According to Rizhao Steel, accompanying the long-term contract between the two firms is an agreement on how to deal with situations that are irresistible such as disasters and so on.

Based on the international standard, irresistible situations like earthquakes, windstorms are acceptable. However, the financial crisis is seen as unjustifiable.

''This arbitration touches upon both the Chinese and the Australian sides, so in order to carry out a proper result both sides need to negotiate, which is not that easy,'' said a Chinese industry analyst.

The arbitration is said to be the first one of its kind filed by overseas iron ore miners to Chinese steel makers.

Rizhao Steel was ordered to pay $114 million in arbitration to the Australian iron ore miner Mount Gibson Iron for breaching a15-year long-term iron ore purchase contract set in 2007 and pay an interest of 6 percent as well as legal expenses.