In order to maintain a fair business environment both internally and externally, the international community widely believes that the center of arbitration activities should be the arbitration tribunal based on parties’ diverse considerations. Arbitration institutions established with local contributions should only possess private administrative functions. In contrast, China’s legal analogy assigns four quasi-judicial functions to arbitration institutions, including determining arbitration jurisdiction, identifying the nationality of the award, ascertaining foreign law, and approving arbitration awards. These quasi-judicial functions affirm the territorial infl uence of arbitration institutions over arbitration decisions, potentially causing foreign investors to be concerned about the fair protection of their interests in arbitration cases and thereby jeopardizing the international attractiveness of the business environment. To allay the concerns of foreign investors, arbitration institutions should refrain from exercising quasi-judicial functions and should only retain private administrative functions.