Earlier this year, Prime Minister Mark Carney’s speech at the World Economic Forum Annual Meeting in Davos was a pivotal moment for Canada’s international economic positioning. His speech was delivered against a backdrop of heightened pressure from the Trump administration, including tariff measures affecting Canadian trade and rhetoric touching on Canadian sovereignty. Importantly, it underscored Canada’s need to navigate an increasingly complex global environment with pragmatism and resilience. This broader repositioning has now shaped Canada’s approach to important commercial relationships, including with China.
An earlier sign of that shift was the Prime Minister’s prior trip to China, which appeared to mark a thaw in Canada-China relations after a prolonged period of strain. Carney’s later speech in Davos this year then elevated that broader repositioning onto the international stage. Businesses are watching closely to see what this thaw could mean for trade, investment, and cross-border commercial activity. But where commercial momentum grows, disputes inevitably follow, and the real question becomes whether the dispute resolution framework is ready for the evolving world.
Meanwhile, China has revised its arbitration framework in ways that appear intended to modernise the management of business disputes, particularly in foreign-related matters. The revised Arbitration Law of the People’s Republic of China, adopted on September 12, 2025, and in effect since March 1, 2026[1] (“Revised Arbitration Law”), introduces a number of changes that international stakeholders may wish to keep in view.
As commercial engagement increases, China’s revised arbitration framework may become increasingly relevant in cross-border transactions and disputes. This relevance may arise from the parties’ contractual arrangements, a transaction’s connection to China, or the need to consider at the drafting stage how potential disputes would be managed.
This bulletin highlights a few key changes in the Revised Arbitration Law. It is intended as commentary from an international arbitration and cross-border commercial planning perspective. The focus is not to advise on the content or application of Chinese law, nor to provide a comprehensive interpretation of the Revised Arbitration Law.
A Few Key Changes in China’s Revised Arbitration Framework
One theme runs through the revisions: certain aspects of China’s arbitration framework appear to move closer to concepts that international stakeholders already recognise, while keeping clear boundaries around how, where, and in what types of disputes those tools are available.
The Seat of Arbitration
A central example is the law’s clearer treatment of the seat of arbitration. At a high level, Article 81 expressly recognises the “place of arbitration” as a legal anchor in foreign-related cases. Parties can agree on the seat in writing and the award is deemed to have been made at the seat. Where the parties have not agreed on the seat or where the agreement is unclear, Article 81 provides that the seat will be determined first by the agreed arbitration rules. If the arbitration rules contain no such provision, then the arbitral tribunal will determine the seat based on the circumstances of the case and in accordance with the principle of facilitating dispute resolution. The selection of the seat can be significant because, in international arbitration, the seat is not merely a geographical reference point, but rather a legal concept that helps anchor the arbitration within a particular procedural framework.
Where the seat is in China, parties should consider that courts at the seat may have a supervisory role in relation to the arbitration. That makes the choice of seat an important one. Parties may wish to consider the legal framework that may apply, the role of the courts at the seat, and the practical and commercial context in which any related proceedings may arise. The choice is therefore best treated as a substantive strategic decision, to be assessed in light of the transaction, parties, and dispute resolution objectives, rather than as a neutral drafting detail.
International Cooperation and Investment Arbitration
This move toward greater international alignment is also reflected in Article 12, which encourages domestic arbitration institutions to strengthen exchange and cooperation with overseas institutions and relevant international organisations, including participation in the development of international arbitration rules. In addition, Article 94 appears to contemplate that arbitration institutions or arbitral tribunals may handle international investment arbitration matters in accordance with applicable investment treaties or agreements and the rules agreed by the parties.
Enforcing Awards Rendered Outside China
The Revised Arbitration Law also addresses a practical issue that matters in any cross-border relationship: what happens if an award is rendered outside China? Article 88 appears intended to clarify aspects of the process for seeking recognition and enforcement in China of arbitral awards made abroad, aligning the regime more closely with the Civil Procedure Law of the People’s Republic of China (“PRC”). It refers to enforcement applications before the relevant Intermediate People’s Court by reference to the award debtor’s place of residence or assets, and, where both are outside China, the award creditor’s place of residence or another location reasonably connected to the dispute.
Article 88 contemplates that the review of enforcement applications is to be conducted in accordance with applicable international treaties or the principle of reciprocity. It also formalises a reciprocity mechanism allowing corresponding measures where foreign jurisdictions impose discriminatory treatment on PRC parties. For businesses engaged in cross-border trade and investment, the enforceability of an award can be just as important as the forum selected at the outset.
Provisional Relief
Another important change speaks to what businesses often care about most when a dispute escalates: speed and means to preserve the status quo. Article 39[2] addresses provisional relief[3] in a more business-facing way by covering property preservation and also orders requiring or prohibiting certain acts. It also appears to contemplate that, in urgent circumstances, a party may apply to the domestic court before commencing arbitration. In many disputes, provisional measures can have an outsized effect on commercial leverage and business continuity long before a final award is rendered.
