Adecision by the board of governors of the China International Economic Trade and Arbitration Commission (CIETAC) to expand the arbitration body's jurisdiction is expected to give foreign investors the opportunity to resolve mainland-based contractual disputes in China. CIETAC could announce the rule changes as early as next week, allowing the arbitration commission to hear domestic disputes involving foreign-invested joint ventures and wholly owned foreign companies. CIETAC - the mainland's leading arbitration body - currently hears disputes arising from international or foreign-related economic and trade transactions, but is barred from handling disputes involving domestic parties. 'Such disputes are increasingly common in the Chinese business world, particularly as subsidiaries established by foreign companies, including joint ventures and other entities, are regarded by Chinese law as Chinese legal people,' Baker & McKenzie attorney Michael Moser said. Mr Moser is among CIETAC's longest-serving foreign arbitrators. He was one of four overseas nationals appointed by CIETAC to its panel of arbitrators in 1988. CIETAC today lists 123 foreign nationals among the 428 arbitrators eligible to hear disputes before the commission. CIETAC's importance as an international arbitrator had expanded with China's development as an economic power, Mr Moser said. In 1985, it handled 37 cases, but by 1995 that number had grown to more than 1,000. Despite improvements to increase the body's conformity with international practices and standards, dissatisfaction persists in many quarters. Concerns centre on its jurisdiction, formation of its tribunals, and its procedures and awards enforcement. 'Many people ask: is CIETAC arbitration fair?' Mr Moser said. 'CIETAC arbitration is only as fair as the arbitrators are fair. Many of the arbitrators are serious, well-intentioned people, but it also must be said that there are others who are less experienced in international business matters.' He said CIETAC was unique among international arbitration bodies in that petitioners and respondents were allowed to appoint arbitrators only from CIETAC's recognised list. CIETAC arbitration panels are composed of three arbitrators, one of whom is selected by the petitioner and one by the respondent. The third is either agreed upon by both parties or is appointed by CIETAC. The third arbitrator, who also served as chairman of the arbitration panel, almost inevitably was Chinese, Mr Moser said. 'Arbitrating before CIETAC gives a home-court advantage to the Chinese party,' Mr Moser said. 'You cannot deny that.' Nonetheless, he said that for certain types of contracts, designating CIETAC in the event of a dispute made sense. 'If, for example, you are a Hong Kong trading company executing 30 commodities contracts a day, I think CIETAC arbitration is fine,' he said. 'It would be quicker and cheaper than if you would provide for arbitration in London. 'On the other hand, for major investment contracts, like joint-venture contracts, I think the general advice of all foreign lawyers is to provide for something other than CIETAC.' The reasons mainly were strategic: for Chinese parties, filing for CIETAC arbitration was easy. 'It's their home court, it's their language, it's their culture,' he said. 'But they'll think twice about commencing an arbitration proceeding in Stockholm or London.' Mr Moser also said obstacles continued to exist to gaining enforcement of CIETAC arbitral awards, particularly against recalcitrant opponents. That stemmed from a variety of factors common to developing countries, including local protection, corruption, poor legal training of judicial personnel and a generally hostile attitude of court personnel towards arbitration. Nevertheless, Mr Moser said a recent study by the China Arbitration Research Institute found that by the end of 1996, of more than 3,000 CIETAC awards rendered, only 164 applications were filed to the courts for enforcement. Of the 164 cases, the courts had denied 37.