I. Financial Transactions and Financial Disputes What is a financial transaction? Financial transactions refer to financial transactions between financial institutions and between financial institutions and other legal persons and natural persons in the money market, capital market, foreign exchange market, gold market and insurance market, including but not limited to loans, certificates of deposit, guarantees, letters of credit, bills, fund transactions and fund custody, bonds, collection and foreign exchange remittance, factoring, interbank payment agreements, securities and futures. According to the content and definition of the above financial transactions, we can think that all disputes arising from the above financial transactions between financial institutions and between financial institutions and other legal persons and natural persons in the currency, capital, gold and insurance markets are called financial disputes. Because financial disputes occur in financial transactions, they have the following characteristics: 1. Particularity of subjects. The subject of financial transactions, at least one party should be a financial institution; Other forms of transactions do not require this. 2. The particularity of the disputed area. Financial transactions occur in the fields of money market, capital market, foreign exchange market, gold market and insurance market. 3. The complexity of the reasons. In financial transactions, many interests are usually involved, which makes them face greater risks. 4. The particularity of the solution. Because financial transactions are often a long-term and reputable activity, the parties to the dispute are generally reluctant to make the dispute public for the sake of long-term interests. There are many legal norms to solve financial disputes. Financial transactions are international, and the legal norms of different countries and regions are different, which has produced many international legislative norms in the financial field. Two. Comparative analysis of arbitration and other dispute settlement methods At present, dispute settlement methods generally include reconciliation, mediation, arbitration and litigation. The first two methods belong to alternative dispute resolution, abbreviated as ADR (Alternative Dispute Resolution) in English, which is the general term for non-litigation and non-arbitration alternative dispute resolution. Arbitration and litigation are the final legally binding solutions. Once there is a final ruling or judgment, the parties are not allowed to fail to perform it, otherwise the other party may apply for national enforcement. According to my understanding in practical work, colleagues in the banking industry are familiar with the way of litigation to solve disputes, but not so familiar with the way of arbitration to solve civil disputes, which is often confused with labor arbitration procedures. In fact, arbitration is quite different from litigation and labor arbitration. (1) Comparison between arbitration and litigation: The similarities between them are: 1. Arbitration institutions and courts are impartial authorities, making fair judgments on disputed rights and obligations; 2. Arbitration and litigation must follow certain procedures; 3. Arbitration conforms to certain rules and systems in litigation; 4. The arbitral award has the same legal effect as the litigation judgment, and both parties must fully perform it. The difference between arbitration and litigation is: 1. The scope of accepting cases is different. Litigation can accept all disputes arising from private rights; Arbitration can only accept disputes over private rights of the parties who have the right to dispose of them. 2. The ways of accepting cases are different. As long as one party sues legally, the lawsuit will be accepted; Arbitration can only be accepted if both parties reach an arbitration agreement in advance or afterwards. 3. The jurisdiction of the case is different. Litigation has compulsory jurisdiction of region, level and exclusiveness; Arbitration is governed by agreement, and is not restricted by rank, region and exclusivity. 4. The trial level system is different. The lawsuit is subject to four-level second instance and ordinary second instance, and you can also apply for retrial; Arbitration shall be terminated by one arbitration. 5. The source and formation of arbitrators and judges are different. Litigation is a full-time judge, appointed by the National People's Congress, and the appointment system is implemented; Arbitrators work part-time, and the arbitration institutions shall appoint them from the relevant parties according to the conditions stipulated in the Arbitration Law. High employment conditions and strong professionalism reflect the particularity of project management. 6. The composition of the trial court is different. Litigation is designated by the court and its members, judicial power is exercised by the court, and some cases should be submitted to the judicial Committee for discussion; Arbitration means that the parties choose the personnel of the arbitration tribunal, some are appointed by the chairman of the arbitration commission when the parties disagree, and some are appointed when the parties do not choose, and the arbitration tribunal exercises the power of adjudication. Individual difficult cases do not exclude the expert committee of the Arbitration Commission from discussing the case, but the opinions formed are only for the reference of the arbitration tribunal. 