Comparing head office and branches on arbitration agreement validity

Autonomy of will is the core logic of commercial arbitration. In other words, a valid arbitration agreement is a necessary prerequisite for arbitration institutions to have jurisdiction over property disputes between specific parties.

Although some specific circumstances of “the expansion of the validity of an arbitration agreement” have been recognised in theory and judicial practice abroad, only those in the Interpretation of the Supreme People’s Court concerning Some Issues on Application of the Arbitration Law are currently recognised in China at institutional level, and expansion between head office and branch company does not fall within the scope of the interpretation.

Therefore, in arbitration agreements with only one valid signature or seal of the head office or branch, if the opposite party wanted to include the other non-signatory to the agreement as an arbitral party participant in proceedings, there would undoubtedly be insufficient evidence to support the party’s claim.

However, in practice, claimants initiating arbitration often wish to list the head office or branch, without a valid signature and seal on the contract, as respondent to carry out its claim in arbitration. This article analyses whether such an arbitration strategy is valid in terms of contract relativity.

Click here to view the full article.