If parties to international commercial and trade relations fail to resolve their disputes through negotiation and mediation, they may resort to either arbitration or litigation. Once they enter into a valid arbitration agreement, they waive their rights to file a lawsuit (see Article 5, Attachment 5: The Law of Choice of Law Applicable in International Civil Relations of the People's Republic of China).

If the disputing parties have reached a valid arbitration agreement in written form and the disputes thereunder are arbitrable, they may not resolve their disputes by filing a lawsuit in any court. Even if either party brings a lawsuit without producing the arbitration agreement and the case is admitted by the court, the other party may challenge the admission by producing the arbitration agreement before the first hearing of the court. In such a case, the court will review the admission and make an order to dismiss the case. But if the other party fails to challenge the admission before the first hearing, it constitutes a waiver of his right to challenge and the court will proceed to hear the case (see Attachment 6 for detailed provisions).