Wang Shengchang, former director of the law department of the China Council for the Promotion of International Trade (CCPIT), has been arrested for alleged fraudulent activities, according to official sources.

Judicial department officials have declined to give details about Wang's case simply noting that it's being investigated.

Wang, who was also the former secretary-general of the arbitration committee of the CCPIT, had participated in several hundreds of arbitrary cases, including a dispute between the international soft drinks giant Pepsi Cola and its local partner in Sichuan Province, in southwest China.

The Pepsi dispute, known as the "first case in China's post-WTO era", had drawn wide attention, domestically and internationally. Wang played a remarkable role in the case and was criticized by some Chinese for allegedly making personal profits when dealing with the case.

Wang could have earned over 1.2 million yuan (about US$150,000) as one of the three arbitrators at an international business arbitration in Stockholm, said Hu Fengxian, president of Sichuan Pepsi. Wang was said to have turned down an appeal to the CCPIT by Hu's company after the Stockholm arbitration was made.

The Sichuan company has appealed to China's Supreme People's Court in an effort to stop the Stockholm arbitration to taking effect in the country.

If it comes into force in China the case might be cited as an example by relevant departments in dealing with other such cases which could bring about huge losses for the Chinese government and companies, said Professor Liang Huixing, one of those assisting with the draft of the Contract Law.

The Pepsi case is typical and shows international giants who have tried hard to take a larger share of the Chinese market after the country had become a member of the World Trade Organization, he explained. China currently lacked relevant laws and regulations to protect the country's interests, the expert said.

(Xinhua News Agency April 24, 2006)