Online Arbitration
The Revised Arbitration Law also recognises online arbitration, which has become a common feature of international arbitration. Article 11 provides that arbitration activities may be conducted online, unless a party expressly objects, and that online arbitration activities have the same legal effect as offline/in-person arbitration activities. This development appears broadly consistent with the increased use of remote and technology-enabled procedures in international arbitration, including under the rules or practices of institutions such as the International Chamber of Commerce, the London Court of International Arbitration, the International Centre for Settlement of Investment Disputes, and the Singapore International Arbitration Centre.
Ad Hoc Arbitration
The revisions also provide for ad hoc arbitration in certain foreign-related categories under Article 82. For instance, in foreign-related maritime disputes and certain foreign-related disputes between enterprises registered in designated areas (including free trade zones and the Hainan Free Trade Port), parties may choose either institutional arbitration or, with China as the seat, proceed under agreed rules before an arbitral tribunal constituted by qualifying individuals, provided that the arbitrators meet the statutory requirements.
These ad hoc arbitrations are subject to additional administrative features, including a requirement that the details of the arbitration be filed with a relevant arbitration association within three working days of the arbitral tribunal’s constitution. The law does not specify which arbitral association is responsible for these filings and Article 82 only sets out the general framework. Certain practical aspects therefore remain to be clarified, including procedural mechanics for court involvement where interim measures are sought.
Time Limit to Apply to Set Aside an Award
Finally, the law tightens post-award timing. Article 72[4] reduces the time limit to apply to set aside an award to three months from receipt. Although procedural in form, changes of this kind can affect post-award strategy and the pace at which parties must make consequential decisions.
Rules, Seat, and Consent to Arbitrate: Different Questions with Different Answers
Needless to say, arbitration agreements and/or clauses should be drafted carefully. The Revised Arbitration Law serves as a useful reminder that the arbitration rules, the arbitral institution, and the seat of arbitration are related but distinct concepts. The rules govern the procedure (how the arbitration is conducted). The institution administers the case. The seat determines the “legal home” of the arbitration and the courts that may supervise it.
This distinction matters in cross-border contracts. For instance, a contract could provide for arbitration before a China-based institution or under Chinese institutional rules, while also selecting a seat outside China. In that situation, the choice of Chinese rules or institution does not necessarily mean that China is the seat of the arbitration.
The issue becomes more difficult where the contract does not clearly record the parties’ agreement to arbitrate. Article 27 of the Revised Arbitration Law[5] introduces a significant change by providing that an arbitration agreement may be deemed to exist where one party asserts its existence and the other party does not deny it before the first hearing, provided the arbitral tribunal has noted and recorded that position. However, in a foreign-seated arbitration, a court outside China may take a different approach to whether the parties validly consented to arbitrate.
The practical point is simple: if arbitration is intended, it should be clear. The same principle applies to the above elements, including the arbitral institution, applicable rules, seat of arbitration, etc. Clear and careful drafting reduces the risk of preliminary disputes over whether arbitration can proceed, how it should be conducted, and which courts have authority over the process.
Why These Changes Matter for Canada-China Commercial Engagement
Taken together, these changes help explain why the revised arbitration framework is relevant in a period of renewed attention on Canada-China commercial engagement. As trade, investment, and other cross-border business activity increase, stakeholders may encounter a growing number of contracts and disputes with a connection to China. As a result, awareness of these changes in the Revised Arbitration Law may assist businesses in evaluating dispute resolution options, allocating risk, and considering how arbitration clauses are drafted in cross-border transactions. More broadly, these changes underscore the importance of proactive dispute planning as Canada-China commercial relationships continue to evolve.
About the Authors & Fasken’s International Arbitration Team in London
Nabila Abdul Malik is a Partner in Fasken’s Ottawa and London (UK) offices. Her practice focuses on international arbitration (including proceedings under ICSID, ICC, LCIA, SIAC, and UNCITRAL Rules), complex cross-border disputes, international trade and investment, and white collar defence.
Tina Sun is an Associate in Fasken’s Ottawa office. Her practice focuses on commercial litigation and international arbitration (including proceedings under the ICSID and ICC Rules).
Melody Li is an Associate in Fasken’s London (UK) office. Her practice focuses on project finance and cross-border transactions, including matters involving emerging markets across Asia and the Middle East.
Fasken’s London (UK) arbitration team is frequently selected to act on some of the leading arbitral disputes in the world. With support from lawyers in other key offices, particularly Ottawa and Montreal, our multilingual team (including French and Mandarin) deploys in multiple jurisdictions around the world to advance our clients’ interests in arbitral matters. A pragmatic, business-oriented group, our team comprises lawyers with significant experience actually litigating cases, in addition to outstanding knowledge of the law. For more information, please contact the authors or the London team leader, Peter Mantas.
