Validity of an Arbitration Agreement Signed by an Unauthorized Agent

The validity of arbitration agreements are governed by the provisions of The Civil Code pertaining to the validity of contracts. Therefore, an arbitration agreement signed by an unauthorized agent on behalf of a disputing party is invalid unless the disputing party:

(1)   ratifies the arbitration agreement; or

(2)   fails to challenge the validity of the arbitration agreement before the arbitral tribunal proceeds with the first hearing.

Therefore, the disputing party must file a challenge to the arbitration commission over the validity of the arbitration agreement before the first hearing if he refuses to ratify it.

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.