While non-administered or “ad hoc” arbitration is relatively common in the United States, China is just beginning to explore its use. This post explores the issues related to ad hoc arbitration in China.
Ad Hoc Arbitration in China
Wen Dai
What happens when a legal system built almost entirely around arbitration institutions decides to let some parties arbitrate without one? China is beginning to find out. After three decades in which Mainland arbitration was essentially institutional by design, the 2025 Arbitration Law creates a narrow but significant opening for ad hoc arbitration.
The change is small in statutory terms, but it tests a much larger question about dispute-system design: how much freedom should parties have to design an arbitral process themselves, and how much institutional or regulatory structure should remain around that freedom? China’s answer, at least for now, is to liberalize cautiously.
Why China Required an Institution
The 1995 Arbitration Law required an arbitration agreement to designate a chosen arbitration commission. That rule reflected the legislature’s cautious approach to arbitration at a time when China’s modern commercial arbitration system was still developing. In practice, a clause providing for ad hoc arbitration seated on the Chinese mainland risked being unenforceable because it named no institution.
The result was an unusual asymmetry. Chinese courts could recognize and enforce ad hoc awards rendered abroad under the New York Convention, yet parties generally could not choose ad hoc arbitration with a mainland Chinese seat. Ad hoc arbitration was therefore not rejected as a form of dispute resolution; it was excluded from the domestic procedural architecture.
Experiment Before Legislation
The shift began in 2016, when the Supreme People’s Court introduced what became known as the “three specifics” rule for enterprises registered in pilot free trade zones. An arbitration agreement could be treated as valid if the parties specified the place of arbitration, the arbitration rules, and the persons who would serve as arbitrators. The rule was narrow and appeared in a judicial policy document rather than a statute, but it created the first domestic opening for ad hoc arbitration.
Local experimentation followed. In 2017, Hengqin in Zhuhai issued China’s first ad hoc arbitration rules. Other specialized rules followed, including in maritime arbitration. In 2023, the first ad hoc case in which the China Maritime Arbitration Commission served as appointing authority and provided case-management support was concluded. In August 2024, Shanghai reported China’s first foreign-related maritime ad hoc arbitration. The sequence is important: reform developed through local pilots and judicial support before it was incorporated into national legislation.
Article 82 Opens Two Doors
The revised Arbitration Law, adopted in September 2025 and effective March 1, 2026, gives ad hoc arbitration a national statutory basis for the first time. Article 82 permits it in two categories. First, foreign-related maritime disputes may be arbitrated ad hoc. Second, foreign-related disputes between enterprises registered in State Council-approved free trade pilot zones, the Hainan Free Trade Port, or other areas designated by the state may proceed without a permanent arbitration institution.
The opening remains deliberately limited. Purely domestic disputes do not qualify, and neither do most foreign-related disputes involving enterprises registered elsewhere. The law also retains a measure of institutional oversight: once the tribunal is constituted, the parties must file information about its composition with the arbitration association. China has therefore accepted the core idea of ad hoc arbitration without adopting a fully laissez-faire model.
Party Autonomy With Guardrails
That combination makes the reform particularly interesting beyond China. Ad hoc arbitration is often described as the form of arbitration that gives parties the greatest procedural autonomy. The parties select the arbitrators, choose the rules, and organize the process without a permanent institution administering the case. That flexibility can reduce cost and permit highly tailored procedures, but it also removes some of the infrastructure that institutions provide: appointment mechanisms, case administration, fee systems, procedural defaults, and emergency support when the parties cannot agree.
China’s model treats those advantages and risks as something to be tested rather than assumed. The legislature has opened ad hoc arbitration first in areas with substantial foreign-related commercial activity and prior regulatory experimentation. Registration of the tribunal preserves visibility for the arbitration system even when no institution administers the case. The result is a controlled experiment in party autonomy rather than wholesale deregulation.
The practical significance of Article 82 will depend on how parties, courts, arbitrators, and supporting institutions use it. Parties may continue to prefer established institutions, especially for complex disputes. Or specialized sectors may find that ad hoc procedures offer advantages that justify greater responsibility for designing and managing the process. Much will also depend on how courts approach questions that institutional rules ordinarily help resolve.
For the broader ADR community, the Chinese experiment poses a familiar design problem in an unusually clear form. Greater party control can produce flexibility and innovation, but procedural infrastructure exists for a reason. The interesting question is not whether institutions are good or bad; it is which functions parties actually need an institution to perform, and which they can successfully perform themselves.
The next post pushes the autonomy question in a different direction. Ad hoc arbitration asks whether parties need an institution; crowdsourced online dispute resolution asks whether they need a professional neutral. Yun Zhao and Zhiming Xiao examine systems in which online platforms distribute decision-making among users, raising a more basic ADR question: who, or what, can legitimately exercise dispute-resolution authority?
About the author
Wen Dai is a partner at Zhong Lun Law Firm in Beijing, specializing in international arbitration and cross-border dispute resolution.
This post draws on Wen Dai, “Regulatory Innovations and the Opening of China’s Arbitration Regime,” in Richard Bales & Dan Xie, eds., The Cambridge Handbook of Arbitration in China (Cambridge University Press, forthcoming spring 2027). The submitted chapter is available on SSRN.
