New Chinese Mediation Mechanisms Discussed at AMA HK

photoDr. Liu Xiaochun, the Secretary General of the South China International Economic and Trade Arbitration Commission (SCIA) shared his observations on new mediation developments in China.  He described 7 general mechanisms available to parties:

1. Arb-Med-Arb which allows for the use of mediation during the course of arbitration proceedings at the parties or tribunals initiative. This has been used to settle over 20% of SCIA cases from 1993-2007.  In order to address the issue of compromised arbitrator neutrality in the event of a failed mediation, the 2012 SCIA rules allow parties to decide if the mediating arbitrator should resign from the panel.  Also, all opinions expressed during the course of the mediation can not be invoked in the subsequent arbitration hearings.  The SCIA arbitration panel is comprised of 232 arbitrators from 42 jurisdictions.

2. Mediation + Arbitration – via SCIA’s specialized mediation center followed by a separate arbitration process.  At present, the mediation panel consists of 242 members.

3. Chamber of Commerce Mediation + SCIA Arbitration – this is mediation targeted primarily to foreign investor disputes.

4. Exhibition Mediation + SCIA Arbitration – this method is used to resolve IP disputes arising at the Canton Trade Fair.  Since its inception, 622 disputes were resolved through this method between 2008-2013.

5. HK Mediation + Mainland Arbitration – is what the name implies – mediation in Hong Kong and Arbitration in China.  This provides for cross border enforcement of awards.

6. 4 in 1 Model – Mediation, Arbitration, Industry Specific DR, Administrative Regulation – used primarily in disputes between securities dealers and clients.

7. Non-Tribunal Facilitated Mediation – consisting of an alliance between Guandong/HK mediation entities.

 

Dr. Xu noted that he sees independent mediation and independent arbitration services as the emerging trend for future dispute resolution in Mainland China.

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Upcoming ICC Seminar on Mediation in Hong Kong

In November of this month, the International Chamber of Commerce (ICC), International Centre for ADR and the International Chamber of Commerce – Hong Kong, China are co-organizing an ADR workshop with a focus on practical aspects in mediating international commercial disputes: “Win-win strategies: Effective and Successful Mediation for International Commercial Disputes”.  Further information can be found at the following link.

New Arbitration Ordinance in Hong Kong Provides for Med-Arb

The Secretary for Justice in Hong Kong, Mr. Wong Yang Lun, recently announced the promulgation of the new Arbitration Ordinance in Hong Kong at a recent talk held at the ICC offices in November.  He noted that the Ordinance, which draws on the UN Model Law on International Commercial Arbitration, also permits arbitrators to act as mediators prior to or following an arbitration, provided that all parties agree.   Section 32 covers the appointment of mediators in an arbitration agreement. It provides that “no objection can be made against an arbitrator solely on the basis that the same person had acted previously as a mediator in the dispute.”  Similarly, Section 33 provides that an arbitrator “may act as a mediator after the arbitration has commenced provided all parties consent in writing.”

Optional Mediation for Hong Kong Lehman Mini bond Investors

Investors of failed Lehman “mini bonds” have been encouraged to use mediation to settle their disputes with Hong Kong banks.  Thus far, 149 cases have been referred to the Hong Kong International Arbitration Association.  According to a recent report, many of the parties who have used the process have been satisfied with the outcome.

Approximately 43,000 investors in Hong Kong invested nearly 15.7 billion (U.S. 2.07 billion) in financial products associated with Lehman Brothers.  Most disputes arising from these investments involve charges that the banks selling such products gave wrong advice to customers or failed to disclose important information.  The elements of this charge include misrepresentation and reliance on advice given by bank representatives.

The Hong Kong Monetary Authority has agreed to pay for the costs of mediation for qualified investors.  The process is voluntary, and investors also have the right to take their case to trial.