Withdrawal and Deemed Withdrawal of a Request for Arbitration
According to the Arbitration Law, a request for arbitration or a counterclaim may be withdrawn or deemed withdrawn. In practice or according to arbitration rules, the arbitral tribunal or the chairman of the arbitration commission may decide that the claimant or the defendant, as the case may be, whose request for arbitration or counterclaim is withdrawn or deemed withdrawn should bear the arbitration cost, unless the claimant and the defendant agree otherwise.
a) Withdrawal of a Request for Arbitration
The claimant may withdraw his request for arbitration at any time before an arbitration award is rendered. If the request for arbitration is withdrawn before an arbitral tribunal is formed, the chairman of the arbitration commission may decide to dismiss the case. If the request for arbitration is withdrawn after an arbitral tribunal has been formed but before an arbitration award is rendered, the arbitral tribunal will proceed with the hearing of the counterclaim, if any, and render an arbitration award thereon, or decide to dismiss the case in the absence of a counterclaim.
The claimant may withdraw his request for arbitration if the claimant and the defendant reach a settlement through negotiation. In such a case, they may enter into a settlement agreement or request the arbitral tribunal to make an award based on their settlement agreement. It should be noted that if either the claimant or the defendant reneges on the settlement agreement after the request for arbitration has been withdrawn, the same dispute may be referred to arbitration for a second time according to their arbitration agreement. But if an arbitration award has be made based on their settlement agreement, the award is final and the same dispute may not be referred to arbitration again.
b) Withdrawal of a Counterclaim
The defendant may withdraw his counterclaim at any time before an arbitration award is rendered. After the counterclaim is withdrawn, the arbitral tribunal will proceed with the hearing of the claim of the claimant and render an arbitral award thereon.
If both the claim and the counterclaim are withdrawn before an arbitral tribunal is formed, the chairman of the arbitration commission will decide to dismiss the case. If they are withdrawn after an arbitral tribunal has been formed, the arbitral tribunal will decide to dismiss the case.
c) Deemed Withdrawal of a Request for Arbitration
A request for arbitration will be deemed to have been withdrawn if the claimant fails to appear at a hearing absent good cause shown after he has been notified in writing by the arbitral tribunal or leaves the arbitration room without the permission of the arbitral tribunal. In such a case, the arbitral tribunal will proceed with the hearing of the counterclaim, if any, and render a default award thereon, or decide to dismiss the case in the absence of a counterclaim.
d) Deemed Withdrawal of a Counterclaim
A counterclaim will be deemed to have been withdrawn if the defendant fails to appear at a hearing absent good cause shown after he has been notified in writing by the arbitral tribunal or leaves the arbitration room without the permission of the arbitral tribunal. In such a case, the arbitral tribunal will proceed with the hearing of the claim of the claimant and render a default award thereon.
Robert Zhang 
Steve Li 