7. The way of trial is different. Litigation is generally heard in public, and interviews are allowed, except for cases involving privacy, commercial secrets, state secrets and divorce as stipulated by law, unless the parties apply for non-public hearing; Arbitration is generally not heard in public, and irrelevant personnel are not allowed to attend, except when both parties agree to make it public. (II) Comparison between arbitration and labor arbitration First of all, judging from the setting of arbitration institutions, the arbitration commission is not set up by administrative divisions, but a unified civil and commercial dispute arbitration institution established by the municipalities directly under the central government, the cities where the people's governments of provinces and autonomous regions are located and other cities divided into districts according to law; The labor dispute arbitration committee is a specialized agency established in counties, cities and municipal districts according to administrative divisions to deal with labor disputes, and its permanent office is located in the administrative department of labor security at the same level. Secondly, in the scope of accepting cases, arbitration covers most civil and economic fields, including all kinds of contract disputes and other property rights disputes; Labor dispute arbitration is limited to labor disputes. Thirdly, in terms of jurisdiction, arbitration is governed by agreement, and the parties can choose litigation or arbitration independently, or they can choose the arbitration commission independently; However, labor dispute arbitration is subject to regional jurisdiction and hierarchical jurisdiction. After a labor dispute occurs between the parties, they may not bring a lawsuit directly to the people's court, but must apply for labor dispute arbitration first, and it is not necessary for the parties to conclude an arbitration agreement. Finally, from the perspective of the effectiveness of the award, the arbitration is subject to a final award system, and the award will take legal effect once it is made; However, the arbitration award of labor disputes is non-final. If you are not satisfied, you can bring a lawsuit to the people's court. Third, the characteristics of financial arbitration In the process of financial transactions, the emergence and settlement of disputes are inevitable, so how to solve them quickly is a problem that the financial community is more concerned about. Financial arbitration refers to "a quasi-judicial system in which contractual and non-contractual contract disputes and other property rights disputes occur between citizens, legal persons and other organizations with equal subjects in financial transactions, and the parties submit the disputes to arbitration according to the arbitration clause in the contract and the arbitration agreement reached afterwards." Modern finance usually relies on accelerating capital flow and increasing financing channels to obtain profits. The time cost, capital cost and opportunity cost in financial industry are much higher than those in other industries, so it is an unresolved dispute. In addition, with the development of information technology and the marketization and internationalization of the financial industry, the technical and legal issues involved in financial disputes are becoming more and more complicated, the degree of specialization is getting higher and higher, and the professional quality of dispute solvers is quite high. Then financial arbitration is an ideal way to solve financial disputes. (I) Advantages of Financial Arbitration The financial arbitration system has the following advantages in financial transactions: 1. Professionalism of arbitrators. The Arbitration Law has strict regulations on the selection and employment conditions of arbitrators, and the selection and employment of financial arbitrators should be more professional and professional. Due to the diversification of financial transactions, the technical, factual and legal issues involved in financial disputes are more complicated, and it is difficult for arbitrators who are not familiar with the financial profession to undertake the trial of financial disputes. Arbitrators with financial background can understand the trading rules and habits in the financial field, and the financial disputes they try can be more fair and just, improve the efficiency of case trial, and their ruling results are more conducive to the stability of the financial market. At present, major arbitration institutions in China, such as Shanghai Financial Arbitration Institute, Guangzhou Arbitration Commission and China International Economic and Trade Arbitration Commission, have specially appointed arbitrators to hear financial arbitration cases and set up a roster of financial arbitrators to ensure the professionalism of arbitrators. 2. Low cost. In practice, because the amount of disputes is too large, or because the case or fact itself is complex, or because there are legal blind spots or legal pluralism, or because the parties are emotionally opposed, it is easy to cause a considerable number of financial disputes to be difficult to be resolved through self-reconciliation or third-party mediation, and often they have to resort to legal procedures. Comparing the two legal procedures, financial arbitration and litigation, from the cost point of view, because financial arbitration is final and the acceptance fee is half that of ordinary arbitration cases, it determines that the cost of financial arbitration (including arbitration fee and lawyer's fee) is generally lower than that of litigation. (See table 1 for specific comparison). 3. Highlight efficiency. Financial arbitration not only has the advantages of finality and non-publicity, but also further optimizes and shortens the trial time limit and procedure according to the characteristics of the industry, which is conducive to saving the time cost of dispute settlement and avoiding the litigation cycle. At the same time, the enforceability of arbitration award can also reach the effect of litigation judgment. This dispute resolution mechanism caters to the characteristics of financial pursuit of efficiency. 4. Fully respect the autonomy of the parties. The state often restricts the jurisdiction of the court through legislation, which leads to the objective occurrence of positive and negative conflicts of jurisdiction and inevitably has a negative impact on safeguarding the interests of the parties; However, financial arbitration can respect the autonomy of the parties to the greatest extent and allow the parties to choose arbitration institutions through agreement between disputes, which will easily avoid conflicts of jurisdiction. 