SHANGHAI: A court of arbitration specializing in financial disputes was inaugurated here Tuesday, marking what industry analysts say is a milestone in the city's efforts to establish itself as an international financial center.
Shanghai's Vice-Mayor Feng Guoqin said at the launch ceremony: "The inauguration of the new Shanghai Court of Financial Arbitration demonstrates a great effort to ensure the city's legal system keeps pace with the rapid development of Shanghai as a leading financial center."
The court will provide a base for a team of financial and legal experts from China and overseas involved in the arbitration of financial disputes at home and abroad, officials said.
Experts Tuesday praised the introduction of the arbitration system, calling it an essential feature of any international financial center where complex transactions involving many different parties are common.
Lu Fang, deputy director of the Shanghai Arbitration Commission, said: "The construction of the arbitration system is an integral part of improving financial services.
"A well-functioning financial legal system will enable the city to attract many more international financial institutions, which will bring new expertise and vast global links enabling Shanghai to plug into the world's financial marketplace."
Industry players have said the resolution of financial disputes through courts of arbitration, handled by arbitrators with extensive financial knowledge, is a common practice worldwide and preferable to litigation.
Liu Hua, director of the Shanghai municipal government's legal system office, said: "In the history of China's financial sector, there have been many disputes that should have been resolved through arbitration.
"As the domestic financial market expands, there is great potential for financial arbitration."
Fang Xinghai, director of the local government's financial services office, said the new arbitration court will lay a solid legal foundation for more financial innovations.
He said innovations are key to the development of an international financial center.
"Most of the time, the law simply cannot keep up with the fast-evolving financial market. Without a transparent and efficient arbitration mechanism, financial innovation will be thwarted," he said.
The official said the introduction of the arbitration mechanism will also help collect firsthand information on dealing with financial disputes and problems.
Moreover it will be able to provide guidance for the government to take macroeconomic measures for the sound and steady development of the financial sector.