Governing financial disputes in China: What have we learned from the Global Financial Crisis of 2008?

Abstract

In light of the recent global financial crisis of 2008, this article critically compares how China's national arbitration commissions and local courts are responding to new challenges brought about by an increase in the number of banking related disputes. Drawing on comparative case analysis, the article examines the operation of the China International Economic and Trade Arbitration Commission (CIETAC) and the Shanghai Courts' financial dispute resolution mechanisms in resolving financial disputes. Drawing on insights from selected case findings, it provides insight into which institution is best positioned to handle financial-related cases, discusses prospects for coordination between the two, and sets out proposals for further reform. Initial findings suggest that given CIETAC's limited exposure to banking and financial sector disputes, in the immediate term parties should seek resolution through local financial division dispute resolution mechanisms, such as the financial division of the Shanghai Courts. In the long term, prospects for greater strengthening of national mechanisms such as CIETAC and the Securities Dispute Resolution scheme will provide additional avenues of recourse.