Scope of Arbitration - Equal Legal Status

Scope of Arbitration - Equal Legal Status

Arbitration only resolves disputes between parties of equal legal status, i.e., individuals, legal entities, and/or other organizations of equal legal status arising out of or in connection with contracts or over property rights or interests (see Article 2, The Arbitration Law of the People's Republic of China).

Individuals mentioned above should be persons with full capacity for civil acts. Otherwise, their civil acts shall be represented or ratified by their by their legal representatives (see Articles 18 to 24, The Civil Code of the People's Republic of China).

Legal entities include for-profit legal entities (limited liability companies, joint-stock companies, and other companies as legal entities), nonprofit legal entities (public institutions, social organizations, foundations, and social service entities, etc., that have the status as legal entities), special legal entities (government authorities, rural collective economic organizations, urban or rural cooperative economic organizations, or residents' autonomous organizations, etc., that have the status as legal entities), and unincorporated entities (sole proprietorships, partnerships, and professional service entities not granted the status as legal entities) (see Chapters III and IV, Title One, The Civil Code of the People's Republic of China).

Other entities refer to unincorporated entities that are not granted the status as legal entities but may engage in civil activities in their own names according to law. Such entities include but are not limited to sole proprietorships, partnerships, and professional service entities not granted the status as legal entities.