Publish time: Sun May 18 00:00:00 CST 2008 Contributor:
--- Report on the mediation training program between BAC and Straus Institute for Dispute Resolution at Pepperdine University School of Law, USA
(Author: Jiang Li, originally released on Page 7 of “China Legal Daily” on March 30th, 2008)
On March 23rd, 2008, in the International Conference Hall at the Beijing Arbitration Commission (BAC) was filled with warm applause as 42 students from China and the USA received their certificates for completing a sophisticated six-day mediation training course. The course was conducted by the Straus Institute for Dispute Resolution at Pepperdine University School of Law (Straus Institute), located in the USA. The program was a huge success.
This course coincides with the implementation of the BAC’s new Mediation Rules, which came into effect on April 1st, 2008. The BAC has been preparing to introduce cutting-edge mediation culture, methods, skills and experiences for commercial cases from the USA into China. Since early 2007, the BAC has been in cooperation with the Straus Institute, whose dispute resolution program consistently ranks first in the USA. This time the training program included a one-day Dispute-Review-Board (DRB) dispute settlement method training on March 13th, 2008, and was followed by a 6-day training program, titled “Mediating the Litigated Case.” The DRB training was mainly aimed toward the related experts and dispute resolution professionals in the construction project field. Besides the BAC arbitrators in attendance there were also professionals from the USA and Taiwan, China. In the 6-day interactive teaching program, teachers and students encouraged, collaborated, and grew with each other. Everyone felt the training was a direct, in-depth, and comprehensive study of the mediation cultures between China and the USA. The program was a success, and produced some very exciting results.
(I) The Dispute Review Board
The Dispute Review Board, or Dispute Resolution Board (DRB) and Dispute Adjudication Board (DAB) are two similar methods of dispute resolution that can be used in lieu of settlement via the project architect or engineer. DRB’s and DAB’s are usually comprised of 1-3 professionals in the construction field. The Board will propose a written resolution for the dispute within a relatively short period of time, and will usually be binding to the both parties of the dispute. The two methods have small differences in terms of selection of the board members and the working procedures, etc, and their decisions all will constitute the components of the contract, Decisions by a DAB are quasi-binding in nature; unless the verdict is overturned by arbitration or the court, it shall be binding for both parties. Normally, a DRB will only issue a recommended opinion, though it will become an important reference during arbitration or litigation. Due to it is economical, convenient and highly efficient nature, this dispute settlement method has been gradually gained popularity throughout the international engineering community.
On November 9th, 2007, ministries including SDRC, the Ministry of Construction and the Ministry of Information Industry jointly established the “Trial regulations for <Pre-review documents for the standard construction bid-invitation qualification>and the <Standard documents of bid-invitation for construction>” as well as its related appendices (This document will be implemented on May 1st, 2008). In the sample construction contract provided, dispute review procedures are required. In order to promote the DRB as a dispute settlement mechanism, as well as ease the burden on parties and promote harmonious development, the BAC took the initiative to collaborate with the Straus Institute for this training program. The Straus Institute sent its best – Professor Thomas Stipanowich, Academic Director of the Institute, as principal lecturer for the program. The BAC invited experts and some senior arbitrators from ministries such as SDRC, and related sectors including China Irrigation-works & Hydro-power Engineering General Co., Ltd and SinoPec, to attend the training.
Professor Stipanowich introduced the origin, characteristics and the current application status in the international market of the DRB/DAB system. He also explored specific methods and processes of DRB/DAB. During the training process, BAC solicited opinions from the students on the BAC’s new DRB Rules. The new Rules were established by the BAC, and are based on principles set forth in the current ICC rules.
Mr. Song Dongsheng, Deputy General Manager of China Irrigation-works & Hydro-power General Co., Ltd, said, in the arena of international projects, application of the DRB/DAB system has been very normal. As a party in such disputes, his company has resolved disputes in construction projects through DRB/DAB many times, and has achieved very good results. DRB/DAB is often a favorable alternative when compared to litigation, arbitration and negotiation, especially in the resolution of construction project disputes, and has potential for broad application in the domestic project field.
Arbitrator Li Qingyan said that projects such as the Xiaolangdi Project in China, have applied the DRB/DAB system for long time. This system not only applies the advantage of the professional judgment, but also is good to promote the continuous implementation of the projects and managing the contract in real time. He thinks that the review board members should not only be experts in the construction field, but also have strong mediation skills.
Professor Song Lianbin from Wuhan University said that the DRB/DAB system can not only relieve pressure from the court system, but can also control the disputes in real time, which is absolutely necessary in the construction sector, because of the need to complete projects on time. The responsible governmental departments and industrial associations should become a main force for promoting the DRB/DAB system. He encouraged arbitration organizations, as key players in the dispute resolution field, to aggressively participate in the development and construction of this system. In organizing the training program in this special field for the first time, the BAC has demonstrated it’s will to provide diversified dispute resolution services and the courage to actively uphold its social responsibilities.
