitration clause in the Hongda Boiler Renovation and Steam Sale Agreement meets the requirements of Article 16 of the PRC Arbitration Law. None of the grounds of invalidity in Articles 17 and 18 applies, so the clause is lawful and valid. p. 6
2. The court found Hongda's request to have no basis and dismissed the application under Articles 17, 18 and 20 of the Arbitration Law. Its reasoning did not separately discuss the argument that requiring a non-Chinese presiding arbitrator in a domestic dispute breaches public policy. pp. 6–7
3. Before the court, both parties accepted that the legal relationship had no foreign element and that the arbitration was domestic. The court recorded that CIETAC had accepted Veolia Heze's arbitration on the basis of the clause and the tripartite agreement. pp. 2, 4, 6
4. Costs: the application fee of RMB 400 is borne by Hongda, which had already paid it. p. 7

Procedural history

1. 15 July 2016Hongda and Veolia (China) Energy Management Co., Ltd. sign the Boiler Renovation and Steam Sale Agreement, which contains the CIETAC arbitration clause in Article 21.
2. 30 March 2017Tripartite agreement transfers Veolia (China)'s rights and obligations to Veolia Heze. This date comes from Hongda's submissions.
3. 31 March 2020Veolia Heze files a request for arbitration with CIETAC. CIETAC accepts the case in 2020.
4. 11 August 2021The Beijing No. 4 Intermediate People's Court registers Hongda's application to declare the arbitration clause invalid.
5. 28 September 2021Ruling: the application is dismissed and the arbitration clause is held valid.

Tribunal, counsel and experts

For the claimant

北京市金杜律师事务所

For the respondent

北京天达共和律师事务所

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Keywords

• validity of arbitration agreement
• CIETAC
• Veolia
• nationality of presiding arbitrator
• foreign arbitrator
• domestic arbitration
• foreign-related element
• public policy
• judicial sovereignty
• PRC Arbitration Law Article 13
• Arbitration Law Article 16
• Arbitration Law Article 17
• Arbitration Law Article 67
• party autonomy
• steam supply
• boiler renovation
• China
• New York Convention Article V

Summary generated with AI from the published documents — refer to the award for the authoritative text.