Where to arbitrate?

I run of a mineral extraction company. I entered into a joint venture with another company in China as a minority partner. There is no clause in the contract that stipulated where arbitration should take place. We are now in dispute and because the contract was drafted in China we are worried that the arbitration will have to be held there. Do we have any options about resolving the dispute elsewhere?

The choice of country where the arbitration takes place, called the seat, has important implications. It is not just simply the venue for the hearing. Arbitrators apply the procedural law of the seat.

The national courts of the seat supervise the arbitration: they might replace arbitrators acting capriciously, or entertain (limited) challenges to arbitration awards. However, the law of the seat would not be applied to decide the actual dispute. The merits of the case are decided by applying the governing law of the contract, which can be different from the law of the seat.

Many contracts contain a specific ‘governing law clause’. If the seat or the governing law are not spelt out in the contract, then the arbitrators (once appointed) may be able to determine these after hearing the parties.

Rules governing arbitrations generally allow the arbitrators to decide the most appropriate seat, and the most suitable governing law. Most international arbitrators appreciate that neutrality is a valid concern when it comes to the seat and the governing law. So, even though your counterparty is China and the joint venture operates there, you retain a chance of persuading the arbitrators that a neutral place and governing law should nevertheless apply.