The participants expressed that, through this training, they had gained a comprehensive understanding of the DRB/DAB systems. They further felt that the implementation of the BAC’s Mediation Rules and DRB Rules that would create favorable conditions for the operation of these systems. For promoting and recommending the DRB/DAB, the governmental departments could add the DRB/DAB into the standard contract model referring to the World Bank’s standard contract model.
(II) Professionalism in Mediation
The quality of mediation depends on the quality of the mediators. This follows the famous saying in the arbitration community: “The quality of arbitration depends on the quality of the arbitrators.” After participating in the six-day mediation training, one of the deepest feelings amongst students was that mediation is a very challenging and professional art for dispute settlement. Mediators must possess a high degree of skill, which is not likely to be achieved only through personal experience, and requires systematic study and training. The professional quality of mediators will directly influence the results of the dispute settlement!
Before the training, it was the view of many Chinese students that mediation was just a point or a supplementary instrument in litigation and arbitration procedures. However, during a rapid development process in the past few decades, mediation in USA has matured into a unique system in which a great deal of technical analysis and theory has been created. In 1980s, every state in the USA passed legislation promoting the use of dispute settlement. Alternative dispute resolution (ADR) became a focus of many reforms. The importance of ADR was evident in the establishment of specific dispute resolution programs, as the law schools at Pepperdine, Harvard, and Missouri. Professional training for mediation and arbitration became more prominent throughout the legal system, corporations, enterprises, law schools and business schools in USA, and many dispute settlement centers specializing in providing mediation and arbitration services, as well as professional arbitrators and mediators were born. Mediation gives the parties absolute autonomy in selection of the service they desire, which allows for the formation of a professional market. This kind of the ‘market’ selection and appointment mechanism prompts mediators to continuously improve their professional levels so as to remain competitive, and best meet the needs of the parties.
III.The Interaction of Mediation Cultures between China and USA
The six-day mediation training program focused on several major aspects of mediation, including an overall introduction on dispute resolution, analysis of different negotiation styles, the application of different mediation methods, closing skills, drafting the settlement agreement, confidentiality and ethical obligations, and the functions of attorneys in mediation. The training combined related knowledge from the fields of sociology and psychology in addition to that from the normally relevant fields. The instructors urged students to widen their perspective and ‘think out of the box’ in order to assist the parties in reaching the mutually beneficial resolutions. Instructors and students alike felt the differences and interaction of mediation ideas arising from their different cultural backgrounds.
In the questionnaire for the training program, over 90% of students expressed that they have gained a new understanding and knowledge on the roles mediators play. Arbitrator Hu Wanru summarized, that after the training she came to deeply realize that a mediator is a ‘servant’ of the parties! Arbitrator Wang Jialu expressed great emotion: “In traditional concepts, mediation seems mainly to be the competitive negotiation between the parties, but after this training program, I have learnt mediation methods and skills for a mediator to participate in the negotiation between the parties and ultimately, reach a compromise, or collaboration. Arbitrator Li Jiaqing from Taiwan Arbitration Association specially wrote a letter to BAC: “After the training program this time, all the students fully understand that the power of a mediator comes from the parties, and the mediation procedures and the ultimate result are also determined by the parties.” He believes that traditional mediation in China is valuable in the greater sense, but this training “officially connects domestic mediation with international standards, and launches the new era of Facilitative mediation in China. It is believed that the high-outlook operations by the BAC will play an important role when dealing with the domestic and international mediation cases in the future, and will make significant contribution in domestic and international dispute settlements!”
One subject that particularly impressed the students was the idea of “going below the line,” which stresses the difference between the distinct claims, or positions of the parties and the underlying interests behind those positions. By going ‘below the line’ of positions, and focusing on interests, students were able to use a greater amount of creativity in crafting their resolutions. In the simulated mediation scenarios, the students also experienced this approach to much different than what they were used to, yet very satisfactory in obtaining results that take into account the social effects of the situation, and the harmony sought in Chinese mediations!
Professor Peter Robinson from the Straus Institute said that during his interaction with the students he found them to have very keen insight, and thought they would definitely become very good mediators. He also felt the differences in mediation cultures between China and USA: The mediation in China may be more authoritative, and the mediators tend to tell the parties how to act, while many American mediators only play an assistant role, to facilitate both parties to reach an agreement. This finding let him have a more in-depth understanding of mediation in China, and would affect the future of the way he taught mediation. Professor Thomas Stipanowich said that the Straus Institute agreed the program was a great success, and that he was very impressed with all the students. The professors were very pleased to see the students actively participate in the lectures and mediation scenarios, and were very pleased to have an opportunity to discuss the different aspects of the Chinese and American cultures. While he could not predict the specific impact of the training program, he believes it will have a positive impact on dispute resolution in China, America and throughout the world.