Validity of an Arbitration Agreement Signed by an Unauthorized Agent

Validity of an Arbitration Agreement Signed by an Unauthorized Agent

The validity of arbitration agreements is also governed by the provisions of The Civil Code pertaining to the validity of contracts. Therefore, if an unauthorized agent enters into an arbitration agreement in the name of a disputing party, the arbitration agreement is invalid unless the disputing party:

(1)  ratifies the arbitration agreement; or 

(2) fails to challenge its validity before the first hearing of the arbitration commission.

Reference:

Article 503 of The Civil Code of the People's Republic of China:

Where an unauthorized agent enters into a contract in the name of the principal, the principal's commencement to perform its obligations under the contract or acceptance of the performance by the other party to the contract shall be deemed the principal's ratification of the contract.