Cross Border Dispute Resolution in China

Cross Border Dispute Resolution in China

Mr. Sun Wei, a managing partner of Zhong Lun Law Firm, where he shares his extensive experiences and accomplishments in cross-border dispute resolution. Mr. Sun Wei, with a remarkable 23-year career, began as a construction dispute resolution lawyer in China and expanded his expertise globally through education at New York University and the University of London. He has represented clients in over 20 jurisdictions and contributed to several landmark legal milestones, including being the first emergency arbitrator in the Chinese Mainland and playing a significant role in multiple high-profile cases. Mr. Sun was assisted in this interview by his colleague Ms. Zhang Zhuo.

Could you elaborate on the key efforts and notable achievements you have made in this field?

I started my legal career as a construction dispute resolution lawyer in China. Seeking to expand my expertise globally, I pursued master’s degrees at New York University and the University of London. These transformative overseas experiences not only enhanced my understanding of dispute resolution concepts but also provided valuable mentorship from pioneering professionals.

Over my 23-year career as a cross-border dispute resolution lawyer, I’ve represented clients across more than 20 jurisdictions, and contributed to several landmark milestones: I sat as the first emergency arbitrator in the Chinese Mainland, nominated by GAR for “Best Development of 2019”; I acted as the presiding dispute review expert in the first case applying the Construction Project Disputes Review Rules of the China International Economic and Trade Arbitration Commission; I acted as the lead counsel in the first litigation in China between the applicant for independent guarantee and the issuer over wrongful payment; I was involved in a landmark case on the recognition and enforcement of an arbitral award rendered by the Sugar Association of London, through which the Supreme People’s Court of China, for the first time, confirmed that those violating Chinese mandatory laws do not necessarily violate China’s public policy, etc.

Beyond my legal practice, my scholarly endeavors include founding the “China Construction Law Review”, China’s first journal dedicated to construction law, and authoring a seminal book on Singapore Mediation Convention, titled “United Nations Convention on International Settlement Agreements Resulting from Mediation – Legislative Background and Articles Interpretation”, which is among the world’s first expositions.

In addition to contributing to the enhancement of legal practices and scholarly references, I have been actively engaged in legislative proceedings in China. Since 2017, I have served as China’s representative in UNCITRAL Working Group II, striving to influence legislative trends in crucial areas. More specifically, I’ve delivered reports on the ratification advice of the Singapore Mediation Convention, the formulation of China’s Commercial Mediation Law, and the revision of China’s Arbitration Law. Leading an expert working group, I played a key role in drafting proposals for China’s Building and Construction Industry Security of Payment and Adjudication Law.

Globally, I have fostered advancements in the field of cross-border dispute resolution through leadership roles in arbitration institutions. I co-led the establishment of the Tashkent International Arbitration Centre, actively contributed to the formulation of its arbitration rules, and currently act as a member of its Supervisory Committee. Additionally, as a Member of the ICC International Court of Arbitration, Board Member of the Singapore International Mediation Centre, and Member of the International Advisory Board of the Vienna International Arbitration Centre, I joined those institutions’ efforts in advancing arbitration practices and engaged in thought leadership at international forums.

Could you share some impressive international arbitration cases from your career as counsel?

Throughout my career, I have been involved in many complex international arbitration cases, two of which stand out due to their unique challenges and successful outcomes.

The first case was representing a Chinese investor in two parallel proceedings against the government of an African country. Acting as the contractor, my client entered into a construction contract with the government, as the employer of an infrastructure project. Disputes later arose out of the government’s repudiation of the contract. Given the intricate facts, sensitive nature, and substantial dispute value, this case was particularly challenging.

The government, playing dual roles as the employer of the project and the host state’s government, not only breached the contract but also violated treaty obligations outlined in its bilateral investment treaty with China. In response, we pursued both investment arbitration and commercial arbitration simultaneously, aiming to safeguard our client’s procedural and substantive rights. This exerted significant pressure on the government, which ultimately led to the signing of a settlement agreement favorable to the investor.

This case was a landmark in my career, marking the first instance of a Chinese law firm independently representing a Chinese investor in an investment arbitration. The success of our strategy further solidified our pride in achieving positive outcomes under challenging circumstances.

The second case involved representing a Chinese construction company in multiple intertwined ICC arbitration proceedings relating to the construction of a stadium for the 2022 FIFA World Cup in Qatar, culminating in highly favorable outcomes received in September 2023. The dispute arose among the stakeholders spanning technical issues, delay, and quantum matters, and ended up each resorting to ICC arbitration. The stakeholders, respectively located in the Chinese Mainland, Hong Kong SAR, Qatar, India, and Germany, initiated three separate but closely related ICC arbitrations. The seat of arbitration was London while hearings were held in Doha. The complexity of the cases was immense, involving over 5,000 pieces of evidence and 13 witnesses. The arbitration proceedings extended beyond 2.5 years.

When handling these three cases, my team invested substantial time in comprehending the core technical dispute with the assistance of our clients and experts. This enabled us to present compelling submissions and conduct effective cross-examinations. As can be clearly seen from the final awards, the tribunals were very impressed by the independence, objectivity, and technical prowess of our client’s experts. The tribunals also acknowledged the effectiveness of our team’s cross-examinations in highlighting issues related to the counterparty’s experts’ impartiality and questionable methodologies. Our overarching legal strategy in navigating these three arbitrations proved successful, contributing to the resolution of this exceptionally complicated construction dispute.

What common challenges do counsels typically face when representing clients in international arbitration cases related to construction and infrastructure?

In international arbitration cases related to construction and infrastructure, counsel often face the challenge of effectively coordinating a diverse team of professionals working on a single case, including financial analysts, technical experts, and legal professionals from various jurisdictions.

To tackle this challenge, my approach begins with an initial case assessment, which is pivotal for me to identify the various dimensions of the dispute. Based on the assessment results, I tend to encourage the client to engage key experts at an early stage. In the realm of construction and real estate, the expertise of three key types of professionals—technical experts, delay experts, and quantum experts—is often essential. I usually actively assist the client in engaging those experts and delineate clear roles and responsibilities for each expert. This helps mitigate the risk of overlaps and ensure comprehensive coverage of every facet of the dispute.

In cases where experts from opposing parties need to discuss technical or financial matters, I often arrange joint meetings. This proactive approach serves to clarify issues, narrow down points of contention, and potentially pave the way for agreements on specific aspects. Given the complexity of the process with multiple moving parts, effective timeline management becomes crucial. So, I always place particular emphasis on establishing reasonable timelines for experts.

During hearings, I meticulously plan the sequence of presentations and testimonies to ensure a coherent and logical flow. Considering the intricate nature of construction and real estate disputes, characterized by complex factual scenarios, I favor the hot-tubbing approach. This enables experts to directly engage, responding to and challenging each other’s perspectives on specific issues. This dynamic interaction fosters a thorough discussion, elucidates intricate details and aids the tribunal in grasping the nuances of the case.

Equity Partner / Beijing
Tel +86-10-5957-2176

Practices: Litigation & Arbitration, Investment/M&A & Corporate Governance, Construction & Project

Industries: Real Estate, Urban Infrastructure, Energy & Power

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