SHIACA Tackles Turbulence Over Ad Hoc Aviation Arbitration in China
Given the inherently international nature of the aviation industry, its technical complexity and the myriad of stakeholders variously involved in the process, magnetic susceptibility to economic fluctuations with widest-reaching impacts, aviation related disputes inevitably arise at various levels. With the booming development of the industry, the use of arbitration for the resolution of aviation-related disputes has increased significantly over the past years. Today, arbitration clauses are almost omnipresent in commercial contracts entered among airlines, manufacturers, suppliers and other stakeholders. With COVID-19 pandemic restrictions on movement and travel bans, resulting in a sharp drop in air traffic with an overall reduction of air passengers and cargo up to almost 70 % in 2020 and 2021, air transport industry is one the most significantly impacted sectors. As such, there will be a growing number of disputes, a subset of which will be referred to arbitration. Similarly, in the People’s Republic of China (“China”), arbitration has experienced a major increase over the past decades. Putting COVID-19 to one side, Chinese air transport industry, the world’s second-ranked aviation power in terms of total civil air cargo turnover, has grown exponentially in recent years. As the aviation market has expanded in China, the number of aviation-related disputes involving Chinese entities has likewise increased significantly, making the demand in China for a specialized institution to resolve aviation-related disputes particularly pressing. For brevity and clarity, this note will discuss the conundrum of an ad hoc arbitration of aviation disputes in mainland China and will further introduce the initiative of a specialized arbitral institution in the aviation sector – the SHIACA.