Governing China’s financial disputes in the aftermath of the Global Financial Crisis of 2008

Abstract

In light of the recent global financial crisis of 2008, this article critically compares how China’s national arbitration commissions and local courts are responding to new challenges brought about by an increase in the number of banking related disputes. Drawing on comparative case analysis, the article examines the operation of CIETAC and the Shanghai Courts financial dispute resolution mechanisms in resolving financial disputes. Drawing on insights from selected case findings, the article provides insight into which institution is in the best position to handle financial-related cases, discusses prospects for coordination between the two and sets out proposals for further reform. Contrary to conventional wisdom indicating a general preference for arbitration over in-court litigation processes, initial findings suggest that given CIETAC’s limited exposure to banking and financial-sector disputes, in the immediate term, parties are advised to seek resolution through reference to local financial division dispute resolution mechanisms such as the financial division of the Shanghai Courts. In the long term, prospects for greater strengthening of national mechanisms such as CIETAC and the Securities Dispute Resolution scheme will provide additional avenues of recourse.