Beijing Arbitration Commission

1. What is mediation?

Mediation a dispute resolution process where a neutral mediator assists the parties to resolve their disputes. Mediation is a consensual dispute resolution process based on the parties’ agreement, and each party may unilaterally terminate the mediation proceedings at any point. Different from litigation and arbitration, mediation emphasizes more on party autonomy, and the mediator is appointed to facilitate the communication between the parties, and to attempt to bring them to a mutually accepted reasonable settlement.

In particular, the mediator, with his/her mediation skills, will assist the parties to analyze their disputes from a more unbiased, rational and professional perspective, and to the most extent promote shared understanding between the parties and help them to cease hostility and to find a win-win way out. In case of need, the mediator will make an analysis for the parties in respect of the legal, commercial and public opinion risks of their disputes according to his/her rich experiences, and in this way help the parties to reach a reasonable decision on settlement. Mediation is also a confidential process. Despite the fact that Chinese law so far has not yet clarified the obligation of confidentiality in mediation, it is generally recognized that any content or material presented or exchanged in mediation, either between the parties or between the parties and the mediators, shall not be referred to in any relevant litigations and arbitrations.
2. Why the Beijing Arbitration Commission Mediation Center?

The Beijing Arbitration Commission Mediation Center (the “Center”) has been characterized by the following features based on its extensive practice during the past two decades:

  1. Full privacy for communication. The Center’ Mediation Rules stress on strict confidentiality of mediation, and the Center is well equipped with high-tech facilities, which jointly ensure the information exchanged during the mediation process will not be leaked out or be referred to in subsequent litigations or arbitrations.
  2. Formal negotiation platform. The Center provides sound management services of mediation proceedings, and requires that its mediators shall make reasonable schedules and shall identify the subject matters of negotiations, so as to increase the transparency of mediation. Mediation participants can therefore make an early preparation, better control the negotiation process, and have a clearer prediction of the outcome. With a specific assessment system, the Center makes sure services of mediators will be in conformity with its high standards.
  3. Professional coordination. Mediators shall make reasonable working plans under the Center’s Mediation Rules. Such working plans shall identify the subject matter of each meeting and the overall arrangement of mediation. The remuneration of mediators shall be made according to the performance of the working plan. After a preliminary review of the case files, a mediator shall identify the issues in dispute, inform the parties of the detailed contents and materials to be prepared for negotiation, and set the targets for each meeting. The Center will assess the rationality, feasibility and effectiveness of the mediators’ working plans, and will endeavor to coordinate the mediation proceedings, for the purpose of an efficient dispute resolution.
  4. Win-win outcome. With the support of mediators’ professional judgments and extensive experiences, the Center’s mediation services concentrate on helping the parties to find reasonable criteria of negotiation, mutual understanding of each other’s core interest, and then a workable alternative. A win-win outcome is the final pursuit. More than a reasonable “allocation of interests”, mediation should also be special brainstorming, where the mediator assists parties to conduct a creative negotiation and then to make an advisable choice.

5.  Flexible enforceability. If the parties reach a settlement through mediation, the Center can provide several options as to the matter of enforcement in addition to drawing up a settlement agreement for the parties. The parties can apply for arbitration to the Beijing Arbitration Commission and request the arbitral tribunal to render an arbitral award or a conciliation statement following the content of the settlement agreement, so as to make the settlement agreement enforceable.

3. Does mediation really work?

The engagement of mediators and the professional mediation services can to the most degree reduce the natural antagonism between disputing parties, and can help the parties to look at the substance of their disputes objectively and rationally. Meanwhile, mediators’ extensive experiences in dealing with commercial disputes and sound knowledge of relevant industries will strengthen the parties’ capability to resolve their disputes. Mediation does not always work, but it does offer another possibility to parties in deadlock of disputes.

4.What are mediation’s advantages in comparison with arbitration and litigation?

Substantively speaking, mediation provides parties with the opportunities of settling their commercial disputes mostly based on their respective interests. In arbitration and litigation, however, parties can only strive to win over the adjudicators, namely the arbitrators or judges, by proving their legal rights and obligations. To be more precise, mediation’s advantages include the follows:
·  Parties have the final say and absolute control over the mediation process, and thus can avoid any uncertainty therein;
·  The success of mediation depends on the parties’ appropriate dealing with their respective interest concerns, other than sticking to whether they can win in law;
·  Mediation is more controllable in its costs, and is comparatively cheaper;
·  Mediation can effectively avoid antagonism, and to the most degree maintain the relationship between the disputing parties, and even promote their mutual trust;
·  Mediation can be customer-tailored, and is flexible in meeting parties’ needs in different cases;
·  Statistics show that mediation is a more efficient and convenient dispute resolution mechanism.

5. How long will mediation take?

In most cases, the mediation process only takes several hours. Still the time duration may vary depending on the complexity of the dispute and the parties’ cooperation.

6. Is the mediation result enforceable?

In the event of a successful mediation, the parties shall reach a settlement agreement with the validity as a contract. Under the existing Chinese law, such a settlement agreement itself lacks enforceability. Nevertheless, pursuant to the BAC Arbitration Rules, it can be converted into an arbitral award or a conciliation statement, which is enforceable.

Meanwhile, although the settlement agreement only has the validity as a contract, in certain cases, it can greatly lighten the parties’ burden of proof.

7. What disputes are target cases for mediation?

Mediation works for most civil and commercial disputes. Yet an effective mediation process shall depend on the parties’ true desire of settling their disputes and the mediator’s experience in handling similar disputes. In general, we suggest the parties to try out mediation, if:
·  The parties intend to settle their disputes efficiently and quickly;
·  The parties hope to control over the plan and outcome of their dispute resolution and avoid any unexpected risk as far as possible;
·  The parties hope to settle their disputes in private;
·  The parties hope to sustain a good relationship of cooperation.

Model Arbitration Clause Arbitration Clause
All disputes arising from or in connection with this contract shall be submitted to Beijing Arbitration Commission / Beijing International Arbitration Center for arbitration in accordance with its rules of arbitration. The arbitral award is final and binding upon both parties.
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