New BAC Rules to enter into force on 1 September 2019

The Beijing Arbitration Commission (BAC) has updated its arbitration rules and fee schedule. The new versions will replace the current (2015) version, with effect from 1 September 2019.

Among a number of notable amendments, BAC's revised fee structure marks a significant step towards aligning Chinese arbitral practice with international standards. The new fee schedule:

• distinguishes between the institution's administrative charges and the arbitrator's fees, with a clear imposition of higher charges for the latter. Under the current fee schedule, arbitration fees are payable entirely to the institution, without transparency as to the proportion that is paid to the arbitrators;
• applies equally to both domestic and international arbitrations, removing any differentiation between the fees applicable. In addition, parties to domestic arbitrations can now agree to have the arbitrator's fees charged on an hourly basis whereas under the current rules, this option is only available for international arbitrations;
• increases the minimum administrative charges as well as arbitrator's fees. For arbitrations involving amounts in dispute below RMB 250,000, the administrative charges and arbitrator's fees shall be RMB 5,000 and RMB 12,000 respectively, totalling RMB 17,000. Under the current rules, the minimum arbitration fees payable for a dispute up to and including RMB 1,000 is only RMB 5,100, a sum that barely covers one hour of a sole arbitrator's hourly rate;
• imposes a maximum on the administrative charges and arbitrator's fees, thereby preventing disproportionately high costs for high-value cases. For arbitrations involving amounts in dispute of RMB 5 billion and above, the administration fees will be capped at RMB 8.761 million. If the disputed amount is RMB 8.682 billion and above, the arbitrators' fees will further be capped at RMB 18 million. Where hourly rates apply, an arbitrator's hourly fee shall be capped at a maximum of RMB 5,000.

Other highlights of the new BAC Rules include:

• the threshold for ordinary procedures before a full panel of three arbitrators has been increased from RMB 1 million to RMB 5 million. Where the amount in dispute falls below RMB 5 million, summary procedures handled by a sole arbitrator shall apply (Article 54);
• a claimant may file a single notice of arbitration where a dispute arises out of multiple contracts provided that (i) the contracts contain identical or compatible arbitration clauses and (ii) the contracts are collateral or the contracting parties are identical and the subject matter of the arbitration is of a similar or related nature (Article 8);
• amendments to the emergency arbitration procedure. Drawing on its experience of administering the first emergency arbitration in China in 2017, which resulted in an award that was successfully enforced in Hong Kong, BAC has clarified the emergency arbitration regime in its new rules. This includes clearer stipulations of the procedures and fees involved in the appointment of emergency arbitrators (Article 63);
• the period for BAC to accept a case after a claimant's payment of the requisite fees is extended from five to 10 days (Article 9);
• an option for certain administrative deadlines to be extended by approval of the Secretary-General of the BAC, depending on the circumstances of each case, is now expressly codified (Article 70).

The new BAC Rules and fee schedule will no doubt be warmly welcomed by users and practitioners, enhancing BAC's reputation as one of China's most progressive arbitral institutions.