5. The arbitration method is flexible and simple. In financial arbitration, the parties can not only choose the trusted arbitrator as the arbitrator of a specific case, but also determine the trial mode, time, place and arbitration language through consultation, and some foreign-related cases can also stipulate the applicable law of the dispute. In the practice of international arbitration, sometimes financial arbitration can be held at any place agreed by both parties, such as finding an elegant hotel, so that both parties can solve disputes in a relaxed environment. 6. Recognition and enforcement of the validity of arbitral awards. Nowadays, financial transactions are highly internationalized, and many financial disputes will involve the disposal of overseas financial assets, which may lead to the recognition and enforcement of effective awards in foreign courts. According to 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (new york Convention), the awards of the contracting parties can be recognized and enforced in more than 40 other contracting countries or regions around the world, and each contracting party undertakes the obligations that must be observed under the international convention 1987, which entered into force for China on April 22nd. At the level of a country's domestic law, many countries have determined the effectiveness of arbitral awards in the form of domestic legislation, such as China's arbitration law, civil procedure law and many departmental laws. In contrast, it is obviously not so easy for a court judgment of one country to be recognized and enforced by another country without a mutual legal assistance treaty. The Convention on Recognition and Enforcement of Foreign Civil and Commercial Judgments of The Hague Conference on Private International Law has only three countries. (II) Disadvantages of financial arbitration Although financial arbitration has considerable advantages compared with other dispute settlement methods, there are still some shortcomings: 1. Lack of third-party system. In a general arbitration agreement, only the two parties sign the agreement, and there is no third party. The arbitration tribunal cannot add a third party who may be involved in financial disputes according to the arbitration agreement. In the actual financial transaction relationship, the interests of three parties or many parties are often involved, such as disputes over letters of credit, financial leasing, secured financial transactions and subordinated creditors. It seems not enough to use financial arbitration to solve these problems. If the parties choose arbitration before litigation, not only the cost is high, but also the results may be inconsistent. 2. Arbitration law needs to be improved. The Arbitration Law does not stipulate that the arbitration tribunal has the final decision on the validity and jurisdiction of the arbitration agreement, which leads to many problems in practice. 3. Lack of litigation preservation function. Because there is no relevant enforcement authority given by law, the arbitration institution or arbitration tribunal can only request the relevant court to take enforcement measures when the parties request to take litigation property preservation measures or evidence preservation measures, so the efficiency and effect of enforcement are sometimes not completely satisfactory. Four. Suggestions on the development of financial arbitration Although there are still some deficiencies and defects in the financial arbitration system itself, these deficiencies and defects will be gradually improved through legislation. Compared with the national judicial nature of litigation, financial arbitration has a set of strict procedures, principles and systems. Arbitration based on the choice of the parties is more flexible, simple and efficient, which can better reflect the autonomy of the parties' private rights, and is especially valued by commercial parties. There is also the confidentiality of closed-door trials. The author believes that with the extensive publicity of the arbitration system in the financial and commercial fields, the advantages of financial arbitration will be gradually recognized by people. The service that financial arbitration institutions can provide is not only the trial and judgment of financial cases, but also the way of "going out and bringing in" to learn from each other, publicize and expand their own brands, so as to achieve a win-win effect. First of all, arbitration institutions have gathered a large number of legal, economic and other human resources, which can provide economic policies, legal advice and rights relief for the development and improvement of commercial banking business. Secondly, in order to adapt to the financial innovation of commercial banks, arbitration institutions should strive to establish a team of arbitrators with high quality who are familiar with international financial practices, electronic banking, intermediary business, investment banking and other businesses, and their arbitrators can be selected and trained from legal affairs personnel at all levels of universities and commercial banks. Thirdly, learn from the financial brand marketing of commercial banks, set up a special arbitration room for outstanding financial arbitrators, and make it a social brand to carry out financial dispute arbitration. Finally, arbitration institutions should also learn from the after-sales service and service evaluation system of commercial banks. After the conclusion of financial dispute cases, we should pay a return visit to the relevant commercial banks or other parties in time, evaluate the arbitration effect, continuously improve the quality of financial arbitration services, and give goodwill legal risk warnings to commercial banks' products and work defects found in arbitration activities.